A federal watchdog warned in 2024 that EPA couldn’t account for $836 million in school bus grants and had built in an incentive for recipients to sit on the cash. Two years later, the agency’s own numbers show what came of it: a bankrupt manufacturer, thousands of undelivered buses, and a program its own administrator calls a disaster.
Nearly four years after Washington began handing out billions of dollars to replace America’s aging school bus fleet with electric models, the Environmental Protection Agency’s own figures show the program has failed on its most basic promise: getting buses to children who need them. Of roughly 2,600 electric buses purchased through the Clean School Bus Program, fewer than 40 percent — about 1,100 — have actually been delivered, according to agency data reported by the New York Post on September 24. Another 854 are behind schedule, and EPA says 140 will never arrive at all.
EPA Administrator Lee Zeldin did not mince words. “American taxpayer dollars vanished into thin air, and our children were left without buses,” he said of a program that has already disbursed $2.7 billion of its $5 billion authorization.
That is a political appointee’s characterization of a program built by the prior administration, and it should be read as such. But the underlying numbers are not a partisan talking point — they are EPA’s own, and they track almost exactly what the agency’s independent Office of Inspector General predicted nearly two years earlier, in an audit the agency has never disputed.
A Climate Priority Written Into Infrastructure Law
The Clean School Bus Program was created by the 2021 Infrastructure Investment and Jobs Act, the bipartisan infrastructure law, which authorized $5 billion over five years (fiscal years 2022 through 2026) to help school districts replace diesel buses with cleaner alternatives. The statute, codified at 42 U.S.C. § 16091, required EPA to reserve half of each year’s funding exclusively for zero-emission — meaning battery-electric — buses, with the remaining half available for either zero-emission buses or lower-cost “clean” alternatives such as propane and compressed natural gas.
In practice, EPA and the districts and contractors applying for its money pushed far past that floor. By the agency’s own accounting, roughly 90 percent of committed funds went to all-electric buses rather than the cheaper alternative-fuel options the second funding pool was also designed to support. Of 2,600 buses ordered, only 60 were propane-fueled — and nearly all of those have been delivered without incident, according to EPA’s figures. The contrast is instructive: where the program stuck to mature, off-the-shelf technology, it worked. Where it chased an all-electric fleet on an accelerated timeline, it did not.
The sales pitch, at the time, was straightforward: diesel exhaust is a documented health hazard for children who breathe it every school-day morning, and replacing the oldest, dirtiest buses first would deliver an immediate public-health benefit. That premise was not fabricated — EPA’s own research on diesel particulate matter predates this program by decades. What the agency did not adequately plan for, according to its inspector general, was whether the money it was handing out would actually turn into buses on the road.
The Audit That Called It
On December 4, 2024, EPA’s Office of Inspector General published Report 25-P-0007, an audit of how 2022 rebate recipients were managing the money they had already received. The findings were blunt. EPA had committed to monitoring recipients’ use of funds but, in practice, had lost track of more than $836 million in disbursed rebates. Only 22 of 360 recipients — 6.1 percent — had completed the closeout process required to confirm their money was spent as intended, even though the deadline for many had already passed. Nearly 60 percent of audited recipients had not finished installing the charging infrastructure their buses would need, putting them at risk of missing an October 2024 deadline outright.
Most strikingly, the inspector general found that EPA had given rebate recipients no real guidance on how to manage the federal funds sitting in their accounts, and had allowed them to commingle program money with other funds and keep any interest it earned while sitting unspent — a structure the audit said created “vulnerabilities to fraud, waste, and abuse.” EPA’s own response to the audit, on the record, treated one of the two core recommendations as unresolved because the corrective action it proposed did not fully address the problem the inspector general had identified.
This was not the first warning. Earlier OIG reviews — an internal-controls report in July 2024, and a management-implication memo and a utility-delay report both in December 2023 — had already flagged weak verification of applicants’ eligibility and recurring infrastructure delays. By the time the December 2024 audit landed, the pattern was well documented inside the government. It simply had not yet been converted into a public accounting of how many buses had — or had not — shown up.
Where the Money Went
That accounting arrived this September, and it names names. Lion Electric, a Quebec-based manufacturer that had become one of the program’s largest bus suppliers, collected $160 million in Clean School Bus funds before filing for bankruptcy protection in 2024, leaving districts that had ordered from it without a working bus and without a company to hold accountable. Highland Electric Fleets took in more than $150 million and, according to EPA, developed what the agency characterizes as significant management problems, including gaps between the buses it had been funded to provide and the school contracts needed to actually deploy them. First Student, the country’s largest school bus contractor, was awarded $401 million — and by EPA’s count, two-thirds of the electric buses it owes are behind schedule across 37 districts.
