Grants Management: EPA Has Taken Steps to Improve Competition for Discretionary Grants but Could Make Information More Readily Available
Published: 2017-01-23T00:00:00

Fast Facts:
Annually, about $500 million in grants are awarded at EPA's discretion to state governments, nonprofits, tribes, and others. The grants pay for activities such as environmental research and wetlands restoration.
We found that EPA has developed policy on how to advertise grants, evaluate applications, and award the grants. A senior official oversees the process.
However, EPA still has work to do to make information about these grants more transparent. For example, you may need to look across at least four federal websites to find out how many applicants there were, who got the grants, and what they're going to do with them.

Highlights:
section_title: Why GAO Did This Study
paragraphs: EPA annually awards hundreds of discretionary grants, totaling about $500 million. EPA has the discretion to determine grantees and amounts for these grants, which fund a range of activities, from environmental research to wetlands restoration. EPA awards and manages discretionary grants at 10 headquarters program offices and 10 regional offices. Past reviews by GAO and EPA's Inspector General found that EPA has faced challenges managing such grants, including procuring insufficient competition for them and providing incomplete public information about them. GAO was asked to review EPA's management of discretionary grants.
This report examines (1) how EPA manages competition for discretionary grants, (2) how much in discretionary grants EPA provided from fiscal years 2013 through 2015 and to what types of grantees, and (3) the information EPA makes publicly available on discretionary grants. GAO reviewed EPA's competition policy and guidance, examined internal evaluations of grant applications for competitions that were selected partly because they accounted for large portions of discretionary grant dollars, analyzed EPA data as well as information EPA made available on public websites, and interviewed EPA officials.
section_title: What GAO Found
paragraphs: The Environmental Protection Agency (EPA) manages competition for its discretionary grants through a process established by its competition policy and implemented by its program and regional offices. Under the policy, offices are to advertise discretionary grant opportunities on Grants.gov—a website for federal grant announcements—and may also advertise using other methods, such as trade journals and e-mail lists. The announcements must describe eligibility and evaluation criteria, and the process may be customized to assess (1) all applications against eligibility criteria and (2) eligible applications for merit against evaluation criteria. Under the policy, EPA established a Grants Competition Advocate, a senior official who provides guidance to and oversight of the offices. EPA officials said this position has been key to improving competition for discretionary grants.
From fiscal years 2013 through 2015, EPA provided nearly $1.5 billion in discretionary grants to about 2,000 unique grantees, with state governments, nonprofits, and Indian tribes receiving the largest shares, according to GAO's analysis of EPA data. Of the $1.5 billion, $579 million was for new grants subject to the competition policy, and according to EPA, the agency met its performance target to competitively award at least 90 percent of these new grant dollars or awards annually. Some discretionary grants are not subject to the competition policy for several reasons—for example because they are available by law only to Indian tribes. Of the remaining approximately $920 million, $282 million was for new grants not subject to the competition policy, and about $632 million was for amendments to existing grants, such as for added work.
Publicly available information from EPA about its discretionary grants is neither easy to identify nor complete. For example, different information about the grants, such as dollar amounts, is available at four federal websites; but three of these websites do not have a way to search all the grants, and the fourth cannot identify the grants because EPA does not flag them in its submissions to the website. EPA officials plan to better flag these grants in the future; however, to obtain complete information, users would still have to search several websites containing different parts of this information. Also, GAO found that the unofficial reports EPA makes publicly available on the number of applications received for its grant competitions contain limited information. Moreover, these reports are not current because EPA relies on manual processes to collect the information from its offices, which can cause reporting delays. Further, GAO found that although EPA's internal grants management system has a field for tracking grant types, a lack of clarity in EPA's guidance may contribute to EPA staff's inconsistent use of this field. Consequently, EPA cannot easily identify discretionary grants in its system or collect complete and accurate information on them. EPA is transitioning to a new system that is expected to be operational in 2018 and to provide the capability to collect more timely and complete information. However, EPA officials said they do not have plans to use the new system to improve their publicly available reports, which is inconsistent with effective internal and external communication suggested by federal internal control standards. More complete information could help Congress and other decision makers better monitor EPA's management of discretionary grants.
section_title: What GAO Recommends
paragraphs: GAO recommends that EPA develop clear guidance for tracking grants and determine how to make more complete information on discretionary grants publicly available. EPA agreed with GAO's recommendations.

section_title: Letter
paragraphs: Grants make up almost half of the Environmental Protection Agency’s  (EPA) budget, or about $4 billion annually. The majority of EPA grant  dollars are awarded noncompetitively through formula grants, with  grantees and dollar amounts determined by statute or regulation. Roughly  11 percent of EPA grant dollars, or about $500 million annually, are  awarded through discretionary grants, for which EPA has the discretion to  determine grantees and dollar amounts. EPA awards hundreds of  discretionary grants competitively (i.e., through a merit-based selection  process) and noncompetitively every year, and these grants fund a range  of activities, from environmental research and education to wetlands  restoration. Our past reviews and those of the EPA Office of Inspector  General have found that EPA has faced challenges managing its grants,  including discretionary grants. Challenges related to discretionary grants  have included insufficient competition for discretionary grant awards and  incomplete publicly available information about discretionary grant  opportunities. In response to some of these reviews, EPA has taken  several actions, including issuing a grants management plan, developing  and continuing to update a grants competition policy, and beginning to  transition to a new internal grants management system.
EPA awards and manages its grants at multiple levels across the agency,  including the Office of Grants and Debarment (OGD) in the Office of  Administration and Resources Management in headquarters, 10 national  program offices in headquarters, and program offices and administrative  grants management offices in EPA’s 10 regional offices. OGD develops  national grant policies and guidance, awards some grants, and oversees  EPA’s administrative grants management agency-wide. Headquarters  program offices implement national policies for their grant programs, and  both headquarters program offices and regional offices award and  manage discretionary grants, including by providing technical and  program-specific oversight of their discretionary grants. EPA is required  to provide certain information about the grants it awards to several  publicly accessible federal websites.
You asked us to review EPA’s management of discretionary grants. This  report examines (1) how EPA manages competition for its discretionary  grants; (2) how much in discretionary grants EPA provided from fiscal  years 2013 through 2015 and to what types of grantees, and how much of  that was competitively awarded; and (3) what information EPA makes  publicly available on discretionary grants.
To examine how EPA manages competition for its discretionary grants,  we reviewed relevant statutes and regulations, EPA’s competition policy,  and EPA’s procedures and guidance for conducting grants competition.  We also reviewed internal EPA evaluations, including competition  effectiveness reviews from fiscal years 2013 through 2015 and decisions  on grant eligibility and evaluation disputes from May 2004 through March  2016, which includes every year EPA has issued these dispute decisions,  according to OGD officials. We assessed the extent to which a  nongeneralizable sample of competitive discretionary grant  announcements met key EPA criteria for preparing such announcements  by reviewing the 12 announcements that were active on April 27, 2016,  and comparing them with EPA’s competition policy and guidance. In  addition, we reviewed internal documentation for the eligibility and  evaluation criteria reviews for a nongeneralizable sample of five  discretionary grant competition opportunities—two opportunities managed  by the Office of Research and Development (ORD) and three  opportunities managed by the Region 9 Office. We selected these  offices, in part, for geographic diversity and because they are responsible  for some of the largest portions of discretionary grant dollars and awards  among program and regional offices. Our findings cannot be generalized  to all EPA discretionary grant competition opportunities, but they do  provide us with examples of key steps in EPA’s process for managing  discretionary grants.
To examine how much in discretionary grants EPA provided and  competitively awarded from fiscal years 2013 through 2015 and to what  types of grantees, we analyzed EPA internal data on discretionary grants  awarded from fiscal years 2013 through 2015, including types of  grantees, award amounts, and whether grants were competitively  awarded. In response to our data request, EPA obtained these data from  its Integrated Grants Management System, as of May 6, 2016. According  to EPA, the data could change over time as offices make corrections or  adjustments. We also analyzed EPA’s available information on the  number of applications received for discretionary grant competition  opportunities.
To examine what information EPA makes publicly available on  discretionary grants, we reviewed EPA’s competition policy. We also  reviewed information on four publicly accessible websites—three  government-wide websites as well as EPA’s public website—for which  EPA provides certain grants information, such as opportunities available  and dollars awarded. We compared this information with EPA’s internal  data to assess the extent to which information on EPA discretionary  grants was readily available from publicly available sources. We  compared the information EPA makes publicly available on discretionary  grants with federal standards for internal control to assess the extent to  which EPA follows principles for information and communication.
To address all three objectives, we interviewed officials in OGD, ORD, the  Region 3 Office, and the Region 9 Office about how they manage and  make information publicly available on discretionary grants. To assess the  reliability of the data we analyzed, we reviewed database documentation,  interviewed EPA officials familiar with the data, and conducted electronic  tests of the data, looking for missing values, outliers, or other anomalies.  We determined that the data were sufficiently reliable for our purposes.  Appendix II contains more detailed information on the objectives, scope,  and methodology of our review.
We conducted this performance audit from December 2015 to January  2017 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: This section describes the following general aspects of EPA’s  management of discretionary grants: (1) types of grants awarded by EPA;  (2) EPA’s competition policy and grants management plan; (3) new  discretionary grant awards; and (4) amendments to discretionary grant  awards.
subsections: section_title: Types of Grants Awarded by EPA
paragraphs: EPA generally awards three types of grants that are authorized by  statutes and regulations.
