EPA Has $3 Million Tied Up With Contractors Who Aren’t Doing Anything

$583,875 set aside for purchases on contracts that have had 'no activity in the last 18 months'

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April 11, 2016

The Environmental Protection Agency has nearly $3 million tied up with contractors that have not done any work for the agency in a year and a half, according to a new audit.

The agency’s inspector general analyzed multiple unnecessary contracts that taxpayer dollars are still being obligated towards.

"We performed this audit to determine whether the U.S. Environmental Protection Agency (EPA) has adequate controls in place to identify and deobligate unneeded contract, purchase and miscellaneous obligations (such as training, settlement agreements, transit subsidies, and non-competitive sources—utilities); and to determine the potential dollar amount of obligations that could be deobligated," the audit said. "An unliquidated obligation can be described as an obligation or liability that has not been outlaid, expended, or liquidated."

"If the final payment request has been received and the obligation is fully satisfied, the obligating official should request a deobligation of any remaining funds in the agency’s financial system

The audit identified $583,875 set aside for purchases on contracts that have had "no activity in the last 18 months," and estimated an additional $2,962,058 could be saved through closing other contracts.

"When the EPA does not deobligate unliquidated obligations timely, the funds cannot be used for other EPA environmental activities that would benefit human health and the environment," the inspector general said.

The inspector general said the EPA "did not adequately review or monitor outstanding obligations" on contracts. It is against agency guidelines to not restructure contracts that have had no activity for six months.

"Consequently, the EPA was unable to reprogram unneeded funds to other environmental activities that could result in benefits for human health and the environment," the inspector general said.

Audits over the past several years have found similar problems with the EPA’s contract oversight.

In November 2014, the inspector general identified unnecessary funds totaling $4.4 million, and another audit found over $200 million meant for local drinking water improvements sitting idle.

"The report found that the EPA and the five states reviewed took many actions to reduce Drinking Water State Revolving Fund [unliquidated obligation] ULO balances, but those actions had not reduced the fund’s ULO balances to the goal of 13 percent of cumulative federal capitalized grants awarded," the inspector general said of the audit, completed in July 2014. "As a result, $231 million of capitalization grant funds remained idle, loans were not issued, and communities were not able to implement needed drinking water improvements."

The EPA is under fire for its handling of the water crisis in Flint, Michigan.

The inspector general recommended the agency review all of its contracts that have had no activity in a year and a half. The EPA agreed with the recommendations, and said it began using a new database last June that more effectively tracks contracts with unliquidated obligations.

Published under: Government Waste