The report, Preventing Fraud, Waste and Abuse Within the EPA’s Clean School Bus Program, was released Dec. 27 following a review of 2022 and 2023 grant applications considered by the U.S. Environmental Protection Agency. OIG’s review of 2023 applications is ongoing. For the current funding round, the EPA will continue to accept grant applications until Jan. 31.
The EPA, according to its Clean School Bus Program website, will distribute $5 billion in grants and rebates over a five-year period (2022-2026) to replace diesel school buses with low- and zero-emissions models, which are typically electric vehicles. More than 2,000 applications have been submitted since the program was announced, and it prioritizes low-income districts. Under the current guidelines, individual school districts (up to 50 buses) or third parties acting on behalf of multiple districts (up to 100 buses collectively) can apply for funds.
The OIG report does not call for any sanctions, but it provides recommendations for better transparency and fraud protections in the future. The “EPA’s lack of robust verification mechanisms” within the Clean School Bus Program is what led to these problems, the report said.
According to the OIG report, some applicants did not provide adequate supporting documentation that should be required for federal grants. One entity that was funded, for example, did not list enrollment size or any proof that the buses would be used to transport students. Some applications did not list the name of the district(s) that would be served by the replacement buses, and in reporting information on the buses to be replaced, some “self-certified” in lieu of retaining vehicle use records that track miles driven per year, type and amount of fuel used, and the current state of repairs.
For the 2022 grant cycle, there were instances where school districts declined grants after telling the EPA they were not aware that a third-party contractor had applied for the money on their behalf, prompting the federal agency to redirect $38 million from those recipients to other applicants on the waiting list, the report said.
“This extended the program timetables and created confusion and inconsistency within the program,” the report said. “In one instance, we had to conduct six months of investigative work, including issuing subpoenas and conducting interviews and surveillance, to ascertain information that should have been in the application, such as the identity of the contractor applicant.”
For future grant applications, OIG made the following recommendations:
- Require supporting documentation and a robust validation process including school district identifiers, student enrollment, use of vehicles and for other eligibility factors noted in applications. School site audits and documentation from reliable “external” sources could be applied to this process.
- Require recipients to archive documentation for a minimum of six years.
- Make applicants aware of the criminal penalties for fraud and require acknowledgement of such with signed certifications.
- Require notarized attestations and certifications. This should apply for each statement in the application, and the “legally and financially responsible individual” should be noted by name, Social Security number, address, date of birth and telephone number.
- Strengthen oversight of third-party contractors. The EPA should assure that a school entity is aware of, and consents to, the third party’s application on its behalf.
“As part of this investigation, we identified an urgent lack of essential fraud-prevention measures in the EPA’s Clean School Bus program and alerted the EPA through a Management Implication Report,” Stout wrote, adding that the school districts or third-party contractors cited for improprieties will not be named because the investigation is ongoing.
Stout declined to speak on how or if OIG’s findings will affect the Clean Bus Program application review process for current candidates, referring inquiry on that matter to the EPA.
Shayla R. Powell, speaking for the EPA, responded in an email that the agency is still reviewing OIG’s report and has no additional information to share at this time.
On its website, the EPA did not issue a public statement regarding OIG’s Dec. 27 report. The agency did, however, publish several news releases between Jan. 8 and Jan. 10 noting that it has awarded more than $1 billion for the purchase of clean school buses to school districts or third parties in 34 states. In New York state, the largest amount went to a third party, J.P. Bus and Truck Repair, which will get $31.5 million to buy 80 buses and 84 chargers. In California, the largest grant went to third-party contractor Zum Services Inc., which is expected to spend $26.57 million on 80 new buses, according to a news release.
