Six government and non-profit organizations who received $26.3 million in funding for a diesel-reduction program misspent more than 90 percent of funds, the Environmental Protection Agency's (EPA) Office of Inspector General (OIG) said in an audit review report released Monday.
Paid for by the stimulus law, the Diesel Emissions Reduction Act (DERA) program was designed to reduce truck emission and create jobs, and underwent EPA audits over the past couple years, where they found "significant financial management issues," reported Free Beacon.
Four of the six recipients "did not meet all the objectives of the award," or Recovery Act requirements, and five of the recipients "did not have a financial management systems that applied to the grant award," according the OIG report.
This led to the questioning of $23.8 million of the $26.3 million in grants awarded under the agreements in 2009, said the OIG.
The entirety of a $9 million grant to the non-profit Cascade Sierra Solutions was reportedly wasted, said Free Beacon, as Cascade "did not install verified emission control technologies on pre-2007 model year trucks," resulting in the vehicles failing to meet emission requirements.
"Our audits reported that, in some cases, recipients misunderstood requirements of the cooperative agreement awards; or, in the haste of completing projects within the Recovery Act deadlines, guidance was not adequately communicated or documented to the recipient," said the OIG.
While Cascade did purchase the trucks with their allocated funds, they did not retrofit them as required by the reward, and cited approval from the EPA project officer to retrofit them at a later date.
"However, the communication cited by Cascade does not provide the project officer's approval for the purchase," said the OIG report, further stating, "as of the report date of September 4, 2012, Cascade had yet to retrofit the pre-2007 model-year trucks."
When the company closed earlier this year, it was more than $19 million in debt to banks and creditors and had received in excess of $60 million in grants from the federal government, reported Free Beacon.
The OIG report stated that the EPA has so far recovered only $1.8 million from Cascade.
The entirety of the $8.9 million allocated to the state-run California Air Resources Board was also questioned when they failed to "scrap or re-manufacture replaced locomotive engines" as agreed, also failing to achieve significant reductions in diesel emissions.
EPA audits additionally questioned the entire $2.9 million allocated to the non-profit Railroad Research Foundation, the entire $1.6 million given to the Tennessee Department of Transportation, and $1.4 of the $1.9 million given to Grace Hill Settlement House.
The OIG report concluded that "the EPA should issue additional guidance and improve oversight to ensure that completed activities achieve planned emission reductions and that the activities are reported accurately."
