increase. However, I am aware that there has been some sort of increase in the required paperwork. Certainly to the extent that the State agencies are particularly understaffed, this does take them away from other activities.

Mr. WRIGHT. Would it surprise you that a spokesman for the Council of State Governments would conclude that there has been a threefold increase in 6 years?

Mr. CARROLL. No, sir; I do not think it would really surprise me. In fact, the 6 months that the Environmental Protection Agency has been in existence, this is one of the main concerns that we have had, and one of the things we are trying very hard to solve. I would like to go ahead and discuss with you some of the actions we have taken to be responsive to that.

Before I do, I would like to make two additional comments. One of the problems in recruiting and retraining of qualified personnel at the State level, of course, is the compensation which States are able to pay for highly skilled people.

In our proposed fiscal year 1972 budget, we are increasing the amount of moneys for State assistance grants for operating control agencies in the water field from $10 million to $15 million to be responsive to specifically that problem.

Mr. WRIGHT. There has to be some finite limit on an amount that a State is able to handle and willing to handle. Is it not alarming to you that people have had to be taken away from testing effluents and training plant operators in order to fill out the papers?

Mr. CARROLL. It could be, depending on the alternative work they are doing.

The second point I wanted to make is that one of the reasons that persons have been taken off the job of testing effluents, for example, over a period of the last 3 years has been to develop statewide plans to determine the standards for any given body of water in that State, to do cost effectiveness studies on the size and location and nature of waste water treatment plants.

In the long run, I feel that these are efforts which, perhaps, are not so immediate as checking effluent daily or weekly, or whatever their time period may be, are activities which will benefit the entire program, specially at the State level. Rather than having us plan for them, or insist from Washington that the State operate its program in a particular way, it is preferable that the State accomplish its own planning even though it puts a greater burden on them.

Mr. WRIGHT. The statement by Mr. Krause was made before the Public Works Committee on June 8. Two days later, on June 10, during the water pollution hearing, the following question was asked of three State water pollution control executives:

We have heard the Federal paper work requirements are consuming an inordinate amount of time and are detracting from the state efforts. What percent of the water pollution control man-hours in your state is consumed by what you consider to be non-essential federally inspired paper work?

There were three answers:

The State water pollution control executive in Michigan replied that, in his judgment, 30 percent of the man-hours in his State were consumed by what he regarded as nonessential federally inspired paperwork.

The State water pollution control executive in the State of Virginia replied 30 percent.

The State water pollution control executive of the State of Kansas replied 50 percent.

Does that supply anything to you?

Mr. CARROLL. The order of magnitude is suprising to me. It involves, also, a certain subjective judgment as to what may be necessary or unnecessary. We have, in the history of our programs, tried on occasion to put more of the burden in the first instance on the States, so that we are not reviewing and checking and spending time back and forth to occupy their time on review after review. You will see some evidence of that problem in this chart which I am going to show you. Mr. WRIGHT. Continue, please.

Mr. CARROLL. We have a responsibility on the part of the Federal Government, a custodial responsibility, to see that these funds are wisely and adequately used.

In certain States, we found that the level of competence was not up to that of other States. In those cases it requires more work than just accounting for the expenditure of funds. We had severe criticism from the General Accounting Office on this score-I believe it was 2 years ago and I think the remedy to this, in part, created the paper work. Also, the paperwork in the States is a reflection of the increase in the number of projects and size of projects.

In the early days this program was primarily aimed at the smaller cities. Now, as you get into larger projects, in the larger cities, the projects are very much more complex, and they take more review on our part as well as on the State's part.

Mr. WRIGHT. Well, we share your concern to see that money is wisely expended, but it seems to me that for 30 to 50 percent of the expenditures for personnel to be consumed in this paperwork, rather than in carrying out the program, is too much.

Mr. CARROLL. It sounds inordinately high; yes, sir.

Mr. WRIGHT. It seems to me that in itself represents an unwise expenditure of funds. In any event, if you would proceed with your description of the process.

