New Report from OIG Highlights Noncompliance in Clean Water and Drinking Water SRFs

A new report released by EPA’s Office of Inspector General (OIG) on September 14 summarized OIG’s findings from a review of external audits of nonfederal entities, such as states, local governments, and tribes, that spent EPA grant funds from 2019 through 2021. The review found seven areas of frequent noncompliance with applicable federal laws, regulations, and program requirements. The report concluded that the majority of the 364 instances of noncompliance were associated with the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund, at 135 and 120 instances respectively. Most compliance issues were within seven different areas: procurement, suspension, and debarment; reporting; allowable costs/cost principles; cash management; activities allowable or unallowable; special tests and provisions; and subrecipient monitoring.

The Agency stressed the importance of this review, stating that with “the expected and significant increase of [ Infrastructure Investment and Jobs Act] funds slated to be given to the EPA and subsequently awarded as grants to nonfederal entities, it is important that the EPA monitors grant recipients to ensure that goods and services are acquired in accordance with federal laws, regulations, and terms and conditions of the awards.”