STATE OF WEST VIRGINIA


PRELIMINARY PERFORMANCE REVIEW OF THE

West Virginia Stream Partners Program


Positive Impact of Program
Controls Over Grant Distribution
Deviation from Governance Structure


OFFICE OF LEGISLATIVE AUDITOR
Performance Evaluation and Research Division
Building 1, Room W-314
State Capitol Complex

CHARLESTON, WEST VIRGINIA 25305
(304) 347-4890
August 1999


Introduction & Background


The West Virginia Stream Partners Program was created by 1996 legislation under §20-13 1 of the West Virginia Code. The purpose of the Program is

...to encourage citizens to work in partnership with appropriate State agencies so that the State's rivers and streams: (a) Are safe for swimming, fishing and other forms of recreation; (b) can support appropriate public and commercial purposes; and (c) can provide habitat for plant and animal life.

The Program is jointly administered by the Division of Natural Resources, the Division of Environmental Protection, the Division of Forestry, and the State Soil Conservation Agency. The headquarters is located within the Division of Environmental Protection's Office of Abandoned Mine Lands and Reclamation. By statute, each of the four Directors of the administering agencies or their designees comprise an Executive Committee. In practice, there is an eight member "Review Team" that meets on an annual basis to decide which projects will receive funding. The members of the Review Team are designated by the agency Directors. (See Issue Area 3 for more information concerning the Program's deviation from the statutory governance structure.)

Within the Division of Environmental Protection's Office of Abandoned Mine Lands, a Stream Restoration Group Manager and a Program Coordinator work part-time and full-time, respectively, for the Stream Partners Program, with the Manager supervising the Coordinator. Both positions are fully funded through a federal grant.

The Division of Natural Resources is responsible for the Stream Partners Program Fund. General Revenue in the amount of $100,000 has been appropriated to this Fund annually, which is used exclusively to provide grants to community-based organizations which are dedicated "to restore, protect and utilize West Virginia's rivers and streams for public health, recreation, commercial and habitat uses." The maximum amount of each grant awarded is $5,000. Each grant that is awarded should be matched by the grantee with cash or in-kind contributions of at least 20% of the grant. The grant period, or "grant year," is one year from September 1 of the application year to August 31 of the following year.

In order to be eligible for grants from the Stream Partners Program, the community-based organization must submit an application to the Program. A completed application includes the following:
(a) Identify the stream or streams to be restored, protected, utilized or enhanced;
(b) Identify the representatives of groups applying for funds and the financially responsible entity to receive funds, all from the geographic area immediately surrounding the stream or streams. These identified individuals shall represent the general public, industry, environmental groups, sportsmen, forestry, agriculture, local government, tourism, recreation and affected land owners, all located in the geographic area immediately surrounding the stream or streams;
(c) Demonstrate an ability to achieve within the grant year a specific improvement project that enhances the identified stream or streams; and
(d) Evidence a commitment to educate the citizens in the area of the identified stream or streams about the benefits of restoring, protecting, and enhancing the stream or streams in a responsible manner.

ISSUE AREA 1: The Stream Partners Program has a Positive Impact on the Citizens of West Virginia.

Since the inception of the Stream Partners Program (SPP) in 1996, numerous communities throughout the State have benefitted from the grant money that the SPP distributes. Watershed associations have used the Stream Partners' grants to enhance their respective streams. Some of the watershed associations are able to take the $1,000 to $5,000 SPP grants and use them as "seed money" to acquire grants from other organizations and to obtain in-kind contributions. Local businesses and citizens have donated time, equipment, and materials to help complete watershed projects throughout the State. These projects have increased the recreational value of streams and rivers, and provided safer conditions for humans as well as plant and aquatic life. The watershed associations provide outreach to their respective communities, which helps educate citizens about the streams in their areas. In essence, the SPP grants give watershed associations momentum and credibility within the communities that they represent.

According to the Stream Partners Legislative findings and purpose section, West Virginia Code, §20-13-2,

It is the purpose of the Legislature, therefore, to establish a program to encourage citizens to work in partnership with appropriate state agencies so that the state's rivers and streams: (a) Are safe for swimming, fishing and other forms of recreation; (b) can support appropriate public and commercial purposes; and (c) can provide habitat for plant and animal life.

All evidence reviewed in this Preliminary Performance Review indicate the Stream Partners Program (SPP) is meeting the vision identified in the Legislative findings above. According to the Stream Partners' informational brochure, a stream partner is defined as,

a community-based organization comprised of local citizens, industry, environmental groups, sportsmen, local government, and landowners that are interested in improving the quality of life in and around their stream and watershed.

Every year since 1996, the Legislature has appropriated $100,000 to the Stream Partners Program. This money is disbursed on an annual basis to selected watershed associations in amounts of $5,000 or less. According to the SPP, there are various types of watershed improvement projects that have been funded. Some examples include:

€Fish and wildlife habitat creation and enhancement;
€Stream bank stabilization and erosion and sediment control;
€Education and outreach on the importance of restoring, protecting, and enhancing streams and watersheds;
€Clean-up projects that remove debris and litter from stream banks, in conjunction with a sustainable watershed improvement project;
€Water quality monitoring and water quality improvements;
€Wetland restoration;
€Establishment of trails and trail bridges;
€Study to classify as many tributaries in a watershed to identify erosion; and
€Fish stocking.

Table 1 offers a breakdown of the number of projects that Stream Partners has funded and the amount of grant money that Stream Partners has disbursed from 1996 to 1999.

Table 1
Number of Projects and Grant Money Distributed

Funding Year# of Applications# of Projects FundedMoney Disbursed
19966619 $95,000
19973119$90,000
19983223$100,000
19994738$100,000

As illustrated in Table 1, the number of projects receiving funding has increased from 19 in 1996 to 38 in 1999 and the number of applications has decreased from 66 in 1996 to 47 in 1999. According to the Program Coordinator,

The decrease in applications from 66 in 1996 to 31 in 1997 can be attributed to the fact that a mass mailing was done in 1996 to promote the Program with the hopes the recipients would pass the information along to those organizations who fit the criteria. Many applicants in 1996 did not meet the criteria to become a Stream Partner. Several of the applicants from 1996 realized that they were not eligible and did not apply again in the future.