Mr. CARROLL. When a grant application with the necessary State approval and priority certification is received in the EPA regional office, it is first referred to the administrative section. There, the fiscal, legal, and administrative aspects are reviewed. If the application is in order, it is referred to the engineering section for review to determine that the proposed work will result in an operable treatment work eligible under the program.

If the application is approved, a grant offer is prepared and forwarded to the applicant. The applicant agrees to certain requirements of the program and the amount of the grant, by signing the acceptance and returning it to the regional office.

Following acceptance of a grant, the applicant submits final plans and specifications to the State agency for review to assure that they meet State requirements. They are then submitted to EPA where they are again reviewed to assure that they meet Federal requirements. If they pass these reviews, the applicant is authorized to advertise for bids for construction of the projects.

Following receipt and opening of bids, a compilation of bids and a copy of the bid which the applicant wishes to accept is submitted to

EPA for review to determine that competitive bidding requirements have been fulfilled. If so, the applicant is authorized to award construction contracts and start construction.

During construction, regional office engineering personnel visit the site when possible to assure that the project is constructed in accordance with approved plans and specifications. As work progresses, payment of the grant is made in installments when the work is 25 percent, 50 percent, 75 percent, and 100 percent complete.

Personnel of the regional office are also responsible for determining that the project and its construction conform with all other legal requirements on federally assisted projects, such as the Davis-Bacon Prevailing Wage Act, the Wages and Hours Act, title VI of the Civil Rights Act, the Copeland Anti-Kickback Act, and others.

In addition, applications must be referred to the planning group in the regional office for review for conformance with basic, metropolitan, and regional planning.

Mr. WRIGHT. In what sense does the Civil Rights Act come into play here? Is it to make sure the contractor building the project is not discriminating?

Mr. CARROLL. That is correct; yes, sir. It also assures that the Federal funds benefit all segments of the population.

The chart being used is one of a series of charts developed by the Grants Administration Division, which recently completed a review of procedures followed in processing grants in 20 programs now in EPA. I believe this committee has heard that similar studies were undertaken by EPA in the Federal Water Quality Administration, which is now a part of EPA, a year and a half ago. We feel it is important that these processes be reviewed periodically, and that is why we have undertaken this twice within 2 years.

The major findings of our review of the construction grants pro

gram were that:

(a) Federal involvement in the preapplication, or assistance, phase of the existing construction grant procedures needed strengthening; and

(b) Detailed management and technical-including engineering— reviews conducted by Federal regional office personnel often duplicate the efforts of State agencies which review, approve, and assign priorities to all applications for construction grants before they are submitted to the regional office.

The weakness in the preapplication phase of the existing construction grant procedures, according to program personnel, is the limited staff and the sheer numbers of grant applications-approximately 2,000-received annually.

Mr. WRIGHT. How many are processed and approved annually? How many construction starts, out of the 2,000 grant applications, are begun annually?

Mr. CARROLL. Giving account to the timelag, now the number of starts would be very close to the number of applications.

Mr. WRIGHT. You feel that approximately 2,000 individual community starts a year are being recorded under the program? Mr. CARROLL. That is correct.

Mr. WRIGHT. So that we are not building up an ever-growing backlog of applications?

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Mr. CARROLL. No, sir. The primary backlog has been in projects for which we received applications, and on occasion have approved applications, but they are still waiting for funding at the State and local level, either because they are waiting for the State to adopt a matching grant program, which I mentioned only 32 States have adopted so far, or because they must pass a bond issue to raise that money locally, and must go through that public process.

Mr. WRIGHT. Mr. Carroll, the 2,000 applications you cite are those that come to your agency from the States; is this not correct? Mr. CARROLL. That is correct.

Mr. WRIGHT. So that if there is a substantial backlog, it probably exists within the States themselves. Do you have any knowledge of

this?

