EPA-350-K-03-002
EPA-350-K-03-002 November 2003
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving tJic Environment
Semiannual Report
to Congress
April 1, 2003 -
September 30, 2003
The EPA Office of Inspector General has reported on the
Agency's response to environmental conditions following the
World Trade Center terrorist attacks. See Inside for details.
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EPA Inspector General
Vision Statement
We are catalysts for improving the quality of the Environment and Government through problem
prevention and identification, and cooperative solutions.
Mission
The Inspector General Act of 1978, as amended, requires the Inspector General to: (1) conduct
and supervise audits and investigations relating to programs and operations of the Agency;
(2) provide leadership and coordination, and make recommendations designed to (a) promote
economy, efficiency, and effectiveness, and (b) prevent and detect fraud and abuse in Agency
programs and operations; and (3) fully and currently inform the Administrator and the Congress
about problems and deficiencies identified by the Office of Inspector General relating to the
administration of Agency programs and operations.
To find out more about the U.S. Environmental Protection Agency's
Office of Inspector General, visit our web site at:
http://www.epa.gov/oig
Cover photo: View of the World Trade Center site following the terrorist attacks of September 11, 2001,
courtesy of the New York Police Department.
Printed with vegetable oil based inks on 100% recycled paper (minimum 50% postconsumer)
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Foreword
We recently issued a major report examining how EPA responded to the crisis at
the World Trade Center following the terrorist attacks on September 11, 2001.
This report - which contains information from interviews with more than a
hundred individuals, including EPA officials, air quality experts, rescue and
demolition workers, and residents - noted that the staff at EPA did a
commendable job responding to an unprecedented crisis. Nonetheless, due in
large part to the unexpected nature of the event, we found that some things could
have been done better. Since our country continues to face the threat of
additional terrorist attacks, we think the Agency should address those problems to
be better prepared for any future tragedies. A recurring theme during our work,
confirmed by a survey we conducted of New York City residents, was that
regardless of who is actually responsible, Congress and the American public turn
to EPA when they are concerned about a situation that has environmental
ramifications.
Since "9/11," we have done an extensive amount of work on homeland security
issues. In two separate reviews regarding EPA's role as the nation's lead agency
for protecting America's water supply against potential outside threats, we found
that EPA needs to place greater emphasis on vulnerability assessments and
measuring changes. Also, the Agency needs to improve certain areas of its
computer security self-assessment process to better measure this security.
Further, our Office of Investigation has established a Computer Intrusion
Investigations Unit, to investigate any suspicious or unauthorized computer
activity within the Agency, and is also developing a Network Penetration
Laboratory to conduct computer security testing and risk assessments.
Another area of major focus was assistance agreements. EPA uses more than
half of its budget to fund these grants, and it is essential that the Agency spend
this money wisely. In response to a Congressional request, we provided a report
that details what we found from our grants audits over the past few years. I also
testified before a Congressional subcommittee on these issues. While the Agency
is making progress in this area, it still needs to improve the way it awards these
grants to ensure that funding is awarded for projects that best enable EPA to meet
its goals, and is then managed properly.
Details on these issues and others are contained in this semiannual report.
LouU-te-,' L vIx-^^-LL^/
Nikki L. Tinsley (/
Inspector General
U.S. Environmental Protection Agency
Region 5, Library (PL-12J)
77 West Jackson Boulevard, 12th Floor
Chicago, IL 60604-3590
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Table of Contents
Air
Water
Land
7
9
Cross Media 11
Grants 14
Contracts 17
Business Systems 18
Investigations 21
Public Liaison 26
Testimony 27
Other Activities 29
Appendix 1 - Reports Issued
Appendix 2 - Reports Issued Without Management Decisions
(Available Upon Request)
39
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Highlights
EPA V^orld Trade Center
Response Evaluated
We conducted an extensive
evaluation on how the U.S.
Environmental Protection
Agency (EPA) responded
following the terrorist attacks
on the World Trade Center
towers in New York on
September 11, 2001. We
sought to address steps EPA can
take to be better prepared for
future tragedies (page 3).
In conjunction with this
evaluation, we conducted a
survey to gauge the public's
perception of air quality
information received after
"9/11" (page 5).
Experiencing Problems
EPA's project to modernize its
Permit Compliance System,
used to track permits related to
water discharges, has fallen
significantly behind schedule,
and initial cost estimates rose
dramatically (page 7).
A settlement in connection with
an investigation conducted by
the EPA Office of Inspector
General (OIG), regarding a
false claims case, has resulted
in a cost savings to the
Government of more than
$2.5 million (page 24).
In response to a Congressional
request, we provided details on
EPA's recent actions on prior
audits of assistance
agreements. We continued to
audit grants, and questioned
$32.1 million in grantee
claimed costs (page 14). We
also testified on agreements
before a Congressional
subcommittee (page 27).
Steps Needed to Protects
Nation's Wal
To better protect the Nation's
water supply against
bioterrorism and other terrorist
attacks, EPA needs to place
greater emphasis on
vulnerability assessments and
measurements (page 11).
A petroleum refiner pleaded
guilty to falsifying a report
made to EPA on how much
gasoline it produced and
transferred (page 21).
The Agency continues to make
progress in improving its infor-
mation technology security, but
certain improvements are still
needed (page 19).
We found no evidence to
indicate that EPA's National
Hardrock Mining Framework
has contributed to any
environmental improvements
or protections at sites (page 9).
iputer Intrusion Unit
[fi-jisifecjp*.,_. _ ^
EPA OIG has established a
Computer Intrusion
Investigations Unit to
investigate any suspicious or
unauthorized computer activity
within the Agency (page 23).
- ,,
ť C jtelilSrf Procurements- ,-'
EPA can increase competition
for work under General
Services Administration
Federal Supply Schedule
contracts by obtaining price
quotes from more than just
incumbent contractors
(page 17).
The EPA OIG met with an
18-member research team from
the Board of Audit and
Inspection, Seoul, Republic of
Korea, to tell the group how
EPA OIG performs its work
(page 29).
