Grants Management: EPA Has Opportunities to Improve Planning and Compliance Monitoring
Released: 2015-09-17T00:00:00

Letter

Background

EPA’s 2009–2013 grants management plan contained five strategic goals that addressed weaknesses we identified in our 2006 grants management report related to: (1) demonstrating achievement of environmental results; (2) fostering a high-quality grants-management workforce; (3) enhancing the management process for grants policies and procedures; (4) standardizing and streamlining EPA’s grants management processes; and (5) leveraging technology to strengthen decision making and Across the five strategic goals, the plan increase public awareness.outlined 17 performance goals with targeted levels of performance or timeframes to hold agency officials accountable for achieving results (see table 1).

EPA is currently developing a 5-year plan for 2016–2020. Similar to its 2009–2013 plan, EPA’s draft plan also addresses five strategic goals: (1) maintaining an effective grants management policy, (2) streamlining grants management procedures, (3) fostering a high-quality grants management workforce, (4) ensuring transparency and demonstrating results, and (5) evaluating grants management performance (see app. III).

As we have previously found, in developing new initiatives, agencies can benefit from following leading practices for strategic plans.GPRA was enacted to improve Federal program effectiveness and public accountability, among other purposes, and established a system for agencies to set goals for program performance and to measure results.

In 1993, The statutory framework for performance management in the federal government was updated with the GPRA Modernization Act of 2010 (GPRAMA). OMB’s Circular A-11 provides guidance to agencies on how to prepare these plans in accordance with GPRA and GPRAMA requirements. We found that these requirements also can serve as leading practices at lower levels within federal agencies, such as planning for individual divisions, programs, or initiatives. We identified 17 leading practices related to strategic planning and selected 4 based on their applicability to (1) program-level strategic planning, (2) the content of the plan rather than the planning process, and (3) grants management. See table 2 for selected leading practices in federal strategic planning.

EPA Met Few Performance Goals in Its 2009–2013 Grants Management Plan for Various Reasons

Of the 17 performance goals in its 2009–2013 grants management plan, EPA fully met 2, partially met 6, and did not meet 1, according to our review of EPA grants management performance data. EPA did not measure its progress for the remaining 8 performance goals, according to OGD responses to our standard set of questions.

EPA made the most progress toward achieving the performance goals under its strategic goals of standardizing and streamlining the grants business process and enhancing the management process for grants, according to our review of EPA data, planning documents, and OGD responses to a standard set of questions. Specifically, under its strategic goal of standardizing and streamlining the grants business process, EPA fully met 2 of its 6 performance goals—share of grants awarded in a timely manner and share of eligible dollars and awards that were competitively awarded. EPA partially met 3 other performance goals under this strategic goal—share of expired grants closed out in a timely manner, reduction in the amount of unexpended expired funds, and share of applications processed in a timely manner—because it met its performance goal for many, but not all of the years from 2009-2013.

In addition, EPA partially met 2 of its 3 performance goals—reviewing guidance for consistency and completing a comprehensive guidance manual—under its strategic goal of enhancing the management process for grants policies and procedures. EPA partially met these performance goals because it completed the activities under both goals but missed the deadline in its grants management plan for these goals by 2 years and 4 Finally, EPA partially met its goal of migrating its IT years, respectively.system to a governmentwide grants management system. Specifically, EPA analyzed system alternatives but did not implement a new system by the March 2012 deadline in the GMP.

In addition, EPA did not meet 1 performance goal—preparing a long-term training plan—under the strategic goal of fostering a high-quality workforce. According to OGD officials, OGD determined that it did not have available resources to develop a long-term training plan. However, OGD reported that it took steps to mitigate any negative effect by implementing new training tools, such as webinars, online training, and lectures to meet the agency’s needs and provide more efficient and flexible methods for a changing training environment.

For the remaining 8 performance goals, which span all five strategic goals, EPA did not measure its performance. Specifically, EPA did not measure its performance for

2 performance goals under its strategic goal of demonstrating achievement of environmental results,

2 of the 3 performance goals under its strategic goal of fostering a high-quality grants management workforce,

1 of the 3 performance goals under its strategic goal of enhancing the management process for grants policies and procedures,

1 of the 6 performance goals under its strategic goal of standardizing and streamlining the grants business process, and

2 of the 3 performance goals under its strategic goal of leveraging technology to strengthen decision making and increase public awareness.

