Recovery Act: Preliminary Observations on the Use of Funds for Clean and Drinking Water Projects
Published: 2011-05-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The American Recovery and Reinvestment Act of 2009 (Recovery Act) included $4 billion for the Environmental Protection Agency's (EPA) Clean Water State Revolving Fund (SRF) and $2 billion for the agency's Drinking Water SRF. This testimony is based on GAO's ongoing review of clean and drinking water projects. It provides preliminary observations on (1) the status and use of Recovery Act SRF program funds nationwide and in nine selected states, (2) jobs funded by the Recovery Act SRF programs and federal and state efforts to oversee the programs, and (3) challenges, if any, that states have faced in implementing Recovery Act requirements. For this ongoing work, GAO is, among other things, obtaining and analyzing EPA nationwide data on the status of Recovery Act clean and drinking water funds and projects, as well as information from a nonprobability sample of nine states that it had not reviewed in previous bimonthly reports. These states represent all but one of EPA's 10 regions. GAO is also interviewing EPA and state officials about their experiences with the Recovery Act clean and drinking water funds
section_title: What GAO Found
paragraphs: Nationwide, the 50 states have awarded and obligated the almost $6 billion in Clean Water and Drinking Water SRF program funds provided under the Recovery Act and reported using the majority of these funds for sewage treatment infrastructure and drinking water treatment and distribution systems, according to EPA data. These funds supported more than 3,000 water quality infrastructure projects nationwide. Since the Recovery Act was passed, states have drawn down $3.1 billion (79 percent) of the Clean Water SRF program funds and $1.7 billion (83 percent) of the Drinking Water SRF program funds provided under the Recovery Act. States also met the act's requirements that at least (1) 20 percent of the funds provided be used to support "green" projects, such as those that promote energy or water efficiency, and (2) 50 percent of the funds provide additional subsidies in the form of loans for which the principal is forgiven, loans for which the repayment is less than the principal (negative interest loans), or grants. In the nine states GAO reviewed, Recovery Act funds have paid for 419 infrastructure projects that help to address major water quality problems, although state officials said that in some cases, Recovery Act requirements changed their priorities for ranking projects or the projects selected. For example, because some projects could not meet the act's requirement to have funds under contract by February 17, 2010, some states provided Recovery Act funds to lower-ranked projects. Some states provided funding to these priority projects in other ways, such as through state grants or non-Recovery Act SRF funds. In addition, although not required by the Recovery Act, the nine states used 24 percent of the funds they received to pay for projects in economically disadvantaged communities, the majority of which was provided as additional subsidies. States reported that the Recovery Act SRF programs funded an increasing amount of full-time equivalent (FTE) positions from the quarter ending December 2009 through the quarter ending June 2010, from 6,000 FTEs to 15,000 FTEs, declining to 6,000 FTEs for the quarter ending in March 2011 as projects were completed. EPA and the states are overseeing Recovery Act projects and funds using EPA's oversight plan, updated in June 2010 in response to recommendations GAO made to specify procedures for oversight. The fiscal year 2010 and 2011 appropriations for the SRF programs continue the green project and additional subsidy requirements. State officials GAO interviewed identified challenges in implementing these requirements for the Clean and Drinking Water SRF programs, including: (1) Encouraging green projects. Officials in some states said that the goal of supporting green projects is important but that the percent of funds specifically dedicated to green funds (20 percent) was difficult to achieve. (2) Providing subsidies. Officials in several of the nine states noted that when monies are not repaid into revolving funds to generate future revenue for these funds, the SRF program purpose changes from primarily providing loans for investments in water infrastructure to providing grants.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the preliminary results of our  ongoing work examining states’ use of funds made available for clean and  drinking water projects under the American Recovery and Reinvestment  Act of 2009 (Recovery Act). Among other things, the purposes of the  Recovery Act were to preserve and create jobs, promote national  economic recovery, and provide long-term economic benefits through  infrastructure investments, including water infrastructure. The Recovery  Act mandates that GAO conduct bimonthly reviews of the funds used by  states and determine whether the act is achieving its stated purposes. We  are completing the tenth bimonthly review responding to the act’s  mandate, which updates our May 2010 report and adds new information  on the use of the Recovery Act funds provided for the Clean and Drinking  Water State Revolving Fund (SRF) programs. Over the past 2 years, our  oversight of programs funded by the Recovery Act has covered a wide  range of programs, including Medicaid, education, Head Start, highways  and transit, and environmental and energy programs.