1
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Profile of Activities and Results
Audit Operations
Reviews Performed by EPA OIG
Audit Operations
Other Reviews
(Reviews Performed by Another Federal Agency
or Single Audit Act Auditors)
April 1,2003 to
September 30, 2003 Fiscal
(dollars
Questioned Costs *
- Total
- Federal
Recommended Efficiencies *
- Federal
Costs Disallowed to be Recovered
- Federal
Costs Disallowed as Cost Efficiency
- Federal
Reports Issued - OIG-Managed
Reviews
- EPA Reviews Performed by OIG
Reports Resolved
(Agreement by Agency officials to
take satisfactory corrective actions)***
in millions) 2003
$29.0 $31.0
$28.3 $30.1
$0.2 $0.7
$1.8 $3.2
$0 $0
27 48
76 128
April 1,2003 to
September 30,
2003
(dollars in millions)
Questioned Costs *
- Total
- Federal
Recommended Efficiencies *
- Federal
Costs Disallowed to be Recovered
- Federal
Costs Disallowed as Cost Efficiency
- Federal
Reports Issued - Other Reviews
- EPA Reviews Performed by
Another Federal Agency
- Single Audit Act Reviews
Total
Agency Recoveries
Recoveries from Audit Resolutions
of Current and Prior Periods
(cash collections or offsets to
future payments) **
$3.9
$3.9
$0.5
$0.3
$0
119
100
219
$2.9
Fiscal
2003
$6.0
$6.0
$0.5
$0.3
$0
245
191
436
$5.6
April 1,2003 to
September 30, 2003
(dollars in millions)
Fines and Recoveries (including civil) ****
Cases Opened During Period
Cases Closed During Period
Indictments/Criminal Informations/Complaints
Convictions
Civil Actions
Administrative Actions Against EPA Employees/Firms
$3.5
71
89
10
7
2
15
Fiscal
2003
$371.6
136
134
26
16
4
32
Questioned Costs and Recommended Efficiencies subject to change pending further review in audit resolution process.
Information on recoveries from audit resolution is provided from EPA Financial Management Division and is unaudited.
Reports Resolved are subject to change pending further review.
Total includes actions resulting from joint investigations.
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Significant OIG Activity
Praise, Concern Noted Regarding EPA's Response
to World Trade Center Towers' Collapse
Our extensive evaluation of how EPA responded following the terrorist attacks on the
World Trade Center towers in New York City on September 11, 2001, disclosed areas of
concern. While Agency personnel performed commendably in response to an unexpected
and unprecedented event, management should take steps to ensure that it responds better
to future tragedies in order to ensure protection of public health.
Reassuring Nature of Early Public Statements Raised Concern
EPA's early public statements following the towers' collapse reassured the public
regarding the safety of the air in the area before EPA had sufficient data and analyses to
make such a blanket statement.
This occurred, in part, because the White House Council on Environmental Quality
convinced EPA to add reassuring statements and delete cautionary ones from an early
press release. We were told that a desire to reopen Wall Street and national security
concerns were considered when preparing EPA's early press releases.
An EPA draft study more than a year later indicated outdoor air levels had been unlikely
to cause adverse health effects to the general population. However, due to numerous
uncertainties -
including the extent
of the public's
exposure and a lack
of health-based
benchmarks - a
definitive answer as
to whether the air
was safe to breathe
may not be settled
for years to come.
In the future, EPA
needs to ensure it
has adequate data
before reassuring
the public about
health issues.
World Trade Center site (New York Police Department photo)
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We also concluded that the public did not receive sufficient air quality information and
wanted more information on health risks. This was noted through many sources, and
further supported by a separate survey that we conducted (see accompanying story).
EPA Could Have Taken More Proactive Approach Regarding Indoor Air
EPA was not obligated to respond to indoor air concerns following the World Trade
Center towers' collapse, and New York City initially exercised a lead role regarding
indoor air. Nevertheless, while EPA's actions to evaluate, mitigate, and control risks to
human health from exposure to indoor air pollutants were consistent with applicable
statutes and regulations, the Agency could have taken a more proactive approach than it
did to ensure the health of the public regarding indoor air.
EPA began to assume a lead role regarding indoor air in February 2002 as part of a
multi-agency task force. However, prior to initiation of the EPA-led indoor cleanup,
many World Trade Center area residents returned to their homes, and a study indicated
most of them had not followed recommended cleaning practices. The indoor cleaning
program was limited to residences in Lower Manhattan south of Canal Street. This
boundary was based on EPA's
qualitative assessment of contamination
and not a systematic analysis of indoor
contamination. In addition, the program
was voluntary and all residences within
a building were not required to be
cleaned. As a result, uncleaned
apartments could potentially
re-contaminate cleaned apartments
where buildings had a central heating,
ventilation, and air conditioning system.
We recommended that EPA conduct
testing to verify that the apartments
cleaned through the multi-agency
program had not been re-contaminated.
EPA Needs to Be Ready for Future Disasters
EPA has already initiated many actions as a result of its own lessons learned exercise to
be better prepared for future disasters, and we encourage EPA to continue these efforts.
Based on our review, we made a number of recommendations to improve EPA's
emergency response capabilities in three areas: (1) contingency planning, (2) risk
assessment and characterization, and (3) risk communication.
In particular, we recommended that the Agency strengthen its risk communication
procedures for emergency situations, and ensure that public pronouncements regarding
health risks and environmental quality are adequately supported with available data and
analysis and are appropriately qualified. Further, we recommended that EPA take
various actions to ensure it obtains more complete data during future disasters. We also
recommended that EPA work with others to develop protocols for determining how
Study: EPA was told
4 to alter WTC report
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indoor environmental concerns will be handled in large-scale disasters. EPA agreed with
12 of our 16 major recommendations, disagreeing with some recommendations related to
the indoor air cleanup program
(Report No. 2003-P-00012, EPA's Response to the World Trade Center Collapse:
Challenges, Successes, and Areas for Improvement, August 21, 2003)
Survey of Public Perceptions Following "9/11"
In conjunction with our evaluation of how EPA handled air concerns following the
collapse of the World Trade Centers towers in New York City on September 11, 2001,
we surveyed a random sample of residents from all five boroughs of the City to gauge
their perception of and satisfaction with the air quality information they received in the
weeks following "9/11."
