Nanotechnology encompasses a wide range of innovations based on the understanding and control of matter at the scale of nanometers—the equivalent of one-billionth of a meter. To illustrate, a sheet of paper is about 100,000 nanometers thick and a human hair is about 80,000 nanometers wide. At the nanoscale level, materials may exhibit electrical, biological, and other properties that differ significantly from the properties the same materials exhibit at a larger scale. Exploiting these differences in nanoscale materials has led to a range of commercial uses and holds the promise for innovations in virtually every industry from aerospace and energy to health care and agriculture. In 2006, an estimated $50 billion in products worldwide incorporated nanotechnology and this figure has been projected to grow to $2.6 trillion by 2014. One research institute estimates that over 500 consumer products already available to consumers may contain nanoscale materials. The National Nanotechnology Initiative (NNI) was established in 2001 as a federal, multiagency effort intended to accelerate the discovery, development, and deployment of nanoscale science, engineering, and technology to achieve economic benefits, enhance the quality of life, and promote national security. Management of the NNI falls under the purview of the National Science and Technology Council (NSTC) that coordinates science and technology policy across the federal government. The NSTC is managed by the Director of the Office of Science and Technology Policy (OSTP), who also serves as the Science Advisor to the President. The NSTC’s Committee on Technology established the Nanoscale Science, Engineering, and Technology (NSET) subcommittee to help coordinate, plan, and implement the NNI’s activities across participating agencies. In 2003, the NSET subcommittee further established a Nanotechnology Environmental and Health Implications (NEHI) working group. The purpose of the NEHI working group, composed of representatives from 16 research and regulatory agencies, is to, among other things, coordinate agency efforts related to EHS risks of nanotechnology. Similar to the NNI, the NEHI working group has no authority to mandate research priorities or to ensure that agencies adequately fund particular research. In December 2003, Congress enacted legislation to establish a National Nanotechnology Program to coordinate federal nanotechnology research and development. Among other things, the act directs the NSTC to establish goals and priorities for the program and to set up program component areas that reflect those goals and priorities. To implement these requirements, the NSTC has established a process to categorize research projects and activities undertaken by the various federal agencies into seven areas. Six of the seven focus on the discovery, development, and deployment of nanotechnology, while the seventh relates to the societal dimensions of nanotechnology that include issues such as the EHS risks of nanotechnology. As part of the annual federal budget process, agencies also report their research funding for each area to OMB. The NNI’s annual Supplement to the President’s Budget, prepared by the NSTC, includes EHS research figures from the agencies and a general description of the research conducted by the agencies in each of the areas. For reporting purposes, the NSET subcommittee has defined EHS research as efforts whose primary purpose is to understand and address potential risks to health and to the environment posed by nanotechnology. Eight of the 13 agencies that funded nanotechnology research in fiscal year 2006 reported having devoted some of those resources to research that had a primary focus on potential EHS risks. Under the NNI, each agency funds research and development projects that support its own mission as well as the NNI’s goals. While agencies share information on their nanotechnology-related research goals with the NSET subcommittee and NEHI working group, each agency retains control over its decisions on the specific projects to fund. While the NNI was designed to facilitate intergovernmental cooperation and identify goals and priorities for nanotechnology research, it is not a research program. It has no funding or authority to dictate the nanotechnology research agenda for participating agencies. The NNI used its fiscal year 2000 strategic plan and its subsequent updates to delineate a strategy to support long-term nanoscale research and development, among other things. A key component of the 2000 plan was the identification of nine specific research and development areas— known as “grand challenges”—that highlighted federal research on applications of nanotechnology with the potential to realize significant economic, governmental, and societal benefits. In 2004, the NNI updated its strategic plan and described its goals as well as the investment strategy by which those goals were to be achieved. Consistent with the 21st Century Nanotechnology Research and Development Act, the NNI reorganized its major subject categories of research and development investment into program component areas (PCA) that cut across the interests and needs of the participating agencies. These seven areas replaced the nine grand challenges that the agencies had used to categorize their nanotechnology research. Six of the areas focus on the discovery, development, and deployment