My statement today is based on an ongoing review of clean and drinking  water projects under the Recovery Act and examines the (1) status and  use of Recovery Act SRF program funds nationwide and in nine selected  states, (2) jobs funded by the Recovery Act SRF programs and federal and  state efforts to oversee these programs, and (3) challenges, if any, that  states have faced in implementing Recovery Act requirements. For our  ongoing work, we are obtaining and analyzing nationwide data from the  Environmental Protection Agency (EPA) on the status of Recovery Act  Clean and Drinking Water SRF funds and projects, as well as information  from nine states on their use of Recovery Act funds. We are discussing this  information and Recovery Act requirements and reporting with EPA and  state officials, including program officials in state environmental and  public health departments responsible for the SRF programs and state  Recovery Act officials. To develop a more in-depth view of the states’ use  of Recovery Act funds for Clean and Drinking Water SRF programs, we  selected a nonprobability sample of nine states that we had not reviewed  in our previous bimonthly reports, representing all but one of EPA’s 10  regions. We had state officials review and correct data in EPA’s Recovery  Act databases; we found the data reliable for our purposes. We conducted  this performance audit from September 2010 through April 2011, in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: Both the Clean Water and Drinking Water SRF programs authorize EPA to  provide states and local communities with independent and sustainable  sources of financial assistance, such as low- or no-interest loans, for  projects that protect or improve water quality and that are needed to  comply with federal drinking water regulations and protect public health.  The Clean Water SRF program was established in 1987 under the Clean  Water Act, which was enacted to protect surface waters, such as rivers,  lakes, and coastal areas, and to maintain and restore the physical,  chemical, and biological integrity of these waters. The Drinking Water SRF  program was established in 1996 under the Safe Drinking Water Act, which  was enacted to establish national enforceable standards for drinking water  quality and to guarantee that water suppliers monitor water to ensure  compliance with standards.
The Recovery Act provided $6 billion for EPA’s Clean Water and Drinking  Water SRF programs. This amount represents a significant increase over  the federal funds awarded to the base SRF programs in recent years. From  fiscal years 2000 through 2009, annual appropriations averaged about $1.1  billion for the Clean Water SRF program and about $833 million for the  Drinking Water SRF program. The Recovery Act funds represent a  significant federal investment in the nation’s water infrastructure at a time  when, according to a 2010 Congressional Budget Office report, overall  spending on infrastructure has been declining, and when reported  problems with the quality and safety of water supplies have raised  questions about the condition of the nation’s infrastructure.
In addition to increasing funds, the Recovery Act included some new  requirements for the SRF programs. First, projects funded with Recovery  Act SRF program funds had to be under contract—ready to proceed— within 1 year of the act’s passage, or by February 17, 2010. Second, states  had to use at least 20 percent of these funds as a “green reserve” to  provide assistance for green infrastructure projects, water- or energy- efficiency improvements, or other environmentally innovative activities.  Third, states had to use at least 50 percent of Recovery Act funds to  provide “additional subsidies” for projects in the form of principal  forgiveness, grants, or negative interest loans (loans for which the rate of  interest is such that the total payments over the life of the loans are less  than the principal of the loans). Uses for these additional subsidies can  include helping economically disadvantaged communities build water  projects, although these uses are not a requirement of the act. Congress  incorporated two of these requirements—green projects and additional  subsidies—into the fiscal year 2010 and 2011 non-Recovery Act, or base,  SRF program appropriations.
In addition to program-specific provisions, water projects receiving  Recovery Act funds had to meet the act’s Buy American and Davis-Bacon  provisions. The Recovery Act generally requires that all of the iron, steel,  and manufactured goods used in the project be produced in the United  States, subject to certain exceptions. Federal agencies could issue  waivers for certain projects under specified conditions, for example,  using American-made goods was inconsistent with the public interest or i f  the cost of goods was unreasonable; the act limits the “unreasonable co st”  exception to those instances when inclusion of American-made iron, steel,  or other manufactured goods would increase the overall project cost by  more than 25 percent. Furthermore, agencies do not need to use  American-made goods if they were not sufficiently available or not of  satisfactory quality. In addition, the Recovery Act applied Davis-Bacon  provisions to all Recovery Act-funded projects, requiring contractors and  subcontractors to pay all laborers and mechanics at least the prevailing  wage rates in the local area where they were employed, as determined by   Contractors were required to pay these workers  the Secretary of Labor. weekly and submit weekly certified payroll records.