Table 3 shows the status of EPA’s 17 performance goals and our assessment of whether they met, partially met, or did not meet the goal.

EPA officials provided five reasons why, for 15 of the 17 performance goals, the agency either did not measure (8), partially met (6), or did not meet (1) goals. These five reasons included redirected resources, process delays, IT constraints, budget constraints, and errors requiring rework (see app. II for more detail).

Redirected resources. According to OGD responses to our standard set of questions, of the 8 performance goals not measured, EPA did not measure 5 because it redirected some of its grants management resources to managing American Recovery and Reinvestment Act of 2009 (ARRA) funds. Under ARRA, EPA more than doubled its grants awards from $3.7 billion in fiscal year 2008 to $9.8 billion in 2009. Although ARRA provided EPA with additional funds to manage these grants, the EPA OIG found that the additional workload for ARRA activities impacted non-ARRA work. According to OGD responses to a standard set of questions, for all 5 performance goals, EPA had to redirect resources from implementing its grants management plan to meet additional requirements under ARRA. For example, EPA typically monitors key aspects of grants annually, but for ARRA grants, EPA required routine monitoring every 90 days to support ARRA quarterly reporting requirements and required more in- depth monitoring twice a year, according to an agency assessment of EPA’s ARRA activities.

Of the 5 performance goals that EPA did not measure, 2 addressed increasing the share of state workplans and progress reports consistent with EPA’s environmental results directives (OGD responses show that budget constraints were also a factor); 2 addressed increasing staff satisfaction with EPA’s performance appraisal system and available IT tools; and 1 addressed increasing the share of grants management staff with performance plans that include grants management (OGD responses show that budget constraints were also a factor).

Process delays. For 4 performance goals that EPA either partially met (3) or did not measure (1), OGD responses to our standard set of questions and supporting documents indicate that it was because the activities took longer than expected. For example, 1 performance goal was for EPA to migrate its IT system to a governmentwide grants management system by March 31, 2012. OGD responses and documented analysis of EPA’s IT systems show that the agency partially met this performance goal because the systems EPA initially identified either did not meet its needs or were too expensive. As a result, the agency had to identify and analyze alternative systems, which led to EPA missing its 2012 deadline. Delays in approving and revising policies also caused EPA to partially meet 2 performance goals related to its strategic goal of enhancing the management process for grants policies and procedures, according to OGD responses to our standard set of questions. For the performance goal that EPA did not measure, OGD responses state that the agency did not measure its performance goal for improving training timeliness because approving policies took longer than expected.

IT constraints. According to OGD responses to our standard set of questions, EPA did not measure (2) and partially met (1) of its performance goals because of IT constraints. Specifically, EPA did not measure the share of grants that receive routine monitoring annually because its IT system could not sufficiently track the variation in due dates for individual awards. In addition, EPA did not measure its performance goal to increase the share of certain state and tribal grants offered via Grants.gov because the website could not handle the increased demand during ARRA implementation, according to OGD responses and supporting documents. EPA partially met its performance goal to reduce unexpended expired funds because EPA officials said that their IT system could not produce accurate data for the end of the fiscal year in 2013.

Budget constraints. EPA partially met 1 performance goal and did not meet 1 goal due to budget constraints, according to OGD responses to our standard set of questions and supporting documents. Specifically, EPA partially met its goal to improve the share of expired grants closed in a timely manner because it redirected resources from closing grants due to furloughs associated with sequestration, according to OGD responses and supporting documents. EPA did not meet its performance goal to develop a long- term training plan because the agency determined that it did not have the resources to do so, according to OGD responses and budget data. For example, OGD’s workforce decreased from 79 full-time equivalent staff in 2009 to 71 full-time equivalent staff in 2013.

