Front Cover
 Table of Contents
 Reporting and reviewing

Title: Drinking water infrastructure grants : territorial program : operating agreement
Full Citation
Permanent Link: http://ufdc.ufl.edu/CA01300676/00001
 Material Information
Title: Drinking water infrastructure grants : territorial program : operating agreement
Physical Description: Book
Language: English
Creator: United States Virgin Islands. Department of Planning and Natural Resources.
United States Environmental Protection Agency ( Contributor )
Publisher: United States Virgin Islands. Department of Planning and Natural Resources.
Publication Date: 2001
Subject: Caribbean   ( lcsh )
Spatial Coverage: North America -- United States Virgin Islands
 Record Information
Bibliographic ID: CA01300676
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.


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Operating_Agreement_DWCIG ( PDF )

Table of Contents
    Front Cover
        Page A-1
    Table of Contents
        Page A-2
        Page A-3
        Page A-4
        Page A-5
        Page A-6
        Page A-7
        Page A-8
        Page A-9
        Page A-10
    Reporting and reviewing
        Page A-11
        Page A-12
        Page A-13
        Page A-14
        Page A-15
        Page A-16
        Page B-1
        Page B-2
        Page B-3
Full Text





Region 2



DATED: September 2001


I. INTRODUCTION ........ .............................. ..... .1

A. Purpose...................... ............. ........ ..1
B. Scope. ...................................................
C. Format and Structure........................................
D. Timing .....................................................

II. IMPLEMENTATION ...........................................

A. Assurances and Certifications ............... ... ...........
B. Financial Administration ......... ... .................... ...
C Program A dm inistration ........................... ...........

II. REPORTING AND REVIEW ........................................

A. Annual Review ................... ...... .................. .
B. Sanctions and Compliance. .....................................
C. Public Inquiries. ........................ ................ 8
D. Records ................... .... ..... ...................

IV. EXECUTION ............. .....................................

A. Designated Signatories. ......................................
B. Revising the OA. .............................................
C E effective D ate .. ... ... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ......


Attachment A

Attachment B

Attachment C

Territory of Virgin Islands Drinking Water Capital
Improvement Grant Program Authority

Federal Cross-Cutters

Payment, Disbursement and Flow of Funds


A. Purpose

This Drinking Water Capital Improvements Grant Territorial Program (DWCIG)
Operating Agreement (OA) establishes the relationship between the U.S. Environmental
Protection Agency Region 2 (EPA) and the Territory of Virgin Islands (Territory) acting
by and through the Virgin Islands Department of Planning and Natural Resources

The purpose of this OA is to provide a framework of the agreement between the EPA
and the DPNR in administering the DWCIG program, to include procedures for the
submittal of the annual program grant agreement application and Intended Use Plan
(IUP) and to set in place the administrative and technical procedures of the program to
be implemented by the Territory and the review, audit and oversight procedures to be
conducted by the EPA.

B. Scope

The scope of the OA includes the policies, procedures and the activities carried out or to
be carried out by and between the Territory and the EPA under the DWCIG program,
established pursuant to Section 1452 of the SDWA.

This OA will continue from year to year and will be incorporated by reference into the
annual program grant agreement. Amendments are made by written agreement
between the designated signatories of the OA.

C. Format and Structure

Detailed information concerning DWCIG program laws, guidelines, polices, and
procedures are incorporated by reference in this OA. Changes to the OA will be
considered during the annual program grant application submittal. Only the materials
relevant to the proposed changes should be submitted. Information that changes from
year to year shall be contained in the annual DWCIG program grant application and

D. Timing

A complete program grant application shall be submitted to the Regional Administrator
by July 1 of each year. If EPA approves the program grant application, the EPA award
official shall promptly prepare and sign a program grant agreement and send it to the
DPNR for execution. DPNR shall execute such grant agreement within three calendar
weeks of receipt or request an extension. Execution of the program grant agreement by

EPA and DPNR shall constitute an obligation for the payment of the designated amount
of federal funds to the DWCIG program.