To enhance transparency and accountability over Recovery Act funds,  Congress and the administration built numerous provisions into the act,  including a requirement that recipients of Recovery Act funding— including state and local governments, private companies, educational  institutions, nonprofits, and other private organizations—report quarterly  on a number of measures. (Recipients, in turn, may award Recovery Act  funds to subrecipients, which are nonfederal entities.) These reports are  referred to as “recipient reports,” which the recipients provide through  one Web site, www.federalreporting.gov (Federalreporting.gov) for final  publication through a second Web site, www.recovery.gov (Recovery.gov).  Recipient reporting is overseen by the responsible federal agencies, such  as EPA, in accordance with Recovery Act guidance provided by the Office  of Management and Budget (OMB). Under this guidance, the federal  agencies are required to conduct data quality checks of recipient data, and  recipients can correct the data, before they are made available on  Recovery.gov. Furthermore, additional corrections can be made during a  continuous correction cycle after the data are released on Recovery.gov.
A significant aspect of accountability for Recovery Act funds is oversight  of spending. According to the federal standards of internal control,  oversight should provide managers with current information on  expenditures to detect problems and proactively manage risks associated  with unusual spending patterns. In guidance issued in February 2009,  OMB required each federal agency to develop a plan detailing the specific  activities—including monitoring activities—that it would undertake to  manage Recovery Act funds. EPA issued its first version of this plan in  May 2009, as required, and updated this document as OMB issued new  guidance.
section_title: All Recovery Act SRF Program Funds Have Been Awarded and Obligated, and With Some Exceptions, States Reported Supporting Major Infrastructure Projects and Helping Economically Disadvantaged Communities
paragraphs: Nationwide, the 50 states have awarded and obligated the almost $6 billion  in Clean Water and Drinking Water SRF program funds provided under the  Recovery Act and reported using the majority of these funds for sewage  treatment infrastructure and drinking water treatment and distribution  systems, according to EPA data. In the nine states we reviewed, states  used these funds to pay for infrastructure projects that help to address  major water quality problems, although state officials said that in some  cases, Recovery Act requirements changed their priorities or the projects  selected for funding. The nine states also used their Recovery Act funding  to help economically disadvantaged communities, although officials  indicated that they continue to have difficulty helping these communities.
subsections: section_title: Nationwide, EPA Data Indicate States Used the Majority of Recovery Act Water Funds for Sewage Treatment Infrastructure and Drinking Water Treatment and Distribution Systems
paragraphs: As of March 30, 2011, states had awarded funds for contracts and obligated  the $4 billion in Clean Water SRF program funds and $2 billion in Drinking  Water SRF program funds provided under the Recovery Act. As we  reported in May 2010, EPA indicated that all 50 states met the Recovery  Act requirement to award Recovery Act funds to contracted projects by  February 17, 2010, 1 year after the enactment of the Recovery Act. In the  2 years since the Recovery Act was passed, approximately 79 percent, or  $3.1 billion, of the Clean Water SRF program funds and approximately 83  percent, or $1.7 billion, of the Drinking Water SRF program funds have  been drawn down from the Treasury by states.
Across the nation, the states have used the $6 billion in Recovery Act  Clean and Drinking Water SRF program funds to support more than 3,000  water quality infrastructure projects. As shown in figure 1, the states used  the majority of their Recovery Act Clean Water SRF program funds to pay  for secondary and advanced treatment at wastewater treatment plants, as  well as projects to prevent or mitigate sanitary sewer overflow.  Wastewater treatment involves several processes, including primary  treatment to remove suspended solids; secondary treatment to further  remove contaminants using biological processes; and tertiary or advanced  treatment to remove additional material in wastewater, such as nutrients  or toxic chemicals. Sanitary sewer overflows can occur as a result of  inclement weather and can pose significant public health and pollution  problems, according to EPA.
As shown in figure 2, the states used about half of their Recovery Act  Drinking Water SRF program funds to pay for projects to transmit and  distribute drinking water, including pumps and pipelines to deliver water  to customers. States used about 40 percent of their funds for projects to  treat and store drinking water.
