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How agencies scale up to oversee infrastructure grants

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The recent interview we had with the project on government oversight for Pogo said agency inspectors general are not prepared to oversee the hundreds of billions of dollars in infrastructure spending coming their way. My next guest disagrees. Katherine Trimble the assistant inspector general for audits at the EPA joined The Federal Drive with Tom Temin.

Tom Temin …

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Best listening experience is on Chrome, Firefox or Safari. Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne.

The recent interview we had with the project on government oversight for Pogo said agency inspectors general are not prepared to oversee the hundreds of billions of dollars in infrastructure spending coming their way. My next guest disagrees. Katherine Trimble the assistant inspector general for audits at the EPA joined The Federal Drive with Tom Temin.

Tom Temin  Before we get into the details here, tell us the connection of EPA and infrastructure because I think people tend to think well, this is all Transportation Department.

Katherine Trimble  Sure, no, thanks for asking that. So really, the connection between infrastructure and the EPA is water, our clean water and our drinking water, our, you know, delivery system sewage systems, what you’ve heard in the news about Flint, Michigan, or Benton Harbor, Michigan communities getting lead in their water, or just the need to upgrade sewage facilities. So things continue to smoothly moving forward.

Tom Temin  And therefore EPA will oversee a significant piece of grant funding to localities that are seeking to upgrade water?

Katherine Trimble  That’s right. So EPA is getting about $60 billion through the infrastructure act, and that’ll be over a five year period. And just for a little bit of context, you know, this is a significant increase over the amount of funding that EPA tends to manage on a daily basis, their budget, you know, for the past number of years has really been about $8 to $9 billion a year. So this additional 60 billion, even over a five year period is a significant increase for EPA and their responsibilities of that 60 billion, about 55 billion will be administered through grants and other assistance agreements to the states, tribes and others. And then about 83% of the funding is allocated for water infrastructure projects that will be administered through the states.

Tom Temin  And you mentioned state and tribal does it get down to say a municipality could apply for these grants, also? Or a county?

Katherine Trimble  Absolutely, so EPA sends the funding to the states, and then the states administer the funding more discretely out to local communities.

Tom Temin  So 83% of 55 billion out of 60 billion then is water?

Katherine Trimble  Correct.

Tom Temin  And either way, it’s a lot more than EPA is used to overseeing and also granting, you know, there’s a big function both on the oversight and the granting originality there. So what does the agency, what are you doing? What do you need to do to gear up? Let’s talk about personnel, first human capital to be able to handle this task?

Katherine Trimble  Sure. So we are you know, both we and the agency are in hiring mode right now, you know, we are hiring folks really across our office, but predominantly in our audit evaluations and investigations groups, to help us conduct the oversight that needs to be done. We are hiring our traditional staff for audit and evaluations and investigations, but also, you know, some specialties, we’ve set aside some room to hire specialists to help us really dig into some of these funding areas where EPA will be concentrated.

Tom Temin  The original grant itself has to be free of original sin if the money is going to be spent correctly down the line.

Katherine Trimble  Right. And so in that regard, we’re planning our oversight in three phases to oversee, you know, this, this funding. And the first phase is really it’s about talking with the agency talking with our other colleagues out there in the oversight community, and planning. So one of the first things we started doing is as far back as last November, in December, was talking with EPA about about their plans for gearing up to manage this funding, we actually our Office of Investigations has been providing fraud awareness briefs to EPA, since starting back in December, and really hearing from them what they feel they need to do. I mean, EPA, to its credit is aware of this is a lot you know, and they realize they really need to step up to, you know, manage this historic amount of funding they’re getting. So really just talking about their plans and the risks involved. And to that extent, we’re providing lessons learned. So right now we’re going back through our reports from the past, again, across audit evaluation and investigations and pulling together, what can we remind EPA about deficiencies in the past that they need to remember, as they move forward to administer these grants and other assistance agreements?

Tom Temin  We’re speaking with Katherine Trimble, she’s assistant inspector general for audits at the EPA. So you have to have the human capital, both on the granting end and on the auditing post grant end to make sure that everything is done right. What about procedures, data systems, other capacity outside of people that you might need to make sure these grants are spent correctly?

Katherine Trimble  Right. This is part of you know, the grants lessons learned that we’re pulling together for the agency. We know, to the point you raise about workforce, we know that EPA has struggled with some grant workforce issues in the past, getting the right people into the right position, making sure they’re trained, making sure they know what their requirements are. And then systems. We’ve actually issued a report just recently looking back at the CARES Act, but looking at calling out deficiencies within EPA’s Grants Management System, and its ability to have the right information available to the right people at the right time. Further, we are one of the few, if not the last one left of the OIGs, that directly does the financial statement audit for the organization for the agency we oversee. And we have a lot of information through our financial statement audit work to, you know, again, remind EPA of related to its financial systems, and, you know, what it needs to do and what it needs to remember to be able to track this funding carefully, accurately moving forward.

Tom Temin  And are the requirements in these grants that the localities that receive them have to do regular reporting on what’s going on? So you know, who they spend money with, in terms of, say, contractors to know that they are legitimate?

Katherine Trimble  Yes, those are traditional requirements that go out through grant awards. And typically it works, you know, we do a lot of work in that area going in and looking at OK, did this recipient ultimately provide the reporting it was supposed to provide to document that? Yes, it’s spent the funds as intended and got the intended outcomes. So we do, we do have existing mechanisms that we’ll continue to use moving forward. I also would mention, you know, the OMB guidance that came out in April on effective stewardship of infrastructure resources, you know, is telling federal agencies, reminding them that they need to be prepared to collect data down to the sub-award Level. So you know, we talked about EPA grants that go out to the states. Well you can’t just stop at the money you gave to the states, you need to be able to continue that oversight down to what we refer to as the sub-recipient. But that’s the community that receives, say, those funds to upgrade its sewer system. We need to be able to track all the way down to that level to make sure that we’ve realized the intended results of that funding. That would be information that we’d be interested in tracking. And we do do work in that area to looking at you know, ultimately, where did the communities put this money. And if it wasn’t a contract, you know, were those contracts, meeting the required terms. That is all on the table that kind of gets into, I mentioned our three phases of oversight. Some of that, you know, there’s the upfront making sure EPA and the intended recipients know what to do on the back end, you know. Grants can be alive for a very long time. But we’ll be there at the end as these grants are being closed out to go in and really look and make sure did these recipients provide the sufficient documentation to show that they spent the funds as intended and again, achieved the intended outcomes.

Tom Temin  It strikes me there’s a couple of things you have to look at, they could get the intended outcome, and the water is good, and the pipes are good and so forth. But they might have blown way too much money getting there. On the other hand, they could spend exactly to the penny that they should have, yet, the water is still dirty at the end. So you really have more than one simple criterion for judging whether the money was in fact used correctly.

Katherine Trimble  Absolutely, yes.

Tom Temin  And what about the EPA itself on the grant making side, which is not the Inspector general’s office, but EPA, water part division? Are they also staffing up to be able to handle the volume of grant making that they’ll have to make again to prevent that original sin that you’ll find later in auditing?

Katherine Trimble  Yeah, absolutely. EPA is very much in the throes of, as many across the federal government are, with the infrastructure act. In the throes of of hiring and increasing its staff to make sure that it can perform the oversight it needs to.

Tom Temin  Katherine Trimble is the Assistant Inspector General for audits at the EPA. Hey, thanks so much for joining me.

Katherine Trimble  Tom, thanks so much for having us on. It was a pleasure talking with you.

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