The EPA made three times as many improper grant payments than it reported last fiscal year, according to a report issued Wednesday by the agency’s internal watchdog.
The Office of Inspector General said the Environmental Protection Agency should have reported at least $71.3 million in improper grant payments in fiscal 2019, but only reported $22.5 million.
In a study of 20 grants, an additional $571,469 in grant payments was unaccounted for, the OIG said it found.
Improper payments includes those to ineligible parties, for goods or services that either weren’t received or aren’t eligible, duplicate payments, and payments so poorly documented that a reviewer couldn’t tell whether they were proper.
The problems arose because the EPA’s reviewers either weren’t properly trained or didn’t follow the agency’s standard operating procedure, according to the report.
One EPA supervisor told the OIG that no staffers at the agency’s Las Vegas finance center received additional training for fiscal 2019 beyond what they received for fiscal 2018, other than two “informal ‘lessons learned’ sessions conducted internally.”
The agency’s error rate should have been at least 3.97%, rather than the 1.25% it reported in fiscal 2019, according to the report.
No Fraud, Misconduct Found
The OIG investigators didn’t find any evidence of fraud or misconduct, Khadija Walker, director of contracts and assistance agreements audits at the OIG, said in an interview.
Those questions were outside the scope of the audit, but the OIG would have flagged them for further review had they surfaced, Walker said.
In many cases, payments were deemed improper because receipts were submitted without supporting evidence detailing what they were for, said Patrick McIntyre, an auditor on Walker’s team.
The EPA did follow the Improper Payments Elimination and Recovery Act, a 2010 statute that requires agencies to estimate the improper payments they make each year, the OIG said.
The agency said it had acted to fix the problems in April 2019, including annual training for grant reviewers. The OIG said it hadn’t reviewed those fixes and wouldn’t be able to until its fiscal 2020 audit.
The EPA also said the OIG’s estimate of $571,469 in improper payments was drawn from preliminary data that agency staff hadn’t itself checked for quality.
Separately, the OIG found in March that the EPA had given inaccurate information to Congress about its grant awards, potentially influencing lawmakers’ spending and policy decisions.
As of September 2019, the EPA had $8.3 million in unspent balances for grants that expired one year or more earlier, the watchdog said.
“The real problem is that the money is sitting out there, and it’s on expired grants,” Madeline Mullen, the report’s project manager, said in March.