Formula grants. EPA awards formula grants noncompetitively to  states in amounts based on formulas prescribed by law to support  water infrastructure projects, among other things. For example, EPA  awards formula grants from the Clean Water and Drinking Water  State Revolving Funds to support water treatment facility construction  and improvements to drinking water systems, such as pipelines and  drinking water filtration plants.
Categorical grants. EPA generally awards categorical grants—which  it also refers to as continuing environmental program grants— noncompetitively, mostly to states and Indian tribes to operate  environmental programs that they are authorized by statute to  implement. For example, under the Clean Water Act, states and tribes  can establish and operate programs for the prevention and control of  surface water and groundwater pollution. EPA determines the amount  each grantee receives for a categorical grant on the basis of agency- developed formulas or program-specific factors.
Discretionary grants. EPA awards discretionary grants— competitively or noncompetitively—to eligible applicants for specific  projects, with program and regional offices selecting grantees and  determining dollar amounts. Also, for some discretionary grants, EPA  negotiates work plans, which include estimated time frames and dollar  amounts for activities under the grant. EPA awards these grants for a  variety of activities, such as environmental research, training,  providing education programs, and cleaning up brownfields. The  respective grant programs under each program and regional office  generally have varied focuses. According to OGD officials, EPA has  historically held roughly 100 to 125 discretionary grant competitions  annually. Appendix III lists EPA’s 67 active discretionary grant  programs, including the program or regional office responsible for  managing each one.
section_title: EPA’s Competition Policy and Grants Management Plan
paragraphs: EPA’s competition policy establishes parameters for the competition of  discretionary grants. The competition policy states that it is EPA policy to  promote competition to the maximum extent practicable in the award of  grants. Further, it states that EPA policy requires that the competitive  process be fair and impartial, that all applicants be evaluated only on the  criteria stated in the grant announcement, and that no applicant receive  an unfair competitive advantage. In 2002, EPA developed its first  competition policy, which created OGD’s Grants Competition Advocate,  who is the senior official responsible for administering and overseeing  implementation of, and compliance with, the policy and issuing guidance  for its implementation. EPA made substantial revisions to the policy in  2005, including by establishing detailed justifications for awarding grants  noncompetitively, and has continued to periodically update and revise it,  as necessary.
In 2003, EPA issued its first grants management plan, which included  goals such as strengthening grants oversight and promoting competition  in the award of grants. The plan established a variety of performance  targets, including competitively awarding at least 85 percent of new  awards subject to EPA’s competition policy annually by 2005. In a 2009  update to the plan, EPA modified the target to competitively award at  least 90 percent of new awards or dollars subject to the competition policy  annually, and this performance measure remained in the 2016 plan  update. EPA reports progress on this target annually in its agency  financial report.
The management of EPA discretionary grants is subject—as are all  stages of the federal grants life cycle—to a range of requirements derived  from a combination of Office of Management and Budget (OMB)  guidance, agency regulations, and program-specific statutes. OMB is  responsible for developing government-wide policies to ensure that grants  are managed properly. Until recently, OMB’s policies were published as  guidance in various circulars that grant-making agencies would adopt into  their own regulations. In December 2013, OMB consolidated its grants  management circulars into a single document, Uniform Administrative  Requirements, Cost Principles, and Audit Requirements for Federal  Awards (known as the Uniform Guidance), to streamline its guidance,  promote consistency among grantees, and reduce administrative burden  on nonfederal entities. In December 2014, along with EPA and other  federal grant-making agencies, OMB issued a joint interim final rule  implementing the Uniform Guidance for new awards made on or after  December 26, 2014.
section_title: New Discretionary Grant Awards
subsections: section_title: Open and Simplified Competitions
paragraphs: Under its competition policy, EPA generally awards new discretionary  grants competitively in two ways.
Open competition. Open competitions are available to all potentially  eligible applicants identified in the Catalog of Federal Domestic  Assistance (CFDA) description for a particular grant program.  According to the competition policy, open competition is EPA’s  preferred method of competition and is required when the estimated  total amount of awards under a competition—regardless of the  amount of any individual awards—exceeds $100,000, unless the  grant is an exception to or an exemption from competition (discussed  below).
Simplified competition. Simplified competitions are available to a  subset of the potentially eligible applicants identified in the CFDA  description, as long as EPA determines that they are capable and  qualified to successfully perform the project. Simplified competition  may only be used when the CFDA description indicates that EPA may  limit eligibility to compete to a number or subset of eligible applicants.  The competition policy states that, when the estimated total amount  expected to be awarded does not exceed $100,000, open competition  is preferred, but simplified competition is permitted. According to the  competition policy, simplified competition is intended to reduce  administrative costs, promote efficiency in competitions, and minimize  burdens for program and regional offices and applicants in conducting  and competing for grants for which a limited amount of funding is  available.
section_title: Exceptions to Competition
paragraphs: Under its competition policy, EPA may award new discretionary grants  noncompetitively as exceptions to competition under any one of the  following circumstances: when an award is $25,000 or less; when a program or regional office demonstrates that there is only one  responsible source that has the capability to successfully perform a  project because of such reasons as possessing proprietary data or  unique or specialized equipment or facilities; when an award cannot be delayed because of unusual and  compelling urgency or the interests of national security; when an award is to fund an unsolicited proposal that is unique or  innovative, has been independently originated and developed by the  applicant, was prepared without government direction or involvement,  and does not resemble the substance of a pending or contemplated  competitive grant; or when EPA determines that competition is not in the public interest.
section_title: Exemptions from Competition
paragraphs: Many EPA grant programs are exempt from competition and, thus, are  not subject to the competition policy. Exemptions from competition are  made for the following groups of grant programs, which include some  discretionary grants: grants to states, interstate agencies, local agencies, Indian tribes,  intertribal consortia, and other eligible grantees under a variety of  programs, including the Leaking Underground Storage Tank Trust  Fund Cooperative Agreements, Oil Spill Trust Fund grants, and  awards under any program that has a statutory or regulatory allotment  or allocation funding formula; other programs available by statute, appropriation act, or regulation  only to Indian tribes and intertribal consortia; grants required or authorized by law, executive order, or international  agreement to be made to an identified grantee(s) in order to perform a  specific project, and congressional earmarks to an identified  grantee(s) to the extent consistent with any applicable executive  orders and any other government-wide laws or guidance relating to  earmarks;
Senior Environmental Employment Program Cooperative grants to foreign governments and to United Nations agencies and  similar international organizations for international environmental  activities; and other programs if approved by the Assistant Administrator for the  Office of Administration and Resources Management.
Appendix III provides information on the EPA discretionary grant  programs that have an exemption from competition.
section_title: Amendments to Discretionary Grant Awards
paragraphs: EPA’s competition policy describes provisions for making amendments to  discretionary grants depending in part on whether the grant was  disbursed over time and also whether it was subject to the competition  policy. EPA generally makes four types of amendments to discretionary  grants.
No-cost amendments. No-cost amendments are for time extensions  or to authorize spending unexpended funds on additional activities  within the scope of the original grant. No-cost amendments do not  provide additional dollars and are not required to be awarded  competitively.
Incremental amendments. Incremental amendments are for funding  a grant over time, instead of funding the grant in a one-time lump  sum. Incremental amendments are not required to be awarded  competitively, as long as the work is within the scope of the original  grant. Incremental amendments can only be funded up to the  approved amount of the original grant, which may or may not have  been awarded competitively.
Supplemental amendments. Supplemental amendments are for  additional dollars for unanticipated cost increases or for added work to  grants awarded competitively or as exceptions to competition.  Supplemental amendments for unanticipated cost increases are not  required to be awarded competitively if they do not involve added  work. Supplemental amendments for added work up to $25,000 (in  the aggregate per grant) are not required to be awarded competitively  if the work is within the scope of the original grant. Supplemental  amendments for added work exceeding $25,000 (in the aggregate per  grant) must be awarded competitively, unless the program or regional  office demonstrates that the work is within scope of the original grant  and only the grantee can perform it in a cost-effective manner.
Amendments to exempt awards. Amendments to exempt awards  are for any amendment to a grant awarded under an exemption from  competition. While amendments to exempt awards may serve  purposes similar to those of incremental and supplemental  amendments, they constitute a separate category of amendments.  Like the original award, amendments to exempt awards are not  subject to the competition policy.
section_title: EPA Manages Competition for Its Discretionary Grants through a Process Established by Its Competition Policy and Implemented by Program and Regional Offices
paragraphs: EPA manages competition for its discretionary grants through a process  established by its competition policy and implemented by its program and  regional offices, which fund activities related to their own programmatic  focuses. Under the competition policy, program and regional offices are to  advertise discretionary grant opportunities through announcements on  Grants.gov and other methods as appropriate; evaluate all applications  against eligibility criteria and all eligible applications against evaluation  criteria; and award grants. Under the competition policy, the Grants  Competition Advocate’s Office in OGD is responsible for providing  ongoing guidance and oversight for program and regional offices.
subsections: section_title: EPA’s Competition Policy Establishes a Process That Includes Advertising Grant Opportunities, Evaluating Applications, and Awarding Grants
subsections: section_title: Advertising Grant Opportunities
paragraphs: Under EPA’s competition policy, program and regional offices are to  advertise open competition opportunities on both EPA’s website and  Grants.gov. The competition policy allows program and regional offices  to also advertise discretionary grant opportunities using other methods  reasonably calculated to ensure the notification of all potentially eligible  applicants, including newsletters, trade journals, newspapers, and email  lists. While open discretionary grant opportunities can be found on both  Grants.gov and EPA’s website, initial applications for competitively  awarded discretionary grants must be submitted using Grants.gov,  according to EPA policy. Eligible applicants may apply for and receive  multiple discretionary grant awards unless prohibited by the authorizing  law for a particular grant or the terms of a particular grant opportunity.
