EPA's Fix for Its $20M Sewer-Grant Backlog Keeps Missing Deadlines
Summary
A February 2025 audit by EPA's own Office of Inspector General found that the agency had left about $20.2 million -- 18% of the roughly $110 million allocated to states -- unawarded in its Sewer Overflow and Stormwater Reuse Municipal Grants Program, with Regions 7 and 8 sitting on 72% and 83% of their allocations. EPA disputed the finding as outdated; OIG's own follow-up check found a smaller but still substantial $15.4 million unawarded. Whichever number is right, the recommended fix has not shipped: EPA's own semiannual report to Congress, covering October 1, 2025 through March 31, 2026, still lists the core recommendation as unresolved, its target completion date pushed in sequence from September 2025 to December 2025 to March 2026 to June 2026 -- and a second recommendation, to file the legally required report to Congress on the program, has slipped on the same schedule.
Six of ten regions left money on the table
Congress appropriated the OSG Program $202 million for fiscal years 2020 through 2024⧉ -- far short of the more than $1 billion it had authorized over the same period. Auditors found that, as of January 10, 2024, the EPA had not awarded about $20 million -- 18% -- of the roughly $109.9 million allocated to states for fiscal years 2020 through 2022⧉, leaving 18 states without their grant money across six of the agency's ten regions.
The problem wasn't spread evenly. Regions 7 and 8 alone had not awarded over 70% of their funds⧉ -- Region 8 left 83% of its $3.9 million allocation on the table, Region 7 left 72% of its $7.9 million. Four regions -- 1, 4, 9, and 10 -- had awarded every dollar. Auditors traced the gap to the 's own management: some states never applied, and the national program office never told regions how to reallocate the funds those states left behind, or set up a way to track OSG money and grant files centrally.
View data as table
| Region 1 | 0% | $0 of $8,457,000 allocated left unawarded |
|---|---|---|
| Region 2 | 18% | $2,642,000 of $14,766,000 allocated left unawarded |
| Region 3 | 34% | $4,258,000 of $12,465,000 allocated left unawarded |
| Region 4 | 0% | $0 of $12,961,000 allocated left unawarded |
| Region 5 | 4% | $772,000 of $18,412,000 allocated left unawarded |
| Region 6 | 37% | $3,686,001 of $9,866,000 allocated left unawarded |
| Region 7 | 72% | $5,660,000 of $7,873,000 allocated left unawarded |
| Region 8 | 83% | $3,219,800 of $3,893,000 allocated left unawarded -- the worst of any region |
| Region 9 | 0% | $0 of $16,414,000 allocated left unawarded |
| Region 10 | 0% | $0 of $4,783,000 allocated left unawarded |
EPA pushed back on its own watchdog's number
's Office of Water did not accept the finding. In its written response to the draft report, the agency said it agreed with the 'sentiments' of OIG's recommendation but found the underlying information 'not accurate, as awards have accelerated,'⧉ and would only agree if updated its numbers. did: pulling fresh grants-database data on December 23, 2024 and extending the analysis to include the fiscal year 2023 allocation, it found the pace had picked up -- $15.4 million left unawarded out of $159 million allocated, about 10%⧉.
That is real improvement, and six regions had by then awarded every dollar. But Regions 6, 7, and 8 still had roughly 29%, 50%, and 82% of their funds left unawarded⧉ -- the same two regions that were worst in the original count, still worst in the agency's own preferred recount. 's rebuttal changed the size of the number. It didn't change which regions were the problem.
View data as table
| Original finding (FY20-22, as of Jan. 2024) | 20,237,801 | 18% of $109.9M allocated -- the figure OIG's own tracking still attaches to the still-open recommendation |
|---|---|---|
| Updated analysis (FY20-23, as of Dec. 2024) | 15,400,000 | About 10% of $159M allocated, after EPA disputed the original number and OIG extended the analysis to include FY2023 awards |
Fourteen months on, the fix keeps sliding
The report's own tracking table, published at issuance, marked the core recommendation -- update OSG guidance so regions award and reallocate funds on time -- as Unresolved, with no completion date set and a $20,238,000 potential monetary benefit attached⧉. Four narrower recommendations -- fix program reporting, tighten grant-application review, examine prior grants for cost-share compliance, and amend one Region 7 grant to Nebraska that had wrongly been charged a cost share meant to be waived for rural and financially distressed communities -- were marked resolved, with -agreed completion dates ranging from March through September 2025.