Nonetheless, the SPP has seen a growth in the number of projects that received funding and the Program Coordinator has been instrumental in this growth through public relation efforts which includes visiting watershed associations statewide. In addition, the SPP created a new and innovative brochure that includes a grant application which was used for the first time during the1999 grant year.

The Importance of In-kind and Other Grant Contributions

As a result of the Stream Partners Program, the watershed associations have been able to acquire almost $368,500 through in-kind and other grant contributions in grant years 1996 and 1997, which exceeds the funding amounts that Stream Partners distributed for those same two years. The in-kind contributions for grant year 1998 have not yet been reported to the SPP. The in-kind contributions, which must be at least 20% of the amount of the SPP grant, include: 1) time donated by volunteers; and 2) donations of equipment, materials and fuel. The SPP only requires that in-kind contributions be reported along with the final report and does not require reporting of grant amounts that watershed associations have received from other sources. Therefore, the $368,500 reflects the in-kind contributions and any other grants that the watershed associations may have voluntarily reported. Table 2 illustrates the comparison between grant money disbursed and in-kind contributions.
Table 2
Grant Money Disbursed and In-kind Contributions from 1996 to 1997

Funding YearMoney DisbursedIn-kind Contributions
1996$95,000
1997$90,000
Total$185,000$368,500

Sample of Watershed Projects

In order to determine the Stream Partners Program effectiveness and impact, the Legislative Auditor visited three watershed associations funded by the Program, which represented five SPP grants. Table 3 depicts the projects that were visited.

Table 3
Projects Physically Reviewed by Legislative Auditor

Group NameType of ProjectGrant Amoun tFunding Year
White Day Creek Watershed AssociationRail to trail bridge and hiking trail improvement$5,0001997
Dunkard Creek Watershed AssociationTrout stocking and outreach$5,0001996
Dunkard Creek Watershed AssociationA study to classify tributaries to identify erosion$5,0001997
Davis Creek Watershed AssociationTrash clean-up, fish habitat/stream bed restoration$5,0001996
Davis Creek Watershed AssociationBank stabilization and additional stream bed restoration$5,0001998
White Day Creek Watershed Association

The White Day Creek Watershed Association's 1997 project consisted of making improvements to a rails-to-trails bridge, building a swinging foot bridge, trash cleanup, and planting 642 trees along a  mile stretch of the headwaters of White Day Creek. A representative of the Legislative Auditor's Office visited the rails-to-trails bridge, the swinging foot bridge, and the site of the trash clean-up, which was referred to as the "Refrigerator Hole." Appendix A offers photos of the rails-to trails bridge, swinging foot bridge, and cleanup site. The two bridges are in good working condition and the trash cleanup site remains free of refrigerators and debris. Through the combined efforts of various organizations, 29,950 pounds of trash was removed from the trash cleanup site and 15,150 pounds of it was recycled. White Day Creek received a $5,000 grant in 1997 and had exhausted all but approximately $200 of it at grant year end, which has since been used for a 1998 project. In-kind contributions included approximately 375 hours of volunteer work, money donated for gasoline, and T-shirts given to volunteers. The in-kind services were valued at approximately $1,685, which more than matches the required 20% of the $5,000 Stream Partners Grant.

After viewing these projects, it is quite evident that the White Day Creek Watershed Association has adhered to the project proposal and has benefitted from the Stream Partners Program. An important benefit of the Stream Partners Program is the ability for watershed associations to use the SPP grants as "seed money" for other grants. The White Day Creek Watershed Association has been successful to this end. According to a representative of White Day Creek, "Stream Partners has been instrumental in White Day Creek receiving other grants from Trout Unlimited and Canaan Valley Institute. Stream Partners has had a positive impact on White Day Creek Association." The Canaan Valley Institute grant totaled $1,500 and the Trout Unlimited grant $500. In addition, the White Day Creek Watershed Association has cultivated relationships with organizations such as the Boy Scouts and with students from West Virginia University and Fairmont State. In summary, the $5,000 Stream Partners grant was worth an estimated $8,685 in improvements to the State of West Virginia.

Dunkard Creek Watershed Association

The Legislative Auditor evaluated the Dunkard Creek Watershed Association's (DCWA) 1996 and 1997 projects. An auditor met with the president of DCWA at the Mason-Dixon Historical Park, which is located outside of Morgantown and is the headquarters of the Dunkard Creek Watershed Association. The 1996 grant application lists a section for the watershed association to describe at least one anticipated project to be completed by the end of the grant year. DCWA's application does not commit to a specific project. The proposal states,

...The feasibility of many projects is not ensured at this time. However, during our strategic planning process, our group may decide to create a public access site for small boat launching, and to develop a short (5 miles +/-) float course along the creek...An alternative project might be to stabilize a section of failing streambank.


A representative of West Virginia's DNR informed the Dunkard Creek Watershed Association that DNR would assume responsibility to develop the stream access site described as a "possible" grant project. Since DCWA did not commit to a specific project and failed to complete the public access site during the grant year, the Stream Partners Program made a questionable decision in this instance. Issue Two addresses the deficiencies regarding the distribution of the grant money. However, the funding was later used as discussed below.

In lieu of the stream access site, the Dunkard Creek Watershed Association received permission from the Stream Partners Program to spend part of the grant money for stocking trout in Dunkard Creek. Due to the alteration, all of the 1996 grant money had not been used as of April '99. Approximately $2,429 was spent on outreach, meeting supplies, trout stocking supplies, and fund raising. The trout cost $2,000, leaving $571 of the $5,000 unexpended as of April 1999. In addition, volunteers performed approximately 1500 hours of fund raising for outreach. The 1500 volunteer hours were estimated to be worth $7,500 of in-kind services, which more than matches the required 20% of the $5,000 Stream Partners grant. For the $5,000 1996 Stream Partners grant, the State received $12,500 worth of benefit.