According to the competition policy, simplified competition opportunities  are not advertised on Grants.gov and, instead, must be issued directly to  the competing applicants by the relevant program or regional office.  According to the competition policy, if one award is expected, the  simplified competition opportunity must be issued to at least three eligible  organizations. If multiple awards are expected, simplified competition  opportunities must be issued to at least twice as many eligible  organizations as are expected to receive awards. Any organization  expressing an interest must be allowed to participate in a simplified  competition opportunity. Program and regional offices must document  how they determine the field of competing applicants and, if conducting  multiple simplified competitions, must vary the field of competing  applicants for each opportunity.
The competition policy states that program and regional offices are  responsible for preparing all announcements for open and simplified  competition opportunities in accordance with the Uniform Guidance, other  OMB guidance, and guidance from the Grants Competition Advocate.  According to the competition policy and the Uniform Guidance, all  announcements must include the following eight sections:  1.  funding opportunity description, including the programmatic and  technical description with authorizing statutes and regulations and  clear examples of eligible activities;  2.  award information, including information about the expected number  of awards and award amounts;  3.  eligibility information, including information identifying the applicants  eligible to compete for awards and specific eligibility criteria;  4.  application and submission information, including a description of the  required content and format of the application and instructions on how  to apply;  5.  application review information, including specific ranking and  evaluation criteria and the relative importance assigned to them, such  as relative points, weights, percentages, or other means used to  distinguish them;  6.  award administration information, including notice to applicants of  EPA’s disputes procedures and other pertinent administrative  information;  7.  agency contacts, including a point of contact for answering questions  about the announcement; and  8.  other information, including any additional information that may be  helpful to applicants.
section_title: Evaluating Applications
paragraphs: Under EPA’s competition policy, program and regional offices are to use  an objective and unbiased process for reviewing competitive discretionary  grant applications and selecting applicants for awards. According to the  competition policy, this process requires a comprehensive, impartial, and  objective examination of applications based on criteria in the  announcement by persons who do not have conflicts of interest and who  are knowledgeable in the field for which awards are being made. To  achieve such an examination, the competition policy established a two- step process to evaluate competitive discretionary grant applications: (1)  review and assess all applications against eligibility criteria, and (2)  review and assess eligible applications for technical merit against  evaluation criteria. All reviewers must sign conflict of interest statements.
The competition policy states that applications must typically meet  eligibility criteria before being considered eligible and reviewed for merit  under the evaluation criteria. Eligibility criteria must be specified in the  announcement and, according to EPA documents, typically include  whether the applicant meets criteria specified in a grant program’s  authorizing statutes or regulations and the CFDA description. According  to EPA documents, eligibility criteria also typically include whether the  application addresses program priorities, requests an allowed amount,  complies with instructions, meets geographical restrictions, and is  submitted on time. According to OGD officials, these eligibility criteria are  largely yes/no determinations.
Eligible applications are to be reviewed for technical merit against an  announcement’s evaluation criteria. These criteria vary by competition  opportunity but typically include project activities and methods, past  performance, and environmental results, according to EPA documents.  According to the competition policy, the evaluation criteria must be  tailored to the nature of the projects being awarded competitively,  represent key areas of importance and emphasis to be considered in the  selection process, and support meaningful and fair comparisons of  competing applicants. To ensure that applications are fairly and  objectively assessed against the evaluation criteria, program and regional  offices must use a scoring method that assigns numerical weights or  points, descriptive ratings (e.g., acceptable, good, outstanding), a low- medium-high rating system, or something similar to each of the evaluation  criteria, which may then be used to determine a total, average, or  consensus score for each application. Evaluation criteria reviewers  comprise a review panel, and each reviewer must complete a scoresheet  and include comments explaining reasons for the score assigned.
section_title: Awarding Grants
paragraphs: EPA divides responsibility for awarding discretionary grants among  different officials—a selection, approval, and award official—to ensure  independence and provide checks and balances. Following the process  for evaluating applications, the review panel provides the selection official  a list of eligible applications ranked according to their scores. The  selection official then makes a funding recommendation—multiple  applications may be recommended for funding—that is based on the  scores assigned and other factors, as allowed under the terms of the  announcement. According to OGD officials, the selection official’s primary  responsibility is to assure that the applications selected for award are for  eligible projects with technical merit, based on the terms of the  announcement. According to the competition policy, if the selection official  selects an application out of the ranked order, the program or regional  office must document the basis for that decision. The competition policy  states that the selection official cannot depart from the rankings of the  review panel on the basis of undisclosed selection criteria, personal  preference, or information that is not reasonably related to the evaluation  factors in the announcement. The approval official, a senior manager in  the respective program or regional office, is responsible for signing the  funding recommendation and may be the same person as the selection  official.
The competition policy directs the selection official to prepare a selection  rationale document—to be included in or attached to the funding  recommendation—that includes a summary of the competition, a  discussion of how the recommended applications ranked in comparison  with other applications, and an explanation of why the applications were  selected to receive an award. According to EPA documents, after  reviewing the funding recommendation, the award official has the  authority to obligate funds and make awards. Depending on the office,  the officials serving in the capacity of the selection and award officials can  vary; however, the selection official generally has subject-matter  knowledge of a particular grant program, and the award official generally  has knowledge of grants management.
According to EPA documents we reviewed and officials we spoke with,  before an award is made, the program or regional office conducts a final  review that includes verification of applicants’ eligibility and assurance  that all award requirements are met. Once the award official obligates the  funds, all awards enter a 5-day congressional waiting period, during  which EPA notifies the applicants’ respective congressional delegations  so they have an opportunity to track the awards, according to OGD  officials. Awards of $1 million or more include an additional 5-day White  House notification before the funds are obligated. Following the waiting  periods, EPA sends an award agreement to the grantee electronically, at  which time the grantee can begin using the funds.
The competition policy includes procedures for providing applicants timely  feedback about the process for evaluating applications and awarding  grants. These procedures are also aimed at providing an efficient,  effective, and meaningful dispute resolution process for certain  competition determinations. The policy states that disputes and  disagreements must be resolved at the lowest level possible, and it  establishes three key opportunities to do so.
Notification. Within 15 days of an ineligibility determination or a  negative selection decision, program and regional offices must  provide applicants with a written explanation of why they were either  determined ineligible or not selected. The notification must indicate  that applicants may request a debriefing on the basis for these  determinations.
Debriefing. Debriefings may be oral (e.g., face-to-face or by  telephone) or in writing, although the competition policy states that  oral debriefings are strongly preferred because they provide a better  opportunity to resolve issues quickly. During debriefings, program and  regional offices may answer questions and provide applicants with  information on the strengths and weaknesses of their applications and  the basis for their scores. All debriefings must be conducted promptly  so that applicants have an opportunity to either re-enter the  competition if they successfully challenge the determination during the  debriefing or file a written dispute.
Filing a dispute. After receiving a debriefing, applicants may file a  written dispute with a designated Grants Competition Disputes  Decision Official, who cannot be involved in the competition process  and must be from outside the program office conducting the  competition. Disputes are required to be considered only when they  challenge a determination that the application (1) is ineligible based  on the applicable statute, regulation, or announcement requirements  or (2) did not meet eligibility criteria in the announcement. After  consulting with the Grants Competition Advocate and with the  concurrence of EPA’s Office of General Counsel or regional counsel,  as appropriate, the Grants Competition Disputes Decision Official is to  issue a written decision on the dispute, which constitutes the final  agency action.
section_title: EPA’s Program and Regional Offices Implement the Process According to the Unique Circumstances of Each Grant Program
paragraphs: Program and regional offices implement EPA’s process for advertising,  evaluating, and awarding discretionary grants according to the unique  circumstances of each grant program. While the competition policy states  that open grant opportunity announcements must be advertised on  Grants.gov and EPA’s website and must include key information required  by OMB guidance and EPA policy, such as expected award amounts and  eligibility and evaluation criteria, the actual content of these  announcements is the responsibility of the respective program or regional  office that issues them, according to OGD officials. In addition to  advertising grant opportunities on Grants.gov and EPA’s website,  program and regional offices also advertise some open opportunities  using supplemental methods. OGD officials stated that program and  regional offices have discretion over whether to use other supplemental  methods to advertise grant opportunities. For example, 7 of the 12 active  grant opportunities available on Grants.gov on April 27, 2016, and  prepared by nine different program and regional offices were advertised  using supplemental methods, according to OGD officials. Three of these  were advertised via a combination of webinars, press releases, and other  regional outreach; three others via a listserv in combination with Twitter,  email groups, or newsletter notifications; and the seventh via an email  announcing the opportunity to existing grantees.