Based on responses from 1,110 residents, we found that, overall, the majority of
respondents wanted more information regarding outdoor and indoor air quality, wanted
this information in a more timely manner, and did not believe the information they
received.
The survey results suggest a disconnect between reassuring government statements about
air quality and respondents' perceptions of possible health risks from breathing air in
Lower Manhattan. The majority of respondents reported that they thought breathing
outdoor and indoor air in Lower Manhattan in the weeks after the towers' collapse could
expose them to short- and long-term health risks.
Further, data indicated that contamination from the collapse of the towers spread into the
homes of respondents located beyond the perimeter of the zone designated as eligible for
the EPA-led testing and cleaning program, most notably the rest of Manhattan and
Brooklyn.
Our data indicated that only about 1 out of 10 respondents knew about EPA's "Response
to September 11" web site, and even fewer visited the site. The majority of respondents,
however, were aware of EPA's recommendation to have contaminated homes
professionally cleaned and EPA's testing and cleaning program in eligible areas of
Manhattan. Nonetheless, despite this awareness, relatively few respondents with home
contamination had their homes tested for asbestos or professionally cleaned.
Due to a response rate of 11.8 percent and a lack of information regarding certain
characteristics of non-respondents, we determined that results from the data presented in
our report would be limited to the pool of survey respondents who reported living in
New York City as of September 11, 2001. We did not draw any inferences about the
overall population of the five boroughs of New York City.
(Report No. 2003-P-00014 Survey of Air Quality Information Related to the World Trade
Center Collapse, September 26, 2003)
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Participate Matter Methods Development Activities
Need Strengthening
EPA needs to better support its methods development activities related to measuring
"fine" particles of Particulate Matter (PM) found in ambient air.
PM is a complex mixture of harmful solid and liquid particles found in ambient
(outdoor) air. Exposure to excess PM levels can result in respiratory and other health-
related illnesses. PM25 - the smaller of two types of regulated PM - represents "fine"
particles that are less than or equal to 2.5 microns in diameter, or about l/30th the
thickness of a human hair.
Methods development is the process of
developing, evaluating, and validating the
methods and associated instrumentation for
measuring PM, to identify those areas where
people are exposed to unhealthy levels.
We found that EPA has not supported PM2 5
methods development activities to the extent
necessary to achieve its short- and long-range
goals. EPA is about 18 months behind
schedule in obtaining sufficient PM2 5
monitoring data for determining areas with
excess PM2 5 levels, although EPA is planning
to reduce that delay to about 9 months. Among its many important uses, the data is
needed so that emissions control strategies can be developed.
Further, more methods development activities are needed to address current monitor
limitations and ensure an appropriate monitoring network is in place to better enable
State and local agencies to develop plans to reduce excess levels of PM. Also, increased
methods development activities will be needed to address future PM monitoring needs,
such as supporting homeland security and enabling areas to meet future PM standards.
A significant reason for the problems was a gradual and largely unintended decline in
methods development activities related to PM. Agency officials attributed this decline to
a loss of technical expertise, a shift in priorities, and the lack of a comprehensive
methods development strategy. We recommended that EPA develop a comprehensive
methods development strategy for the PM program. This strategy should ensure that
methods activities are clearly defined, tracked, and appropriately funded, and would
guard against unintended decreases. Also, EPA would have better assurance that it is
making progress in reducing human exposure to unhealthy levels of PM.
We also made recommendations regarding improving monitoring methods and
addressing technology limitations. EPA generally agreed with our recommendations.
(Report No. 2003-P-00016, Decline in EPA Particulate Matter Methods Development
Activities May Hamper Timely Achievement of Program Goals, September 30, 2003)
Ambient air monitoring station in Wilmington,
Delaware (Delaware Department of Natural Resources
and Environmental Control photo)
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Permit Compliance System Modifications
Experiencing Significant Schedule Slippages
and Cost Overruns
EPA's Permit Compliance System modernization project has fallen significantly behind
schedule, and initial cost estimates have increased dramatically.
The Permit Compliance System is a critical information system used by EPA to track
permit issuance as well as enforcement and inspection activity for more than 64,000
facilities whose water discharges are regulated under the Clean Water Act. The system
had its last major revision in 1982, and there have been recent concerns about it being
out of date and unreliable.
The project, initially expected to be completed no later than September 2003, is now at
least 2 years behind schedule. Estimated costs have increased significantly; for example,
costs to design the software have increased by 71 percent. Also, EPA had not completed
certain required planning
Permit Compliance System modernization has:
documents, and the cost benefit
analysis prepared was inaccurate.
Fallen 2 years behind schedule. >! * >, <
/- - " /- ' Nl _,' "f ' ' s
Significantly exceeded cost estimates. . ,
Not included all required planning documents.
Included an inaccurate cost benefits analysis.
EPA is considering reducing costs
by eliminating some of the new
system's functionality, but we have
concerns about such action and
recommended that the Permit
Compliance System Steering
Committee be consulted before any
functionality is eliminated.
We also recommended that EPA develop a realistic cost estimate and cost benefit
analysis, and develop realistic implementation dates. EPA indicated it is taking steps to
address our concerns.
Deficiencies regarding the Permit Compliance System represent an Agency-level
weakness, and the system needs to be modernized to fix the weakness. By addressing our
concerns, EPA should get on track toward correcting the weakness.