Dunkard Creek's 1997 project, which consisted of a study to classify tributaries to identify erosion, has been finalized. The study was conducted by a graduate student at West Virginia University. As stated in DCWA's final report, a description of the study is as follows:

Classified 70 tributaries in the watershed as to amount of erosion. Ranked sites, using criteria, as to immediacy of need to control. Conducted 97 site visits. Found approximate volume of material being washed downstream. Found landowners 100% willing to cooperate. At each site visit, took pictures, bank measurements, water samples, and notes on water conditions, stream bed deposits, stream bank conditions, land uses, and litter. Completed a booklet, over 200 pages, that contained all this information and may be used as a reference for further research.

The 1997 project proposal was adhered to and the Stream Partners grant was properly used. Of the $5,000 Stream Partners grant, approximately $88 had not been used by the end of the grant year. This money will be applied to the cost of duplicating additional copies of the final report. In kind contributions consisted of approximately 200 volunteer hours by DCWA members who traveled to various sites to evaluate the erosion. These 200 volunteer hours were estimated to be worth approximately $1,000, which is enough to match 20% of the $5,000 Stream Partners grant. To help facilitate the tracking of volunteer hours, DCWA developed a volunteer card that can be carried in a wallet or pocket. The card has several blocks in which the volunteer is instructed to mark an "X" for every hour of volunteer work for the Dunkard Creek Watershed Association. According to the president of DCWA,

The Dunkard Creek Watershed Association would have had a hard time surviving without the Stream Partners Program. There would not have been adequate funding without the Program. The Stream Partners Program was a springboard for scientific research. There is good flexibility and accessability with the Stream Partners and they have had a wide and positive impact. The Stream Partners Program has helped DCWA attract interest throughout the community. For example, the trout stockings have been successful in increasing public awareness about Dunkard Creek and its recreational value. In addition, public awareness about the environment has been increased. DCWA's success and determination has enabled it to develop partnerships with other agencies and individuals. These partnerships have allowed DCWA to acquire additional knowledge about aquatic life, scientific matters, and Dunkard Creek in general. The partners include the USDA Natural Resources Conservation Service, West Virginia University, private consultants, and volunteers.

Davis Creek Watershed Association

The Legislative Auditor visited and evaluated the Davis Creek Watershed Association's 1996 and 1998 stream improvement projects. The 1996 project consisted of trash clean-up, stream habitat restoration, and outreach. While an earlier project which provided sewer service to residents formerly discharging raw sewage into the stream via straight pipes did wonders for the water quality of Davis Creek, the running of sewer lines along the streambed was destructive to fish habitat. Prior to the work of the Association, the stream bottom was flat and covered with sediment and offered little of the structure which is critical to aquatic life. In 1996, Stream Partners disbursed a $5,000 grant to the Davis Creek Watershed Association. With this grant the Association gained credibility with area residents and merchants who contributed $5,637 in volunteer labor and in-kind donations, an amount exceeding the Stream Partners grant.

Using donated boulders, trucking, equipment, straw, fuel and labor, the Association was able to build v-dams and rocky structures which provide needed cover for fish and channel current to strip sediment from the rocky bottom of the stream. The exposed rocky bottom of the stream, in turn, provides habitat for the macro-invertebrates that fish eat. The Association used grant money to pay for items which could not be donated, such as the backhoe operator's time, additional fuel, and outreach activities. A project summary report submitted to Stream Partners indicated that approximately $2,000 had not been spent as of November 1997. However, since that time the money has been spent on completion of the stream habitat restoration work.

The site visit evidences adherence to the 1996 project proposal and proper use of the grant. Evidence of aquatic life and community pride abounds. Countless fish spawning sites were observed, as were several schools of minnows and broods of other fish, mature fish, ducks, a snapping turtle, insect larvae attached to the bottoms of submerged rocks and fingernail clams, all providing ample evidence of aquatic life. Appendix A offers some select photographs from the fieldwork. While visiting the site, several area residents stopped in their cars and on foot to speak with the Association providing the tour. Invariably, the stream was the initial topic of conversation as the car windows retracted. These residents, including the Association member offering the tour, exuded pride and ownership of the stream. A photo in Appendix A shows flowers planted at the stream's edge by residents taking pride in the stream that was once seen as a depository for oil cans and chicken bones.

The businesses and individuals that provided these in-kind contributions, as well as the Stream Partners Program, have not only given an economic boost to the Davis Creek Watershed Association, but also helped provide some recognition for the Davis Creek community. For example, articles about the Davis Creek Watershed Association have appeared in the Spring 1999 edition of West Virginia Executive, several Charleston newspaper articles, and a Walker Machinery publication (Walker Machinery donated use of a brand new backhoe to the project).

While visiting the 1996 Davis Creek project site, the Legislative Auditor was informed by a Davis Creek representative that the 1998 project was completed in October of 1998 and could be examined as well. The 1998 project included completing another section of the stream habitat restoration work that was started in 1996, including the placement of small to medium boulders, construction of "V" dams, and outreach. In addition, sections of stream bank were stabilized by the placement of boulders. Evidence of the success of the 1998 project was just as abundant as that of the 1996 project. The Stream Partners grant has been used in accordance with the Association's proposal. Final reports for the 1998 grant year are not to be submitted until September 30, 1999.

SPP Administration Staff Funding

The Stream Partners Program staff consists of the Program Coordinator, who is a full-time employee and the Stream Restoration Group Manager, who works for the Program on a part-time basis along with his other duties. Their salaries are federally funded through the Consolidated Federal Funds General Administration Fund. Personal services for these two employees are approximately $70,000. In essence, the State is reaping additional benefits from the Stream Partners Program due to the staff being funded by way of a Federal grant.