In addition to requiring that projects awarded funds be under contract  within 1 year of the act’s passage, the Recovery Act required that states  use at least 20 percent of their funds for “green” projects. According to  EPA data, all states met the 20-percent green requirement, with $1.1 billion  of total Clean Water SRF program funds going to green projects and $544  million of total Drinking Water SRF program funds going to green projects.  The goal of supporting green projects is to promote green infrastructure,  energy or water efficiency, and innovative ways to sustainably manage  water resources. Green infrastructure refers to a variety of technologies or  practices—such as green roofs, porous pavement, and rain gardens—that  use or mimic natural systems to enhance overall environmental quality. In  addition to retaining rainfall and snowmelt and allowing them to seep into  groundwater, these technologies can mitigate urban heat islands, and  sequester carbon. Figure 3 shows the amount of Clean Water and Drinking  Water SRF program funds that states awarded to green projects by type  of  project.
Nationwide, states also met the Recovery Act requirement to provide at  least 50 percent of the Clean Water and Drinking Water SRF program  funds as additional subsidies in the form of principal forgiveness, negativ interest loans, or grants. Of the total Recovery Act funds awarded, 76  e  percent of Clean Water SRF Recovery Act funds and 70 percent of  Drinking Water SRF Recovery Act funds were distributed as additional  subsidies. Figure 4 shows the total Clean Water and Drinking Water  Recovery Act funds awarded by states as principal forgiveness, negative  interest loans, or grants. The remaining funds will be provided as low- or  no-interest loans that will recycle back into the programs as subrecipients repay their loans.
section_title: Recovery Act Water Funds Generally Addressed Major Water Quality Problems in Nine States, Although Recovery Act Requirements Changed State Priorities or Projects
paragraphs: In the nine states we reviewed, Recovery Act Clean and Drinking Water  SRF funding has been used to address the major clean and drinking water  problems in the state. The nine states we reviewed received a total of  about $832 million in Recovery Act SRF program funds—about $579  million for their Clean Water SRF programs and about $253 million for  their Drinking Water SRF programs. In total, these funds supported 419  clean and drinking water projects. Officials in the states we reviewed said,  however, that Recovery Act priorities—particularly the need for projects  to be under contract 1 year after the passage of the Recovery Act or green  projects—either changed their priorities for ranking and funding projects  or changed the projects they funded.
To award SRF program funds, each of the nine states we reviewed used a  system to score and prioritize water projects seeking funds to address  water quality problems. To do this, states generally rank or group water  infrastructure projects, submitted by local municipalities or utilities, using  a system of points. The projects with the most points are considered the  highest priority on the list of projects for funding and, in all but one state  we reviewed, state officials used their ranking system to address major  water problems. In most of the nine states we reviewed, compliance is a  key aspect of their ranking system, allowing points to be awarded to  infrastructure projects that help the states eliminate causes of  noncompliance with federal or state water quality standards and permits.  Officials in most of the nine states said that they generally obtain  information on their water systems’ compliance with federal and state  water quality standards through discussions with their program  compliance staff and from state databases.
Officials in the nine states we reviewed told us that the Recovery Act  requirements—the readiness of a project to proceed; the green project  requirement; and, to a lesser degree, the Buy American and Davis-Bacon  provisions—caused them to modify their ranking systems or otherwise  modify the list of projects that receive Recovery Act funding.
Readiness of a project to proceed. In the nine states, officials included  readiness to proceed and other Recovery Act requirements in their ranking  system and selected projects on the basis of that ranking system or said  that they did not fund—or bypassed—top-ranked projects that were not  ready to proceed to construction by February 17, 2010, 1 year after the  passage of the Recovery Act. For example, Washington State’s two top- ranked clean water projects did not receive Recovery Act SRF program  funds because they could not meet the February 2010 deadline. The  projects were to decommission septic systems and construct a wastewater  treatment plant to reduce phosphorus discharges to the Spokane River. In  Wyoming, many of the projects that were not ready to proceed were water  treatment plants, which state officials said take longer to design and plan  for construction. Although these higher-ranked projects did not receive  Recovery Act funds, at least two states were able to fund these projects in  other ways, such as through state grants or non-Recovery Act SRF  program funds.