(Report No. 2003-M-00014, EPA Should Take Further Steps to Address Funding
Shortfalls and Time Slippages in Permit Compliance System Modernization Effort,
May 20, 2003)
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Areas for Improving Drinking Water
Capacity Development Noted
As EPA and the States continue to implement "capacity development" programs to
improve community water systems, greater emphasis needs to be placed on making sure
sufficient managerial and financial assistance is provided. EPA needs to assess
performance of the capacity development initiative.
Capacity development is a way of
structuring drinking water
protection programs to assist water
systems in attaining the technical,
managerial, and financial capacity
needed to achieve and maintain
long-term sustainability. Almost
264 million people in the United
States obtain their drinking water
from 54,000 community water
systems. Congress provided
funding for capacity development
as part 1996 Safe Drinking Water
Act amendments.
With assistance from EPA, States
designed capacity development
strategies that generally met
requirements. States emphasized
technical aspects. EPA needs to place greater emphasis on ensuring that managerial and
financial capacity needs are also met.
Further, EPA has not developed a plan to assess the performance of the capacity
development initiative, and is currently unable to report on the results that the capacity
development program is having on a national basis.
We recommended that EPA place greater emphasis on the managerial and financial
aspects of capacity development, and develop a performance measurement system. EPA
generally disagreed with our report, stating that capacity development was progressing at
an appropriate level.
A water tower in New Jersey (EPA OIG photo)
(Report No. 2003-P-00018, Impact of EPA and State Drinking Water Capacity
Development Efforts Uncertain, September 30, 2003)
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Hardrock Mining Framework
Not Achieving Sufficient Results
We found no evidence that EPA's National Hardrock Mining Framework has
contributed to any environmental improvements or protections at specific hardrock
mining sites.
Hardrock mining involves the extraction of certain metals and minerals from hard
formations of the earth, and include copper, gold, iron ore, lead, and silver. EPA
estimates there may be as many as 200,000 abandoned hardrock mines alone in the
United States. EPA issued the Framework in 1997, after 3 years of development, to deal
with environmental issues posed by proposed,
active, and abandoned hardrock mining sites.
Certain laws and regulations present obstacles
to what EPA can realistically accomplish. For
example, EPA has only an advisory role in
developing environmental impact statements
for hardrock mines on public lands. Further, the
primary environmental programs that allow
EPA to prevent pollution from hardrock mining
are delegated to the States or provide regulatory
exclusions for the type of waste generated from
hardrock mining.
EPA did not develop or communicate a strategy
for implementing the Framework, management
did not support it, and there was inadequate
coordination within EPA and between EPA and
other agencies. EPA did not have current and accurate data on the extent of the
challenges posed by hardrock mining activities.
We recommended that EPA develop effective implementation strategies for the
Framework to account for gaps, lack of coordination, and regulatory challenges. EPA
management responded that they believed the Framework has utility, but agreed that
improvements can be made and indicated they will initiate actions. However, EPA was
not clear on what those actions would be.
(Report No. 2003-P-00010, Implementation, Information, and Statutory Obstacles
Impede Achievement of Environmental Results from EPA's National Hardrock Mining
Framework, August 7, 2003)
Coeur D'Alene Mine in Idaho (Colorado School of
Mines photo)
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EPA Needs to Better Demonstrate Effectiveness
of Efforts to Purchase Recycled Goods
EPA has not taken sufficient steps to ensure that Federal efforts to purchase goods made
from recycled materials are effective.
Under Section 6002 of the Resource Conservation and Recovery Act, EPA is required to
designate items made from recycled-content goods that the Federal Government should
purchase. Further, as a procuring agency, EPA is directed to establish an affirmative
procurement program to ensure it purchases those EPA-designated items.
EPA has generally complied with Section 6002 by designating 54 recycled-content items
for purchase. However, EPA's affirmative procurement program contained information
on only 5 of the 54 designated items, and EPA has not monitored or evaluated program
effectiveness. We also could not determine the success of the program within EPA itself
due to the lack of program management plans.
We recommended that EPA develop a comprehensive strategy for its procurement
program, update its affirmative procurement program to address all 54 items, and take
various other steps to ensure the program is adequately implemented. The Agency
generally agreed with our report and indicated it has begun corrective actions.
(Report No. 2003-P-00013, Pollution Prevention: Effectiveness of EPA's Efforts to
Encourage Purchase of Recycled Goods Has Not Been Demonstrated, September 22,
2003)
10
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Cross Media
Steps Taken to Protect Nation's Water Supply,
Further Action Needed
EPA was designated in 1998 as the nation's lead agency for protecting America's water
supply against potential outside threats. EPA renewed its emphasis in this area following
the terrorist attacks on September 11, 2001, and the subsequent passage of the Public
Health Security and Bioterrorism Preparedness and Response Act of 2002 (the
"Bioterrorism Act").
EPA had taken many steps to fulfill its role in protecting the Nation's water supply.
In particular, EPA developed a strategic plan, developed technologies to improve
infrastructures and monitoring, funded research, and facilitated development of
information sharing. Further, EPA provided threat guidance, training, and financial
assistance to utilities to help them conduct vulnerability assessments.
However, we noted in two separate reports (additional reviews in this area are planned)
that EPA needs to place greater emphasis on (1) vulnerability assessments, and
(2) measuring changes.
Vulnerability Assessments Need Better Focus
Vulnerability assessments serve as the foundation for emergency response plans and
security enhancements implemented by water utilities. However, rather than focusing on
terrorism, vulnerability assessments performed so far may have focused on more
traditional, less consequential acts, such as vandalism and disgruntled employees.
Neither EPA nor the vulnerability
assessment methodologies provided
threat guidance that identified the
most vulnerable components unique
to water systems.
Our review focused on assessments
conducted by larger utilities, which
were the first under the
Bioterrorism Act required to
perform the assessments. EPA
planned to review those assessments
prior to submission of assessments
by smaller utilities, and we offered
suggestions to EPA on areas where
it should place focus.
EPA DIG photo
11
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Strategy to Measure Changes Needs Improvement
Although EPA has taken various measures to improve water security, it has not outlined
how resources, activities, and outputs will achieve the water security program's goals.