Errors requiring rework. EPA officials said that EPA partially met its performance goal to increase the share of applications processed in a timely manner, because errors in processing application packages required the agency to rework several packages. According to EPA officials and agency workload analyses, in some cases, these errors resulted from a large workload for staff who also managed ARRA grants. In other cases, staff that had a small grants management workload made errors because they were not familiar with policy and IT requirements. These officials said that the complexity of some grant projects was also a factor.

For five performance goals, EPA and OGD reported that not meeting or not measuring the goals did not affect EPA’s grants management activities because the agency either mitigated the potential negative effect of missing the performance goal, or the negative effect was minimal, according to our analysis of OGD responses and supporting documents (see app. II). For example, EPA reported that it mitigated the potential effect of missing EPA’s performance goal to increase the share of grants management staff whose performance plans include grants management. Specifically, EPA determined that it could build staff’s grants management activities into their performance by providing staff managers with (1) additional performance guidance and (2) individual and agency-level grants management performance data for comparison, according to OGD responses and EPA performance guidance documents.

For another performance goal, to mitigate the effect of not measuring staff satisfaction with an IT application, EPA addressed the low ratings of the IT application’s operation in its 2010 baseline survey by adding more user-friendly features, such as a web-based reporting tool, according to OGD responses to our standard set of questions, and an internal memorandum. For its performance goal of developing a long-term training plan, EPA mitigated negative effects of missing its goal by implementing new training tools such as webinars, online training, and lectures to meet the agency’s training needs and provide more efficient and flexible methods for a changing training environment, according to OGD responses and training documents. EPA’s actions are consistent with our March 2004 guidance for assessing training, which states that agencies should modify their efforts to fit their unique circumstances and conditions.

For the other two performance goals, the effect of not measuring them was minimal, according to our review of OGD responses to our standard set of questions. Specifically, EPA did not measure employee satisfaction with its performance appraisal system, which likely had a minimal effect on grants management activities. Similarly, for its performance goal to increase the share of expired grants closed out in a timely manner, EPA missed the target in 2013 by less than 1 percent, which also likely had a minimal effect on grants management.

However, for 10 performance goals, our review of OGD responses to our standard set of questions and supporting documents found negative effects of the agency not measuring or partially meeting them, as follows:

Limited the agency’s data on compliance. For three performance goals, not measuring them led to the absence of agencywide data on compliance with directives intended to ensure that grant funds achieve the desired results of protecting human health and the environment, according to OGD responses to our standard set of questions and supporting documents. Specifically, because of ARRA demands and budget constraints, EPA did not measure its two performance goals to increase grant recipients’ workplans and progress reports consistent with EPA’s environmental results directive, according to OGD responses and agency planning documents. Additionally, although EPA collects real-time data on compliance with routine monitoring requirements, because of IT constraints, EPA did not measure its performance goal on the share of grants that receive routine monitoring annually on a cumulative basis, according to OGD responses. As a result, EPA does not have a complete picture of its compliance with certain directives—directives that are designed to ensure that funds are used appropriately and achieve the desired results. EPA planning documents indicate the agency plans to review state workplans and progress reports in fiscal year 2017, and EPA officials said that they are looking into capturing annual data on compliance with routine monitoring requirements.

Inefficient processes. For two performance goals, not measuring or partially meeting them led to less efficient processes remaining in place, according to OGD responses to our standard set of questions and supporting documents. For example, EPA did not establish a baseline or measure its performance goal on the share of certain state and tribal grants offered via Grants.gov, according to OGD responses. Consequently, some applicants continued to apply for these grants by e-mail or on paper, according to OGD responses and policy documents. Additionally, EPA partially met its performance goal to migrate its IT system to a governmentwide grants management system, which led to EPA’s continued use of an IT system that EPA IT analyses state is aging, inefficient and, in some cases, requires data entry in multiple databases to document a single action. According to these analyses, these inefficient processes result in a greater workload for a grants management workforce that is already strained.