EPA's own semiannual report to Congress⧉, covering October 1, 2025 through March 31, 2026, shows two of those five recommendations still open. The core recommendation is still Unresolved, its target completion date revised in sequence from September 2025, to December 2025, to March 2026, and now to June 2026⧉ -- and the 's own tracking still attaches the original $20,238,000 figure to it, not the smaller number its own recheck found. The recommendation to complete the legally required report to Congress and organize the program's records, originally due May 31, 2025, has been pushed on the identical schedule to the same June 2026 target.
This one program is a small piece of a larger pattern: as of March 31, 2026, the OIG counted 83 unimplemented recommendations across the EPA, worth over $265 million in combined potential cost savings⧉. The OSG Program's still-open recommendation is one line in that ledger -- notable mainly for how long the two sides have spent disagreeing over its size instead of closing it out.
- 's found about $20.2 million -- 18% of $109.9 million allocated -- unawarded in the OSG sewer-overflow grants program as of January 2024, with Regions 7 and 8 sitting on 72% and 83% of their allocations.
- disputed the finding as outdated; 's own updated check, run at the agency's request, still found $15.4 million (about 10% of $159 million) unawarded, with the same two regions worst in both counts.
- 's tracking table still attaches the original $20,238,000 figure -- not the smaller updated number -- to the program's core recommendation, which remains formally unresolved.
- As of 's own semiannual report through March 31, 2026, that recommendation and a second one (to file the report to Congress the law already requires) are both still open, their target completion date pushed four times, most recently to June 2026 -- one line among 83 unimplemented recommendations worth over $265 million.
All figures come from two Office of Inspector General documents: The Left $20 Million Unawarded in the Sewer Overflow and Stormwater Reuse Municipal Grants Program (Report No. 25-P-0014, February 10, 2025) and the Semiannual Report to Congress: October 1, 2025-March 31, 2026 (Report No. 26-N-0028, published May 2026). Region allocation and unawarded-fund totals ($109,890,000 and $20,237,801) are independently summed from Report No. 25-P-0014's own Table 4 and match its stated totals exactly; the 72% and 83% regional shares are recomputed from the same table's dollar figures and match the report's own rounded percentages. The $4,837,801 gap between the original and updated findings is a direct subtraction of the report's own two stated totals ($20,237,801 minus $15,400,000); it compares two different scopes (FY2020-2022 vs. FY2020-2023) and is offered to show the size of the revision, not a like-for-like recount of the same funds.
Sources(2) ▾
- U.S. Environmental Protection Agency, Office of Inspector General, The EPA Left $20 Million Unawarded in the Sewer Overflow and Stormwater Reuse Municipal Grants Program (Report No. 25-P-0014) (2025-02-10) — The primary document -- the 's performance audit of the Sewer Overflow and Stormwater Reuse Municipal Grants Program (OSG Program). Source for the original unawarded-funds finding, the region-by-region breakdown, the Nebraska cost-share example, the recommendations and their status at issuance, and the report's own December 2024 updated analysis. epa.gov · original document
- U.S. Environmental Protection Agency, Office of Inspector General, Semiannual Report to Congress: October 1, 2025-March 31, 2026 (Report No. 26-N-0028) (2026-05-29) — The 's own statutory semiannual accounting of every recommendation across that remains unimplemented. Appendix 3 lists Report No. 25-P-0014's Recommendations 1 and 2 as still open as of March 31, 2026, with the sequence of revised planned-completion dates and the potential cost savings the still attributes to Recommendation 1. Also source for the agency-wide total of 83 unimplemented recommendations worth over $265 million. epa.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
's Office of Inspector General -- the agency's own internal watchdog, independent of the programs it audits -- found in a February 2025 report⧉ that the had left approximately $20 million unawarded in its Sewer Overflow and Stormwater Reuse Municipal Grants Program (OSG), a fund that channels federal money through the states to municipalities building projects that keep raw sewage out of nearby water bodies. disputed the number as stale. checked again and still found tens of millions sitting unawarded. More than a year later, EPA's own semiannual report to Congress⧉ shows the recommended fix -- and a second recommendation to file a report to Congress the law already requires -- still hasn't shipped.