The Territory agency responsible for implementing the DWCIG program and for
coordinating and working with the EPA on DWCIG issues, is the DPNR. DPNR is
responsible for all actions necessary to comply with the requirements of the SDWA. An
annual IUP will be issued for public comment and review. A summary of the comments
and responses will be incorporated into the IUP prior to submission to EPA. DPNR will
annually submit the complete program grant application to EPA. In addition, DPNR will
perform technical project reviews and monitor construction. DPNR is empowered to
enter into Program Grant Agreements, through its designated representative with the
Regional Administrator and to accept DWCIG program grant awards made under the
SDWA. DPNR is responsible for assuring compliance with all terms and conditions of
this OA and the Program Grant Agreement, and for the fiscal integrity of the DWCIG

EPA will provide funding through the award of program grants to DPNR, upon the joint
acceptance of this OA and approval of a completed application. EPA will make
available grant funds to the DWCIG Automated Standard Application for Payment
(ASAP)/ Automated Clearing House (ACH) account in accordance with the payment
schedule developed in conjunction with the grant application and as approved in the
program grant agreement and to take appropriate actions to ensure that timely cash
draws are made to DPNR. In addition, EPA will provide technical assistance to DPNR
as needed and will provide advice and consultation, if required. EPA will oversee
DPNR's DWCIG program to ensure compliance with the SDWA, regulations, and EPA
policies/guidance. EPA reserves the right to conduct project reviews.

A. Assurances and Certifications

DPNR is responsible for providing assurances on how it will comply with specific
requirements of the DWCIG, as well as other requirements applicable to federal
funding. The following addresses these assurances and requirements:

1. Territory has the technical capability to operate the program.

DPNR agrees to manage the DWCIG program in accordance with this OA; the terms of
the grant agreement including grant conditions; the SDWA; and applicable federal and
Territorial regulations. DPNR shall maintain adequate staff to properly administer and

Page 5

comply with all applicable requirements of the DWCIG program, and to provide
technical assistance to the systems. The technical assistance may include assistance
to potential fund recipients to achieve and maintain compliance with federal and
Territory drinking water regulations. DPNR requires all applicants to complete capacity
assessment worksheets, which are included in the IUP, to demonstrate their adequacy
of source water, infrastructure, finance, and technical knowledge.

2. Territory shall accept program grant funds in accordance with a payment

DPNR shall include, in its annual DWCIG program grant application, a proposed
payment schedule supported by the IUP. DPNR agrees to accept grants payments in
accordance with a negotiated payment schedule and use those payments for the
activities of the DWCIG program.

3. Territory shall deposit all program grant funds in the Automated Standard
Application for Payment (ASAP)/ Automated Cleaning House (ACH)
Accounts and use Generally Accepted Accounting Principles (GAAP).

DPNR agrees to deposit the program grant funds in the DWCIG ASAP/ACH accounts.
Identifiable and separate accounts will be maintained for portions of the capitalization
grant to be used for program administration, small system technical assistance and
project activities. DPNR agrees to establish and maintain fiscal controls and accounting
systems, according to Generally Accepted Accounting Principles (GAAP) as
promulgated by the Government Accounting Standards Board, that are sufficient to
assure proper accounting during appropriate accounting periods, for payments
received, disbursements made by the DPNR and fund balances at the beginning and
end of the accounting period. All policies, procedures and systems described above
shall be in conformance with the latest edition of "Standards for Audit of Governmental
Organizations, Programs, Activities, and Functions", published by the Government
Accounting Office (GAO).

The accounting system and cash management procedures shall be maintained by the
DPNR. The accounting system shall identify and record all financial transactions of the
DWCIG fund.

4. Territory shall conduct annual compliance and financial audits in
accordance with Generally Accepted Government Auditing Standards.

Page 6

A compliance and financial audit of the operations of the DWCIG program must be
conducted once a year. The audit(s) must provide an auditor's opinion on the DWCIG
financial statements, a report on internal controls, and a report on compliance with laws
and regulations. The audit of the use of funds deposited in the DWCIG account shall
be done in accordance with Generally Accepted Government Auditing Standards
(GAGAS) issued by the Comptroller General of the United States. This audit may be
done in conjunction with the Single Audit Act audit performed in accordance with Office
the Management and Budget (OMB) Circular 133.

The annual audit report shall be completed and submitted within 90-days of the end of
each Federal Fiscal Year. If such audits are not satisfactory to EPA, additional audits
may be conducted directly by EPA.

