Why We Did This Report
The U.S. Environmental Protection Agency Office of Inspector General performed this audit to determine whether the EPA’s annual appropriations and Infrastructure Investment and Jobs Act, or IIJA, funds in the Clean Water State Revolving Fund, or CWSRF, Program are at risk from procurement fraud related to construction bidding processes.
Summary of Findings
Federal dollars flowing through the CWSRF Program are at risk of procurement fraud in the construction bidding process. This risk primarily stems from two factors. First, the CWSRF Program’s structure as a partnership between the EPA and the states means that the states are primarily responsible for administering the state-level programs and projects. Second, the Uniform Guidance provides that loans from a pass-through entity to a subrecipient, such as loans made under a state revolving fund program, are not subject to the procurement standards.
