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 Drinking Water State Revolving Funds, Section 1452 of the SDWA created an annual cycle of accountability in the DWSRF program. States are required, for the life of the DWSRF program, to submit a biennal report to EPA that communicates performance over the past two years. EPA conducts an annual review of each states’ 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 DWSRF program. EPA is modifying its annual review checklist to ensure compatibility with ARRA requirements.
Section 1452(g)(4) also requires States to annually conduct a financial audit of the DWSRF fund accounts, through the Single Audit Act and for most States, through an independent program audit. These audits test a state’s financial management system in place and can also provide reports on the internal controls and compliance of each DWSRF 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 DWSRF program (1997) 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 DWSRF 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 DWSRF 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, 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.