Mr. CARROLL. I do not have specific knowledge of that. I can foresee that that might be the case. I believe in the course of our survey where we had-I think we had 14 people that were part of this grant processing study-they talked to State people. They talked to our regional offices, and no mention was made of that. I might check that. Mr. GREENE. Mr. Chairman, I think in several States-I think California is one of them--there are projects which have not been forwarded, either pending State legislation or resolution of questions of eligibility for an increased allotment, so that there are several States in which there are backlogs.

Mr. WRIGHT. The State is expected to certify priority with regard to each of those project applications it forwards, is it not?

Mr. CARROLL. That is correct.

Mr. WRIGHT. The State presumably has some rough means of anticipating how much money is going to be available to that State to execute plans?

Mr. CARROLL. Yes, sir.

Mr. WRIGHT. Therefore, the State would reasonably try to keep the number of applications within the scope of the amount of money it would have available for the Federal matching program in the coming fiscal period?

Mr. CARROLL. That is correct. I think the need has been demonstrated in some States to go out and start those projects anyway and without waiting for Federal moneys, and that is why we now have this $1.7 billion so-called reimbursable figure.

Mr. WRIGHT. There really might be something of a backlog in some of the States that has accumulated simply by virtue of the funding available to that State?

Mr. CARROLL. I would think if there was a feeling on the part of the people in that State concerned with water quality that the State might be about to pass legislation for matching moneys, they might, in cooperation with the municipalities, want to wait until that money is available.

Also, you have had a history in this program that annually, the amounts of money appropriated have increased. The proportion of Federal money available for projects has increased, and, in certain cases, that has been a disincentive to act, because, if they wait a little longer, they may do a little better.

We have tried to overcome that in our proposed fiscal year 1972 appropriations request by arriving at the amount of money which the

States and municipalities told us would be necessary for individual projects.

We surveyed 470 cities across country as to what they saw their needs to be.

Mr. JOHNSON. Might I ask one question here?
Mr.WRIGHT. Mr. Johnson.

Mr. JOHNSON. California authorized $250 million over a 5-year period-was it 5 years?-I believe it is. Are there enough Federal funds coming to California to encumber that money, would you say?

Mr. CARROLL. I would have to get you the exact figure. But, by the process we are taking for fiscal year 1972, by going to the State of California and saying, "What projects do you anticipate?" if we achieve our appropriation requests, we would be able to meet in 1972, 1973, and 1974, all demands of the State of California. I do not know how that matches to the State's $500 million.

Mr. JOHNSON. $250 million, I think-I think the State bond issue, they made available $250 million for their 25 percent, and that would entitle them to 50 percent Federal and 25 percent local. Do you have the figures there?

Mr. GREENE. I have a calculation of the grants which would accumulate, and for California, over a 5-year period, it would be $346.5 million.

Mr. CARROLL. That is Federal share?

Mr. GREENE. Yes. I have the figures of the allocation of 1971 funds to California of $65.5 million out of the $1 billion appropriation in 1971. So, presumably, this would be adequate.

Mr. JOHNSON. I wanted to get that.

Mr. CARROLL. Greater participation in a preapplication phase might eliminate the need for the current detailed step-by-step reviews, once the application has been formally submitted.

Improved preapplication procedures would enable the program staff to provide meaningful input and assistance at the stage at which a prospective applicant's objectives and proposals might best be influenced.

I might cite the sort of things involved there. One is the environmental assessment which we are now asking the State to submit to us, so that we may then prepare an environmental impact statement.

The second is cost effectiveness studies so that we may be certain that the plan is suitable to the needs, that the plant is in the right place, and of the right kind.

Third, that the project conforms with basin and State plans and, fourth, that the operation and maintenance requirements for the proposal are met.

We feel that we could do a better education job by actually meeting with and, on occasion, even providing the people to work with the State, that we can eliminate the time delay that results from a backand-forth review of plans after the fact. That is a device that has not been used very much to date.

A second device that we are considering is the turnkey type of proposal. If we can get certain States or municipalities to accept turnkey proposals of waste treatment facilities, that puts the paperwork burden on the contractor.