A recent report by the U.S. Department of the Interior Office of Inspector General slammed two federal agencies for their lack of oversight when dealing with coastal restoration grants in Louisiana.
The audit of the Coastal Impact Assistance Program released at the end of September outlines concerns about contract awards and other financial matters.
The U.S. Fish and Wildlife Service and the state Coastal Protection and Restoration Authority, which are in charge of the program, say the audit didn’t cite serious problems, but did point out areas for improvement.
“There was nothing, to us, that appeared egregious,” said Kyle Graham, executive director of the state Coastal Protection and Restoration Authority. “You can always do better.”
Put in place by a 2005 act of Congress, CIAP is a program that takes a portion of federal offshore oil and gas lease money and makes it available to states for approved projects to mitigate the industry impact. In Louisiana, a majority of the CIAP money over the years has gone toward coastal restoration projects.
Louisiana, through the state Coastal Protection and Restoration Authority, received 65 percent of the state’s share of the money with the remainder split up among qualifying coastal parishes.
From the start of the program until Oct. 1, 2011, the federal Bureau of Ocean Energy Management, Regulation and Enforcement was in charge of the program’s oversight until that duty was handed to the U.S. Fish and Wildlife Service.
The audit says that “poor administration and lax monitoring of early grant projects” have persisted under the Fish and Wildlife Service’s management of the program.
U.S. Fish and Wildlife Service officials said the audit was done at the request of that agency to ensure the program was on sound financial and administrative ground after they were handed the reins of the program in 2011.
“We will continue to work cooperatively with the OIG to take appropriate corrective action addressing any and all outstanding issues and concerns,” Laury Parramore, public affairs with U.S. Fish and Wildlife Service, wrote in an emailed response. “Our goal is to ensure that every CIAP dollar is spent in the most efficient and effective manner possible.”
The report looks at the CIAP program in Louisiana from Oct. 1, 2007, through March 5, 2013. During that time, the state and parishes received $495 million. The report looked at 47 grants totaling $367 million and found $14 million in spending that raised concern. The report identified $4.3 million of grant spending that could have been put to better use and made 30 recommendations for changes.
Of the recommendations, 12 were resolved, 14 were resolved but haven’t been completed yet, and four are unresolved — several because the U.S. Fish and Wildlife Service disagreed with the finding.
In comparison, Mississippi fared far worse than Louisiana in a similar report of the Mississippi CIAP program completed last year. The audit examined $39 million in grants from a total of $99 million. Auditors found that $30 million of that amount was questionable and issued 37 recommendations.
In general, the audit of Louisiana’s CIAP program found that the lack of oversight from U.S. Fish and Wildlife Service, the lack of knowledge about grant requirements from some parishes and conflicting grant money records raised concerns about the ability of managers to detect or prevent fraud or misuse of federal money.
At the state level, one of the biggest financial questions came from a $6.5 million purchase of land through the Coastal Forest Conservation Initiative designed to purchase and conserve coastal forest lands.
The land that was purchased at Blind River and Bayou Sale was appraised looking at several factors, including recreation and mitigation credits. However, the appraiser also looked at conservation value which isn’t allowed under federal practices.
Graham said a contractor was hired to do the appraisal and it was approved through the state and U.S. Fish and Wildlife Service, none of whom caught the error. The appraisals are being redone to be resubmitted for approval, he said.
Another high dollar amount came from a questioned $4 million that was budgeted for administrative costs and, instead of being coded to be drawn from CIAP, was taken from the state wetland trust fund, Graham said.
Those types of accounting errors could raise concerns as the state gets ready to accept millions of dollars from oil spill related funding and offshore oil and gas revenue. However, Graham said, the amount of money from so many sources coming in for coastal restoration and protection prompted CPRA to request early enrollment in the new state accounting system.
“We need a robust system that can handle all these revenue streams,” Graham said. “This is a more business-driven-type system that will let us better track expenditures.”
Other items were things the auditors just didn’t like. For example, although states are allowed to use their own laws in how to go about hiring professional services like engineers, the auditors didn’t like the way Louisiana laws are set up. The auditors did credit the state for going beyond the state’s law to make contracts competitive, but then didn’t document when they strayed from making that extra effort.
“In one case, we found that the committee recommended a contractor who had ranked fourth on the technical score sheets with no justification why it passed on the three contractors with higher scores,” according to the audit.
Graham said it’s important to the state that the capacity to build the ever-increasing number of projects is improved and one way to do that is through contracts.
“We don’t think it’s fair to issue all our work to the top five companies,” he said, especially if the goal is to help the capacity to do coastal work grow in the state. If there are three companies that can do a particular job, it’s helpful in the long run to sometimes award the contract to a smaller company instead of returning yet again to the larger companies that are already doing a lot of work for the state.
Follow Amy Wold on Twitter, @awold10.