According to the competition policy, program and regional offices may  identify applicants for simplified competition on the basis of prior history  and experience with the applicant or expressions of interest by potentially  eligible applicants. OGD officials told us that program and regional offices  rarely use simplified competitions because EPA’s preferred method is  open competition and the administrative work in preparing an  announcement for simplified competition is comparable to that for open  competitions. However, OGD officials said the review process for  simplified competitions may be shorter than that for open competitions  because it involves fewer applications to review.
Exceptions to competition are not advertised, and program and regional  offices are responsible for determining whether to make exceptions to  competition on an award-by-award basis. The competition policy states  that program and regional offices must provide written justification for  exceptions to competition, except those for $25,000 or less, and that the  justification must contain sufficient facts and rationale, including statutory  or regulatory authority for the award. Depending on the type of exception,  the justification is to be approved in writing by the lead agency official  responsible for a particular grant, or the lead agency official’s designee.  According to the competition policy, the Grants Competition Advocate is  responsible for approving justifications for several, but not all, types of  exceptions.
Program and regional offices may customize EPA’s two-step process for  evaluating applications. The competition policy directs program and  regional offices, in most cases, to establish a panel of reviewers for  evaluating applications and specifies that reviewers must independently  review applications in accordance with the criteria stated in the  announcement. OGD officials stated that program and regional offices  typically have one person perform the eligibility review, in consultation  with EPA legal staff if necessary, and a panel of different people reviews  applications against the evaluation criteria. These officials said that the  eligibility reviewer may be someone from the program or regional office  but that evaluation panels are usually composed of technical and subject- matter experts who are typically EPA staff, although some programs may  use other federal or nonfederal reviewers. According to OGD guidance,  program and regional offices are to prepare reviewer instructions and  brief reviewers on their responsibilities, including providing guidance on  the scoring process so that all reviewers are operating under a common  framework.
OGD officials told us that program and regional offices have flexibility to  design the scoring approach for evaluation criteria they believe is best  suited for their competition opportunity. They stated that, although most  offices use a weighted 100-point scale, some use other approaches. For  example, ORD uses an external peer-review process to evaluate eligible  applications, and the scores are based on descriptive ratings (e.g., poor,  fair, good, very good, excellent), which are then used to determine  applications to forward to an internal EPA review panel. According to EPA  documents, the agency occasionally receives a group of applications that  all receive low scores; in these cases, EPA may not make any awards  because, according to OGD officials, there are no proposals worth  funding.
In May 2006, we reported that, before 2002 EPA did not extensively  award grants competitively or provide widespread notification of  upcoming grant opportunities. We further reported that the 2002  competition policy represented a major cultural shift for EPA managers  and staff, requiring EPA staff to take a more planned, rigorous approach  to awarding grants. OGD officials told us that creating and implementing  the agency’s competition policy in 2002, continuing to update the policy,  and creating the Grants Competition Advocate were several steps taken  to improve EPA’s grants competition process in response to past  congressional reviews and assessments of the process by OMB, EPA’s  Office of Inspector General, and us. According to these officials and EPA  documents, other steps included developing EPA’s competition  performance targets and substantially revising the competition policy in  2005, for example by imposing more rigorous review for exceptions to  competition and enhancing the necessary documentation staff had to  submit.
section_title: EPA’s Grants Competition Advocate’s Office Provides Ongoing Guidance and Oversight for Program and Regional Offices
paragraphs: The competition policy allowed for the establishment of the Grants  Competition Advocate, the senior official responsible for interpreting and  administering the competition policy and for providing ongoing guidance  and oversight for program and regional offices. The Grants Competition  Advocate oversees a small staff, and together they comprise the Grants  Competition Advocate’s Office. According to OGD officials and  information on EPA’s website, the Grants Competition Advocate’s Office  administers and oversees the competition policy and provides advice and  support to program and regional offices on matters related to awarding  grants competitively. OGD officials told us that creating the Grants  Competition Advocate as a senior-level position was the agency’s key  action taken under the original competition policy, among several steps  taken, to improve EPA’s grants competition process in response to past  reports and reviews.
The competition policy states that program and regional offices are  responsible for complying with guidance issued by the Grants  Competition Advocate. Among other things, such guidance directs  program and regional offices to document that individuals involved in the competition, evaluation, and  selection of grants do not have any conflicts of interest; use exceptions to and exemptions from competition only under proper  and appropriate circumstances and prepare adequate and defensible  justifications for noncompetitive awards, many of which must be  reviewed and approved by the Grants Competition Advocate; ensure that funding recommendations and award decisions contain  selection justification documents required by the competition policy;  and provide the Grants Competition Advocate with information, as  requested, pertaining to competitions conducted.
According to EPA documents we reviewed and OGD officials we spoke  with, the Grants Competition Advocate’s Office provides support to  program and regional offices in several ways.
Training and guidance. The competition policy directs the Grants  Competition Advocate to coordinate training to help program and  regional offices implement the policy and make recommendations and  take actions necessary to maintain, facilitate, promote, and enhance  the policy, such as by providing guidance. For example, according to  OGD officials, the Grants Competition Advocate’s Office provides  ongoing guidance for program and regional offices via training,  intranet sites, group emails, and in-person consultations. This  guidance includes an intranet checklist for preparing announcements  that meet the competition policy and Uniform Guidance. According to  OGD officials, EPA’s competitive discretionary grant announcements  have become more consistent, reliable, and of better quality in recent  years as program and regional offices have become more familiar  with the guidance, including the checklist, and begun consulting the  Grants Competition Advocate’s Office as they prepare new  announcements.
Announcement reviews. According to EPA documents and OGD  officials and in accordance with the competition policy, the Grants  Competition Advocate and Office of General Counsel review and  concur on all announcements for $1.5 million or more before they are  posted to ensure compliance with requirements and for quality control.  In addition, every year, according to OGD officials, program and  regional offices send the Grants Competition Advocate’s Office about  10 to 12 justifications for exceptions to competition for review or  approval. Further according to EPA, depending on workload and other  considerations, the Grants Competition Advocate’s Office and agency  attorneys review many announcements under $1.5 million. OGD  officials stated that most EPA competitive discretionary grant  announcements, and nearly every justification request for exceptions  to competition, are reviewed to some extent by the Grants  Competition Advocate’s Office or agency attorneys before they are  made available to the public or finalized.
Effectiveness reviews. The Grants Competition Advocate’s Office  conducts annual competition effectiveness reviews of a small sample  of discretionary grant competitions to ensure that they were  conducted in accordance with the competition policy, according to  OGD officials. The office selects a single competition opportunity for  review from every office that conducts competitions, alternating  annually between headquarters and regional offices. According to  officials from the Grants Competition Advocate’s Office, the main  methodology for making each selection is to pick a competition  opportunity where awards have been made and that has not been  reviewed recently. The officials stated that they also try to avoid  picking competition opportunities with the same subject matter in  consecutive years, but that this can be challenging when selecting  competition opportunities from the regional offices because they  generally offer fewer competition opportunities than headquarters  offices. In its competition effectiveness reviews from fiscal years 2013  through 2015, EPA found that the competitions were generally being  conducted in accordance with the competition policy and that most  offices had made improvements, such as in ensuring reviewers  documented their evaluations properly. EPA also made several  recommendations in these reviews, such as that offices confirm all  reviewers sign conflict-of-interest statements and that review panel  chairs advise reviewers to provide detailed comments justifying their  scores.
The Grants Competition Advocate’s Office also provides support to  applicants, according to EPA documents and OGD officials. OGD offers a  website on understanding, managing, and applying for EPA grants that  includes various applicant resources, such as guidance and training,  including a tutorial on applying for grants. In addition, according to OGD  officials, the Grants Competition Advocate’s Office conducts webinars  quarterly and posts them online to explain EPA’s grant competition  process and to answer questions from the public. OGD also offers an  annual forecast to highlight competition opportunities of interest to certain  community-based organizations, such as small organizations, according  to EPA documents and officials.
section_title: EPA Generally Followed Its Process for the Selected Grant Announcements and Competition Opportunities Reviewed
paragraphs: EPA generally followed its process for advertising grant opportunities for  the 12 announcements we reviewed and for evaluating and selecting  applications to fund for the 5 discretionary grant competition opportunities  we reviewed. To assess how EPA has advertised grant opportunities, we  selected all of the 12 active EPA grant announcements, prepared by nine  different program and regional offices, that were available on Grants.gov  on April 27, 2016, and checked the extent to which these announcements  included elements that the competition policy and OGD’s checklist for  preparing announcements direct them to include. In general, we found that the majority of the elements were included in each announcement,  with a few discrepancies and minor errors, mostly involving elements  being located in the wrong place in the announcement.
To assess how EPA has evaluated and selected applications to fund, we  reviewed internal documentation for the eligibility and evaluation criteria  reviews for a nongeneralizable sample of five discretionary grant  competition opportunities—two opportunities managed by ORD and three  opportunities managed by the Region 9 Office. Our review found  complete documentation for key steps, including signed conflict-of- interest statements, reviewer instructions, eligibility reviews, reviewer  scoresheets, and reviewer comments. In addition, the funding  recommendations for each competition opportunity included such key  information as a summary of the competition, a discussion of application  rankings, and an explanation of why applications were selected for  funding.