EPA's strategic plan lacks such fundamental components as measurable performance
results and information and analysis, needed to ensure the greatest practicable reductions
in risk.
EPA agreed with our assessment that it needs more clearly defined performance
measures and a baseline for water security, and indicated it will take the necessary
corrective actions.
(Report No. 2003-M-00013, EPA Needs to Assess the Quality of Vulnerability
Assessments Related to the Security of the Nation's Water Supply, September 24, 2003;
and Report No. 2003-M-00016, EPA Needs a Better Strategy to Measure Changes in
Utilities'Water Security, September 11, 2003)
Fellowship Program Needs to
Better Measure Results
EPA needs to place greater emphasis on measuring the results and achievements of its
Science to Achieve Results (STAR) Fellowship Program to ensure the program is
accomplishing its goals.
EPA established the STAR Fellowship Program in 1995, to encourage promising
students to obtain advanced degrees and pursue careers in environmentally related fields.
However, EPA primarily focused on selecting the fellows and awarding the grants,
without determining whether the recipients actually obtained degrees or pursued careers
in environmentally related fields.
STAR Fellowship Program Summary of Findings (1995-1999)
Degree Completed
Thesis/Papers Pubtehed Post Fellowship Info Career Wo (alter 3 years)
OtSeirchBantats
The STAR Fellowship
Program was designed
to track fellows for
3 years after
completing the
fellowship. However,
as shown in the chart,
EPA often did not
have information on
issues such as how
many fellowship
recipients went on to
obtain a degree in an
environmentally
related field or had a
career in an
environmentally
12
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related field after 3 years. Such information is needed for EPA to determine whether the
fellowship program is achieving the desired results of having students attaining
advanced degrees and pursuing careers in environmental fields.
Also, EPA did not emphasize collecting and analyzing demographic data in
administering the STAR Fellowship Program, and could not determine the level of
participation by groups that have been traditionally under-represented in the science and
engineering workforce, such as women, minorities and people with disabilities.
As part of our review, we examined similar fellowship programs at three other agencies,
and provided EPA with procedures followed by these agencies that can help EPA
improve its program.
We recommended that EPA establish meaningful performance measures, collect and
maintain necessary data on fellowship applicants and recipients, and conduct regular
internal reviews. EPA generally agreed with our recommendations.
(Report No. 2003-P-00019, Science to Achieve Results (STAR) Fellowship Program
Needs to Place Emphasis on Measuring Results, September 30, 2003)
Progress on Children's Health Performance
Measures Not Reported Accurately
EPA did not accurately report on its annual performance measures regarding children's
health research. For Fiscal Year (FY) 2000, EPA's Annual Performance Goal 60 stated,
"develop risk assessment guidance for regional assessments concerning risks to children
exposed to environmental contaminants." However, the information that EPA's Office of
Research and Development reported for two of the three annual performance measures
for that goal was not reported accurately.
EPA reported that "assessments of pesticide exposures to children in Washington,
Minnesota, and Arizona were published in FY 2000." However, we found that the
assessments were not completed and the project completion dates were extended in all
three States. For another measure, "develop exposure factors handbook for children,"
EPA reported in its FY 2000 Annual Report that the handbook would be published in
FY 2001, but it now is not expected to be published until 2004.
We recommended that procedures be followed regarding annual performance goals and
measures, and that a system be put in place to verify completion of measures. EPA
agreed with our recommendations, and had already convened a workgroup and taken
needed actions.
(Report No. 2003-M-00017, Selected Children's Health Annual Performance Measures
for Goal 8, Sound Science, September 26, 2003)
13
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Grants
Report to Congress on Assistance Agreement
Compliance Notes Continuing Problems
In response to a Congressional request regarding audits conducted on assistance
agreements, we noted there were continuing problems regarding non-compliance and
how EPA deals with it.
More than half of EPA's fiscal year 2002 budget ($4.4 billion of $8.0 billion) was
awarded to organizations outside the Agency through assistance agreements (primarily
State, local, and tribal governments; universities; and non-profit organizations). Such
agreements are the primary vehicle through which EPA delivers environmental and
human health protection.
For fiscal years 2001 and 2002, during which time 369 audits of assistance agreements
were issued, 27 audits noted material non-compliance issues, as well as questioned costs.
Regarding those 27 audits, totaling about $29.6 million in questioned costs:
EPA issued a final decision for 19, and recipients were appealing 9 of those
19 decisions.
Only about $5.4 million of $29.6 million in questioned costs were sustained.
EPA provided new funds to 11 recipients subsequent to audits noting
non-compliance.
Except for an employee from one recipient being debarred for embezzling grant
funds, no recipients or employees were suspended or debarred as a result of
non-compliance and other issues noted in the audits.
EPA did not take any adverse personnel actions against any EPA employees in
relation to issues noted in the audits.
EPA procedures appeared to be adequate to identify deficiencies regarding financial
status reports, progress reports, and cash draws. Other deficiencies, such as unsupported
or ineligible costs, may not be detected by EPA unless the recipient is selected for more
detailed monitoring.
(Report No. 2003-S-00006, Congressionally Requested Review of EPA Actions Taken in
Response to Financial Assistance Agreement Reports, July 23, 2003)
Assistance Agreements Continue to Be Reviewed
As part of our efforts to ensure assistance agreement funds are being properly used, we
conducted "costs claimed" audits for various agreements to ensure that costs were
eligible and supported. We found a number of instances of questionable costs involving
both ineligible and unsupported claimed costs. Highlights include:
14
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We questioned all of the more than $2.3 million claimed by the Tribal Association
on Solid Waste and Emergency Response because, in part, the Association: (1) could
not reconcile total program outlays claimed with its general ledger; (2) did not
maintain an adequate labor cost distribution system; and (3) did not competitively
procure services or perform cost or price analyses.
