Management Implication Report: Some States Failed to Conduct Required Financial Audits of Their State Revolving Funds

Why We Did This Report

We are alerting the U.S. Environmental Protection Agency to issues that the Office of Inspector General has encountered regarding mandatory audits of state revolving funds, or SRFs. 

Summary

The statutes creating the SRFs require states to conduct financial and compliance audits of their SRFs. The EPA’s implementing regulations expressly or implicitly require, among other things, that the states send these audits to the OIG and that the OIG review the audits. Until our April 2023 request, the states have not submitted their audits to the OIG so that the OIG can determine whether those audits meet regulatory requirements.