In addition, to assess the prevalence of formal disputes over  determinations resulting from EPA’s process, we reviewed the Grants  Competition Advocate Office’s dispute decision matrix, which includes  summary information on all formal disputes. Overall, EPA has received  relatively few formal disputes over how its program and regional offices  have conducted grant competitions, from May 2004 to March 2016.  According to OGD officials and our review of the matrix, of the thousands  of applicants who submitted applications during this period, 61 filed formal  disputes over eligibility or evaluation determinations; 10 of these disputes  were sustained, at least in part. Over this period, most of the program and  regional offices that conduct competitions and award grants had received  at least one formal dispute. According to OGD officials, EPA receives few  disputes in part because program and regional offices take steps to  explain EPA decisions during debriefings and resolve applicants’ issues  before they ever reach the formal dispute phase.
section_title: EPA Provided Nearly $1.5 Billion in Discretionary Grant Dollars to a Variety of Grantees from Fiscal Years 2013 through 2015 and Competitively Awarded at Least 90 Percent of New Awards Subject to Its Competition Policy
paragraphs: From fiscal years 2013 through 2015, EPA provided nearly $1.5 billion in  discretionary grant dollars to about 2,000 unique grantees, including state  governments, nonprofits, Indian tribes, state universities, and local  governments, according to our analysis of EPA data. Of this total, $579  million was for new awards subject to the competition policy, and  according to EPA, the agency met its annual performance target to  competitively award at least 90 percent of these dollars or awards. EPA’s  available information shows that the number of applications for  discretionary grants fluctuates widely by competition opportunity.
subsections: section_title: EPA Provided Nearly $1.5 Billion in Discretionary Grant Dollars to a Variety of Grantees from Fiscal Years 2013 through 2015
paragraphs: From fiscal years 2013 through 2015, EPA provided nearly $1.5 billion in  discretionary grant dollars to a variety of grantees, including grantees in  all 50 states, according to our analysis of EPA data. State governments  received the largest amount (28 percent), with nonprofit organizations (18  percent), Indian tribes (14 percent), state universities (13 percent), and  municipal governments (11 percent) also receiving substantial amounts of  discretionary grant dollars. Figure 1 shows the percentages of EPA  discretionary grant dollars awarded, by type of grantee, from fiscal years  2013 through 2015.
Examples of discretionary grant awards include approximately $1 million  in fiscal year 2015 to the state of Ohio to support the Great Lakes Water  Restoration Initiative and the Great Lakes Water Quality Agreement;  approximately $6 million in fiscal year 2013 to the National Fish and  Wildlife Foundation to develop and implement the Chesapeake Bay  Innovative Nutrient and Sediment Reduction Program; and approximately  $4 million in fiscal year 2013 to the Northwest Indian Fisheries  Commission in Olympia, Washington, to develop a program to manage  funding for projects to protect and restore Puget Sound. Table 1 shows  amounts of EPA discretionary grant dollars awarded, by type of grantee,  from fiscal years 2013 through 2015.
According to our analysis of EPA data, EPA made discretionary grant  awards—both new awards and amendments—to about 2,000 unique  grantees from fiscal years 2013 through 2015. Of these, EPA made new  discretionary grant awards to about 1,700 unique grantees from fiscal  years 2013 through 2015, and about 480, or about 28 percent, of these  grantees received more than one new award during this period. Table 2  shows the combined number of all new awards and amendments, by type  of grantee, from fiscal years 2013 through 2015.
section_title: Of $579 Million in New Awards Subject to the Competition Policy, EPA Competitively Awarded at Least 90 Percent
paragraphs: According to our analysis of EPA data, of the nearly $1.5 billion in  discretionary grant dollars EPA awarded from fiscal years 2013 through  2015, approximately $579 million was for new awards subject to the  competition policy: approximately $563 million was awarded by open competition, nearly $1 million was awarded by simplified competition, and over $14 million was awarded as exceptions to competition.
According to EPA documents, the agency met its performance target by  competitively awarding at least 90 percent of these new awards annually,  by both dollar amount and number of awards. For example, according to  our analysis of EPA data, in fiscal year 2015, about 95 percent of the  discretionary grant dollars for new awards subject to the competition  policy were awarded by open or simplified competition. Table 3 shows  amounts of EPA discretionary grant dollars for new awards subject to the  competition policy, by type of competition, from fiscal years 2013 through  2015.
As shown in table 4, from fiscal years 2013 through 2015, state  universities received the largest amount, almost $119 million, or 21  percent, of the approximately $563 million awarded by open competition,  according to our analysis of EPA data. Nonprofits received the largest  amount, about $590,000, or 60 percent, of the nearly $1 million awarded  by simplified competition and almost $13 million, or 87 percent, of the  over $14 million awarded as exceptions to competition. Examples of  awards include $196,300 by simplified competition in fiscal year 2013 to  the National Ground Water Association to provide training, technical  assistance, outreach, and informational materials to owners of private  wells nationwide to reduce risks to private well water supplies and  groundwater and $5 million as an exception to competition in fiscal year  2015 to the Health Effects Institute to support research on the health  effects of emissions from motor vehicles, fuels, and other sources of  environmental pollution. Table 4 shows the amounts of EPA  discretionary grant dollars for new awards subject to the competition  policy, by type of grantee and type of competition, from fiscal years 2013  through 2015. Appendix IV provides additional information about new  awards subject to the competition policy by fiscal year.
OGD officials told us that only new discretionary grant awards—and not  amendments to discretionary grant awards—count toward meeting the  grants management plan’s performance target of competitively awarding  at least 90 percent of the dollars or new awards subject to the competition  policy annually. They stated that, while many amendments are subject to  the competition policy—i.e., they are supplemental or incremental  amendments to awards that are subject to the competition policy—it  would be misleading to count these amendments toward the performance  target because doing so could give the impression that EPA had  competitively awarded more grants than it did. This is because an  amendment is not a new award, but rather part of an existing award that  would already have been counted toward meeting the performance target  in the year it was awarded. Further, OGD officials told us they count only  the dollars for the first year of awards disbursed over time because,  although competitively awarded, the out-year dollars—i.e., incremental  amendments—might not eventually be provided to a grantee for a variety  of reasons, such as poor performance by the grantee. Therefore,  counting incremental amendments toward the performance target at the  issuance of the initial award could incorrectly indicate that EPA had  competitively awarded more grant dollars than it might ultimately award.
section_title: Of the Nearly $1.5 Billion, Over $920 Million Was Not Subject to the Competition Policy or Was Not for New Awards
paragraphs: According to our analysis of EPA data, of the nearly $1.5 billion in  discretionary grant dollars EPA provided from fiscal years 2013 through  2015, over $920 million was not subject to the competition policy or was  not for new awards. More specifically, approximately $282 million was for  exemptions from competition, which are new awards that are not subject  to the competition policy, and about $632 million was for amendments to  awards that may or may not have been subject to the competition  policy. OGD officials told us that nearly all amendments to awards  subject to the competition policy do not need to be awarded competitively  because they meet certain conditions in the policy, such as being for work  within the scope of the grant. If a proposed amendment must be awarded  competitively because, for example, it is outside the scope of the grant,  the officials stated that it should instead be processed as a new award.  Table 5 shows the amounts of EPA discretionary grant dollars for  exemptions, amendments, and other awards not subject to the  competition policy, from fiscal years 2013 through 2015.
From fiscal years 2013 through 2015, state governments received the  largest amount, about 38 percent, of the approximately $282 million in  discretionary grants awarded as exemptions from competition, according  to our analysis of EPA data. An example of an award made as an  exemption from competition includes approximately $7 million in fiscal  year 2015 to the Alaska Department of Environmental Conservation to  support wastewater projects in rural communities and Alaska Native  villages. The exemption was for a grant program required by law to be  made to an identified grantee in order to perform a specific project. Table  6 shows the amounts of EPA discretionary grant dollars for exemptions  from competition, by type of grantee, from fiscal years 2013 through  2015. Appendix IV provides additional information about exemptions from  competition by fiscal year.
As shown in table 7, from fiscal years 2013 through 2015, state  governments received the largest amounts, 41 percent and 40 percent  respectively, of both the approximately $288 million in discretionary  grants awarded as amendments to exempt awards and the approximately  $12.6 million in discretionary grants awarded as supplemental  amendments, according to our analysis of EPA data. An example of an  amendment to an exempt award includes approximately $500,000 in  fiscal year 2013 to the state of North Carolina to restore and maintain the  Albemarle-Pamlico estuarine system. Examples of supplemental  amendments include $120,000 in fiscal year 2015 to the Association of  Clean Water Administrators for water quality improvement programs;  $160,000 in fiscal year 2014 to the New York Department of  Environmental Conservation for mapping aquatic vegetation and creating  a long-term conservation strategy for Niagara River areas of concern; and  $138,000 in fiscal year 2013 to the Osage Nation in Oklahoma to conduct  well testing and inspecting, enforcement and compliance, and permitting  of injection wells. Nonprofits received the largest amount, about 30  percent, of the approximately $258 million in discretionary grants awarded  as incremental amendments, according to our analysis of EPA data.  Table 7 shows the amounts of EPA discretionary grant dollars for different  types of amendments, by type of grantee, from fiscal years 2013 through  2015. Appendix IV provides additional information about amendments by  fiscal year.