We questioned all of the more than $1.1 million claimed by the Geothermal Heat
Pump Consortium, Inc., because the Consortium did not: (1) separately identify and
accumulate costs for all direct activities, such as membership support and lobbying;
(2) reduce assistance agreement costs for income generated; (3) prepare or negotiate
indirect costs; and (4) maintain an adequate labor cost distribution system.
For claims submitted by the State of California in connection with the Stringfellow
Superfund site, we cited as ineligible more than $23 million in advance match and
credit claims, primarily involving accrued interest and bond interest that was not
allowable. We also noted more than $1 million in ineligible contractor costs, and
questioned more than $50,000 in travel and equipment costs.
This year, we again recommend that the Agency declare grants management a material
weakness. Below are the results of our most recent audit work in this area, including
single audits. Final determinations on these reports will be made by EPA management.
Assistance Agreement Recipient
California Department of Toxic Substances Control
(For Stringfellow Superfund Site, Riverside, CA)
Report Wo. 2003-1-00013, issued September 30, 2003
Costs
Claimed
Costs
Questioned
$64,311,859 $24,135,237
King County Department of Natural Resources
(Carkeek Park Treatment Plant Project, Seattle, WA)
Report No. 2003-2-00012, issued June 30, 2003
Tribal Association on Solid Waste and
Emergency Response, Washington, DC
Report A/o. 2003-4-00119, issued September 19, 2003
Single Audits (Single audits are performed by
non-Federal, independent accountants of entities to
ensure Government funding is properly expended, and
these audits are reviewed and issued by a Federal
Agency, in this case EPA. Of the 95 audits reviewed for
the semiannual period, 15 included questioned costs.)
14,030,576
703,153
2,357,376 2,357,376
3,338,556
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Revolving Funds Receive Unqualified Opinions
Separate audits of financial statements for Utah's Drinking Water State Revolving Fund
and South Carolina's Clean Water and Drinking Water State Revolving Funds resulted
in our issuing unqualified opinions on the fairness of the statements for both funds.
Through State Revolving Funds, EPA awards billions of dollars in assistance awards to
States each year to help them with their clean water and drinking water programs. For a
selected number of States, we audit financial statements for the State Revolving Funds to
ensure States use sound financial management practices and meet Federal requirements.
We also review revolving fund audits prepared by independent accountants and provide
technical assistance to EPA, States, and other audit organizations.
We issued unqualified opinions on the statements for South Carolina's Drinking Water
and Clean Water State Revolving Funds (Report Nos. 2003-1-00138 and 2003-1-00139,
respectively) on September 17, 2003. The funds had combined total assets of over
$397 million as of June 30,2002. We noted a compliance problem related to the
Drinking Water fund, in that South Carolina did not provide the required dollar-for-
dollar match for expenditures made under the State program management set-aside.
Of $32,089 in total expenditures, there was a $16,281 shortfall. While the State agreed
with our recommendation to correct the problem, we are concerned that the State may
not complete implementation until 2006.
We issued an unqualified opinion on the financial statements for Utah's drinking water
fund on June 3, 2003 (Report No. 2003-1-00110). The fund had over $22 million in total
assets as of June 30,2002. We issued a qualified opinion on Utah's compliance because
it did not meet the minimum loan commitment requirement by $3,220,000 as of June 30,
2002. Utah returned to compliance by issuing an additional $3,546,000 in loans by
November 2002.
Region 6 Takes Action to Improve State Oversight
Since we issued our report EPA Region 6 Needs to Improve Oversight of Louisiana's
Environmental Programs (2003-P-00005), dated February 3, 2003, Region 6 has taken
several key actions to improve oversight. Region 6 established two new leadership
positions to ensure that Louisiana implemented the EPA-defined performance measures
for its water program, and to develop an approach to oversee the Region's five States.
Region 6 is tracking Louisiana's progress on a continuing basis against the seven
performance measures for the water program (including permit issuance and public
access to file) and eight steps for the air program. As of September 30, 2003, the State
had addressed, either partially or in full, all seven measures for the water program and
seven of the eight steps for the air program.
To improve its oversight over all States, Region 6 is enhancing communication by
consolidating into one document its expectations for State performance. Also, the
Region is developing a written policy on partnership in relation to the States; and is
developing output and outcome measures to ensure fiscal accountability,
accomplishment of long-term goals, and the viability of delegated programs.
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Contracts
EPA Needs to Increase Competition for
Federal Supply Schedule Procurements
EPA can increase competition for work under General Services Administration's Federal
Supply Schedule contracts by obtaining quotes from more than just incumbent
contractors.
Federal Supply Schedule orders are used to obtain common goods and services at
volume prices. Of 39 tasks orders reviewed, 30, valued at $62.5 million, were awarded
without competing quotes, and 29 of those 30 went to incumbent contractors.
The lack of competition can result in incumbents having little or no incentive to offer
discounts or lower prices to EPA. Based on studies that had shown that competition can
save at least 15 percent of costs, we believe EPA could have realized significant savings
and promoted greater
efficiency, innovation, and
quality by receiving
Awards Reviewed 39 $72.3 | competing quotes for
Federal Supply Schedule
Awards With More Than One Quote Received 9 9.8 | orders.
Also, we found that EPA
awarded Federal Supply
Schedule orders without
always complying with established policies, procedures, and regulations. For example,
Requests for Quotes lacked evaluation criteria. Also, for the majority of the orders
reviewed, best value/price reasonableness determinations were not adequately
documented. Further, Federal Supply Schedule information generated by EPA's
databases was often incomplete, inaccurate, and unreliable.
We made various recommendations to EPA to increase competition and compliance
related to Federal Supply Schedule awards, and EPA agreed to take some of the actions.
(Report No. 2003-P-00015, EPA Can Improve Use of Federal Supply Schedules When
Procuring Services, September 29, 2003)
17
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Business Systems
EPA's Strategic Human Capital Management
Could Be Strengthened
As a part of our ongoing audit of EPA's Human Capital Strategic Planning and Analysis,
the OIG issued two memorandums suggesting modifications to better integrate strategic
human capital management into the Agency's budget and Senior Executive Service
(SES) performance management processes.