Limited access to information. For two performance goals, partially meeting them led to limited access for grants managers to accurate information on grants management directives, according to OGD responses to our standard set of questions. First, EPA partially met its performance goal to develop comprehensive guidance (i.e., a single manual containing all current guidance on grants management policies) but not by 2009. Specifically, agency documents show that EPA’s comprehensive guidance manual was last substantially updated in 1988, and sections of the manual were out of date. Although EPA issued a series of policy updates on EPA’s website, these updates were not part of the manual.they communicated changes as they happened through EPA’s internal website; however, OGD responses recognize that not having comprehensive guidance negatively affected grants managers’ Agency officials said that timeliness in processing grants. In 2013, EPA integrated and updated all of its guidance online, providing grants managers access to up-to- date information on changing grants requirements, according to OGD responses and an internal memorandum. Second, EPA partially met its performance goal to review all of its guidance for consistency by 2011 and 2012, because it did not complete its review until 2013. As part of its review, EPA policy documents show that the agency identified 25 cases in which its policy updates were incorrect and included obsolete or redundant policies. Therefore, because EPA did not meet this goal in a timely manner and, until it completed its review, identified errors, and corrected its guidance, grants managers did not have readily available, accurate information.

Delayed process for awarding grants. In another instance, partially meeting its performance goal for increasing the share of applications processed in a timely manner increased the amount of time it took for EPA to provide funding to recipients, according to OGD responses to our standard set of questions and performance data. As a result, from 2010 to 2013, EPA did not process grant application packages (commitment notices) within its 60-day target for an additional 10 percent of EPA applications, according to EPA performance data.

Delayed training and policy implementation. According to OGD responses to our standard set of questions and EPA policy and training documents, EPA did not measure its performance for improving the timeliness of training and, in some instances, EPA provided training to grants management officials for a new policy after the policy was already in effect. This was not consistent with EPA’s grants management plan that called for EPA to offer training on new policies at least 4 weeks prior to implementing them. Although EPA officials said that the negative effect in these cases was minimal because the grant workload in October was low, without training prior to these policies’ effective dates, EPA does not have reasonable assurance that grants management officials applied the policies consistently from the dates that they went into effect. In addition, EPA policy documents show that, in some cases, EPA delayed the implementation of new policies designed to simplify and streamline the grants process for recipients to accommodate the training schedule. Because of these delays, recipients could not immediately benefit from these policy improvements as originally planned, according to OGD responses to our standard set of questions and supporting documents.

Inefficient use of grant funds. EPA could not confirm whether it met its performance goal for reducing unexpended expired funds in 2013 and was $900,000 from meeting its goal in early September 2013. According to EPA’s OIG, unexpended expired funds are missed opportunities for EPA and grant recipients to efficiently fund projects and efforts that meet EPA’s mission of protecting human health and the environment.

EPA’s 2016–2020 Draft Grants Management Plan Partially Follows Selected Leading Practices for Federal Strategic Planning but Omits Key Information

As of May 2015, EPA’s November 2014 version of its draft 2016–2020 grants management plan partially follows four selected leading practices for federal strategic planning that we identified from prior GAO work and OMB guidance (see table 4). EPA officials said that they designed their 2016–2020 plan to be more high-level than the 2009–2013 plan so that it would be more flexible and adaptive to changing circumstances, such as legislation that changes EPA priorities. For example, unlike some of the objectives in the 2009–2013 plan, EPA does not prescribe how the agency should meet the objectives in its draft 2016–2020 plan, to give the agency discretion in choosing the most efficient implementation method, according to EPA officials and our analysis of the draft plan.

As shown in table 4, our analysis of EPA’s draft plan indicates that, as of May 2015, it partially incorporated four leading planning practices relevant to grants management:

Define the mission and goals. EPA’s draft plan partially follows this leading practice in that it defines five strategic goals, which explain the grants management program’s purpose and the results that the agency intends to achieve. However, as of May 2015, the agency does not yet link these goals to an overarching mission statement. According to leading strategic management practices, a mission statement explains why the program exists, what it does, and how. We have previously found that a mission statement forms the foundation for a coordinated, balanced set of strategic goals and performance measures. Agency officials said that EPA has not yet incorporated a mission statement into its draft plan because the agency is awaiting stakeholder agreement on the underlying framework but that it plans to do so. Ensuring that its plan has a mission statement could help EPA better establish a framework to guide effectively the agency’s overall vision for grants management.