Conclusion

The Stream Partners Program has been a catalyst for watershed associations across the State. Although the number of applications has decreased from 66 in 1996 to 47 in 1999, the number of projects funded has increased from 19 in 1996 to 38 in 1999. The watershed associations have been able to take SPP grants ranging from $1,000 to $5,000 and use them to enhance their communities. The Stream Partners grants have given these "grass roots" associations credibility with their communities and other granting agencies. As a result, local businesses and citizens have donated time, equipment, and materials to help facilitate the completion of watershed projects and other organizations have provided additional funding on occasions. Consequently, the completed projects have instilled pride in communities and encouraged feelings of goodwill towards the State. The $100,000 that the Stream Partners Program receives each year from the Legislature can go a long way in helping watershed associations survive. The Stream Partners Program has been instrumental in the success that these watershed associations have enjoyed, providing a considerable return on the State's $100,000 per year investment.

ISSUE AREA 2:Controls Over Grant Money Distribution Could Be Improved.

The distribution of grant money is an integral part of the Stream Partners Program (SPP) and demonstrates the Program's performance. The Legislative Auditor's review of the grantees' files indicates that there are deficiencies with the reporting and control process, which can lead to a less than ideal allocation of resources. The Stream Partners Program promulgated a Legislative Rule effective May 4, 1999, which provided some structure that was lacking in the Program prior to its passage. However, the Rule does not provide adequate consideration of the past performance of grantees. The Executive Committee needs to improve the review process by giving formal consideration to the grantees' past performance and incorporating logical reference points into the scoring system that is presently used. In addition, enhancing the application and reporting processes should allow the Program Coordinator and the Executive Committee to acquire a better understanding of the grantees' overall performance.
Controls used to Monitor Grantees

The Stream Partners Program has standards in place to allow it to monitor the status of the grantees. For example, according to Legislative Rule, §60-4-9,

The grantee must provide a mid-grant year report, and a final report that will include the financial statement indicating how the grant money was spent, all in-kind services contributed including the 20% match. The grantee must retain all receipts from expenditures of grant for a minimum of three years. Grantees that do not comply with the reporting requirements will not be eligible for future funding. (Emphasis added.)

For the 1999 grant funding year, the SPP created a new grant application that is encompassed within an informational brochure about the Program. This application includes all time frames relevant to SPP grants. These include: a) the grant application deadline; b) the beginning of the grant year; c) the mid-term report deadline; d) the project completion deadline/grant year end; and e) final report deadline.

In addition to the above items, at the bottom of the application there is a signature line which indicates that by signing the application the grantee agrees to comply with the SPP's requests for documentation according to the stated deadlines. The SPP also emphasizes that failure to comply with the requests will hinder an applicant's chances of receiving future funding. The grant application also includes the 1-800 Stream Partners Hotline number that applicants can call to receive assistance in completing the grant application. According to the Coordinator, the SPP received 248 telephone calls between March and May, 1999 alone. These calls include items other than grant application assistance, such as questions regarding environmental problems, technical and organizational needs, mid-term reports, and final year reports.

Legislative Auditor's Review of the Grant Applications

The Legislative Auditor analyzed the 61 applications that were approved for funding from 1996 to 1998. The Legislative Auditor targeted six areas that were deemed useful in evaluating a watershed's grant application and/or reflected a watershed association's past performance. These six areas represented suspected Program weaknesses after a preliminary review of the project files. Each of these areas has statutory basis and they all contribute to measuring the Stream Partners' effectiveness. The six areas and results of the analysis are as follows:

1) Percentage of files having required mid-term report;
2) Percentage of files having required final report;
3) Percentage of files demonstrating at least 20% in-kind contributions in the final report; 4) Percentage of projects that were completed by the end of the grant year and adhered to;
5) Percentage of files demonstrating at least 20% in-kind contributions in the application; and
6) Percentage of watershed associations that committed to a specific project.

Table 4 provides a summary of the 61 reviewed applications. For those areas that list 1998 as "not applicable," the information was not due to the Stream Partners Program at the time of the Legislative Auditor's review.

Table 4
Summary of the 61 Grant Applications For 1996, 1997 & 1998

Percentage of Funded Proposals...199619971998
Having mid-term reports5%79%NA
Having final reports95%63%NA
Demonstrating at least 20% in-kind contributions in final report68%47%NA
Having project completed by end of grant year63%32%NA
Demonstrating at least 20% in-kind contributions in application21%47%87%
Committing to a specific project95%100%100%

According to the Program Coordinator, "the mid-term report forms and the final report forms are sent to the grantees one month prior to the deadlines." However, the watershed associations are comprised of volunteers who do not always complete the forms and send them to the SPP in a timely manner. With as few as 5% of the funded associations submitting mid-term reports in grant year 1996 and 63% submitting final reports in grant year 1997, the Program has compromised its ability to control for desirable outcomes.

The 20% in-kind contributions that are to be reported in the final reports are an important aspect of the reporting phase. In-kind contributions are valuable in terms of evaluating the success of a particular grantee. When local businesses and residents support a watershed association by donating time and materials, the SPP needs to be aware of these contributions. However, only 47% of the grantees reported in-kind contributions to the Stream Partners Program in grant year 1997. As a result, there is a lack of compliance with the statute. West Virginia Code §20-13-4 states in part,

...Each grant shall be matched by the group of representatives with cash or in-kind services in, at least, an amount equal to twenty percent of the grant: Provided, That no grant shall exceed the amount of five thousand dollars.

During grant year 1996, approximately 63% of the grantees demonstrated to the SPP that a project was completed and adhered to, and just 32% in grant year 1997 did the same. By some of the watershed associations not completing a project within the grant year, there is the distinct possibility of having projects with diminished value. For example, one watershed association proposed completing a one hour outreach video. The association managed to complete a nine minute short version of the video, however, all of the grant proceeds were exhausted in the process. Worse than the possibility of having projects of diminished value, a grantee may never use grant money for its intended purpose. The Program Coordinator acknowledges this by stating,

There have been two instances in the past where a watershed association was awarded a grant and then proceeded not to use any of the grant money within the grant year or failed to attempt a project within the grant year, due to lack of community involvement, technical assistance, or realization that the project was not going to be as effective as originally expected. This occurred during the first year of the Program when there was no Stream Partners staff and review team members assisted watershed associations as their work schedules allowed. Currently, the only type of disciplinary action that Stream Partners can take against a watershed association for failing to use any of the grant money during a grant year or failing to attempt a project is not to fund the group in the future. There is no account set up to put unused funds into if we were to ask for grant money to be returned. The Legislative rules do address the penalty and procedure that must be used for unexpended funds within the grant year.

