What set them off were the Environmental Protection Agency grants promoting the use of electric bicycles and wind power in China.

These payouts totaled $180,000--a drop in the bucket, considering EPA spent $4 billion, or half its fiscal 1999 budget, on grants. Nevertheless the China-related grants caught the eye of staffers at the House subcommittee that oversees the environmental regulator, and they were featured at an oversight hearing last month.

And there's going to be a lot more oversight over the course of the new year.

The House Transportation and Infrastructure subcommittee on oversight, investigations and emergency management, chaired by Rep. Tillie Fowler (R-Fla.), plans three more hearings on EPA grant management over the course of the new year.

"There is strong evidence that EPA is not fulfilling its obligation to monitor and oversee what is happening to its grants," Fowler said at the first hearing.

Grant money is spent on a variety of initiatives, some of them directly related to EPA's regulatory responsibilities. In fiscal year 1998, for example, states received grants for hazardous waste management programs, the underground storage tank program, to carry out Superfund agreements, and for water pollution control--to name a few.

Grants also underwrite special research and policies promoted by the agency such as environmental justice, a program that was established to make sure that certain communities and groups are not disadvantaged by development on sites that may have been polluted in the past.

Conservative groups allege that EPA grant money goes to finance favored Clinton administration projects, such as advancing the ratification of the Kyoto treaty, which contains many pollution-control initiatives to reduce global warming.

EPA officials complain privately that the heavy attention on their grant programs, rather than those at other Cabinet departments, seems motivated by the Republican Congress's sympathy toward industries that run afoul of pollution rules. They note too that Congress doesn't complain about the many grants it "earmarks" for programs near the hearts, or the districts, of individual members.

But EPA's massive grant program is also facing questions within the agency. The inspector general, who already has ordered numerous audits of individual grants, plans to spend the next three years examining how the program works and if taxpayers are getting what they paid for.

In testimony before the subcommittee in November, IG Nikki L. Tinsley said her office will be looking to determine if there are systemic problems in the EPA grants program. Tinsley said the audit work done by her division has shown that "many times the public has not benefited as expected from these expenditures."

Some of the problems the IG turned up include giving the same recipient grant money twice for the same project; not monitoring grants to states, resulting in state work that is substandard in inspection and enforcement; not knowing how money awarded for training was being spent; awarding grant money for jobs that should be done by the agency; and grantees performing only part of the work they were paid to do.

This isn't the first time EPA grants have faced scrutiny. In 1996, the agency admitted that parts of its grant program had serious weaknesses. Officials say they have been working intently on the problems in grant administration ever since.

At the first hearing, subcommittee panel members grilled EPA on the potential for waste, fraud and abuse in the grant program. Besides highlighting the contracts that are related to China, the panel questioned if EPA should be using competitive contracts rather than grants for some projects, whether it was easier for a grantee to get an award if the sum was a relatively small one, and if auditors did enough on-site visits to grantees.

Fowler added that there would be a "persistent, long-term effort to dig into this issue," but insisted the hearings were not an attack on EPA.

Romulo L. Diaz Jr., EPA's assistant administrator for administration and resources management, said in an interview, "We have not seen any systemic deficiencies in the awarding of grants. There have been some needed improvements."

Diaz, a political appointee, took the job of overseeing the grant program in 1998. He said he has stepped up the pace of improvements and changes.

He said the agency has reduced its backlog of completed grants waiting to be taken off the books from almost 20,000 to less than 600. It has trained its project officers who handle the technical aspects of grants. It has held workshops for prospective applicants, stressing allowable costs, reporting, and record-keeping. It has put in place systems to review and evaluate grantees after they receive an award. It has ended some awards that were unpopular politically.

Diaz said that 89 percent of the grant money goes to state, local and tribal governments. Of the other 11 percent, about half are competitively awarded. That leaves about $190 million in research grants for which there is no competition.

The hearings "will turn out to be much ado about nothing," said another EPA official. "It's Congress charging down a dead end, representing industry types and polluters. It's a fishing expedition to find something on the agency."

EPA officials pointed out that congressional overseers might look at their own use of EPA grant resources. For fiscal year 2000, which started Oct. 1, for example, Congress approved 324 "earmarks," worth $475 million, directing EPA to spend funds on specific projects that members or their constituents are interested in, EPA said.

"Institutions call us up and say, 'When do we get our check?' " Diaz said. "In addition to not allowing us to use dollars to meet our highest priority needs, it increases workload in the grant office."

As for those grants in China, Diaz said the bikes are made in the United States and wind power would offer the alternative of clean energy to the Chinese. "Air pollution doesn't recognize political borders," he said.

FOR THE 10th BIG YEAR, the staff at the Federal Communications Commission got into the holiday spirit by rewriting some favorite Christmas carols and singing them at the agency Christmas party.

This year's favorites included "Harold the Great Dissenter," sung to the tune of "Rudolph the Red-Nosed Reindeer." That would be a reference to some of the lengthy dissents FCC Commissioner Harold Furchgott-Roth has written over the past year.

It goes like this:

"Harold, the great dissenter

Had a pithy way with words

And if you ever read them

You would know they're not absurd."

FCC Chairman William E. Kennard got one of his own, to the tune of "Winter Wonderland:"

Phones will ring

Are you listening?

Throughout this land

No one missing

A beautiful sight

And morally right

Connected in the Chairman's Wonderland.

And the staff clearly has not gotten over its move from M Street in the heart of downtown to The Portals, a new office building near the waterfront in Southwest.

To the melody of "White Christmas," with lots of feeling:

I'm dreaming of 20th and M Street

And all the places I used to go

We had Borders and Olsson's

And bars with Molsons

And scores of restaurants in a row.