Green project requirement. Three states listed green projects separately  from other projects. For example, Washington State officials told us that  they established a green projects category because they had anticipated  that energy and water efficiency projects (green projects) would not score  well under their ranking system, which focuses on water quality protection  and improvements. Other states funded green projects ahead of higher- ranked projects. For example, Maryland bypassed many projects to fund  the first green-ranked project on its list. Similarly, Nevada did not fund 11  higher-ranked projects and funded a lower-ranked drinking water project  that had green components.
Buy American and Davis-Bacon provisions. State officials identified a  few projects that did not proceed because potential subrecipients either  did not want to meet one or more Recovery Act requirements, such as the  Buy American and Davis-Bacon provisions, or did not want to increase the  cost of their projects. For example, local officials in Alabama withdrew  their application for a drinking water project because the project was  already contracted without Buy American and Davis-Bacon wage  requirements, and an addendum to the contract to meet the regulations  would have increased the project’s cost. Similarly, officials in all nine  states said that a few communities chose not to apply for or withdrew  from the Recovery Act funding process to avoid paperwork or the  additional costs associated with the act’s requirements. For example,  Wyoming officials said that potential subrecipients for three clean water  projects refused funding, citing time constraints or difficulty meeting Buy  American requirements.
section_title: States Supported Economically Disadvantaged Communities, in Part Using Additional Subsidies Authorized under the Act, Although Officials Cited Continuing Difficulty in Helping these Communities
paragraphs: Although the Recovery Act did not require states to target Clean and  Drinking Water SRF program funds to economically disadvantaged  communities, six of the nine states that we reviewed distributed more than  $123 million in clean water funds, and eight of the nine states distributed  almost $78 million in drinking water funds, to these communities. This  amount represents about 24 percent of the almost $832 million in  Recovery Act funds that the states were awarded. As shown in table 2, a  large majority of the funds provided to these communities were provided  as additional subsidies—grants, principal forgiveness, and negative  interest loans.
According to officials in five states, they provided additional subsidies to  economically disadvantaged communities because the communities would  otherwise have had a difficult time funding projects. For example, officials  in Nevada told us that clean and drinking water subsidies were directed to  such communities because these communities not only have a difficult  time funding projects, they also have some of the projects with the highest  priority for addressing public health and environmental protection  concerns. New Mexico officials told us that they directed additional  drinking water subsidies to economically disadvantaged communities  because these communities have historically lacked access to capital. In  addition, officials in a few other states told us that small and economically  disadvantaged communities often lack the financial means to pay back  loans from the SRF programs or lack funds to pay for the upfront costs of  planning and designing a project. Officials in at least two states also said  that many small and economically disadvantaged communities even lack  full-time staff to help manage the water infrastructure.
Even with the additional subsidies available for projects, officials in a few  states said that small and economically disadvantaged communities found  it difficult to obtain Recovery Act funds. For example, Missouri officials  told us that the Recovery Act deadline was the single most important  factor hindering the ability of small and economically disadvantaged  communities from receiving funding. New Mexico officials also told us  that because small and economically disadvantaged communities typically  do not have funds to plan and develop projects, few could meet the  deadline and several projects that sought Recovery Act funds could not be  awarded funding owing to the deadline.
EPA’s Office of Inspector General (OIG) noted an additional challenge for  EPA related to economically disadvantaged communities. In April 2011,  the OIG reported that EPA could not assess the overall impact of Recovery  Act funds on economically disadvantaged communities because it did not  collect data on the amount of SRF program funds distributed to  economically disadvantaged communities nationwide. The OIG  recommended that EPA establish a system that can target program funds  to its objectives and priorities, such as funding economically  disadvantaged communities.
section_title: The Recovery Act Funded Jobs, and Federal and State Efforts to Oversee the Recovery Act SRF Programs Continue
paragraphs: For the quarter ending December 2009 through the quarter ending in June  2010, the number of full-time equivalent jobs (FTE) paid for with Recovery  Act SRF program funds increased each reporting quarter from about 6,000  to 15,000 quarterly FTEs for planning, designing, and building water  projects, as shown in figure 5. As projects are completed and funds spent,  the number of FTEs funded has declined to about 6,000 for the quarter  ending March 2011. Following OMB guidance, states reported FTEs that  included only the jobs directly paid for with Recovery Act funding, not the  employment impact on suppliers of materials (indirect jobs) or on the  local communities (induced jobs). In addition, state officials told us that,  although funding varies from project to project, 10 percent to 80 percent of  a project’s funding is typically for materials such as cement for buildings  and equipment such as turbines, pumps and centrifuges, and the  remainder pays for labor or FTEs.