The first memorandum suggested that Agency offices be required to describe in budget
proposals, starting with fiscal 2005, the strategic human capital activities they will take
to ensure the Agency achieves its short- and long-term performance goals. This should
help drive a cultural attitude and behavior change about human capital management.
In a second memorandum, we suggested that annual guidance for the SES performance
management system be revised to emphasize the importance of strategic human capital
management activities, and that executives be required to include in their performance
agreements an "individual commitment" that addresses actions they will take to
strategically manage human capital. Our review of 127 fiscal 2002 performance
agreements/appraisals showed that only about 20 percent of the agreements and
30 percent of the self-appraisals addressed strategic human capital management.
Computer Security Self-Assessment Process
Needs Improvement
EPA has taken actions to establish a computer security self-assessment process.
Nonetheless, additional areas need to be addressed to provide greater assurance that EPA
accurately measures information technology security.
EPA uses self-assessments to collect security-related information about its systems and
reports the consolidated results to the Office of Management and Budget. EPA recently
took several important steps to improve its reporting, such as developing an improved
web-based system to compile and report results. However:
Thirty-six percent of the critical self-assessment responses we reviewed were
inaccurate or unsupported, and thus did not identify or support the current security
status of the systems.
EPA's system inventory did not identify all major application systems.
Consequently, these systems were not assessed for security controls and related
operational practices, either independently or as part of a larger general support
system. Agency officials need a full accounting of major systems to understand the
status of the information security program and controls, and to make informed
judgments and investments that appropriately mitigate risks to an acceptable level.
18
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Authentication/identification security controls were not adequate, which increased
the potential for unauthorized access, misuse, and system downtime.
Information system security plans did not contain sufficient detail.
These weaknesses were caused primarily because EPA did not have a systematic
program to ensure that system controls are accurately reported and implemented
throughout the Agency. Our recommendations to EPA stressed the need for EPA to
increase its efforts in this area. EPA generally agreed with our recommendations.
(Report No. 2003-P-00017, EPA's Computer Security Self-Assessment Process Needs
Improvement, September 30, 2003)
Remediation Plan Still Needs to Address
Security Certification Process
In our last financial statement audit report, we concluded that EPA's 2002 report to the
Office of Management and Budget had incorrectly reported the successful completion of
its 1999 Remediation Plan for financial management systems.
The Federal Financial Management Improvement Act requires the OIG to report on the
Agency's progress to remediate significant weaknesses in financial management
systems. We found that EPA had taken all necessary actions to correct weaknesses in the
1999 Remediation Plan, except for establishing a background check program for
non-Federal personnel, such as contractors, by 2002.
The Office of the Chief Financial Officer has issued policy to require the appropriate
type of personnel security screening for Federal and non-Federal personnel accessing
EPA's Integrated Financial Management System. However, the Office of the Chief
Financial Officer has not provided clear evidence to demonstrate that similar
requirements have been established for other financial and mixed systems, which may be
significant to the presentation of Agency financial statements.
OIG is recommending that EPA submit a revised plan that notes responsibilities and
milestones for establishing a background check program for non-Federal personnel with
access to major financial management systems.
Information Security Progress Being Made,
But Further Action Needed
Our annual review of EPA's implementation of the Federal Information Security
Management Act disclosed that the Agency continues to make progress in improving its
information technology (IT) security.
EPA has a Plan of Actions and Milestones process, uses a quarterly reporting process to
monitor progress, has developed an automated system to track program office responses
to self-assessment questions, and reports weekly on computer security incidents. The
Agency has also issued a number of procedures to clearly set forth responsibilities.
19
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However, we believe the Agency could further improve its security program if it were to:
Modify the Plan of Actions and Milestones database to prioritize targeted
completion dates.
Expand its Capital Planning and Investment Control process to include the review of
expenditures for non-major systems (44 percent of EPA's IT portfolio).
Establish or revise security plans for IT systems critical to the cyber-based
infrastructure so that they meet requirements.
Test critical components of Continuity of Operations Plans under circumstances
relative to actual deployment.
Further, we believe EPA's program will be stronger once it implements a planned
training system that will aid in the tracking of security training for employees with
significant security responsibilities. The Agency is proposing to declare information
security implementation an Integrity Act Agency-level weakness for Fiscal Year 2004.
(Report No. 2003-S-00008, 2003 Status of EPA's Computer Security Program,
September 15, 2003)
Financial Services Field Branch Can Improve
Information Technology Controls
Improvements are needed at the Las Vegas Finance Center to more effectively ensure
continuation of information technology services by this Financial Services Division field
branch.
We found that backup media were not properly secured, system documentation was not
stored off-site, and network connection boxes were unlocked. As a result, disruption of
services could occur.
This financial center provides accounting and financial services to EPA offices in the
Las Vegas area and for certain labs and Criminal Investigation Division offices
throughout the country.
Officials at the finance center agreed with our recommendations to conduct a complete
risk assessment, work on a continuity of support plan, and update backup procedures,
and they have initiated actions.
(Report No. 2003-P-00011, Improvements Are Needed for Information Technology
Controls at the Las Vegas Finance Center, May 29, 2003)
20
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Investigations
Laboratory Fraud
Petroleum Refiner Pleads Guilty to Making
False Statements under the Clean Air Act
Jet-Pep, Inc., an Alabama refiner of conventional gasoline, was sentenced on August 1,
2003, to 3 years probation and ordered to pay a $200,000 fine and a $400 special
assessment for making a false statement to EPA in violation of the Clean Air Act. The
sentencing, which occurred in U.S. District Court, Northern District of Alabama, is a
result of Jet-Pep's May 30, 2003, guilty plea.
Jet-Pep had been required to submit an annual report to EPA setting out the gallons of
gasoline produced or transferred, along with compliance calculation results of the
blendstocks. Among the compliance calculation results that had to be reported was the
average T90 value of the gasoline. The T90 value is the distillation characteristic
reflecting the measure at which 90 percent of gasoline evaporates.