OGD officials stated that they do not track, and thus have no data on,  whether an amendment to an exempt award is for additional dollars or  other purposes, such as to award dollars incrementally, because these  amendments are not subject to the competition policy or performance  target. Therefore, to gather such information, officials stated that they  would have to manually examine every amendment to an exempt award  on a case-by-case basis to determine the reasons for the amendment.
section_title: The Number of Applications Fluctuates Widely by Discretionary Grant Competition Opportunity
paragraphs: EPA posts limited information on the overall number of applications  submitted for its discretionary grant competition opportunities; however,  EPA’s available information indicates that, of thousands of applications  received annually, the number of applications fluctuates widely on an  opportunity-by-opportunity basis. OGD officials stated that, while EPA has  historically conducted roughly 100 to 125 grant competitions annually, the  number of competitions varies each year because not every grant  program offers a competition opportunity every year. The officials stated  that there have been fewer annual competition opportunities in recent  years because program and regional offices are offering more multiyear  competitions. As of May 11, 2016, according to EPA’s unofficial reports  for open competitions completed from fiscal years 2013 through 2015,  about 47 percent of 142 competition opportunities received more than 20  applications, about 18 percent received 11 to 20 applications, and about  17 percent received 4 to 10 applications. Approximately 18 percent of the  competition opportunities received 3 or fewer applications, including  about 8 percent that received 1 application.
About half of the competition opportunities receiving one application were  for the Region 3 Office’s Chesapeake Bay Programs. Region 3 officials  said a potential reason for receiving so few applications could be that the  opportunities’ evaluation criteria are highly specialized with few eligible  applicants capable of doing the work. They stated that, in addition to  advertising these opportunities on Grants.gov, they also advertise them  on a listserv and a website for Chesapeake Bay issues; an email  distribution list; targeted emails to local universities, colleges, nonprofit  organizations, and state and local governments; and a hard copy mailing  list with about 1,000 subscribers.
OGD officials told us that, although thousands of potential applicants  could be eligible for any particular competitive discretionary grant  opportunity, the officials have no way of knowing why eligible entities may  choose not to apply for an opportunity and that this is something EPA  cannot control. They said receiving few applications could be the result of  many different reasons for potentially eligible applicants, such as the  location or timing of a project, available resources or expertise, and award  amounts. OGD officials stated that, if a particular grant program has a  pattern of receiving only one quality application across several  competition opportunities, the Grants Competition Advocate’s Office may  advise the program or regional office to consider requesting an exemption  to competition for future awards to more efficiently use resources.
section_title: EPA Provides Grant Information on Publicly Available Websites, but Information on EPA Discretionary Grants Is Either Difficult to Identify or Incomplete
paragraphs: EPA provides various kinds of information on grants, including  discretionary grants, on four federal websites, each of which makes  information publicly available for a different purpose. However, the  information on EPA discretionary grants—including opportunities  available and grant amounts awarded—on these websites is either  difficult to identify or incomplete. In addition, EPA’s internal grants  management system does not identify all discretionary grants, making it  difficult for EPA to provide complete information to publicly available  websites and internal and external decision makers.
subsections: section_title: EPA Provides Information on Grants, including Discretionary Grants, on Four Federal Websites, Each Serving a Different Purpose
paragraphs: EPA provides some key information about grants, including discretionary  grants, on four federal websites, each of which makes information about  grants publicly available for a different purpose. Three of these websites  are government-wide.
CFDA.gov: The purpose of this website is to provide a compendium  of federal grant programs. Information provided by EPA includes a  grant program’s objectives, eligibility requirements, available dollars,  application and awards process, range of and average award  amounts, related programs, and examples of previously funded  activities.
Grants.gov: The purpose of this website is to provide a vehicle for  organizations to search and apply for competitive federal discretionary  grant opportunities. Information provided by EPA includes program  descriptions, eligibility requirements, evaluation criteria, and  application procedures.
USAspending.gov: The purpose of this website is to provide a  publicly accessible, searchable website for tracking where and how  federal money is spent. Information provided by EPA includes grantee  names and locations, project descriptions, and individual grant  amounts awarded.
EPA has its own public website on which it provides links to the above  three government-wide websites. EPA also makes the following other  information on discretionary grants available on its website:
EPA Grant Awards Database: The purpose of this database is to  provide a summary record for EPA grants awarded in the last 10  years and prior grants that are still open. Information includes grantee  names and types, project descriptions, EPA contacts, and cumulative  dollar amounts (i.e., new awards plus any increases or decreases  from amendments) awarded over the life of a grant.
Unofficial reports: The purpose of these reports is to provide  summary information about grant competitions conducted during a  fiscal year. Information includes competition titles, announcement  numbers, closing dates, numbers of applications received, and  grantee names. EPA collects information for these unofficial reports  quarterly.
According to OGD officials, developing the Grant Awards Database and  posting unofficial reports on EPA’s public website were key parts of EPA’s  efforts to respond to feedback from congressional staff and others that  EPA should be more transparent about its awards process for discretionary grants so that these efforts can be monitored. OGD officials  said that they created the Grant Awards Database about 10 years ago in  response to a request from congressional staff that EPA provide a public  database with information on grants awarded. OGD officials stated that  they started posting the unofficial reports online at about the same time.
section_title: Information on EPA Discretionary Grants on Publicly Available Websites Is Either Difficult to Identify or Incomplete
paragraphs: Information on EPA discretionary grants on the four publicly available  websites is either difficult to identify or incomplete for several reasons.  First, while one of the main purposes of Grants.gov is to provide public  information about competitive grant opportunities, the website includes  information only about opportunities for open competition, not simplified  competition, exceptions to competition, or exemptions from competition.  In addition, information is difficult to identify partly because  USAspending.gov and the EPA Grant Awards Database do not have a  way to search for discretionary grants. Further, although CFDA.gov has a  search field for grant types and “discretionary grant” is a second-tier grant  type that users can choose to search for, EPA does not flag discretionary  grants in the information it submits for CFDA.gov. Consequently, when  users search for EPA discretionary grants on CFDA.gov, they get no  results. OGD officials stated that they do not flag discretionary grants in  the information they submit for CFDA.gov because several of the  available second-tier grant types, such as fellowships or cooperative  agreements, could simultaneously apply to the same discretionary grant  program, and the CFDA.gov template for submitting information allows  them to identify only one second-tier grant type. As a result, they said  they do not flag any of these second-tier grant types because prioritizing  one over the others would mean excluding options that also apply, which  could confuse users. OGD officials stated that changing this would  depend on the agency making a policy decision to select discretionary  grant as the second-tier grant type when submitting information for  CFDA.gov.
The Uniform Guidance states that, when agencies submit information for  CFDA.gov, they must identify whether a program makes awards on a  discretionary basis. In addition, EPA’s CFDA user manual directs  program and regional offices to distinguish discretionary grants from other  types of grants in their CFDA submissions. According to EPA officials,  EPA has complied with the Uniform Guidance and user manual, in part,  by using only two primary-tier grant types—formula grant or project  grant—to flag its grants in the information it submits for CFDA.gov. EPA  officials stated that, since formula grants are nondiscretionary by  definition, this approach signals that discretionary grants would be found  under the project grant type, by default. EPA officials said they also  include competition instructions in the narrative of their CFDA  submissions for competitive discretionary grant programs, which further  distinguishes them as discretionary. However, according to EPA officials,  this method is not entirely sufficient because it identifies discretionary  grants indirectly, thus requiring users to understand the difference  between formula and project grants when searching for discretionary  grants. In addition, the project grant type is not exclusively for  discretionary grants; for example, some formula grants, such as EPA’s  State Indoor Radon Grants, are flagged as project grants on CFDA.gov.  According to OGD officials, grant types have not always been clear to the  program and regional staff responsible for preparing CFDA submissions.
OGD officials told us that, as a result of our work for this review, they  realized that they needed to improve how they identify discretionary  grants in their CFDA submissions. To do so, OGD officials stated they are  planning to specifically identify discretionary grant programs in the  narrative descriptions of their future CFDA submissions by including a  sentence explaining that the program generally makes awards on a  discretionary basis. OGD officials also said that, through their ongoing  participation in a working group coordinated by the General Services  Administration (GSA), they plan to work to clarify GSA’s government-wide  guidance on identifying discretionary grants in agencies’ CFDA  submissions.
Even if EPA were to flag discretionary grants in the information it submits  for CFDA.gov, however, identifying such grants on CFDA.gov would be  just one of several steps that users would have to take to obtain more  complete information about EPA discretionary grants, since information  about EPA grants is spread across different websites. Specifically, to  obtain a range of information about discretionary grants, including  program descriptions, eligibility requirements, application procedures,  grantees, and award amounts, users would first have to identify  discretionary grants on CFDA.gov and obtain the CFDA numbers. These  CFDA numbers are the only way to link information across the other three  websites, and they are the only way to identify discretionary grants on  USAspending.gov and the EPA Grant Awards Database. Users would  have to enter the CFDA numbers on USAspending.gov to obtain  information on individual awards, including amendments, and on the EPA  Grant Awards Database for cumulative awards over the life of a grant.  According to OGD officials, the award amounts cannot be compared for  the same grant across USAspending.gov and the EPA Grant Awards  Database because USAspending.gov reports individual amounts  awarded—i.e., for a new award or each amendment made—on a specific  date, whereas the EPA Grant Awards Database reports the total amounts  awarded cumulatively—i.e., for a new award plus or minus any  amendments—over the life of a grant, which may span many fiscal years.