As noted by the Program Coordinator, while the Program has no means to recover such monies, it can exclude such recipients from future consideration. West Virginia Code §20-13-5 requires applicants to "Demonstrate an ability to achieve within the grant year a specific improvement project that enhances the identified stream or streams."

An important aspect of the application process is the demonstration of in-kind contributions, which relates to the ability of watershed associations to generate support for their projects within their respective communities. During grant year 1996, only 21% of the grantees included at least a 20% match of in-kind contributions in their applications. This figure rose to 47% in grant year 1997 and increased to 87% in grant year 1998. Although there has been a constant rise in the number of grantees which acknowledged the in-kind contributions, 46% of the grantees from grants years 1996 to 1998 did not estimate in-kind contributions within the application. Therefore, failing to do so equates to a lack of compliance with West Virginia Code §20-13-4.

Another key element of the application process relates to a watershed association describing a precise watershed project. West Virginia Code §20-13-5 states in part, "...The application shall: (c) Demonstrate an ability to achieve within the grant year a specific improvement project that enhances the identified stream or streams..." This aspect of the application was adhered to completely during grant years 1997 and 1998, with 100% of the applicants complying. However, in grant year 1996, all but one applicant committed to a specific project. The lone exception did not define a specific project in its 1996 grant application. This association still received a $5,000 Stream Partners grant, of which $2,000 was not used until the 1998 funding year.

Strengthening of the Application and Reporting Processes

In order to avoid any confusion or misunderstanding, the Legislative Auditor feels that it would be beneficial for the SPP to include a completed sample application along with the application form when sending it to a potential applicant. This will allow a potential applicant to view a grant application in the correct format and lessen the chances of a grantee filling out the application incorrectly. If an application is still filled-out incorrectly, then the Stream Partners Program should return it to the applicant for corrections or remove it from consideration. For example, this would have been useful for a funded watershed association when it was preparing its 1996 application. Question #8 of the application states in part,

Provide an estimated Budget, including what local resources and in-kind services will support the activities of the organization including, if applicable, planning, organization, outreach, and coordination processes. Budgets may be revised as a group's goals develop...

The association responded to question #8 by providing a budget, but did not distinguish in-kind contributions. The response states,

Outreach - printing, postage, volunteers' lunches $ 100.00
Transporting materials 800.00
Reclaiming storage areas and access sites 100.00
Placement of materials (rocks) 4,000.00
________

Total $5,000.00

This is just one of numerous applications which was not completed in the correct format. Sample mid year and final reports would also help to facilitate the reporting process. This will also give an applicant the opportunity to view mid-year and final reports in the correct format. If a mid-year or final report is still submitted incorrectly, then the Stream Partners Program should send the report back to the grantee, explaining what is wrong and requesting prompt re-submission. Providing sample applications and reports demonstrating the proper completion of each may even eliminate some of the 1-800 hotline calls, allowing the Coordinator to focus on other responsibilities.

The Legislative Auditor urges the SPP to require the grantees to report all other grants in addition to in-kind contributions when submitting final reports. Keeping a separate document listing other grants that watershed associations acquired would enable the Program Coordinator to further measure the effectiveness of the Stream Partners and the Stream Partners Program. When organizations such as Canaan Valley Institute and Trout Unlimited donate grants to watershed associations, the Stream Partners Program should be aware of it. These additional grants help justify the existence of the SPP and the required reporting of them will add value to the Program. This information is also useful in evaluating an association's ability to solicit grants and in-kind contributions to increase the State's return on Stream Partner's projects it funds.

Furthermore, the Legislative Auditor suggests that the Stream Partners Program require the grantees to submit all receipts along with the final report, as opposed to retaining them for a minimum of three years. There should be no additional cost involved and this would relieve the grantees' burden of retaining the receipts. In addition, this will also hold the grantees to a higher level of accountability, enable the SPP to monitor each grantee more closely, and help in determining a grantee's funding status for the next funding year. Having the grantees submit receipts would allow for detection of any misuse of funds or unethical activities.

Criteria for Reviewing Grant Applications

A system has been in place to evaluate grant applications since the inception of the Stream Partners Program. The Legislative Auditor confirmed this with the Program Coordinator, by stating,

The 1999 grant funding meeting was the first funding meeting to have the Legislative Rule in place. This Rule addresses the criteria used to evaluate the grant applications. The same criteria, including points assigned to the individual categories, that is in the Legislative Rule was adopted from the 1998 grant funding meeting. In addition, this criteria was used for the 1996 and 1997 funding meetings as well.

Each grant application is to be scored and ranked using the criteria that is adopted in Legislative Rule, §60-4-6. The criteria is as follows:

a) A showing of how the organization is a broad-based community organization, and the members represent diverse areas and organizations within the community. Also provide an overview of the organization's history (20 points);

b) A review of the issues that affect the stream or streams within the watershed (15 points);

c) A plan showing the organization's vision, mission, long-term goals, short-term goals, and the effect the project will have on the community (20 points);

d) A description of the watershed improvement project that will enhance the quality of the stream and the watershed (25 points);

e) A budget for the watershed improvement project which includes: how you plan to spend the grant, in-kind services, including the 20% match (10 points); and

f) Explain plans to provide education and outreach to the community about the importance of watershed protection and restoration (10 points).