Define strategies and identify resources needed to achieve goals. EPA’s draft plan partially follows this leading practice because it includes strategic objectives, but as of May 2015, the plan does not yet define strategies that address management challenges, include milestones for significant activities, or identify the resources necessary for the agency to achieve its strategic goals. We have previously found in leading federal strategic planning practices that it is particularly important for agencies to define strategies that address management challenges that may threaten their ability to meet long- term goals and include a description of the budgetary and human resources, actions, and time frames needed to meet these goals. EPA officials said that they would discuss the resources needed to achieve their goals but had not considered including a discussion of resources in their draft plan. By also including in its draft plan strategies for addressing the management challenges facing the agency and the resources needed to achieve its goals, EPA could better ensure that its staffing and funding are sufficient to achieve those goals. The agency could also better prepare for future changes in workload or funding—problems that we found had constrained the agency in the past.

Ensure leadership accountability. EPA’s draft plan partially follows this leading practice in that one of the strategic goals is dedicated to evaluating the agency’s performance at managing its grants, which incorporates a degree of accountability into the plan. According to leading federal strategic planning practices, successful organizations use formal and informal practices to hold managers accountable and create incentives for working to achieve the agency’s goals. However, as of May 2015, the other four goals in the draft plan do not yet include mechanisms to hold EPA managers accountable for achieving the agency’s goals. For example, in 2012, we found that EPA had ensured leadership accountability for its environmental justice strategic plan by giving senior administrators lead responsibility for implementing the plan, and incorporating relevant environmental justice measures in its annual national program guidance. By including mechanisms to hold managers accountable for the other four strategic goals, EPA will be better positioned to ensure that the grants program achieves its goals.

Develop and use performance measures. EPA’s draft plan partially follows the leading practice to develop and use performance measures in that it has 11 performance measures but, as of May 2015, only one performance measure has a measurable or numeric target associated with it. According to leading practices, performance measures gauge the agency’s progress toward its mission and strategic goals. They provide information on which the agency can base decisions and create incentives that influence organizational and individual behavior. We have previously found that one of the key attributes for successful performance measures is a measurable target and that such measurable targets could challenge the agency to improve its results. According to agency officials, EPA is planning to develop more measurable targets as part of an annual priority planning process but, at the time of this report, that effort was not yet complete.

As of May 2015, the draft 2016–2020 plan provides a road map that builds on EPA’s progress standardizing and streamlining the grants management process since 2009 and may help the agency continue to work toward the goals set out in the 2009–2013 plan. We have previously found that a primary purpose of federal strategic planning is to improve federal agency management.practices for federal strategic planning, EPA could have better assurance that it has established a framework to effectively manage and assess efforts to accomplish its grants management strategic and performance goals, without reducing the plan’s flexibility, and that may help the agency address its long-standing grants management weaknesses.

EPA Has Made Some Progress Monitoring Its Compliance with Grants Management Directives Agencywide but Faces Two Key Challenges

EPA has made some progress monitoring its compliance with seven selected postaward grants management directives—such as those dealing with compliance, review, and monitoring, and achieving environmental results from EPA grants—agencywide, but it continues to face two key challenges. Specifically, since our 2006 report, OGD has begun monitoring more grants management directives agencywide through its IT systems, such as tracking unexpended grant funds and grantees’ timely submission of reports. However, two key challenges hamper EPA’s efforts to monitor directives agencywide: (1) most of its regional offices rely on paper files and (2) its IT systems have limited reporting and analytical capabilities.

Since 2006, OGD has developed the ability to monitor EPA’s compliance with certain requirements in its grants management directives electronically. For example, EPA has been monitoring administrative activities of grant recipients, unexpended grant funds, and whether grant recipients have submitted their final reports on time. As part of this monitoring, OGD tracks the number of grants for which program officers and grants specialists completed routine annual monitoring, as well as the percentage of grants that received such monitoring against the agency’s performance goal. OGD tracks this information in real time, which provides a snapshot of routine annual monitoring activities. Additionally, OGD monitors the number, dollar amount, and percentage of total unspent grant funds for headquarters and all EPA regions. OGD tracks the percentage of grantees’ final technical reports received in a given fiscal year and compares it to the agency’s performance goal. OGD officials also electronically review and verify certain administrative monitoring actions, such as the percentage of closed-out grants for a given calendar year.

