EPA Oversight Hampered by Funding Gap, Watchdog Tells Lawmakers

The EPA’s inspector general raised concerns to House lawmakers Wednesday that his office can’t adequately track the tens of billions of dollars flowing into the agency from the infrastructure and climate laws under its current funding.

The comments from Sean O’Donnell and two other agency inspectors general come as some congressional Republicans’ concerns that the Biden administration is frittering away taxpayer dollars and increasing the national debt.

“Over the past two years, your federal government has been spending taxpayers’ dollars like it was Monopoly money,” said Rep. Morgan Griffith (R-Va.), chair of the House Energy and Commerce Oversight and Investigations Subcommittee.

But Rep. Kathy Castor (D-Fla.), the panel’s top Democrat, countered that funding from the infrastructure and climate bills is crucial to protect the environment and grow the economy. Rep. Diana DeGette (D-Colo.) said that, despite the financial risks of pushing billions of dollars out the door quickly, the risk of doing nothing is unacceptable.

Broadly, O’Donnell and the other inspectors general pointed to shortcomings in their offices’ ability to oversee government spending. O’Donnell said he wasn’t asking Congress for new money, but “to actually use the money that’s already been given to pay for that independent audit.”

Rep. Michael Burgess (R-Texas) questioned why the inspectors general say they need more money “to make sure that the people in the agencies don’t rob the taxpayer of further dollars.”

“You can’t make this stuff up,” he said. “It’s like a Franz Kafka novel.”

Paltry Funding for EPA Oversight

The infrastructure law (Public Law 117-58) poured more than $60 billion into the Environmental Protection Agency’s coffers, but only a tiny share of that funding was set aside for the EPA’s Office of Inspector General, O’Donnell told the lawmakers.

The climate law (Public Law 117-169) didn’t provide any funding for O’Donnell’s office, meaning it hasn’t been able to do “any meaningful oversight” of the $41.5 billion sent to the EPA.

The inspector general has also had to pause new hiring and cancel or delay work in key areas like chemical safety and pollution cleanup, O’Donnell said.

“The equation of an agency that is dispensing an unprecedented infusion of dollars, times the large number of recipient organizations struggling with capacity issues, equals an extraordinarily high risk for fraud, waste, and abuse,” O’Donnell said.

Some risks he identified include the mismanagement of funds, noncompliance with funding requirements, and failure to meet program goals.

The climate bill poses a greater risk of waste, fraud, and abuse than the infrastructure law because it creates more new EPA programs and lasts until fiscal 2031, O’Donnell said.

For example, he pointed to the EPA’s new Office of Environmental Justice and External Civil Rights. The offices brought together to form that office formerly had a budget of $12 million, but the program must now manage $3 billion.

Success Stories

O’Donnell discussed some areas where the inspector general and the EPA are working together to improve oversight, such as a partnership to make sure contractors, subcontractors, and grant recipients understand they must make truthful, complete, and accurate statements about their work.

The watchdog is also teaming up with the agency to ensure that contract and grant recipients know they face criminal and civil charges if they violate their agreements, according to O’Donnell. He further said his office is starting to review the financial statements of the EPA’s state revolving funds for the first time in 15 years.

During the same hearing, Teri Donaldson, inspector general at the Department of Energy, said her office has historically been underfunded.

The infrastructure and climate bills created 71 new programs at the agency, pushing funding through “untested processes and newly designed and untested internal controls,” Donaldson said.

On Tuesday, three House Republican committee chairs sent a letter to EPA Administrator Michael Regan asking for information about the agency’s plans to spend the huge influx of funding it got under the infrastructure and climate bills.