5. Territory shall use the grants in accordance with the Intended Use Plan

Each year, DPNR will develop an IUP in accordance with Section 1452 of the SDWA
that describes how the Territory intends to use available program grant funds to meet
DWCIG program goals. The IUP will be issued for public comment and review.
Summary of the comments and responses will be incorporated into the IUP prior to
submission to EPA. The annual IUP shall be a part of the annual application for the
program grant. DPNR shall prepare an IUP as long as program grant funds are
available, not just in those years in which an application for a federal program grant is

The IUP will include, but not be limited to the following:

i. Priority list of projects including description and size of community

ii Description of criteria and method used for ranking and distribution of

iii. Description of the financial status of the DWCIG program (covering
project, technical assistance and administrative funds)

iv. Description of the goals of the DWCIG program

6. Territory shall provide EPA with an Annual Performance Status Report.

Page 7

An annual performance status report shall be submitted within 90 days after the end of
each Federal Fiscal Year and will indicate the extent to which the goals and objectives,
as set forth in this OA, and IUP issued in the previous year, are being met.

The annual performance status report shall identify actual program accomplishments
and budgetary information in sufficient detail as directed by the EPA Project Officer. The
report should provide information on the actual use of funds and how the DWCIG has
met the goals and objectives identified for the previous federal fiscal year as specified in
the IUP and grant agreements. At minimum, the report shall identify subgrantees,
project descriptions ( such as start and completion of feasibility studies, design, and
construction and the dates of each), expenditure on project, administration, and
technical assistance. The report shall also include any changes that were made to the
award amounts of the assistance agreements.

7. Territory shall comply with all Federal cross-cutting authorities.

DPNR agrees that it shall remain responsible for ensuring that subgrantees receiving
assistance from the DWCIG program comply with all applicable cross-cutting
authorities. DPNR acknowledges that applicable laws may change with time. DPNR
agrees to inform EPA when consultation or coordination is necessary to resolve issues
regarding compliance with those requirements. EPA will provide any additional
technical assistance to DPNR. Any actions resulting in DPNR's submittal of a formal
referral to a federal agency will be reflected in the annual report, as necessary.

EPA has indicated that those federal laws and authorities identified in Section VII, A, of
the Drinking Water State Revolving Fund Program Guidelines dated February 1997,
apply to the DWCIG program (See Attachment B). Based on factual information
regarding noncompliance with any federal laws and authorities applicable to a project,
DPNR shall submit a formal referral to the appropriate federal agency. DPNR shall
coordinate with the federal agencies with respect to their enforcement actions.

8. Territory shall apply the environmental review procedure to all projects in
accordance with 40CFR Part 6.

DPNR agrees to review and implement all DWCIG funded projects and activities in
according to 40 CFR Part 6, which set out the requirements for EPA funded actions
which are subject to the National Environmental Policy Act (NEPA).

Page 8

B. Financial Administration

DPNR may use up to 4% of total program grant for administration of the program and
up to 2% of total program grant for technical assistance to small public water systems.
The rest ( 94% of total program grant) shall be used for the DWCIG projects.

Page 9

(a) Cash Draws

(i) Rules of Cash Draws

Cash draws from the ASAP/ACH payment system are limited by the payment
schedule and the ceiling available in the DWCIG account. Cash draws are the
transfer of cash under the ASAP/ACH payment process from the Federal
Treasury into the DWCIG program account, whereas disbursements represent
the transfer of cash from the DWCIG account to a subgrantee (See Attachment

DPNR shall provide EPA with a preliminary estimate of cash draws for the
upcoming FFY, including all ongoing projects and current disbursement
schedules for those projects. DPNR shall use the DCN numbers and PE codes
whenever an ASAP/ACH cash draw is made. An accounting and reporting
system to support the use of these separate numbers and codes are required to
be maintained.

(b) Disbursements

(i) Process

DPNR disburses outlays from the DWCIG program accounts on the basis of
incurred cost. However, there shall not be any cash draws from the ASAP/ACH
for the purpose of making an advance on any project.

(ii) Construction Progress and Incurred Costs

DPNR shall conduct periodic inspections to review construction progress in order
to coordinate outlay requests. Construction inspections and disbursement
procedures shall be documented by the DPNR.

