In September 2010 and May 2011, we visited the Wastewater Treatment Plant Improvements Project in the City of Nappanee, Indiana. As part of our site visit, we toured the project, visually inspected equipment and materials, interviewed IFA and city officials and their employees, reviewed manufacturers' substantial transformation supporting documentation, and reviewed documentation related to Buy American requirements. We noted in our draft report 7 of 32 instances where the city could not demonstrate compliance with Buy American requirements as set out in Section 1605 of the Recovery Act. In response, the city provided documentation and agreed to take corrective actions to replace two items with products that meet the Buy American requirements. We agree that six of the seven items now comply with the requirements. For the one remaining item, the city could not demonstrate that it was manufactured in the United States, as required by the Recovery Act. As a result, the project is not eligible for the $1,769,000 of Recovery Act funds authorized by the state unless the U.S. Environmental Protection Agency exercises a regulatory option.