Environmental Protection Agency--Inspector

B-262110 Mar 19, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Environmental Protection Agency (EPA) should have used a procurement contract rather than a cooperative agreement to obtain support services from the University of Kansas (KU) for an EPA data management conference. KU would not have been allowed to pay travel and related expenses for non-federal conference attendees. Neither the certifying official nor KU should have to repay EPA. EPA should have acquired conference support services from KU using a contract instead of a cooperative agreement. 31 U.S.C. Funds would not have been available to KU to pay for the travel and related expenses of non-federal attendees. The total amount awarded was $533. The EPA Inspector General issued a report in June 1994 concluding that EPA should have used a contract to procure the services of KU rather than a cooperative agreement because the support services that KU provided were a direct benefit to EPA. View Decision Matter of: Environmental Protection Agency--Inspector General--Cooperative Agreement--Procurement File: B-262110 Date: March 19, 1997 DIGEST DECISION This responds to a request from the Inspector General of the Environmental Protection Agency (EPA) for our opinion on whether EPA should require either its certifying official or the University of Kansas (KU) to repay the cost of travel and related expenses incurred by non-federal attendees of an EPA conference, and paid by KU under a cooperative agreement between EPA and KU for conference support services. The Inspector General has concluded, and EPA agrees, that under the Federal Grant and Cooperative Agreement Act, EPA should have acquired conference support services from KU using a contract instead of a cooperative agreement. 31 U.S.C. Sec. 6303. The Inspector General notes that under a contract, funds would not have been available to KU to pay for the travel and related expenses of non-federal attendees, and asks whether EPA's certifying official or KU should be required to repay those amounts. In our opinion, neither the official who certified the payments nor KU should be required to reimburse EPA for the travel and related expenses since they both acted in good faith and had no basis to question the decision of EPA's Assistant Regional Administrator to use a cooperative agreement. BACKGROUND In April 1989, EPA's Region 7 awarded a cooperative agreement to KU in response to a proposal to provide management services for EPA's National Environmental Information Conference. The total amount awarded was $533,523, which included approximately a 5 percent contribution from KU. Approximately 400 EPA employees, a handful of other federal employees, and almost 300 non-federal representatives, primarily from state agencies, attended the conference. Just as it had outlined in its proposal to EPA, KU used amounts awarded to cover the cost of travel, hotels and meals for 171 of the non-federal attendees. After an audit of the conference and the cooperative agreement, the EPA Inspector General issued a report in June 1994 concluding that EPA should have used a contract to procure the services of KU rather than a cooperative agreement because the support services that KU provided were a direct benefit to EPA. Under the Federal Grant and Cooperative Agreement Act of 1977, when the principal purpose of the funding instrument is to acquire services "for the direct benefit or use of the United States Government," the agency acquiring the services should use a procurement contract to fund the acquisition. 31 U.S.C. Sec. 6303. The Inspector General's report stated that as a result of using a cooperative agreement instead of a contract, EPA circumvented the statutory prohibition against using appropriated funds to pay for travel and related expenses of non-federal officials. See 31 U.S.C. Sec. 1345. The Inspector General, citing 55 Comp.Gen. 750, 754 (1976), explained that while a contractor's use of contract funds are subject to the restrictions placed on the contracting agency's use of appropriated funds, funds transferred pursuant to a cooperative agreement are not. [1] Because the travel and related expenses of non-federal attendees would not have been allowed if EPA had chosen the proper funding instrument, the report recommended that EPA disallow all of the travel and related expenses and recover those amounts from KU or the EPA certifying official. ANALYSIS Even though EPA management does not dispute that it should have obtained the conference support services from KU through the use of a contract instead of a cooperative agreement, it disagrees with the Inspector General's recommendation that either the certifying official or KU should reimburse EPA for the travel and related expenses of the non-federal officials.