Documents used to Enhance the Review of Applications

In addition to the scoring system being incorporated into the Legislative Rule, the Program Coordinator has made strides in improving the grant application review process by creating a document to assist the committee members in their evaluation of the grant applications. This document has six columns that include the following information: 1) Group Name; 2) Contact Person; 3) Phone Number; 4) Project Description; 5) Previous Grant Status; and 6) Comments. The "Previous Grant Status" column includes the nature of the project and the amount of in-kind contributions. The Coordinator also created a document that illustrates the budget breakdown of each watershed association. This document can be used by the committee members to ensure that applicants adhere to Legislative Rule, §60-4-5, which states in part:

...Authorized uses of grant within the watershed improvement project may include the following: Production, copying and mailing of public information and educational materials to promote the protection of streams within the watershed, not to exceed 20% of the grant in total within the grant year;...General operating expenses of the organization, which can include acquiring and maintaining non-profit status in accordance with Federal 501 (c) (3), of the IRS Tax Code guidelines, not to exceed 20% of the grant in total within the grant year; Equipment for the watershed improvement project that will belong to the organization, not to exceed 20% of the grant in total within the grant year;...Travel expenses for watershed association members to be approved by Stream Partners Program Coordinator and Administrator, for educational training programs, not to exceed 20% of the grant in total within the grant year; and Office equipment and office supplies to support the watershed association, outreach efforts, and the watershed improvement project, not to exceed 20% in total within the grant year.

Past Performance of Grantees

The Legislative Rule has provided more structure to the grant evaluation process. However, the Rule gives no consideration to the past performance by the applicable watershed associations. Although the document that the Program Coordinator created to assist the committee members includes previous in-kind contributions, the past reporting of in-kind contributions is not factored into the criteria created under Legislative Rule. There are no statutory provisions for the recovery of grant money not spent in accordance with the law or penalties for poor or even non-performance. Because of this, the Executive Committee has only the possible withholding of future funding and its careful decision making to control for desirable outcomes.

When scoring the grant applications, the Executive Committee should take into consideration areas that address the performance of watershed associations that have received grants in the past. For example, for each question listed below that has not been satisfied, the committee could deduct five or more points from the total points accumulated. Examples of questions the Executive Committee could incorporate into the current criteria follow:

1) Did the watershed association submit the mid-year report in a timely manner?;

2) Did the watershed association submit the final year report in a timely manner?;

3) Does the final report show evidence of project completion and adherence to the proposal?; and

4) Does the final report include in-kind contributions greater than or equal to 20% of the grant?

Information regarding the past performance of grantees can help to determine the effectiveness and consistency of a watershed association. If an association has a history of submitting reports late, not completing projects on time, or not including in-kind contributions with the final reports, then the Executive Committee should be aware of it and systematically factor this performance history into its ratings. The Program Coordinator can easily track this information and create a report which can be distributed to the committee members prior to the annual grant funding meeting.

The 1999 Grant Funding Meeting

The Legislative Auditor observed the Stream Partners May 1999 grant funding meeting. Seven of the eight committee members were present, along with the Coordinator who served as the chairperson. The 1999 meeting began by having each committee member rank the applications by stating, "Fund," "No Fund" or "Maybe". There were 47 grant applications that were submitted to the Stream Partners Program for funding in 1999. Only one of the applications received unanimous approval after this first stage of the evaluation process. Then, the committee took the remaining applications and discussed the projects on an individual basis. Overall, 32 projects received partial funding, six received full funding, and nine received no funding.

Scoring System Needs Strengthened

The Executive Committee is adhering to the criteria within the Legislative Rule when evaluating grant applications. However, there are deficiencies with the scoring system. According to the Coordinator,

The criteria for funding for the West Virginia Stream Partners Program review team is a score sheet to be used by each member to rank applications. The total is then used by each member to give them a general ranking of the grants to be used in the discussion of which groups are to be funded. There is no grading scale that determines the cut off point for funding.

For example, one committee member may give one application a total score of 60, which would represent a "Maybe" to that member and another committee member may give the same application a total score of 60 as well, representing "Fund" to the second member. Because a total score of 60 may indicate a project should be funded to one individual and a more marginal project to another, the instrument developed for the 1999 funding cycle may not be reliable. An instrument which is not reliable is by definition not valid as well, since reliability is a condition of validity. The adoption of reference points for the grading scale may improve consistency between members and make funding decisions easier. An example of a grading scale may establish scores of 0 to 50 points as indicating low value or "No Fund," scores of 51 to 80 as average value or "Maybe," and scores of 81 to 100 as high value or "Fund." This would entail transposing these ranges to each criterion comprising the total score as well. For example, the following criterion is presently worth a maximum of 20 points:

a) A showing of how the organization is a broad-based community organization, and the members represent diverse areas and organizations within the community. Also provide an overview of the organization's history.

If the Executive Committee desired to work from the overall grading scale in the example above, 0 to 10 points on this item would indicate a low score (suggesting "No Fund"), 11 to 16 would indicate an average score (suggesting "Maybe"), and 17 to 20 points would indicate a high score for that criterion (suggesting "Fund"). As long as there is a common understanding of the ranges, however they may be defined, scoring should be more reliable and meaningful to the process.

Conclusion

The Stream Partners Program has made strides in improving the control it has over the grantees. For example, the changes to the grant application and the Legislative Rule passed in March 1999 have provided the SPP a better opportunity to monitor the grantees. However, additional changes need to be made in order to strengthen the SPP. These changes include: a) incorporating scoring for past performance into its grading scale; b) incorporating logical reference points into its grading scale; c) returning improperly completed applications for re-submission or denying them, and returning improperly completed reports for prompt re-submission; d) including a completed sample application along with the application form when sending to applicants and doing the same with mid year and final year reports; e) requiring grantees to report other grants in addition to in-kind contributions; and f) requiring grantees to submit all receipts relating to the SPP grant.

In addition to the aforementioned changes, the Stream Partners Program needs to continue to improve the monitoring of the outstanding reports that grantees have not submitted. The lack of reporting confounds the measurement of the SPP's effectiveness. The number of watershed associations that have applied to the Stream Partners Program for funding continues to grow each year, which means that it is increasingly important for the SPP to closely monitor the watershed associations' performance so that the grant money is distributed fairly, equitably, and effectively each funding year.

Recommendation
1

The Stream Partners Program should incorporate scoring for past performance into its grading scale.