However, EPA faces two key challenges in its agencywide monitoring efforts. First, 8 of its 10 regional offices document their compliance with grants management directives in paper files, according to EPA officials.

One additional regional office uses electronic record-keeping for interagency agreements, but not for grants. with grants management directives generally requires paper file reviews, which agency officials described as resource-intensive. As a result, EPA officials told us that they deferred some planned compliance reviews due to budget constraints. According to EPA officials, the agency recognizes that paper records are outmoded and plans to transition to electronic records management, but the officials did not provide a timetable for completing this transition. EPA officials stated that EPA headquarters is currently using an electronic grant records system, three regions have agreed to develop electronic grant records systems, and EPA is encouraging the remaining regions to adopt such systems; however, according to OGD officials, the remaining regions are unable to do so due to budget constraints. Second, we found that limitations in OGD’s IT systems’ reporting and analysis capabilities mean that the systems do not produce comprehensive, agencywide summary information for most of the directive requirements we reviewed. This prevents managers from comparing actual performance to expected results agencywide and analyzing significant differences consistent with the federal standards for internal control.

In 2009 and 2011, EPA deployed two web-based reporting systems to pull certain information from its databases for analysis; however, as of June 2015, EPA used these tools to monitor 8 percent (17 of 212) of its requirements. OGD officials stated that they have the capability to use their current web-based tools more broadly. However, they have not done so. According to OGD officials, their process for determining which requirements to track agencywide using these web-based tools is to follow the measures in their grants management plan, as well as to take into account the results of OIG and GAO audits. In addition to the limited agencywide information, OGD’s IT systems require staff to manually review information entered into the database to ensure its accuracy and completeness for most of the requirements (117 of 212) in the seven management directives we reviewed. However, such manual reviews are not consistent with federal standards for internal control, which call for control activities specific for information systems, including computerized edit checks built into the system to review the format, existence, and reasonableness of data (e.g., accuracy and completeness).

According to EPA officials, the agency currently plans to adopt an updated grants management system by 2017, and it is transitioning to the new system in phases that correspond to the grants lifecycle. The agency’s 2016 draft grants management plan incorporates IT system improvements suggested in a 2014 study of EPA’s grants management process. As part of its plans for an updated grants management system, EPA has included establishing a single official electronic file to house all grant information for each individual grant. However, EPA has planned to update its grants management IT system since its 2009 plan but has not yet done so. According to EPA officials, analyzing IT alternatives took longer than they expected and they had to reprioritize their grants management activities due to the additional workload required under ARRA. Nonetheless, agency officials said that the IT system that they plan to implement will save the agency $27 million.

In the meantime, however, EPA has limited information on its agencywide compliance with certain grants management directives intended to provide internal controls over how funds are used and how results are obtained. Better monitoring of agencywide compliance with these directives through electronic record-keeping and using its existing web- based tools more effectively could help EPA better meet federal standards for internal control and help ensure that funds reach grantees quickly, are used appropriately, and achieve the desired results of protecting human health and the environment.

Conclusions

EPA has developed several strategies for addressing its past challenges managing the roughly several billion dollars it distributes each year in grants to help protect human health and the environment. EPA incorporated these strategies into its 2009–2013 plan and made some progress toward achieving its strategic goals. To build on its progress, EPA has developed a draft 2016–2020 grants management plan which, as of May 2015, partially follows several leading strategic planning practices but has not yet included certain key elements, such as defining strategies that address management challenges that may threaten EPA’s ability to meet long-term goals and identifying the resources, actions, and time frames needed to meet these goals. We recognize that EPA is designing its draft 2016–2020 plan to be more flexible and adaptable to changing circumstances to address some of the constraints that prevented the agency from meeting all of its 2009–2013 plan goals. Nonetheless, our past work shows that incorporating more leading practices into the final plan could provide EPA with reasonable assurance that it has established a framework to effectively guide and assess efforts to accomplish its grants management goals, without reducing its flexibility. Doing so could also help EPA address long-standing grants management weaknesses, such as tracking environmental results. Since the draft plan is still under development, EPA has the opportunity to incorporate more of these selected leading practices into the final plan.

