EPA Inspector General Says Oversight Follows Money, Risk and Change
Nicole Murley says the watchdog weighs where money flows, where data is weak and how the agency has changed
By AXY Government Desk ·
Key points
- The EPA inspector general's office ranks audit priorities by where the most money goes, where visibility is weakest and what has changed most, Nicole Murley said.
- The EPA has received more than $60 billion in supplemental funding in recent years, much of it passed to states and subrecipients.
- Murley said distance and volume make oversight harder, and that the agency has reorganized, reduced its workforce and begun introducing AI and new information systems.
The Environmental Protection Agency's inspector general office decides what to audit by asking three questions: where the money is, where the agency can see least, and what has changed the most. Nicole Murley, who described the office's planning in an interview with Terry Gerton published October 20, 2026, said those answers shape where the office puts its limited staff time in the coming year.
An inspector general, usually shortened to IG, is an independent watchdog that sits inside a federal agency. The role was created by the Inspector General Act of 1978. IG offices audit programs, investigate fraud and report their findings to agency leaders and Congress. Because an IG can only examine a fraction of an agency's activity in any given year, the choice of targets effectively sets the oversight agenda. Murley's explanation offers a rare look at how that choice gets made.
Why the money is the first question
The first test is simple: where is the money going? Murley said the EPA has received more than $60 billion in supplemental funding over the last couple of years. Supplemental funding is extra money added on top of an agency's regular annual budget, usually through a separate law. Congress approved money of this kind in laws passed in 2021 and 2022, including the Bipartisan Infrastructure Law and the Inflation Reduction Act.
Most of that money does not stay with the EPA. Murley said it goes out to states and to subrecipients, which are the organizations that receive funds passed down from a state or another primary grant holder. A subrecipient might be a local government, a utility or a nonprofit group. Murley's office also looks at the agency's regular budget and asks where its resources are being moved.
Following the money down the chain
The farther money travels from Washington, the harder it becomes to watch. Murley put it plainly. "The farther the money gets down the chain, the farther it is from the agency to the sub-recipient," she said.
When asked about the challenge, Murley said it comes down to two things. "It's distance and volume," she said. "Two things get harder. There's more money and there's more hands that that money passes through." She said that when the money more than doubles, the work of managing it and the office's own oversight responsibilities grow as well.
The new money also brings new kinds of recipients. Murley said many of them are "unsophisticated recipients" who may never have received federal dollars before. Those groups may lack experienced grant staff, accounting systems built for federal rules, or a track record that lets auditors judge their spending. Murley was clear that the underlying problems have not changed. "The schemes aren't new," she said. What she described as new is the scale and the number of hands the money passes through.
Where visibility runs out
The second test is visibility. Murley said the office asks where it can see good data, where the data is bad and where the gaps are. In practice, a watchdog can only audit what it can see. If a grant passes through several layers before it reaches a local project, the agency may have limited direct records of how that money is being used.
This matters for ordinary people in a practical way. Federal money that is spent well can fund local projects. Money that is poorly tracked can be lost to error, waste or fraud before anyone notices. Murley's framework treats gaps in data as a warning sign in their own right, not just as an administrative problem. A place where the agency cannot see clearly is a place where the office has reason to look harder.
Murley also said the office compares its own past work against where the agency is spending money. The question is which programs the office has already reviewed in recent years, and where its own oversight has gaps. Those gaps, she said, help determine the focus for the coming year.
Preventing problems before they start
Gerton asked what the office does before misuse happens, including whether it trains recipients or adds more checks to the system. Murley called prevention one of her favorite topics. She said it is often the least visible part of oversight. "It's not quantifiable," she said. "How do you count money or fraud that hasn't happened?" She added that prevention is "the bread and butter" of the office's work.
The published excerpt ends before Murley describes specific preventive steps, so it is not clear from this material which training, system flags or other measures the office uses or plans to expand. Readers should not assume details beyond what she said on the record.
What has changed inside the agency
The third test is change. Murley said the EPA has reorganized and reduced its workforce this year. She also said major technology changes are under way. Information systems are being updated, and artificial intelligence, or AI, is being introduced to the workforce.
Those changes can cut both ways. A smaller staff may have less capacity to manage grants, while new systems can improve tracking if they are built and checked carefully. They can also create new points of failure, especially during transitions when old and new records must be matched. Analysts who follow federal oversight would likely point out that a reorganization can move responsibility for a program from one team to another, making it unclear who is accountable for particular spending. Murley did not describe specific effects of the reorganization in the excerpt, so those possibilities remain analysis rather than findings.
Gerton noted that these three questions sound like rules that could apply to nearly any IG office in the federal government. That is a useful point for readers. The EPA is one of many agencies whose inspectors general must decide where to look with limited staff, and the same pressures of money, distance and change appear across government.
What comes next
The practical result of this framework is a list of audit priorities for the coming year. Murley said the office's choices flow from its review of the agency's spending, its visibility gaps, its past work and the changes it sees. Readers who want to track those choices can look at the office's published audit plans and reports, which are usually posted publicly and collected on the government's oversight reporting site, Oversight.gov.
Several things are worth watching. One is whether the office shifts more attention toward subrecipients, where Murley said distance makes oversight hardest. Another is how the agency handles its reorganization and new technology, especially if reduced staff and new systems affect the quality of the data the office says it needs. A third is whether preventive work becomes more visible, since Murley said it rarely makes headlines even though it is central to the job.
For the people who depend on federal money, the stakes are concrete. Supplemental funds are meant to reach communities and projects quickly. If oversight lags behind the money, the risk falls on taxpayers and on the communities that were supposed to benefit. Murley's account suggests the office is trying to get ahead of that risk by looking first where the money is largest, the data is weakest and the agency has changed the most.
Questions and answers
How does the EPA inspector general decide what to audit?
Nicole Murley said the office looks at three things: where the most money is, where it has the least visibility into spending, and what has changed the most at the agency. Its own past oversight work also helps determine where it focuses next.
Why is oversight of EPA funding getting harder?
Murley said the EPA has received more than $60 billion in supplemental funding that goes to states and subrecipients. She said that more money and more layers of recipients make distance and volume the main challenges.
What changes at the EPA are affecting its inspector general?
Murley said the agency has reorganized, reduced its workforce, updated its information systems and begun introducing AI to its workforce. She said these changes are part of the office's risk assessment.
Topics: EPA Inspector General, Nicole Murley, Environmental Protection Agency, federal oversight, supplemental funding, grant management, subrecipients, federal audits
Sources: Federal News Network
https://axynewsglobal.com/article/epa-inspector-general-says-oversight-follows-money-risk-and-change