Prior to certifying the disbursement of funds to ongoing construction projects,
DPNR shall check each disbursement request for reasonability and eligibility.
For disbursement requests at 50 and 100% of completion, DPNR will verify
construction progress and review documentation of all costs to insure they have
been incurred. DPNR shall implement disbursement procedures for tracking
construction progress and reviewing construction documentation.

Page 10

C. Proaram Administration

1. Staffing and Management

DPNR shall maintain adequate staff with a mix of skills to assure that projects
meet acceptable technical, environmental and financial requirements as
established or referenced in this OA, and that the DWCIG program shall be
continuously and effectively operated.

2. Accounting and Audit Process

DPNR shall continue to maintain an accounting system in accordance with
generally accepted accounting principles. The accounting system will properly
identify and record all financial transactions of the DWCIG fund. To ensure that
the accounting system properly reflects the full range of cost reporting needs of
the DWCIG and has built in an audit trail with clearly identifiable bench marks,
EPA may review the system's framework and operation and provide comments
regarding any identified inadequacies.

3. Outlays

An outlay schedule shall be submitted annually by DPNR as part of the program
grant application indicating the anticipated disbursements from the program grant
payments for the upcoming fiscal year. Whenever significant deviations from this
schedule occur, or are anticipated to occur, DPNR shall notify EPA and provide
updated disbursement projections as necessary.

Disbursements of federal funds will be closely tracked by EPA to assure that
annual targeted amounts are being met. When evidence arises during the year
indicating that outlay targets may be missed significantly, EPA may consult with
the DPNR to determine what actions need to be taken to remedy the discrepancy
and to assure that future projections will be more accurate.


A. Annual Review

EPA will conduct annual reviews to assess the success of DWCIG Program in meeting

Page 11

the objectives of Section 1452. In addition to the annual performance status report,
IUP, and the latest annual audit, DPNR agrees that other records, EPA may reasonably
require, will be made available to use in conducting the annual review of the DWCIG
program. The specifics of the annual review, including format and timing of the annual
review and onsite visits, will be negotiated between EPA and DPNR prior to initiation of
the annual review.

B. Sanctions and Compliance

1. Corrective Actions

If EPA determines that the Territory has not complied with the terms of the program
grant, OA, the IUP or any other requirements of the SDWA, EPA will notify DPNR of the
noncompliance and recommendations of the corrective action necessary. DPNR shall
take corrective action and shall submit a plan to EPA within 60 days that will lead to

If, within 60 days of receipt of the noncompliance notice, DPNR fails to take the
necessary actions to obtain the results required by EPA, or provide an acceptable plan
to achieve the results required, EPA shall withhold further payments (but not cash
draws against the payments previously made) to the DWCIG account until DPNR has
taken acceptable actions. Once DPNR has taken corrective action or provided a
corrective action plan satisfactory to EPA, any suspended payments will be released
and scheduled payments continued.

If EPA determines that program grants were subject to waste, fraud or abuse, the
program grant may be recovered under procedures outlined in 40 CFR Part 31.

2. Disputes

The "disputes" provisions of 40 CFR part 31, Subpart F shall be used for disputes
involving EPA disapproval of an application, as well as disputes arising under a program
grant award, including suspension or termination of grant assistance.

C. Public Inquiries

DPNR shall responses to public and other inquiries relating to the DWCIG program and
shall coordinate such responses with EPA as necessary. Although DPNR will be
responsible for project level inquiries, it is recognized that certain DWCIG program level

Page 12

inquiries may be directed to EPA and EPA will be responsible for the response with a
copy sent to the DPNR. When this occurs, the DPNR agrees to provide, in a timely
manner background information needed to prepare such responses to the extent such
information is available.
D. Records

1. Files

DPNR shall receive and review project documents from subgrantees. These
documents, together with DPNR's review memos and summary checklists, shall be filed
in an official project file maintained by DPNR. The project files shall be made available
to EPA for review based on reasonable notice by EPA. Certain project file data shall
also be made available to EPA as needed in conjunction with rectifying significant
discrepancies in meeting outlay projections.

2. Records Retention

DPNR shall retain official project-related documentation in accordance with Territory law
and 40 CFR Part 31.

