What happened:
On July 21, a federal oversight report disclosed that EPA had not awarded roughly 44 percent of its 2022 and 2023 water-project funds by September 2025. That left more than $1 billion across 510 of 1,198 drinking water, wastewater, stormwater, and water-quality projects unused for their stated purpose. Every one of these projects had been approved by Congress.
The EPA attributed this delay to a new program, staff shortages, and inexperienced recipients. They also identified missing goals, scattered tracking, and unclear guidance for consulting tribal governments.
On the source:
The finding comes from EPA’s inspector general.
Why it matters:
The moral wrong is failed stewardship: EPA had the money in hand and did not send it out. The delay did not cancel any project, but it left communities waiting on funds that were already theirs to use, and small systems with the least capacity to absorb delay wait longest. This is an Authority signal in institutional stewardship.
The numbers:
USA MDI Score: 36.65 Elevated
World Rank: 90 of 195
Authority Sub-dim: 25
Authority Lead Drivers: Relatively clean governance with functioning rule of law.
(v3.1.5 published July 1, 2026 - Open Science Framework, license: CC BA-NC-SA 4.0)
Primary source:
Oversight.gov, “Audit of EPA Water Earmark Grants for Fiscal Years 2022 and 2023,” July 21, 2026 — Oversight.gov / U.S. Environmental Protection Agency, “EPA Community Grants - Program Basics,” February 13, 2026 — U.S. EPA / U.S. Environmental Protection Agency, “Community Grants Program: FY 2023 Final Implementation Guidance,” April 2023 — U.S. EPA