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GAO-04-383R 1 (2004-01-30)

handle is hein.gao/gaocrptapwh0001 and id is 1 raw text is: G AO Accountability * Integrity* Reliability United States General Accounting Office Washington, DC 20548 January 30, 2004 The Honorable James M. Inhofe Chairman, Committee on Environment and Public Works United States Senate Subject: Grants Management: EPA Actions Taken against Nonprofit Grant Recipients in 2002 Dear Mr. Chairman: The Environmental Protection Agency (EPA) awards over one-half if its budget, or about $4 billion, annually in grants.' At the end of fiscal year 2002, EPA was providing funding to 4,100 grant recipients, with $245.4 million, or nearly 6 percent of its awarded grant dollars, going to nonprofit grant recipients. Congressional hearings in 1996 and 1999 cited concerns with the grants management capabilities of nonprofit grantees. Specifically, the 1996 hearing raised questions about nonprofit grant recipients' use of federal funds for lobbying. The 1999 hearing cited concerns with the ability of nonprofit grantees to manage their grants,2 because, for example, many nonprofit organizations do not have staff with accounting backgrounds. Often, their grants are too small to be covered under the requirements of the Single Audit Act. In response to such concerns, EPA has included lobbying restrictions in grant agreements, issued guidance and policies on grantee oversight, and has attempted to improve nonprofit grantees' grants management with a 1-day training course and follow-up instructional videotape specifically designed for nonprofit grant recipients. 'Federal financial assistance includes grants, cooperative agreements, loans, loan guarantees, scholarships, and other forms of assistance. For simplicity, we are referring to all financial assistance as grants. 240 C.F.R. Part 30 contains grant management requirements for recipients including nonprofit organizations. 3The Single Audit Act Amendments of 1996, Pub. L. No. 104-156, 110 Stat. 1396 (codified at 31 U.S.C. §§ 7501-7507), requires grantees to have an audit of their financial statements and federal awards or a program specific audit if they spend $300,000 or more in federal awards in a fiscal year. The Office of Management and Budget (OMB), as authorized by the act, increased this amount to $500,000 in federal awards as of June 23, 2003. GAO-04-383R Grants Management

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