According to OGD officials, EPA’s unofficial reports on grant competitions  are the only publicly available source of information about the number of  applications received for discretionary grant competition opportunities.  However, our review of these reports found that they are not current, and  they contain limited information. EPA’s current internal grants  management system cannot provide the type of information included in  these reports because it does not have the capability to centrally track the  number of applications received per competition opportunity. Instead, the  Grants Competition Advocate’s Office collects the information manually  from each program and regional office. OGD officials stated that this  approach takes time and means that a report for a particular fiscal year  may not be complete until a year or two later because the information is  updated on a rolling basis, as it becomes available. In addition, the  information for these reports is not collected until all the awards for a  particular competition opportunity have been made, and, according to  OGD officials, it may take more than a year to complete the award  process. We also found that these reports contain limited information. For  example, they do not include such key information as award amounts,  grantee types, or amendments. Under federal standards for internal  control, agencies are to communicate complete and accurate information  internally and externally to achieve the entity’s objectives.
EPA is transitioning to a new internal grants management system that will  offer capabilities to collect more information and to collect it more quickly,  according to OGD officials. These officials expect the new system to be  fully operational in 2018. The new system will provide EPA with the  capability to more easily collect and use timely and complete information  about the agency’s discretionary grants, which will facilitate internal  oversight and management, according to EPA officials. However, officials  added that the agency does not currently have plans to use this new  system to improve the timeliness and quality of the reports it makes  publicly available on its website. By making more complete information  about its discretionary grants publicly available—such as by posting  timely and complete reports on its website—EPA could help Congress  and other decision makers better monitor, and thus provide oversight of,  its management of discretionary grants.
section_title: EPA’s Internal Grants Management System Does Not Identify All Discretionary Grants
paragraphs: In conducting this review, we asked EPA to provide its internal data on all  discretionary grants awarded from fiscal years 2013 through 2015;  however, EPA could not readily provide data about these grants because  it could not easily identify them. OGD officials told us that they had to  manually review the agency’s CFDA program descriptions in order to  identify all the discretionary grants and respond to our data request.  They stated that EPA’s internal grants management system was not  designed to collect and track this information. Although EPA’s internal  grants management system includes a data field for distinguishing grant  types, including discretionary grants, from one another, the field is not  being used consistently to identify all EPA discretionary grant programs,  according to OGD officials. These officials explained that some  discretionary grants were flagged in EPA’s internal grants management  system as other types of grants, such as categorical grants, which may  have some discretionary aspects to them. The officials stated that EPA  staff may not have a clear understanding of how to use the data field, and  one reason for this may be that OGD’s definition of discretionary grants is  not clear, in part because it does not explain whether categorical grants  with discretionary aspects are considered to be discretionary grants.  According to OGD officials, some categorical and discretionary grant  programs can have overlapping aspects. Another reason EPA staff may  not have a clear understanding of how to use the data field may be that  EPA’s guidance for CFDA.gov provides a definition of discretionary grants  that differs slightly from OGD’s, and inconsistencies among these  definitions could create ambiguity for staff. For instance, OGD’s  definition states that a discretionary grant is one for which EPA has  discretion in negotiating and approving the work plan, whereas the  definition in EPA’s guidance for CFDA.gov does not discuss grants for  which EPA has discretion over work plans. Under federal standards for  internal control, management should design control activities to achieve  objectives and respond to risks—for example, by clearly documenting  internal control in management directives, administrative policies, or  operating manuals. While EPA has documented its guidance for  CFDA.gov, it is not clear because there are inconsistencies between the  definition of discretionary grants in the guidance and OGD’s definition.
OGD officials stated that, in response to our review, they provided the list  of active discretionary grant programs to all program and regional offices  to help them better identify discretionary grants in EPA’s internal grants  management system. OGD officials also posted the list of discretionary  grant programs to their intranet site so that program and regional offices  could access it at any time. In addition to these steps, by having clear  guidance on identifying discretionary grants generally—such as how to  flag categorical grants with discretionary aspects and how to reconcile  inconsistencies among EPA’s two definitions of discretionary grants— staff might be able to better identify all discretionary grants in the internal  grants management system, especially discretionary grant programs  developed in the future. Such guidance would also help staff update  information for ongoing grants made under programs that are now  inactive (i.e., no longer making new awards). By providing clear guidance  to EPA staff to help ensure that they correctly identify all discretionary  grants in the agency’s grants management system, EPA could  communicate more accurate and complete information to internal and  external decision makers and improve the quality of the information it  makes publicly available about its use of taxpayer dollars.
section_title: Conclusions
paragraphs: Over the years, EPA has taken steps to improve competition for its  discretionary grants in response to our past reports and other reviews  identifying challenges in how EPA manages such grants. These steps  include updating EPA’s competition policy for awarding grants, creating a  senior-level Grants Competition Advocate to help offices implement the  policy, and making some discretionary grants information publicly  available so that EPA’s management efforts can be monitored. However,  the information EPA makes publicly available is neither easy to identify  nor complete.
EPA has faced challenges identifying the full universe of its discretionary  grants. Until recently, EPA did not have complete information about which  of its grants are discretionary because staff were not consistently  distinguishing discretionary grants in EPA’s internal grants management  system. EPA has manually reviewed its CFDA descriptions to develop a  complete list of its active discretionary grant programs. Moving forward,  this information can help officials provide clearer guidance to program  and regional staff to help ensure they correctly identify programs in the  internal grants management system. This information can also help  inform guidance on how to update information for ongoing grants made  under programs that are no longer active. Improving how it identifies  discretionary grants internally will allow EPA to provide more complete  information to internal decision makers and improve the information it  makes publicly available.
In addition, our review of EPA’s unofficial reports on grant competitions— the only publicly available source of information about the number of  applications received for discretionary grant competition opportunities— found that they are not current and they contain limited information.  Although EPA is updating its internal grants management system with  capabilities to collect and report more timely and complete information  about discretionary grants, the agency has no plans to use the system to  improve the timeliness and quality of the grants information it makes  publicly available on its website. By making more complete information  about its discretionary grants publicly available—such as by posting  timely and complete reports on its website—EPA could help Congress  and other decision makers better monitor, and thus provide oversight of,  its management of discretionary grants.
section_title: Recommendations for Executive Action
paragraphs: We are making two recommendations:  To improve the quality of EPA’s internal records and the information EPA  can communicate to internal and external decision makers, the EPA  Administrator should direct the Assistant Administrator for the Office of  Administration and Resources Management to direct the Director of OGD  to provide clear guidance to EPA staff to help ensure that staff correctly  identify all EPA discretionary grant programs in the agency’s internal  grants management system.
To better enable Congress and other decision makers to monitor EPA’s  management of discretionary grants, the EPA Administrator should direct  the Assistant Administrator for the Office of Administration and Resources  Management to direct the Director of OGD to determine how to make  more complete information on EPA’s discretionary grants publicly  available, such as by posting timely and complete reports on its website.
section_title: Agency Comments
paragraphs: We provided a draft of this report to EPA for review and comment. In its  written comments, reproduced in appendix V, EPA agreed with our two  recommendations and generally agreed with our findings and  conclusions. EPA stated that it agrees that there are opportunities to  explore how to better develop guidance for tracking grants and determine  how to make more complete information on discretionary grants publicly  available and, as noted in this report, has already taken steps to do so.  EPA stated that it will continue these efforts in 2017, subject to budgetary  and resource constraints. EPA also provided technical comments, which  we incorporated into the report, as appropriate.
To address our first recommendation, in addition to actions it described  having taken, EPA stated that it expects to be involved in GSA efforts in  2017 to improve CFDA descriptions, which may relate to changes to the  CFDA templates that could improve discretionary grant designations.  EPA stated that also in 2017 the agency will assess whether other actions  need to be taken to better identify discretionary grant programs in its  internal grants management systems, including training for grants  personnel to ensure consistency in defining discretionary grant programs.  To address our second recommendation, EPA stated that in 2017 the  agency will begin to examine whether and how it can use its new internal  Next Generation Grants System to generate more timely and complete  reports related to discretionary grants and make them publicly available.  EPA also stated that at the outset the agency plans to explore the  system’s ability to (1) generate more timely and complete information that  can be posted on the EPA website, such as on applications received, and  (2) post an annual report on the amount of funds per discretionary grant  program and whether they were new awards or amendments.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the EPA Administrator, and other interested  parties. In addition, the report will be available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-3841 or gomezj@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix VI.
section_title: Appendix I: EPA Office of Inspector General Reports Identifying Challenges with How EPA Manages Discretionary Grants
paragraphs: EPA Needs to Improve STAR Grant Oversight. Report No. 13-P-0361.  Washington, D.C.: August 27, 2013.
EPA’s Key Management Challenges. Washington, D.C.: April 21, 2006.
