$102M of EPA's $133M PFAS Water Grants Went Unreviewed
Summary
EPA Region 1 awarded roughly $133 million in Infrastructure Investment and Jobs Act grants to six New England states for PFAS and other emerging-contaminant fixes in drinking water, all in a three-week window in 2023 -- and its own inspector general found the agency never completed the reviews required before that money went out. EPA staff failed to identify $102 million (77%) of the proposed subaward costs during cost review, even though the budget narratives contained enough detail to catch it, and three states' budget narratives miscategorized $56 million (42%) of total funds, including one state that booked $30 million in subawards as ordinary contract costs. Every one of the six grants had gaps in required eligibility, financial-integrity, or civil-rights reviews -- two background checks weren't run until 11 and 13 months after the money was already out the door. OIG's own explanation: Region 1 grant specialists were juggling 96 grants apiece, versus a 55-grant agencywide average.
$102 million in costs nobody flagged
The audit's central number: reviewing the same six grant files staff had already approved, 's auditors found approximately $102 million in proposed subaward costs -- money the grant recipient plans to pass through to another organization -- that Region 1's project officer and grant specialists never identified during cost review. That's 77% of everything awarded. It wasn't a documentation gap on the applicant's side; found the budget narratives contained enough detail to catch it, and the 's own cost-review forms included specific prompts asking reviewers to identify subaward costs. Separately, three of the six states submitted budget narratives with $56 million (42%) in costs miscategorized outright -- most strikingly, one state's narrative booked $30 million in subaward money as ordinary "contract costs," a mislabeling that would have hidden it from the subaward-specific oversight and reporting the grant is supposed to carry. As of the audit, only 2 of the 6 grants had been amended to fix the categorization; 4 had not.
View data as table
| Total awarded (6 grants) | 133,000,000 |
|---|---|
| Subaward costs never flagged in cost review | 102,000,000 |
| Costs miscategorized in budget narratives | 56,000,000 |
Skipped background checks, and a workload OIG says explains why
The cost-review failures weren't isolated. None of the six grants had a fully compliant review under 's required eligibility and financial-integrity checklist -- two checklists wrongly claimed applicants had exclusions on record with no explanation on file, three grants had no evidence anyone checked for financial-integrity red flags at all, and two of the required background checks weren't actually run until 11 and 13 months after the grant money was already awarded. One grant specialist's paperwork claimed the check happened in September 2023; the file's own metadata showed it was performed in September 2024. Civil-rights compliance reviews, also required before an award, weren't finalized in advance for three of the six grants either -- one was approved a full 30 days after the money went out, with no documentation on file justifying the exception. 's own explanation points to staffing: Region 1's grant specialists were carrying about 96 grants apiece, against a 55-grant agencywide average -- the heaviest ratio of any region reviewed.
View data as table
| EPA agencywide average | 55 |
|---|---|
| EPA Region 1 | 96 |
- Region 1 awarded roughly $133 million in drinking-water grants to six New England states in a three-week window in 2023, without completing the pre-award reviews its own policy requires.
- $102 million (77%) of proposed subaward costs went unidentified during cost review, and $56 million (42%) of total funds -- including one state's $30 million booked as "contract costs" -- was miscategorized in budget narratives says contained enough detail to catch it.
- None of the six grants had a fully compliant eligibility/financial-integrity review; two required background checks weren't run until 11 and 13 months after the money was awarded, and three grants' civil-rights compliance reviews weren't finalized until after the award, one 30 days late.
- ties the failures to workload: Region 1 grant specialists averaged 96 grants apiece versus a 55-grant -wide average. agreed to all eight of 's recommendations, with $132,774,000 in potential monetary benefit tracked against the lead recommendation and a June 2026 target completion date.
All figures come from Office of Inspector General Report No. 26-P-0037, Audit of Region 1 Awards of the Emerging Contaminants in Small or Disadvantaged Communities Grant Program, issued June 23, 2026, covering all six EC-SDC grants Region 1 awarded between November 15, 2021, and July 31, 2024 (fieldwork October 2024-February 2026). This piece independently recomputed the subaward-cost share (76.69%, matching 's stated 77%), the miscategorized-cost share (42.11%, matching 's stated 42%), the Region 1-versus-agencywide workload gap (74.55%, roughly 75% higher), the grant-amendment completion rate (33%), and one state's $30 million miscategorization as a share of the total $102 million in unflagged subaward costs (29%); all reproduce or are consistent with the report's own figures. 's findings describe a failure of pre-award assurance, not confirmed fraud or lost funds -- the report states the $133 million is "at risk" of not achieving program goals, not that it was misspent.
Sources(1) ▾
- U.S. Environmental Protection Agency, Office of Inspector General, Audit of EPA Region 1 Awards of the Emerging Contaminants in Small or Disadvantaged Communities Grant Program (Report No. 26-P-0037) (2026-06-23) — 's audit of whether Region 1 (the six-state New England region) followed pre-award grant-review requirements before awarding roughly $133 million in Infrastructure Investment and Jobs Act funds under the Emerging Contaminants in Small or Disadvantaged Communities (EC-SDC) drinking-water grant program. Source for every dollar figure, percentage, date, and quote in this piece, including the Status of Recommendations table's $132,774,000 potential-monetary-benefit line and Region 1's written agreement to eight corrective-action recommendations. oversight.gov · original document
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The Infrastructure Investment and Jobs Act set aside $5 billion for the Emerging Contaminants in Small or Disadvantaged Communities Grant Program⧉ -- money meant for public water systems that serve poor or under-10,000-population communities and can't afford to fix and other contamination on their own. In fiscal years 2022 and 2023, 's Region 1 office awarded about $133 million of it to the agency's six New England states, all six grants going out in a three-week window between August 23 and September 11, 2023. An EPA Office of Inspector General audit⧉ released June 23, 2026 found that Region 1 never completed the pre-award reviews 's own rules require before that money went out the door.