The consequences are not abstract. EPA estimates that roughly 46,000 children will not get a promised new bus this school year because of manufacturer delays and failures, and that about a third of participating districts have withdrawn from the program altogether, citing delivery delays, cost overruns, and reliability concerns. In upstate New York, the Gouverneur Central School District spent roughly $1 million in combined federal, state, and local funds to electrify just two of its 28 buses — a unit cost that dwarfs the $150,000-to-$175,000 sticker price of a standard diesel bus, and that runs well above even the $250,000-to-$400,000 market price of an electric bus bought without the program’s added infrastructure and administrative costs.
In February, EPA moved to stop the bleeding. Administrator Zeldin announced the agency was canceling the 2024 rebate award round, opening a 45-day public comment period on expanding eligible technologies to include biofuels, compressed natural gas, liquefied natural gas, and hydrogen, and redirecting the roughly $2.3 billion in remaining, uncommitted funds toward a retooled 2026 grant round built around what the agency described as safety, fiscal responsibility, and reliability rather than a single preferred technology. EPA separately rescinded $38 million in awards after determining they were not eligible in the first place. “As was the case with so many of the Biden-era programs,” Zeldin said at the time, “the Clean School Bus program has been a disaster of poor management and wasteful spending.”
A State Mandate Meets a Federal Retreat
The program’s troubles are landing hardest in places that built their own climate policy on the assumption that federal money would keep flowing. New York state law, championed by Gov. Kathy Hochul, bars school districts from buying new combustion-engine buses starting in 2027 and requires an all-electric fleet by 2035. That mandate was written for a world in which EPA’s $5 billion kept moving; it now collides with a federal program that has pulled back sharply and with the underlying economics an inspector general has already documented.
Local voters are not waiting for Albany to reconcile the two. In Baldwinsville, voters rejected a proposal to buy electric buses by a margin of 1,423 to 716, then turned around and approved 14 traditional buses by a nearly identical margin. Voters in Mexico, New York, and other central New York districts rejected electric-bus purchases outright. Even in Ithaca — hardly a conservative stronghold — voters initially rejected four proposed electric buses before approving a scaled-back purchase of two. Statewide, at least five districts chose traditional buses over electric ones when given the option. The objections voters raised were practical, not ideological: purchase prices of $250,000 to $400,000 against $150,000 to $175,000 for a diesel bus, and open questions about how battery range holds up on long rural routes in a Northeast winter.
The Case Program Defenders Still Make
None of this is to say the program’s premise was fraudulent, or that everyone who built it acted in bad faith. Advocates for electric school buses — including EPA under the prior administration — point to real, well-documented health harms from diesel exhaust in an enclosed vehicle full of children, and argue that large fleet transitions of any kind, public or private, routinely run into early-stage supply-chain and grid-interconnection delays that look like failure in year two but resolve by year five. Proponents also note that electric buses carry lower fuel and maintenance costs over a vehicle’s operating life, which can offset a higher purchase price over time — an argument that depends heavily on a bus actually operating reliably for that life, which is precisely what the inspector general and EPA’s own delivery data now call into question for a meaningful share of this program’s buses.
That is a fair case to make, and RightSideNews notes it because the honest version of this story is not that electric school buses are inherently unworkable — it is that this particular $5 billion federal program, as designed and initially administered, did not build in the oversight needed to tell the difference between an early-stage transition and a program quietly failing.
An Audit Trail, Not a Talking Point
What separates this story from a purely partisan dispute over green energy policy is the paper trail. The most damaging assessment of the Clean School Bus Program was not delivered by a Republican administrator or a conservative think tank — it was delivered by EPA’s own independent inspector general, in a formal audit published under the prior administration’s own EPA, more than a year before Lee Zeldin ever quoted its findings. The $836 million in unmonitored rebates, the 6.1 percent closeout rate, the fund-comingling policy that the government’s own watchdog said invited fraud — all of it is a matter of public record, unrebutted by the agency it describes.
It would also not be the first time this year that a federal agency’s own grant-making machinery has drawn scrutiny for moving money faster than it could track it — RightSideNews has separately documented how FEMA’s disaster-relief screening broke federal law and how institutional guardrails collapsed inside FEMA’s own aid programs. The Clean School Bus Program is a different agency and a different mechanism, but the underlying failure mode — money disbursed well ahead of the verification needed to confirm it did what Congress intended — is becoming a familiar one.
The open question now is whether the roughly $2.3 billion still uncommitted will be governed by better guardrails than the first $2.7 billion was, or whether the same design flaws simply get repackaged under a broader list of eligible fuels. EPA’s own response to its inspector general suggests that question is not yet fully answered: one of the audit’s two central recommendations remains, in the agency’s own words, unresolved. For the districts still waiting on buses that were promised — and paid for — years ago, that is not a technicality. It is the whole story.