EPA Can't Say Why $269 Million in Water Grants Isn't Moving
Summary
Congress set aside $3.7 billion for 2,220 water-infrastructure earmarks between 2022 and 2024. More than a year after that appropriation window closed, EPA has awarded just 35% of it -- and [EPA's own Inspector General found](https://www.epa.gov/system/files/documents/2026-04/_epaoig_20260415-26-n-0023_cert.pdf) that 58% of the active grants it has awarded haven't drawn down a dollar within six months. For 123 of those stalled grants, worth about $269 million, EPA staff never wrote down why.
Awarded isn't spent
An earmark grant becomes real money in stages. Congress appropriates it; awards it to a water utility, city, or county; the recipient then draws down the grant -- bills and gets reimbursed -- as construction actually proceeds. EPA's Policy on Compliance, Review and Monitoring⧉ requires regional staff to check every grant once a year for whether the pace of spending looks reasonable, and a separate rule, Grants Policy Issuance 11-01, specifically requires a written review whenever a grant goes 180 days with zero financial activity. That written review is the paper trail meant to tell an ordinary delay -- a permit not yet issued, a contractor not yet under contract -- apart from a grant that's genuinely stuck.
View data as table
| Active grants reviewed | 291 |
|---|---|
| No funds drawn down within 180 days | 169 |
| No documented reason on file (~$269M) | 123 |
The 180-day check EPA skipped
pulled 291 active earmark grants had awarded by September 30, 2024, and checked whether regional personnel had done that required annual review. 169 of the 291 -- 58% -- had drawn down none of their awarded funds within 180 days of the award date⧉. For most of those, couldn't say why: in 123 of the 169 grant files, or 73%, staff had not written down, in the required annual review report or anywhere in the grant file, the reason the recipient showed no financial activity. Those 123 undocumented grants are worth about $269 million -- roughly a fifth of everything this piece's own estimate puts as having awarded under the earmark program to date.
No recommendations -- on purpose
This report carries zero recommendations, and wasn't required to respond to it at all. That's not an oversight: issued it mid-audit, under an ongoing engagement its background narrative labels Project OA-FY24-0064 (the report's own memorandum header and appendix instead label it OA-FY25-0084 -- an inconsistency in the source document, not this piece), specifically to flag the documentation gap before the fuller review concludes. A second, separate audit already underway, Project OA-FY26-0023, covers a related but different question -- whether is properly approving recipients' payment requests -- rather than whether wrote down its reasoning about them.
's Office of Water pushed back on the report's framing in its written response on two fronts: it argued the audit is really about 's internal unliquidated-obligations review requirement, not documentation of drawdowns that have already happened, and asked to retitle it accordingly; and it disputed the finding's premise that the paper trail belonged in each grant's project file at all, saying the review is supposed to live in 's own ULO Review Tool instead. Substance aside, didn't wait for the final report to act: after seeing the January 5, 2026 draft, the Office of Water briefed its regional Community Grants Coordinators on the review requirement on January 8, posted training internally on January 15, and re-shared it agency-wide on January 20 -- three months before published.
The takeaway
- The money isn't missing -- the paperwork is. 's finding is about undocumented reasons for inactivity, not proven waste or fraud; a stalled grant can mean nothing worse than a permit still pending. But without the written review 's own policy requires, no one -- not , not Congress, not the public -- can tell a routine delay from a project that's actually stuck.
- A fifth of the money has gotten out the door has no explanation on record. Of this piece's own roughly $1.3 billion estimate of dollars has awarded under the earmark program, the $269 million in undocumented stalled grants is about 21% of it -- not proof of a problem, but proof can't currently rule one out.
- Nobody has to answer for it yet. This report has no recommendations and drew no required response -- it's an interim flag from a still-open parent audit, and any recommendations on this documentation gap would come from that unfinished audit, not this report. A separate, also-open audit covers a related but different question: whether properly approved the payment requests behind these drawdowns in the first place. 's Office of Water did start retraining regional staff within days of seeing the draft, months before the report became public.
This report is an interim finding from an audit says remains ongoing (Project OA-FY24-0064); it does not represent 's final word on 's earmark grants management, and explicitly declined to issue recommendations in it. The $3.7 billion and 35%-awarded figures describe the whole earmark program; the 291-grant review, and the 58%/73%/$269 million figures drawn from it, cover only a subset of active grants awarded by September 30, 2024 -- not every earmark grant has made. The ~$1.3 billion 'total awarded' figure and the resulting ~21% share used in this piece's KPI and takeaway are this piece's own arithmetic from the report's two independently rounded figures, not numbers itself published; treat them as order-of-magnitude, not exact.
Sources(2) ▾
- U.S. Environmental Protection Agency, Office of Inspector General, Review of the EPA's Water Earmark Drawdown Documentation (Report No. 26-N-0023) (2026-04-15) — The full interim finding memorandum from 's ongoing audit (Project OA-FY24-0064) of whether is awarding congressionally directed 'earmark' water-infrastructure funding in accordance with federal and requirements. Covers Background/Scope/Methodology, the Finding, and the Appendix reproducing 's Office of Water's written response and 's summary of corrective actions taken. Fetched directly from epa.gov (no bot-challenge encountered) and converted with pdftotext -layout; a Wayback capture was requested at read time for archival redundancy since the document was not yet in Artemis's sealed store. epa.gov · original document
- U.S. EPA, Office of Inspector General, Report: Review of the EPA's Water Earmark Drawdown Documentation — report record (2026-04-15) — 's own public catalog page for Report No. 26-N-0023, confirming the report number, issuing office, publication date, and the PDF used as the primary source. epa.gov · original document
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Between March 2022 and March 2024, Congress earmarked about $3.7 billion for 2,220 water-infrastructure projects -- drinking water, wastewater, and stormwater fixes named project-by-project in appropriations bills, not competed for through the usual grant process. More than a year after that appropriation window closed, EPA's Office of Inspector General⧉ -- the agency's own internal watchdog, independent of the programs it audits -- reports that has awarded only 35% of that money. And most of what it has awarded is sitting still: of 291 active earmark grants checked, 58% hadn't drawn down a single dollar within 180 days of the award, and staff never documented why for 123 of those grants -- a stalled pool worth roughly $269 million.