To oversee Recovery Act projects and funds, EPA developed an oversight  plan, as required by OMB. In response to our May 2010 bimonthly review  and recommendation, EPA updated its guidance to include specific steps  to monitor compliance with Recovery Act Clean and Drinking Water SRF  program provisions. Our current work is showing that EPA and the states  have made progress in implementing EPA’s updated plan, which included  details on frequency, content, and documentation needed for regional  reviews of state programs and state reviews of projects. EPA officials said  that regional staff are visiting all 50 states and reviewing their Clean and  Drinking Water SRFs according to its plan. Furthermore, officials in the  nine states we reviewed indicated that they have visited Recovery Act  projects at least once during construction, as required in EPA’s oversight  plan.
section_title: Challenges in Implementing Recovery Act SRF Programs Highlight Potential Future Challenges for SRF Programs
paragraphs: Our May 2010 report identified the challenge of maintaining accountability  for Recovery Act funds and recommended improved monitoring of  Recovery Act funds by EPA and the states. As we note above, our current  work shows that EPA and the nine states we reviewed have made progress  in addressing this challenge. Two challenges EPA and the states faced in  spending Recovery Act SRF program funds may continue as requirements  introduced with the Recovery Act are incorporated into the base  programs. Specifically, in fiscal years 2010 and 2011, the Clean and  Drinking Water SRF programs were required to include green projects and  additional subsidization provisions.
Encouraging green projects. The effort to support green projects was  included in EPA’s fiscal year 2010 and 2011 appropriations for the base  Clean and Drinking Water SRF programs. As we discussed above, under  the green requirement in the Recovery Act, in certain cases state officials  said they had to choose between a green water project and a project that  was otherwise ranked higher to address water quality problems. We found  similar results in our May 2010 report, when officials in some of the 14  states we reviewed said that they gave preference to green projects for  funding purposes, and sometimes ranked those projects above another  project with higher public health benefits. In addition to competing  priorities for funding, EPA’s OIG found, in its February 2010 report, that a  lack of clear guidance on the green requirement caused confusion and  disagreements as to which projects were eligible for green funding.  Officials in two of the nine states we reviewed noted that the goal of  supporting green projects was not difficult to achieve because they had  already identified green projects, but officials in four other states said that  achieving the 20-percent green project goal was difficult to achieve,  leading one official to suggest that green projects be encouraged without  setting a fixed percentage of program funds.
Providing subsidization. The fiscal years 2010 and 2011 appropriations  for the Clean and Drinking Water SRF programs also continued the  requirement to provide additional subsidies in the form of principal  forgiveness, negative interest loans, or grants. The subsidy provisions  reduced the funds available to use as a subsidy from a minimum of 50  percent of total Recovery Act funds to a minimum of 30 percent of base  SRF program funds. As with the Recovery Act, the appropriations in  fiscal year 2010 and 2011 do not require this additional subsidy to be  targeted to any types of projects or communities with economic need,  and as the recent EPA OIG report notes, there are no requirements for  EPA or the states to track how these subsidies are used. The Clean and  Drinking Water SRF programs were created to be a sustainable source of  funding for communities’ water and wastewater infrastructure through the  continued repayment of loans to states. Officials in four of the nine states  we reviewed identified a potential challenge in continuing to provide a  specific amount of subsidies while sustaining the clean and drinking SRF  programs as revolving funds. State officials pointed out that when monies  are not repaid into the revolving fund, the reuse of funds is reduced and  the purpose of the revolving SRF program changes from primarily  providing loans for investments in water infrastructure to providing  grants.
Mr. Chairman, Ranking Member, and Members of the Committee, this  concludes my prepared statement. I would be pleased to respond to any  questions that you or other Members of the Committee might have.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information regarding this statement, please contact David C.  Trimble at (202) 512-3841 or trimbled@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this statement. Individuals who made key contributions to this  statement include Jillian Fasching, Susan Iott, Jonathan Kucskar, Carol  Peterson, Beverly Ross, Carol Herrnstadt Shulman, Dawn Shorey, Kathryn  Smith, and Kiki Theodoropoulos.
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