EPA has awarded  these grants primarily to nonprofit organizations, universities, and  government entities. EPA Faces Four Key Grants Management Challenges, Despite Past Efforts to Address Them

We identified four key challenges that EPA continues to face in managing  its grants. These challenges are (1) selecting the most qualified grant  applicants, (2) effectively overseeing grantees, (3) measuring the results of  grants, and (4) effectively managing grant staff and resources. In the  past, EPA has taken a series of actions to address these challenges by,  among other things, issuing policies on competition and oversight,  conducting training for project officers and nonprofit organizations, and  developing a new data system for grants management. However, these  actions had mixed results because of the complexity of the problems,  weaknesses in design and implementation, and insufficient management  attention. EPA has not selected the most qualified applicants despite issuing a  competition policy. New Policies and Plan Show Promise but Require Strengthening, Enhanced Accountability, and Sustained Commitment to Succeed

EPA’s recently issued policies on competition and oversight and a 5-year  grants management plan to address its long-standing grants management  problems are promising and focus on the major management challenges,  but these policies and plan require strengthening, enhanced  accountability, and sustained commitment to succeed. EPA’s competition policy shows promise but requires a major cultural  shift. These activities will require significant  planning and take more time than awarding grants noncompetitively. EPA’s December 2002  policy makes important improvements in oversight, but it still does not  enable EPA to identify systemic problems in grants management. For the first time,  EPA plans a coordinated, integrated approach to improving grants  management. In implementing this plan, however, EPA faces challenges to enhancing  accountability. While EPA’s new 5-year grants management plan shows  promise, given EPA’s historically uneven performance in addressing its  grants management challenges, congressional oversight is important to  ensure that the Administrator of EPA, managers, and staff implement the  plan in a sustained, coordinated fashion to meet the plan’s ambitious  targets and time frames. To ensure that EPA’s recent efforts to address its grants management  challenges are successful, in our August 2003 report, we recommended  that the Administrator of EPA provide sufficient resources and  commitment to meeting the agency’s grants management plan’s goals,  objectives, and performance targets within the specified timeframes. Furthermore, to strengthen EPA’s efforts we recommended  incorporating appropriate statistical techniques in selecting grantees for  in-depth reviews; requiring EPA staff to use a standard reporting format for in-depth reviews  so that the results can be entered into the grant databases and analyzed  agencywide;   developing a plan, including modifications to the grantee compliance  database, to use data from its various oversight efforts—in-depth reviews,  significant actions, corrective actions taken, and other compliance  information—to fully identify systemic problems, inform grants  management officials of areas that need to be addressed, and take  corrective action as needed;   modifying its in-depth review protocols to include questions on the status  of grantees’ progress in measuring and achieving environmental outcomes; incorporating accountability for grants management responsibilities  through performance standards that address grants management for all  managers and staff in headquarters and the regions responsible for grants   management and holding managers and staff accountable for meeting  these standards; and   evaluating the promising practices identified in the report and  implementing those that could potentially improve EPA grants  management.
Why GAO Did This Study

The Environmental Protection Agency (EPA) has long faced problems managing its grants, which constitute over one-half of the agency's annual budget, or about $4 billion. EPA uses grants to implement its programs to protect human health and the environment and awards grants to thousands of recipients, including state and local governments, tribes, universities, and nonprofit organizations. EPA's ability to efficiently and effectively accomplish its mission largely depends on how well it manages its grants resources. This testimony, based on GAO's August 2003 report Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges, GAO-03-846 , focuses on the (1) major challenges EPA faces in managing its grants and how it has addressed these challenges in the past, and (2) extent to which EPA's recently issued policies and grants management plan address these challenges.

What GAO Found

EPA continues to face four key grants management challenges, despite past efforts to address them. These challenges are (1) selecting the most qualified grants applicants, (2) effectively overseeing grantees, (3) measuring the results of grants, and (4) effectively managing grant staff and resources. In the past, EPA has taken a series of actions to address these challenges by, among other things, issuing policies on competition and oversight, conducting training for project officers and nonprofit organizations, and developing a new data system for grants management. However, these actions had mixed results because of the complexity of the problems, weaknesses in design and implementation, and insufficient management attention. EPA's recently issued policies and a 5-year grants management plan to address longstanding management problems show promise, but these policies and plan require strengthening, enhanced accountability, and sustained commitment to succeed. EPA's September 2002 competition policy should improve EPA's ability to select the most qualified applicants by requiring competition for more grants. However, effective implementation of the policy will require a major cultural shift for EPA managers and staff because the competitive process will require significant planning and take more time than awarding grants noncompetitively. EPA's December 2002 oversight policy makes important improvements in oversight, but it does not enable EPA to identify systemic problems in grants management. For example, the policy does not incorporate a statistical approach to selecting grantees for review so that EPA can project the results of the reviews to all EPA grantees. Issued in April 2003, EPA's 5-year grants management plan does offer, for the first time, a comprehensive road map with objectives, goals, and milestones for addressing grants management challenges. However, in implementing the plan, EPA faces challenges in holding all managers and staff accountable for successfully fulfilling their grants management responsibilities. Without this accountability, EPA cannot ensure the sustained commitment needed for the plan's success. While EPA has begun implementing actions in the plan, GAO believes that, given EPA's historically uneven performance in addressing its grants challenges, congressional oversight is important to ensure that EPA's Administrator, managers, and staff implement the plan in a sustained, coordinated fashion to meet the plan's ambitious targets and time frames.