Overlapping federal programs make the process through which state and local governments apply for funds to finance rural water and wastewater projects duplicative and costly, the Government Accountability Office found in a new report.

In its third annual report on how the federal government can be more efficient, the GAO identified improvements to the rural water infrastructure funding process as one of 31 areas where greater effectiveness could be achieved through reducing fragmentation, overlap and other cost savings.

“GAO identified the potential for communities to complete duplicate funding applications and related documents when applying for funding from both state revolving fund programs and the Rural Utilities Service’s Water and Waste Disposal program,” the agency said in the report. The SRF programs receive funds through the Environmental Protection Agency while the U.S. Agriculture Department provides funds for the rural utilities program.

Completing separate engineering reports and environmental analyses is duplicative and can result in increased costs and delays for communities applying to both programs, the GAO said. It’s report found that environmental analysis could cost anywhere between $5,000 to $50,000 and a typical environmental analysis could add as little as $500 to a community’s costs or as much as $15,000.

“Having to complete separate preliminary engineering reports or environmental analyses may delay a project because of the additional time required to complete and submit these documents,” the GAO said.

Funding for rural water and wastewater infrastructure is fragmented across the three federal programs that fund water and wastewater infrastructure programs, the report found.

The EPA provides grant funding to states to administer drinking water state revolving funds, which make funds available to communities to finance projects for privately- and publicly-owned drinking water treatment plants. The EPA also provides grants to states to administer clean water state revolving funds, which help communities finance projects for constructing or upgrading publicly owned municipal wastewater treatment plants. In fiscal year 2011, the drinking water and clean water SRFs received $963 billion and $1.5 billion in federal appropriations, respectively.

The USDA administers the water and waste disposal program, which provides funding for both drinking water and wastewater projects in low-income rural communities of 10,000 or less. In fiscal year 2011, the program received $516 million in appropriations and doled the funds out to each state using a formula based on the state’s rural population, unemployment rate and number of households in poverty.

GAO’s analysis showed that communities with 10,000 or less face significant financing challenges to replace or upgrade aging and obsolete drinking water and wastewater infrastructure. The agency estimated it will cost more than $100 billion in the coming decades for such infrastructure projects in rural communities.

“Unlike larger, urban communities that can issue their own public bonds to pay for major water and wastewater infrastructure improvements, rural communities face difficulty independently financing such major improvements,” the GAO said. “In many cases, rural communities have limited access to financial markets, restricting their ability to issue bonds to raise capital.”

The GAO recommended that the EPA and USDA work together with community officials to help avoid delays in coordinating programs for water and waste water infrastructure projects. They also recommended the agencies help communities develop guidelines for uniform environmental analyses.

The GAO reviewed 54 projects in 31 communities across five states that had applied for or received funding from at least one of the three programs.

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