Evaluative Review of Assistance Agreements

EPA is conducting desk and on-site reviews of the financial management and internal control systems of federal assistance agreement recipients to help them more effectively manage their Agency grants and cooperative agreements. These reviews are not intended to be audits, but should improve the outcome of any audits conducted in the future. To date, nationally, these reviews have identified several common areas for improvement:

1. Supporting Documentation: Recipients need to document and maintain sufficient information on assistance agreement implementation. For example, travel authorizations funded through the EPA assistance agreement need to provide sufficient justification for the travel and must be signed by the approving official; time sheets need to reflect actual hours worked and delineate the hours worked on federal and non-federal projects.
2. Tracking of Multiple Grants and/or Sources of Funding: Recipients with multiple assistance agreements and/or sources of funding need to have accounting systems that produce financial records that delineate the various funding sources, whether federal or non-federal.
3. Written Policies and Procedures: Recipients need to have written policies and procedures for procurement, travel, training, payroll, and time and attendance funded in part or in total by the assistance agreement.
4. Internal Controls: Recipients need to have internal policies and procedures that involve checks and balances. For example, there should be a segregation of the various duties related to the assistance agreement (in effect, the approval official is not the same person as the accounts payable official, etc.).

By following these suggestions, recipients of federal assistance agreements can help to ensure that any audit of their grant or cooperative agreement will have a good outcome.