Recommendation 2

The Stream Partners Program should incorporate logical reference points into its grading scale to help achieve consistency in the grant application review process.

Recommendation 3

The Stream Partners Program should return improperly completed applications for re submission or deny them and return improperly completed reports for prompt re-submission.

Recommendation 4

The Stream Partners Program should include a completed sample application along with the application form to ensure that the applications are filled out properly. Sample mid-year and final reports should also be included with the reporting form when they are mailed to the applicants.

Recommendation 5

The Stream Partners Program should require reporting of other grants in addition to in-kind contributions.

Recommendation 6

The Stream Partners Program should require the grantees to submit all receipts pertaining to the expenditures of the Stream Partners grant.

ISSUE AREA 3:The Stream Partners Program Has Deviated from the Governance Structure Established in Statute and Violated the Open Meetings Law.

The Legislature created the Stream Partners Program in 1996 with the intention of having a four person Executive Committee to administer the Program. The Governor was to designate a member of the Executive Committee to serve as the chairman. However, the Stream Partners Program has an eight member "Review Team" which was initially created as an advisory subcommittee to the Executive Committee and has evolved into a default Executive Committee due to the lack of participation by the four administering agency Directors. Further, no official chairman has of yet been appointed by the Governor. During the first three years of funding, the Review Team did not conduct any open meetings and the Directors have never met on a formal basis.

The Intent of the Legislature

The Stream Partners Program is administered by four separate agencies: 1) the Division of Natural Resources; 2) the Division of Environmental Protection; 3) the Division of Forestry; and 4) the West Virginia State Soil Conservation Agency. West Virginia Code §20-13-3 states,

The director or commissioner of each of these administering agencies or his or her designee shall collectively constitute an executive committee to oversee the program. The governor shall designate a member of the executive committee to serve as chair. The committee may designate a staff member from the existing staff of one of the administering agencies to coordinate the program on behalf of the executive committee.

Who Is the Executive Committee?

The governance structure of the Stream Partners Program as implemented does not fully meet the requirements of statute. As quoted above, West Virginia Code §20-13-3 requires that an Executive Committee, comprised of the Director of each of the administering agencies, or his/her designee, oversee the Program (see Appendix B for West Virginia Code §20-13-1 et seq.). The Statute also requires the Governor to designate a chair of the Executive Committee. As of July 1999, there is neither a committee holding public meetings under the name of the "Executive Committee" nor has a Chair been designated by the Governor. In addition, Program staff informed the Legislative Auditor that the agency Directors "have never met on a formal basis, therefore no motions are made and no minutes are kept." At the exit conference for this review, persons representing the administering agencies indicated the Directors did meet informally on one occasion when the Program was first being implemented.

The role of the Executive Committee is currently being met by a committee commonly referred to as the "Review Team" or "Grant Selection Committee." Because members of the Review Team conduct all business the Executive Committee is required by statute to conduct, the Legislative Auditor has determined the Review Team to be the default Executive Committee. The Review Team meets on an annual basis and includes two members of each of the four administering agencies for a total of eight members. However, until it met May 20, 1999, to award grants for the 1999 funding year, it did not hold open meetings. In addition, no minutes were kept for those meetings. Currently, the designated Coordinator serves as the Chair at the Review Team meetings.

The opinion of the Legislative Auditor that the Review Team is the default Executive Committee is in contrast with the view of the SPP staff. When Program staff was asked to explain who is the Executive Committee, they responded as follows:

The "Review Team" does act for the four agency directors that make up the "Executive Committee". The eight "Review Team" members serve as the directors' designees. Official actions are taken at the "Review Team" level with recommendation being made to the "Executive Committee" for the final action.

The subtle disagreement between the Legislative Auditor and SPP administrative staff is largely a matter of semantics. The question of whether the Review Team is the actual Executive Committee or an advisory subcommittee thereto is moot. Either scenario presents fundamental governance concerns. If the Review Team is actually the Executive Committee, the Committee has twice its allotment of members, met only informally until its last funding meeting, maintained no records of its meetings, and allowed persons not on the Executive Committee (the agency Directors) veto power over its decisions. If the Executive Committee is actually the four agency Directors, then the Committee has funded projects without ever having met on a formal basis, and the decisions of an advisory subcommittee have become the default decisions of the Committee if a project was not vetoed at the initiative of an individual Committee member.

For an official answer concerning the composition of the Executive Committee, the Legislative Auditor sent a request to each of the administering agencies' Directors asking for either a copy of the letter of appointment sent to any person currently serving as a Director's designee to the Executive Committee or a brief letter in response naming the person representing the agency on the Executive Committee. The letter of request included West Virginia Code §20-13-3, "West Virginia stream partners program created; executive committee identified; program coordination," as an attachment. Every possibility is represented in the responses received. The Director of the Division of Environmental Protection indicated that he will personally serve as the Division's representative to the SPP Executive Committee. Similarly, the State Soil Conservation Agency reported that the Executive Director continues to serve as the Agency's representative to the Executive Committee. The Director of the Division of Natural Resources responded,

I am pleased to advise you that Mr. [X, one of the DNR's two designees to the Review Team] of our Wildlife Resources Section has been the Division of Natural Resources representative on this Executive Committee for the Stream Partners Program since its creation.

The Director/State Forester of the Division of Forestry, in his response to the request, explained the Division's history of appointments, using the terms "team," "committee," and "program" interchangeably. The letter names the two current members of the Review Team as the Committee members. The responses of the four Directors can be found in Appendix C. Of four Directors having positions on the Executive Committee for themselves or their designees, two Directors communicated a will to represent themselves on the Executive Committee, another named one of two designees to the Review Team as having been the representative to the Executive Committee since the Program's creation, and another named the two current representatives of the Review Team as the Executive Committee members referring to the "Review Team" and the "Executive Committee" interchangeably. Clearly, there is no consensus among the Directors of the four administering agencies concerning the question "Who is the Executive Committee?"