Annually, DPNR shall provide EPA with a specified set of project-level data in its
priority list, IUP, disbursement schedule, annual performance status report, and other
information negotiated between EPA and DPNR. Revisions in those few data elements
which are subject to change, such as estimated costs and dates, will be recorded as
they occur during the year by DPNR but formally submitted to EPA every year, as part
of the annual performance status report, to reflect actual activities and events.

3. Access to Records

Public access to all DWCIG records in the possession of the Territory will be made
available in accordance with the Territory and federal laws governing access to

Information related to the Program Grant Agreement and supporting documents located
in the EPA Region 2 is available in accordance with the Federal Freedom of Information
Act (FOIA).

Page 13


A. Designated Signatories

1. Authorization

The following officials are authorized to execute the OA and to effect program changes
(items significantly altering the OA):

a. For the Territory

Department of Planning and Natural and Resources

b. For EPA

Regional Administrator
Environmental Protection Agency
Region 2

2. Other Changes

Items not significantly altering the terms of OA such as changing implementation or
review procedures may be implemented through the Agreement of the following parties:

a. For the Territory

Department of Planning and Natural and Resources
Division of Environmental Protection

b. For EPA

Branch Chief
Division of Environmental Planning and Protection
Water Program Branch
Region II

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B. Revising the OA

1. This OA may be amended at any time by mutual agreement in writing
between the authorized signatories. Revisions will be especially
considered following reviews of the annual report and annual audit.

2. Decisions regarding modifications to any attachment or procedures shall
be through the officials designated to make implementation or review
procedures changes as indicated above.

C. Effective Date

This OA will be effective commencing on

Regional Administrator

United States Environmental
Protection Agency Region II



Virgin Islands Department of
Planning and Natural Resources,


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Attachment A

Territory of Virgin Islands
Drinking Water Capital Improvement Grant Program

Page 16

Attachment B
Federal Cross-Cutters

Environmental Authorities

S Archeological and Historic Preservation Act of 1974, Pub. L. 86-523, as amended

S Clean Air Act, Pub. L. 84-159, as amended

S Coastal Barrier Resources Act, Pub. L. 97-348

S Coastal Zone Management Act, Pub. L. 92-583, as amended

S Endangered Species Act, Pub. L. 93-205, as amended

S Environmental Justice, Executive Order 12898

S Floodplain Management, Executive Order 11988 as amended by Executive
Order 12148

S Protection of Wetlands, Executive Order 11990

S Farmland Protection Policy Act, Pub. L. 97-98

S Fish and Wildlife Coordination Act, Pub. L. 85-624, as amended

S National Historic Preservation Act of 1966, PL89-665, as amended

S Safe Drinking Water Act, Pub. L. 93-523, as amended

S Wild and Scenic Rivers Act, Pub. L. 90-542, as amended

Economic and Miscellaneous Authorities

S Demonstration Cities and Metropolitan Development Act of 1966, Pub. L. 89-754,
as amended, Executive Order 12372

S Procurement Prohibitions under Section 306 of the Clean Air Act and Section
508 of the Clean Water Act, including Executive Order 11738, Administration of
the Clean Air Act and the Federal Water Pollution Control Act with Respect to
Federal Contracts, Grants, or Loans

S Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91-646,
as amended
S Debarment and Suspension, Executive Order 12549

Social Policy Authorities

S Age Discrimination Act of 1975, Pub. L. 94-135

S Title VI of the Civil Rights Act of 1964, Pub. L. 88-3521

S Section 13 of the Federal Water Pollution Control Act Amendments of 1972, Pub.
L. 92-500 (the Clean Water Act)

S Section 504 of the Rehabilitation Act of 1973, Pub. L.93-112 (including Executive
Orders 11914 and 11250)

S The Drug-Free Workplace Act of 1988, Pub. L. 100-690 (applies only to the
capitalization grant recipient)

S Equal Employment Opportunity, Executive Order 11246

S Women's and Minority Business Enterprise, Executive Orders 11625, 12138 and

S Section 129 of the Small Business Administration Reauthorization and
Amendment Act of 1988, Pub. L. 100-590

S Anti-Lobbying Provisions (40 CFR Part 30) [applies only to capitalization grant

1The Civil Rights Act and related anti-discrimination statutes apply to all the operations of the
SRF program.

Page 2

Attachment C

Payment, Disbursement and Flow of Funds Procedures

Page 3

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