of nanotechnology. The seventh, societal dimensions, consists of two topics—research on environmental, health, and safety; and education and research on ethical, legal, and other societal aspects of nanotechnology. PCAs are intended to provide a means by which the NSET subcommittee, OSTP, OMB, Congress, and others may be informed of the relative federal investment in these key areas. PCAs also provide a structure by which the agencies that fund research can better direct and coordinate their activities. In response to increased concerns about the potential EHS risks of nanotechnology, the NSET subcommittee and the agencies agreed in fiscal year 2005 to separately report their research funding for each of the two components of the societal dimensions PCA. The December 2007 update of the NNI’s strategic plan reaffirmed the program’s goals, identified steps to accomplish those goals, and formally divided the societal dimensions PCA into two PCAs—”environment, health, and safety” and “education and societal dimensions.” Beginning with the development of the fiscal year 2005 federal budget, agencies have worked with OMB to identify funding for nanoscale research that would be reflected in the NNI’s annual Supplement to the President’s Budget. OMB analysts reviewed aggregated, rather than project-level, data on research funding for each PCA to help ensure consistent reporting across the agencies. Agencies also relied on definitions of the PCAs developed by the NSET subcommittee to determine the appropriate area in which to report research funding. Neither NSET nor OMB provided guidance on whether or how to apportion funding for a single research project to more than one PCA, if appropriate. However, representatives from both NSET and OMB stressed that the agencies were not to report each research dollar more than once. About 18 percent of the total research dollars reported by the agencies as being primarily focused on the study of nanotechnology-related EHS risks in fiscal year 2006 cannot actually be attributed to this purpose. Specifically, we found that 22 of the 119 projects funded by five federal agencies were not primarily related to studying EHS risks. These 22 projects accounted for about $7 million of the total that the NNI reported as supporting research primarily focused on EHS risks. Almost all of these projects—20 out of 22—were funded by NSF, with the two additional projects funded by NIOSH. We found that the primary purpose of many of these 22 projects was to explore ways to use nanotechnology to remediate environmental damage or to identify environmental, chemical, or biological hazards not related to nanotechnology. For example, some NSF- funded research explored the use of nanotechnology to improve water or gaseous filtration systems. Table 1 shows our analysis of the nanotechnology research projects reported as being primarily focused on EHS risks. We found that the miscategorization of these 22 projects resulted largely from a reporting structure for nanotechnology research that does not easily allow agencies to recognize projects that use nanotechnology to improve the environment or enhance the detection of environmental contaminants, and from the limited guidance available to the agencies on how to consistently report EHS research. From fiscal years 2001 to 2004, the NSET subcommittee categorized federal research and development activities into nine categories, known as “grand challenges,” that included one focused on “nanoscale processes for environmental improvement.” Agencies initiated work on many of these 22 projects under the grand challenges categorization scheme. Starting in fiscal year 2005, NSET adopted a new categorization scheme, based on PCAs, for agencies to report their nanotechnology research. The new scheme eliminated the research category of environmental improvement applications and asked agencies to report research designed to address or understand the risks associated with nanotechnology as part of the societal dimensions PCA. The new scheme shifted the focus from applications-oriented research to research focused on the EHS implications of nanotechnology. However, the new scheme had no way for agencies to categorize environmentally focused research that was underway. As a result, NSF and NIOSH characterized these projects as EHS focused for lack of a more closely related category to place them in, according to program managers. Furthermore, neither NSET nor OMB provided agencies guidance on how to apportion the dollars for a single project to more than one program component area, when appropriate. This is especially significant for broad, multiphase research projects, such as NSF’s support to develop networks of research facilities. Of the five agencies we reviewed, only NSF apportioned funds for a single project to more than one PCA. In addition to research reported to the NNI as being primarily focused on the EHS risks of nanotechnology, some agencies conduct research that is not reflected in the EHS totals provided by the NNI either because they are not considered federal research agencies or because the primary purpose of the research was not to study EHS risks. For example, some agencies conduct research that results in information highly relevant to EHS risks but that was not primarily directed at understanding or addressing those risks and therefore is not captured in the EHS total.