406 Dirksen EPW Hearing Room

James M. Inhofe


Good morning. I want to open this hearing thanking our witnesses in advance for their testimony. The Committee will receive testimony this morning regarding grants management at the Environmental Protection Agency. Each year the EPA awards over half its annual budget in grants to various recipients including state, local, and tribal governmental entities, education institutions, non-profit organizations, and others. Historically, the EPA has awarded over $4 billion in grants each year for the past several fiscal years. The majority of grants are awarded to governmental entities for implementation of environmental programs. As a former mayor I can appreciate the availability of funds to local governments to pay for local implementation of federal programs designed to ensure such benefits as water pollution control and maintaining air quality. Last year my hometown, the City of Tulsa, Oklahoma received about $3 million from the EPA for such projects as implementation of air quality standards and city water supply security.

The mission of the EPA is to protect human health and the environment. I believe that grants to local recipients can be one of the best tools to accomplish that mission. However, the EPA Inspector General, the General Accounting Office, and the Office of Management and Budget have consistently criticized the EPA for persistent problems in grants management. The OMB and EPA IG recommended as recently as 2002 that the agency designate grants managements as a material weakness, which is the most severe category of weakness under the Federal Managers Financial Integrity Act. For nearly the last 10 years, the EPA has even acknowledged that grants management has been a weakness which to me proves that his should be a non-partisan issue. These problems have persisted regardless of changes in Administration.

This Committee has an obligation to ensure that the EPA budget is consistent with its mission of protecting human health and the environment. One week from today, EPA Administrator Mike Leavitt will testify before this committee concerning the fiscal year 2005 EPA budget. Most importantly, however, the EPA has an obligation to ensure taxpayers that it is accomplishing its mission with the funds it awards each year. However, for at least the last 10 years, the story of grants management is seemingly a revolving door of EPA IG audits and GAO reports, congressional hearings, and new EPA policies in response. Even with this constant cycle of criticism, hearings, and new policies; the GAO reported late last year that the EPA continues to demonstrate the same persistent problems in grants management. These problems include a general lack of oversight of grantees, a lack of oversight of agency personnel, a lack of any measurement of environmental results, and a lack of competition in awarding grants. It is imperative that agency personnel are accountable for monitoring grants and that measurable environmental results are clearly demonstrated. Interestingly, the GAO characterized changing part of the deficiencies in the last 10 years of grants management as requiring a “major cultural shift” at the EPA. I realize GAO was specifically referring to implementing a new competition policy in awarding grants. However, it appears that a major cultural shift is only the beginning of a number of reforms needed to create the culture of accountability to which you, Mr. O’Connor, refer in your testimony that is necessary within the agency for new and effective grants management.

I want to announce to all of you today that this Committee is going to take its oversight responsibilities seriously in regards to grants management. We are going to stay on top of this issue until real changes are made.