Administration of Title III Grant Funds by Water Resources Council

Published by the Government Accountability Office on 1971-07-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                   UNITED STATES GENERAL
                                              WASHlNGTbN,     D C.

                                                                                   Jut.3 Qnn

                   Dear Mr. Maughan'

                          The General Accounting Office has examined Into selected
                   aspects of the Title    III Grant Program admlnlstered    by the Water
                   Resources Council CWRC).     Our  survey included  an  examination of
                   selected State appllcatlons    and was performed at the WRC Central
                   Office In Washlngton, D.C.

                          Section 301 of the Water Resources Planning Act of 1965 author-
                   lzed annual approprlatlons      of $5 mi llion     to WRC for planning   grants
                   for fiscal    years 1967 through 1976. These funds are to be allotted
                   by the WRC as grants to States, on a 50 percent matching basis, to
                   assist them In developing      and partlclpatlng      1.n comprehensive  water
                   and related    land resources plans.       Since lnceptlon    of the program in
                   fiscal   year 1967, through fiscal       year 1971, funds amountlng to
                   $12.5 million     have been approprlatb1      by the Congress to carry out
                   the provisions     of the grant program.

                           The stated purposes of the Title        III program are to encourage
                   (1) State partlclpatlon       In Federal-State       comprehensive  water and
                   related    land resources planning,       (2)  State   preparation  of plans In
                   light of reglonal      and national    plans, and (3) State tralnlng         of per-
                   sonnel, where necessary,        to develop technical       planning capablllty.

                           WRC issued rules and regulations         In November 1966 setting     forth
                   the guldellnes        that States should follow      In making appllcatlon    for
                   the Title      III funds.    The guidelines     stated that non-Federal    funds
                   ellglble     for matching Federal funds granted under Title           III would be
                   llmlted    to the increased expenditures         of non-Federal   funds above the
                   expenditure       for the l&month period endlng June 30, 1965--base year
                   costs.     The guidelines       lndlcated  that once established,     the base
                   level of expenditures         for such period was intended to remain as the
                   base for calculating        non-Federal    funds ellglble    for matching,

                         During 1967, WRCadvised the States at the time It conveyed
                   approval    for their lnltlal appllcatlon for flnanclal assistance
                   under the act that

                               'I* * * the intent of Title   III,  also, 1s to enhance
                               State capability   In comprehensive    water and related
                               land resources planning.     Thus, Federal-or   State-
                               matching funds under Title    III should not be utilized

                                            50 TH ANNiVERSAfYf       1921_ 1971
             for the services of consultants      or for transfer  to
             Federal agencies or local governments       for data-
             gathering    or planning actlvltles,   to an extent that
             would impalr the development of State planning

       During the period June 1969 through January 1971, the Department
of the Interior       issued 26 audit reports          to the WRC on the results          of  H
thezr examination        of grants made to States under the Title                III program,
Chr analysis      showed that for 18 of the 26 reports,               the auditors    raised
qu'estlons on the following           matters      Eleven instances      mvolvmg       the
base year costs totaling            $738,000; 3 instances      involving      the extensive
use of consultants         totaling     $339,000; and 8 instances        lnvolvlng    cer-
tam types of expenditures             included    by States for matchrng purposes
totalmg      $387,000.      The remalnlng      eight audit reports       indicated    that
the grant funds received            by these States had been expended In
compliance with applicable            WRCpolicies      and procedures.

     Examples of the matters          questioned    by the Interior      audit   reports
are as follows-

      1. A report issued In April 1970 on the Louislana            Department
         of Public Works indicated         that the agency had entered Into
         three research agreements with the Gulf South Research
         Institute.      The three agreements amounted to $238,800 and
         constituted      67.7 percent of the total amount $352,252
         expended by the State under the WRC approved State aug-
         mented planning programs.           The auditors  concluded that
         little     is being done with Title      III funds to develop in-
         house State planning       capabIlity    in the State of Louisiana.

      2. A report   issued in December 1969 on the Kentucky Department
         of Natural Resources rndlcated    that (1) contractual    services
         costing $252,560 could not be related       to WRC grant program,
         (2) personal service costs in the amount of $8,300 were not
         adequately    supported, and (3) equipment acqulsltlons     of
         $3,307 had not been adequately    disclosed    to WRC.

         In response to our inquiry         as to what action had been taken on
the audit findings       submitted by Interror,        we were informed by WRC
offlclals      that no further    actlon 1s contemplated        with respect to pro-
viding     additional  instructrons       for use in clarlfylng      either  the base
year expenditures      or the subsequent year expenditures.              The reason
offered     was that the grant program has only 5 years remaining               under
the Water Resources Planning Act of 1965. With respect to the con-
tinued use of consultants         by certain     States, we were advised that the
WRC's action has been limited           to bringing     this matter to the
attention      of the States in question.

      We did note that the WRC had taken steps to improve                  the overall
admlnlstration   of the Title III program.
       Fzrst, WRC established        in June 1970         ee Liaison Teams--Eastern,
Central,     and Western.      The Liaison   Teams' r sponslbilltles         with
respect to the Title        III program are.       (1) ri eep Informed of grant pro-
grams in their regions,         (2) become acquainted       with each State's water
and related     land resources planning       activities,      (3) assist in the
coordination      of State and Federal water and pelated             land planning
programs, and (4) report          to the WRC Committee for State grants con-
cerning any problems, conflicts,           or opportunities       for improvement in
water and related       land resources planning with Federal grants.

       Second, WRC established     the posltlon     of Regional Leader during
February 1971. One of his duties will be to maintain contact with
designated    State water planning     agencies and provide guidance to the
States in making application       for Title    III funds.

         In summary, we believe       that the actlons taken to establish                  the
Liaison     Teams and the position         of the Regional       Leader     are steps      m
the right direction.          We believe,       however, that there is a need for
criteria     for use in determining          the eligible      expenditures        that States
can claim under the matching provisions                 of the Water Resources Plan-
ning Act of 1965. Moreover, we believe                  that the questions           raised by
the auditors      are significant       and should be satisfactorily               resolved.
It appears to us that WRC is administering                  the Title     III program
inequitably      as long as some States have included questionable
expenditures      in the determination,          while other States' expenditures
have complied with WRC policy.               In this regard, we believe              that if
any revisions       are made to the criteria          for determining         eligible
expenditures      under the Title       III program, consideration              should be
given to whether such changes are to be prolective                     or retroactive.

      We acknowledge the cooperation    given to our representatives
during the survey.    We would appreciate    being advised of any actions
taken or contemplated   on the matter discussed herein.

                                                  Sincerely    yours,

Mr. W. Don Maughan
Director, Water Resources           Council