Recovery.gov - Track the Money

1. ARRA funds will increase the amount of money that is available through State revolving funds to provide assistance to:
i. State or local governments for planning, design, and construction of publicly owned wastewater treatment facilities, to build or rehabilitate sewer collection systems, and control or mitigate stormwater runoff.
ii. Public or private entities for capital projects that address nonpoint source pollution, to the extent those projects are identified in State Nonpoint Source Control Plans (under Section 319 of the Clean Water Act).
iii. Public or private entities for capital projects that address water quality needs, to the extent those projects are identified in Comprehensive Conservation Management Plans by one of the 39 estuary programs recognized under Section 320 of the Clean Water Act.
iv. Entities in i.-iii. for green infrastructure, water and/or energy efficiency, and innovative water quality improvements.
2. ARRA funds will support administration of the 51 SRF programs by the States.
3. ARRA funds will increase the amount of money that is available to DC and the territories through direct grants from EPA for:
i. Planning, design, and construction of publicly owned wastewater treatment facilities, building or rehabilitation of sewer collection systems, and control or mitigation of stormwater runoff.
ii. Public or privately owned capital projects that address nonpoint source pollution, to the extent those projects are identified in District/Territory Nonpoint Source Control Plans (under Section 319 of the Clean Water Act).
4. ARRA funds will provide assistance to Tribes through an interagency agreement with the Indian Health Service (IHS) for the planning, design, and construction of wastewater management and treatment facilities.
5. Support of water quality management planning activities by the States, DC, and the territories and regional planning entities.

Monitoring and evaluation begins from the very start of the process, with review by EPA’s Regional Offices of the grant applications (including the States’ Intended Use Plans) adherence to requirements. EPA has developed an application review checklist to be used by Regional Offices to ensure adherence to the new ARRA requirements. Upon grant award, grant conditions specify the terms and conditions necessary to comply with the underlying statute, the ARRA, regulations, and executive orders. This includes requirements for access to sites and information for compliance auditing purposes as well as reporting requirements specific to the grant.

For the State Revolving Funds, Title VI of the CWA created an annual cycle of accountability in the CWSRF program. States are required, for the life of the CWSRF program, to submit an annual report to EPA that communicates performance over the year. EPA conducts an annual review of each states’ annual report, compliance with grant conditions, and overall operation of the program. Part of that review is transaction testing required to ensure that erroneous payments are not occurring. EPA will conduct transaction testing for ARRA funds equivalent to that performed on the rest of the CWSRF program. EPA is modifying its annual review checklist to ensure compatibility with ARRA requirements.

Title VI of the CWA also requires States to annually conduct an independent financial audit of the CWSRF fund accounts. Those independent audits test a state’s financial management system in place and can also provide reports on the internal controls and compliance of each CWSRF program.

In addition, to ensure fiscal accountability, states require local recipients who expend $500,000 or more of federal funds to submit their federally required “single audit” of their federally funded programs.

This process has been in place since the initiation of the CWSRF program (1987) and states and EPA are adept at conducting the monitoring, reporting, and evaluation process. Each element of this process will apply to the ARRA funding provided through the CWSRF program.

In addition to the annual review process, EPA will collect real-time information on project progress and performance. As a term and condition for each CWSRF capitalization grant, States will be required to report on project progress toward meeting the program goals and requirements established by ARRA. EPA will collect data on resource utilization and project performance through established Agency reporting systems and will post these data at least quarterly on EPA’s Recovery Act web area.

For direct grants and water quality management planning cooperative agreements, post-award monitoring plans are established at the time of grant award. Routine monitoring of compliance with the grant conditions, including independent assessment that expenditures reflect work milestones completed, is part of that post-award monitoring. Site visits by EPA, a contractor, or the Corp of Engineers to review project progress, reporting, and accounting are included for direct grants involving construction.

Transparency
Under the ARRA, tracking begins at the direct recipient level, with information on grant applications received and grants awarded (including $ amount obligated). Once expenditures against those grant awards commence, that data will also be reported at a grant level. This information is being made public in the Weekly Recovery Act Reports which are available on www.epa.gov/recovery.

Under the ARRA, tracking will also be done at the project and sub-recipient levels.

For projects in the 50 States, Puerto Rico, the District of Columbia, and the Territories, EPA will be tracking projects and sub-recipient information in a database historically used by the States to track environmental benefits. EPA will make all project and sub-recipient information captured publicly available. Information known at the time of grant award or assistance agreement (sub-recipient) award will be entered in real time and posted on a monthly basis. Updates on construction starts will be entered in real time and posted monthly. Updates on construction progress will be made and posted quarterly.

For projects on tribal lands, IHS will be tracking projects in their project data system (PDS) and making ARRA reporting data publicly available.

Program performance measures that are not ARRA specific will continue to be reported and made publicly available annually with EPA’s Performance and Accountability Report.

Accountability
The CWSRF program will ensure that the expenditure and monitoring of Recovery Act funds are transparent and that appropriate, qualified staff oversee Recovery Act resources.

Regional managers review and approve grant awards, using the evaluation checklists that have been developed under the ARRA. Under the annual cycle of accountability in the CWSRF program, findings from annual reviews and site visits by Regional staff are reported to Regional management and corrective actions taken. EPA Headquarters provides bi-annual review of Regional oversight, and participates in five State reviews each year. Findings are reported to management, issues elevated quickly to senior leaders, and corrective actions taken. State independent financial audits are reviewed at the Regional and Headquarters level. Questionable findings are investigated. Any issues arising from those investigations are escalated quickly to senior leadership and corrective actions are taken.

In compliance with the Federal Managers’ Financial Integrity Act (FMFIA) EPA’s ongoing management integrity program requires us to develop a multiyear program review strategy, conduct systematic and rigorous assessments of internal controls over our programmatic and financial operations, and report on the effectiveness of those controls in our annual letter of assurance to the Administrator. For FY 2009, we will be addressing the integrity of Recovery Act programs in a separate attachment to our assurance letter, which is due to the Administrator by August 14, 2009.

In addition to our internal reviews, we will rely on audit findings and program evaluation results to inform our assessment and strengthen program accountability.

The oversight process in place for ARRA funding ensures that managers and staff will be held accountable for performance. Senior managers’ performance standards include specific performance measures related to the CWSRF program, and staff’s performance standards contain measures reflecting their role and responsibilities in achieving progress. (During midyear performance reviews, these performance standards and measures are being modified to address Recovery Act-specific goals.)

The CWSRF program is implementing the ARRA to ensure that funds are expended effectively to comply with the intent of the Act to focus on energy efficiency and green building technology. As specified in the ARRA, to the extent there are sufficient eligible project applications not less than 20 percent of the capitalization grant received by states will be used for projects to address green infrastructure, water or energy efficiency improvements or other environmentally innovative technologies. States must certify and EPA must accept the state certification that they did not receive sufficient eligible project applications for projects to address green infrastructure, water or energy efficiency improvements or other environmentally innovative technologies. EPA has provided guidance to the States that on implementation of the green reserve provisions, and is requiring States with insufficient green projects to make a concerted effort to solicit those projects from a wider array of potential recipients for 6 months before the State can certify that it has insufficient applications to fully utilize the reserve. EPA has conducted webcasts for States on the implementation of the green reserve provisions, and is planning webcasts for a broader array of constituencies in the Spring.