EPA has made progress monitoring its compliance with certain grants management directives agencywide, yet the two key challenges it faces— dependence on paper files and limitations in its IT systems—continue to hamper its ability to monitor certain requirements agencywide. EPA plans to transition to electronic records management for all 10 of its regional offices, but it does not have a timetable for doing so, and some regional offices have not implemented electronic records management due to budget constraints. EPA also currently plans to adopt an updated grants management system by 2017, and it has incorporated addressing potential IT improvements as part of its draft 2016–2020 plan. However, EPA has had similar plans to improve its IT system since 2009 but has not done so because the systems the agency initially identified either did not meet its needs or were too expensive, resulting in a need to identify and analyze alternative systems. In the meantime, EPA has made limited use of its existing web-based tools for analyzing and reporting agencywide compliance, in part because it has focused its analytical efforts on the measures in its grants management plan. By using existing web-based tools more effectively until it implements its new IT system, EPA can better monitor agencywide compliance with grants management directives.

Recommendations for Executive Action

We recommend that the EPA Administrator direct OGD to take the following four actions: Incorporate all leading practices in federal strategic planning relevant to grants management as it finalizes its draft 2016–2020 grants management plan, such as defining strategies that address management challenges that may threaten the agency’s ability to meet long-term goals and identifying the resources, actions, and time frames needed to meet these goals.

Develop a timetable with milestones and identify and allocate resources for adopting electronic records management for all 10 regional offices.

Implement plans for adopting an up-to-date and comprehensive IT system by 2017 that will provide accurate and timely data on agencywide compliance with grants management directives.

Until the new IT system is implemented, develop ways to more effectively use existing web-based tools to better monitor agencywide compliance with grants management directives.

Agency Comments and Our Evaluation

We provided a draft of this product to EPA for comment. In its written comments, reproduced in appendix IV, EPA generally agreed with our findings and recommendations, with the following exceptions.

With respect to our recommendation that EPA implement plans for adopting an up-to-date and comprehensive IT system by 2017 that will provide accurate and timely data on agencywide compliance with grants management directives, EPA agreed with the recommendation except with the 2017 completion date. EPA said that the agency will need time to prioritize which grants management directives requirements to include in the system, which IT approaches to take, and to identify resources through the budget process. EPA said that implementation is therefore likely to extend beyond 2017. The 2017 completion date is based on an EPA internal planning document, which stated that the agency currently plans to adopt an updated grants management system by 2017. We also note that EPA had difficulty meeting its deadlines from its 2009–2013 Grants Management Plan. We continue to believe that EPA should implement an up-to-date and comprehensive IT system as expeditiously as possible to improve agencywide oversight of the several billions of dollars the agency distributes each year.

EPA also disagreed with our conclusion that long-standing grants management weaknesses continue to exist, such as tracking environmental results, and that EPA, with the concurrence of the OIG, eliminated long-standing grants management as a material or agency weakness in 2007. The grants management weaknesses referenced in our conclusions are issues that the OIG found since EPA issued its 2009– 2013 grants management plan and not those material or agency weaknesses that were eliminated in 2007. We continue to believe this conclusion is valid.

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If you or your staff members 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 V.

Appendix I: Objectives, Scope, and Methodology

This report examines (1) the extent to which the Environmental Protection Agency (EPA) met the performance goals in its 2009–2013 grants management plan; (2) the extent to which EPA’s 2016–2020 draft grants management plan follows selected leading practices for federal strategic planning; and (3) the progress, if any, EPA has in made in monitoring compliance with grants management directives agencywide.

