February 17, 2011, marked the second anniversary of the enactment of the American Recovery and Reinvestment Act of 2009 (Recovery Act). This report summarizes efforts by the Office of Inspector General (OIG) of the U.S. Environmental Protection Agency (EPA) during the past year to monitor EPAs Recovery Act efforts, as well as to educate EPA, state, and other personnel on ways to protect against fraud, waste, and abuse. Outreach has been an important part of our efforts. We provided more than 125 briefings to over 3,900 personnel who are administering or receiving Recovery Act funds. We reported that EPA promoted competition for Recovery Act grants to the maximum extent possible for the National Clean Diesel Funding Assistance Program, and we noted a potential best practice related to a national request for applications and universal guidance for reviewers and selection officials. Also, EPAs controls for reviewing grantee and contractor recipient-reported data resulted in low error rates, although we noted that improvements could enhance data accuracy. In another report, we found that EPAs terms and conditions as well as process to award Recovery Act interagency agreements needed improvements. We conducted a number of site reviews focusing on whether specific grantees met Buy American, wage rate, financial management, and reporting requirements under the Recovery Act, and generally found no problems. The Agency continues to face several challenges related to the Recovery Act. The OIG identified EPA oversight of Recovery Act funds as a management challenge in 2009 because of concerns with meeting Recovery Act requirements, despite Agency steps to address them. EPA must obligate its oversight funds by the end of fiscal year 2011, but many Recovery Act projects will not be completed by that time. The OIG remains concerned as to whether there will be sufficient oversight to ensure that projects are completed timely and environmental objectives are achieved. We will continue to dedicate significant efforts to ensure that EPA uses its Recovery Act funds wisely.