EPA Managers Did Not Hold Supervisors and Project Officers  Accountable for Grants Management. Report No. 2005-P-00027.  Washington, D.C.: September 27, 2005.
EPA’s Key Management Challenges 2005. Washington, D.C.: April 25,  2005.
EPA Needs to Compete More Assistance Agreements. Report No. 2005- P-00014. Washington, D.C.: March 31, 2005.
EPA’s Key Management Challenges. Washington, D.C.: April 21, 2004.
EPA’s Key Management Challenges. Washington, D.C.: May 22, 2003.
EPA’s Key Management Challenges. Washington, D.C.: September 6,  2002.
Surveys, Studies, Investigations, and Special Purpose Grants. Report No.  2002-P-00005. Philadelphia, PA: March 21, 2002.
EPA’s Key Management Challenges. Washington, D.C.: December 17,  2001.
EPA’s Competitive Practices for Assistance Awards. Report No. 2001-P- 00008. Philadelphia, PA: May 21, 2001.
section_title: Appendix II: Objectives, Scope, and Methodology
paragraphs: In this report, we examine (1) how EPA manages competition for its  discretionary grants, (2) how much in discretionary grants EPA provided  from fiscal years 2013 through 2015 and to what types of grantees, and  how much of that was competitively awarded, and (3) what information  EPA makes publicly available on discretionary grants.
To examine how EPA manages competition for its discretionary grants,  we reviewed relevant statutes and regulations, EPA’s competition policy,  and EPA’s procedures and guidance for managing grants competition.  We also examined fiscal year 2013 through 2015 annual competition  effectiveness reviews and office competition assurances for program and  regional offices for fiscal years 2014 through 2015. We reviewed EPA  decisions for grant eligibility and evaluation disputes from May 2004  through March 2016, which includes every year EPA has issued these  dispute decisions, according to EPA Office of Grants and Debarment  (OGD) officials. We also reviewed the Grants Competition Advocate  Office’s dispute decision matrix, which includes summary information on  all formal disputes filed from May 2004 to March 2016. In addition, we  assessed the extent to which a nongeneralizable sample of competitive  discretionary grant announcements met key EPA criteria for preparing  such announcements in the competition policy and OGD’s checklist for  preparing announcements by selecting and reviewing all of the 12 active  announcements, prepared by nine different program and regional offices,  available on Grants.gov on April 27, 2016. To do so, two analysts  reviewed the extent to which the announcements included the dozens of  elements that the competition policy and checklist direct them to include.  The analysts then discussed and compared results to resolve any  differences in their assessments. In addition, we reviewed internal  documentation for the eligibility and evaluation criteria reviews for a  nongeneralizable sample of two discretionary grant competition  opportunities managed by the Office of Research and Development  (ORD) and three discretionary grant competition opportunities managed  by the Region 9 Office. We selected these offices, in part, for geographic  diversity and because they are responsible for some of the largest  portions of discretionary grant dollars and awards among program and  regional offices. We selected the most recently closed discretionary  grant competition opportunities managed by each office, according to  EPA’s unofficial reports on grant competitions. The internal  documentation for the eligibility and evaluation criteria reviews included  conflict-of-interest statements, reviewer instructions, eligibility reviews,  reviewer scoresheets, reviewer comments, and funding  recommendations. Our findings cannot be generalized to all EPA  discretionary grant competition opportunities, but they do provide us with  examples of key steps in EPA’s process for managing discretionary  grants.
To examine how much in discretionary grants EPA provided and  competitively awarded from fiscal years 2013 through 2015 and to what  types of grantees, we reviewed EPA’s competition policy and grants  management plan. We also analyzed EPA internal data on discretionary  grants awarded from fiscal years 2013 through 2015, including types of  grantees, award amounts, whether grants were awarded as new awards  or amendments to awards, and whether grants were awarded  competitively or noncompetitively. In response to our data request, EPA  obtained these data from its Integrated Grants Management System, as  of May 6, 2016. According to EPA, the data could change over time as  offices make corrections or adjustments. In order to assess the reliability  of the data we analyzed, we reviewed database documentation;  interviewed EPA officials familiar with the data; and conducted electronic  tests of the data, looking for missing values, outliers, or other anomalies.  We determined that the data were sufficiently reliable for our purposes. In  addition, EPA officials reviewed and verified our data analysis results. We  also analyzed information on the number of applications received in  EPA’s unofficial reports on grant competitions from fiscal years 2013  through 2015, as of May 11, 2016.
To examine what information EPA makes publicly available on  discretionary grants, we reviewed relevant statutes and regulations,  EPA’s competition policy, and EPA’s procedures and guidance for making  information publicly available on grants. We also reviewed information on  four publicly accessible websites—CFDA.gov, USAspending.gov,  Grants.gov, and the EPA Grant Awards Database—on EPA discretionary  grants from fiscal years 2013 through 2015 and compared it with EPA’s  internal data to assess the extent to which information on EPA  discretionary grants was readily available from publicly available sources.  In addition, we interviewed EPA officials responsible for posting and  maintaining the information EPA makes publicly available on the EPA  Grant Awards Database and the information EPA submits to be made  publicly available on CFDA.gov, USAspending.gov, and Grants.gov. We  compared EPA guidance and the information EPA makes publicly  available on discretionary grants with federal standards for internal control  to assess the extent to which EPA follows principles for designing control  activities and principles for information and communication. We also  analyzed applicant information in EPA’s unofficial reports on grant  competitions from fiscal years 2013 through 2015, as of May 11, 2016.
To address all three objectives, we reviewed our reports and those of the  EPA Office of Inspector General that identified challenges with, or made  recommendations for improving, EPA’s management of discretionary  grants. In addition, we interviewed officials in OGD, ORD, the Region 3  Office, and the Region 9 Office about how they manage and make  information publicly available on discretionary grants.
We conducted this performance audit from December 2015 to January  2017 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.
section_title: Appendix III: EPA Discretionary Grant Programs
paragraphs: This appendix displays the inventory of 67 active discretionary grant  programs EPA developed from its program descriptions in the Catalog of  Federal Domestic Assistance (CFDA). For each program, table 8 shows  the CFDA number, title, EPA program or regional office responsible for  managing the program, and whether the program has an exemption from  competition (i.e., the program is not subject to EPA’s competition policy).
section_title: Appendix IV: Additional Results from Our Analysis of EPA Data on Discretionary Grants, Fiscal Years 2013–2015
paragraphs: This appendix displays results from our analysis of EPA data on  discretionary grants awarded from fiscal years 2013 through 2015. Tables  9 through 11 show the dollar amounts for the different types of new  awards subject to the competition policy, by type of grantee. Table 12  shows the dollar amounts for new awards made as exemptions from  competition (i.e., not subject to EPA’s competition policy), by type of  grantee. Tables 13 through 15 show the dollar amounts of the different  types of amendments to awards, by type of grantee. Table 16 shows the  number of unique grantees receiving two or more new awards, by type of  grantee, in fiscal years 2013, 2014, and 2015. Tables 17 and 18 show the  combined dollar amounts for all new awards and amendments, by  Catalog of Federal Domestic Assistance (CFDA) number and title, in  order of total dollars and CFDA numbers, respectively.
section_title: Appendix V: Comments from the Environmental Protection Agency
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Janet Frisch (Assistant  Director), Enyinnaya David Aja, Emily Christoff, Ellen Fried, Cindy Gilbert,  Chad M. Gorman, Mitchell Karpman, and Jeanette Soares made key  contributions to this report.
section_title: Related GAO Products
paragraphs: Grants Management: EPA Could Improve Certain Monitoring Practices.  GAO-16-530. Washington, D.C.: July 14, 2016.
Grants Management: EPA Has Opportunities to Improve Planning and  Compliance Monitoring. GAO-15-618. Washington, D.C.: August 17,  2015.
Environmental Protection Agency: Progress Has Been Made in Grant  Reforms, but Weaknesses Remain in Implementation and Accountability.  GAO-06-774T. Washington, D.C.: May 18, 2006.
Grants Management: EPA Has Made Progress in Grant Reforms but  Needs to Address Weaknesses in Implementation and Accountability.  GAO-06-625. Washington, D.C.: May 12, 2006.
Grants Management: EPA Needs to Strengthen Efforts to Provide the  Public with Complete and Accurate Information on Grant Opportunities.  GAO-05-149R. Washington, D.C.: February 3, 2005.
Grants Management: EPA Needs to Better Document Its Decisions for  Choosing between Grants and Contracts. GAO-04-459. Washington,  D.C.: March 31, 2004.
Grants Management: EPA Needs to Strengthen Efforts to Address  Management Challenges. GAO-04-510T. Washington, D.C.: March 3,  2004.
Grants Management: EPA Needs to Strengthen Oversight and Enhance  Accountability to Address Persistent Challenges. GAO-04-122T.  Washington, D.C.: October 1, 2003.
Grants Management: EPA Needs to Strengthen Efforts to Address  Persistent Challenges. GAO-03-846. Washington, D.C.: August 29, 2003.
Environmental Protection Agency: Problems Persist in Effectively  Managing Grants. GAO-03-628T. Washington, D.C.: June 11, 2003.
Major Management Challenges and Program Risks: Environmental  Protection Agency. GAO-03-112. Washington, D.C.: January 1, 2003.