The Legislative Rule of the Program, Title 60, Series 4, which can be found in its entirety in Appendix D, includes the following definition:

2.5. "Executive Committee Review Team" means a team consisting of two members of each of the four agencies that jointly administer the program. These agencies included: West Virginia Divisions of Environmental Protection, Forestry, Natural Resources, and the West Virginia State Soil Conservation Agency.

The definition combines the names "Executive Committee" and "Review Team" into "Executive Committee Review Team." The definition describes the Review Team, not the Executive Committee, which is described in West Virginia Code §20-13-3 which reads, "The director or commissioner of each of these administering agencies or his or her designee shall collectively constitute an executive committee to oversee the program." References to the "Review Team" occur throughout the rule, while no references to the "Executive Committee" are made. The "Executive Committee Review Team" is not referenced except for the definition above. Thus, the Division of Environmental Protection, which is charged in §20-13-4 with the responsibility of promulgating the Stream Partners Program rule, will need to promulgate a new rule replacing references to the "Review Team" and "Executive Committee Review Team" with "Executive Committee" and defining "Executive Committee" in a manner consistent with Code §20-13-3.

Lack of Notice and Minutes for Meetings

The Legislative Auditor contacted the Secretary of State's Office to see if any meetings were filed for the Stream Partners Program from 1996 to 1998. The Secretary of State's Office informed the Legislative Auditor that no notice of meetings had been filed for that time span. Since the meetings were not open, the actions of the Review Team could have been voided due to a 1996 West Virginia Supreme Court Case ruling. According to West Virginia Code §6-9A-3, "...all meetings of any governing body shall be open to the public, proof of an intent to violate this section is not required to establish that a violation has occurred." Therefore, all of the meetings that have resulted in grant money being disbursed by the Stream Partners Program could have been nullified by a court of law prior to the 120 day statute of limitations tolling. As of July 1999, the Legislative Auditor was not aware of any actions taken in closed meetings which are not relieved by the statute of limitations.

According to the Program Coordinator, "the review team/grant selection team meets on an annual basis, but no minutes are kept of the activities that transpire." By not keeping minutes, the Review Team is in violation of West Virginia Code §6-9A-5 which states,

Each governing body shall provide for the preparation of written minutes of all of its meetings. All such minutes shall be available to the public within a reasonable time after the meeting and shall include, at least, the following information:
(1) The date, time and place of the meeting;
(2) The name of each member of the governing body present and absent;
(3) All motions, proposals, resolutions, orders, ordinances and measures proposed, the name of the person proposing the same and their disposition; and
(4) The results of all votes and, upon the request of a member, the vote of each member, by name.
Minutes of executive sessions may be limited to material the disclosure of which is not inconsistent with the provisions of section four [§6-9A-4] of this article.

The 1999 Legislature has made changes to §6-9A-5 of the West Virginia Code, which are reflected in the Second Enrollment of House Bill 2005. Therefore, all future meetings of the Stream Partners Program need to abide by the new language in §6-9A-5, which states,

Each governing body shall provide for the preparation of written minutes of all of its meetings. Subject to the exceptions set forth in section four of this article, minutes of all meetings except minutes of executive sessions, if any are taken, shall be available to the public within a reasonable time after the meeting and shall include, at least, the following information:
(1) The date, time and place of the meeting;
(2) The name of each member of the governing body present and absent;
(3) All motions, proposals, resolutions, orders, ordinances and measures proposed, the name of the person proposing the same and their disposition; and
(4) The results of all votes and, upon the request of a member, pursuant to the rules, policies or procedures of the governing board for recording roll call votes, the vote of each member, by name.

The Legislative Auditor provided a representative of the Stream Partners Program with a copy of House Bill 2005. Prior to this, the Coordinator informed the Legislative Auditor that the Review Team members were not aware that they need to keep minutes or hold formal meetings when they meet to review and evaluate the grant applications. Once Program staff became aware of open meetings requirements, they became responsive to those concerns. Notice of the May 1999 grant funding meeting was filed with the Secretary of State's Office, and the Legislative Auditor witnessed minutes being taken at the meeting.

Conclusion

Upon consideration of the question "Who is the Executive Committee?" only one thing is certain: The present system of Program governance could not be more ambiguous. Statute requires the four Directors to either actively participate as members of the Executive Committee or designate a person to serve in their stead. Given the fundamental deficiencies in the current structure of governance, it is imperative that the Directors or their duly appointed designees convene as a bona fide Executive Committee for the purpose of administering the Stream Partners Program as required by law.

The intent of the Legislature is to have a four person Executive Committee to oversee the Stream Partners Program. If the Review Team is, in fact, the Executive Committee, the Committee has twice its allotment of members, met only informally until its last funding meeting, maintained no records of its meetings, and allowed persons not on the Executive Committee (the agency Directors) veto power over its decisions. If the Executive Committee is actually the four agency Directors then the Committee has funded projects without ever having met on a formal basis, and the decisions of an advisory subcommittee have become the default decisions of the Committee if a project was not vetoed at the initiative of an individual Committee member.

Until the May 1999 grant funding meeting, the Stream Partners Program failed to have open meetings and to keep minutes of meetings, both violations of the statute. The Legislative Auditor feels that the representatives of the Stream Partners Program were simply unfamiliar with the requirements of the Code and did not intentionally attempt to commit any violations. Once these concerns were brought to their attention, they responded in a timely manner to rectify the situation.

Recommendation 7

The four agencies should adhere to legislative intent and affirm a four person Executive Committee to oversee the Stream Partners Program.

Recommendation 8

The Executive Committee and any committees reporting thereto should comply fully with the Open Meetings Law, by filing notice of its meetings with the Secretary of State's Office, making meetings open to the public and keeping minutes of its meetings.

Recommendation 9

The Governor should designate a Chair of the Executive Committee as soon as possible.

Recommendation 10

The Executive Committee should make all final decisions.

Recommendation 11

The Stream Partners Program should revise its Legislative Rule by replacing the "Executive Committee Review Team" definition and all references to the "Review Team" with a definition and appropriate references to the "Executive Committee" in a manner consistent with West Virginia Code §20-13-3.