The purpose of the review was to determine the compliance of the City of Bremerton, Washington, with requirements for subrecipients of American Recovery and Reinvestment Act of 2009 (ARRA) funds under the Drinking Water State Revolving Fund (DWSRF) program. The City entered into a loan agreement with the Washington State Department of Community, Trade and Economic Development to design and construct an Ultraviolet Treatment and Chlorine Disinfection Facility. The City received a DWSRF loan for $6.06 million. The loan terms include a $60,000 loan fee and 100 percent forgiveness on the $6 million principal funded by the Recovery Act. The loan fee has a 5-year repayment period at 0 percent interest. We conducted an onsite inspection at the City of Bremerton on June 1 and 8, 2009. During our inspection we: Conducted interviews of the subrecipient's project and financial managers; Reviewed the subrecipient's procurement policies and procedures; Reviewed records maintained by the subrecipient, including procurement documentation; and Toured the project site.