To examine the extent to which EPA met the performance goals in its 2009–2013 grants management plan, we reviewed the plan. We collected data and requested responses from the Office of Grants and Debarment (OGD) for a standard set of questions on EPA’s progress in achieving its 17 performance goals, including officials’ explanations of effects, if any, from not meeting these goals and steps EPA took to mitigate the reported effects. We compared OGD responses with supporting documentation provided by agency officials, such as policies, internal briefings, EPA analyses of its information technology systems, and other documents. As part of OGD responses, OGD officials provided data on the performance goals EPA measured, which we reviewed. To assess the reliability of the data, we compared EPA data against supporting documents provided by agency officials and determined that the data were sufficiently reliable for our reporting purposes. For one performance goal, EPA could not provide accurate data as of the end of fiscal year 2013, so we used EPA-reported data through September 3, 2013, which we note in the report. We also interviewed OGD management and staff.

To examine the extent to which EPA’s 2016–2020 draft plan follows leading practices for federal strategic planning, we reviewed the draft plan We then identified that agency officials provided from November 2014.leading practices from the Government Performance and Results Act of 1993 as enhanced by the GPRA Modernization Act of 2010 (GPRAMA), Office of Management and Budget (OMB) guidance, and prior GAO work. We have previously reported that strategic planning requirements at the federal department/agency level and practices identified by GAO can also serve as leading practices for planning at lower levels within federal agencies, such as individual programs or initiatives. We identified 17 leading practices related to strategic planning and selected 4 based on their applicability to (1) program-level strategic planning, (2) the content of the plan rather than the planning process, and (3) grants management. Based on these selection criteria, we excluded 9 practices because they overlapped with other practices, excluded 2 practices because they focused on process rather than the plan’s content, and excluded 2 others because they were not relevant to grants management or program-level strategic planning. We then compared the draft plan EPA officials gave us from November 2014 with these 4 selected leading practices. We assessed the extent to which the draft plan followed each of the elements of these four practices, and interviewed EPA officials involved with the draft plan.

To examine EPA’s progress in monitoring compliance with grants management directives agencywide, we identified 24 management directives that help EPA implement relevant statutes, regulations, and EPA policies and procedures. Nine of these directives were relevant to the areas where we had previously identified weaknesses, such as ongoing monitoring of grant activities, tracking environmental results, and timely grant closeouts. We selected 7 of those 9 grants management directives. We excluded the other 2 directives because they applied to nonprofit and tribal grant recipients and therefore did not apply to most grant recipients. From these 7 directives, we selected 212 requirements that involved (1) the completion of tasks, (2) the content of tasks, (3) the documentation of tasks, and (4) EPA’s review of tasks. We excluded the remaining directive requirements because they are not the responsibility of OGD and exist outside of EPA’s grants management databases or official grant files. We then compared the 212 requirements to the requirements tracked in EPA’s agencywide grants management systems. Specifically, we examined the requirements in EPA’s Integrated Grants Management System (IGMS) and Grantee Compliance Database and in its web-based State Grant IT Application. We also evaluated the information in the two web-based systems that EPA uses to pull data from IGMS for analysis, Datamart and Quikreports.

We conducted this performance audit from November 2014 to August 2015 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.

Appendix II: GAO Analysis of EPA Progress Against Its 17 Performance Goals

Tables 5 through 9 show the Environmental Protection Agency’s (EPA) progress against the performance goals in its 2009–2013 grants management plan. These tables incorporate Office of Grants and Debarment’s (OGD) responses to our standard set of questions on its progress against the 17 performance goals in its 2009–2013 grants management plan. We provided these questions to OGD officials to complete, including officials’ explanations of effects, if any, from not meeting these goals and steps EPA took to mitigate the reported effects. We compared OGD responses with supporting documentation provided by agency officials, such as policies, guidance, EPA analyses of its information technology (IT) systems, and other documents.

Appendix III: EPA’s 2016 Draft Grants Management Plan

Tables 10 through 14 show the Environmental Protection Agency’s (EPA) objectives and performance measures in its draft 2016–2020 grants management plan, as of November, 2014.

Appendix IV: Comments from the Environmental Protection Agency

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the individual named above, Michael Hix (Assistant Director), Elizabeth Curda, Ellen Fried, Cindy Gilbert, Thomas James, Jerry Leverich, Benjamin Licht, Gary Mountjoy, Jonathan Munetz, Alison O’Neill, Kiki Theodoropoulos, and Lisa Van Arsdale made key contributions to this report.