EPA Inspector General: Potentially $1 billion-plus in water earmark funds not awarded

A report released on July 21 by the U.S. Environmental Protection Agency (EPA) Office of Inspector General (OIG) concluded that roughly 44 percent of water earmark funds for fiscal years 2022 and 2023, totaling more than $1 billion, had not been awarded as of September 2025. 

OIG said it conducted the audit to determine whether the EPA was awarding fiscal years 2022 and 2023 water infrastructure earmark grants expeditiously and in accordance with federal and EPA requirements.

How Congressional Earmarks Are Draining America’s Water Funds

According to the OIG report, EPA had awarded 67 percent of FY 2022 earmark appropriations and 51 percent of FY 2023 appropriations, leaving more than $1 billion of the $2.3 billion total appropriated amount, or 510 of the 1,198 projects, unawarded. OIG said a significant amount of earmark funds remain unawarded while congressional earmark funding continues to increase.

According to EPA, progress has been slow due to challenges such as not initially having an earmark program, significant personnel shortages and many recipients without federal grant experience.

OIG said it found factors associated with the EPA’s award management process that further hindered the timely award of earmark grants, including that:

1. EPA did not establish a goal for the expeditious award of these earmark grants;
2. EPA regions do not maintain records of pre-award communications in EPA’s official electronic grant file system; and
3. EPA did not provide clarification on the applicability of its government-to-government tribal consultation policy to earmarks, which resulted in delays in the award process.

The report laid out several recommendations for corrective actions that the agency and the assistant administrator for water could take. Among those were to implement strategies to facilitate timely awards, document expectations for expeditiousness, and identify recourse steps for when those expectations are not met. OIG also recommend the assistant administrator for water provide clarification to the EPA regions on the application of the agency’s tribal consultation policy for individual grant awards.

More in the full report here.

The EPA’s Office of Inspector General is a part of the EPA but is funded by Congress separate from the agency to ensure independence.