From 1995 through 1998, Jet-Pep failed to perform the T90 analysis on any of its
blendstocks, and a Jet-Pep employee falsified all of the requisite distillation results. As a
result, from 1996 through 1999, Jet-Pep submitted its annual report to EPA knowing
each report contained a false average T90 value.
This investigation was conducted jointly with the EPA Criminal Investigation Division.
Computer Crimes
Additional Sentencings and Plea in
"Operation Bandwidth" Software Piracy Case
Three additional persons have been sentenced in connection with "Operation
Bandwidth," a 2-year long, multi-Agency undercover operation focusing on several
members of a software piracy group known as the "Rouge Warriorz." The group was
dedicated to the illegal reproduction and distribution of copyrighted software, movies,
and games over the internet. At least 18 members of the group were hackers who had
illegally accessed EPA computer systems to further the reproduction and distribution
scheme.
Charles Yurek, a member of the group, was sentenced on August 13,2003, to 6 months
of electronically monitored home detention and 3 years probation, and ordered to pay a
$500 fine. Yurek had been charged on December 6,2002, in U.S. District Court, District
of Nevada, with criminal copyright infringement. Yurek admitted to downloading a
21
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digital copy of Microsoft Windows XP Pro Corporate onto his home computer for the
purpose of private financial gain, without the authorization of the copyright holder.
Brad McGourty, another member of the group, was sentenced on August 4, 2003, to
1 year probation and ordered to pay a $500 fine, a $25 special assessment, and $60 in
restitution to Microsoft Corporation. This sentencing followed charges of criminal
copyright infringement in U.S. District Court, District of Nevada. In his plea agreement,
McGourty admitted to downloading a digital copy of Microsoft Money 2002 Deluxe
onto his home computer for the purpose of private financial gain, without the
authorization of the copyright holder.
On April 14, 2003, Lukasz Doupal was sentenced to 3 years probation and ordered to
pay a $2,000 fine and a $100 special assessment. This sentencing followed a
misdemeanor charge against Doupal in U.S. District Court, District of Nevada. Doupal
admitted that he became aware of and had knowledge of the actual commission of
violations of Federal criminal copyright laws by the members of a software piracy group.
In addition to the sentencings, on September 29, 2003, Lindle Romero pleaded guilty to
one count of conspiracy in U.S. District Court, District of Nevada. Romero is scheduled
to be sentenced in December 2003.
This investigation was conducted jointly with the Federal Bureau of Investigation and
the Defense Criminal Investigative Service.
Network Penetration Laboratory Nle^injl Completion
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22
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Financial Fraud
Former EPA Employee Sentenced for Receiving
Stolen Government Property
Luther Mellen, former EPA Branch Chief, Architecture, Engineering, and Real Estate
Branch, was sentenced on August 15, 2003, to 27 months in prison, followed by 3 years
of supervised release, and ordered to pay a $50,000 fine and a $200 special assessment.
This sentencing, in U.S. District Court, District of Columbia, is the result of a guilty
verdict reached during trial in November 2002 stemming from charges of conspiracy to
defraud the United State and receipt of stolen goods.
Luther Mellen's wife, Elizabeth Mellen, a Telecommunications Specialist with the
Department of Education, managed a contract with the former Bell Atlantic Federal
Systems. From early 1990 to December 1999, Elizabeth Mellen used her official position
and ordered more than $300,000 worth of computers, printers, cellular phones, and
cameras for her personal use. These items were paid for by the Department of Education
as part of the contract. Mellen ordered a computer for the home she and Luther Mellen
shared, and a laptop computer for her stepson at the request of Luther Mellen. Elizabeth
Mellen previously pleaded guilty to theft of government property and conspiracy to
defraud the government.
This investigation was conducted jointly with the Federal Bureau of Investigation and
the Department of Education OIG.
Director Sentenced in Embezzlement Case
On July 1, 2003, Raymond Robertson, Trustee and Director of the National Iron Workers
Apprenticeship Training and Journeyman Upgrading Fund, was sentenced in U.S.
District Court, District of Columbia, to 6 months home detention and 3 years probation.
He was also ordered to pay $103,169 in restitution, a $30,000 fine, and a $800 special
assessment. The sentence was a result of Robertson's guilty plea to charges related to
conspiracy, theft, and embezzlement.
23
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The fund periodically received Federal grants, including a $1.2 million grant from EPA,
to provide certain skills and safety training. Robertson and his daughter, Kerry Tresselt,
the fund's bookkeeper, conspired to conceal their thefts from the fund, including the use
of the fund's credit card for personal purchases. Tresselt has also been found guilty of
conspiracy and embezzlement, and was ordered to pay $234,505 in restitution to the
fund.
This investigation was conducted jointly with the Department of Energy OIG and the
Department of Labor Pension, Welfare, and Benefits Association.
Settlement Results in $2.5 Million Savings
A mediated settlement before the General Services Administration, Board of Contract
Appeals, on May 27,2003, resulted in cost savings to the Government of $2,544,062 in a
false claims case against two firms involved with a wastewater treatment project.
In 1996, the International Boundary and Water Commission (IBWC) awarded two
separate fixed price contracts, worth approximately $7.6 million, to a joint venture of
Reza, Inc., and Dennis J. Amoroso Construction Co., Inc. (Reza), for the construction of
wastewater collectors. These contracts were part of a larger project to construct a
wastewater treatment and disposal facility along the California-Mexico border in San
Diego, California. The IBWC received funding for this project from EPA under an
Interagency Agreement totaling $58 million.
Reza submitted 49 requests for reimbursement to the IBWC totaling $3,644,062,
purportedly for reimbursement for work beyond the scope of the original contracts,
inappropriately assessed liquidated damages, extended overhead, and differing site
conditions. The IBWC contracting officer denied most of the requests after preliminary
audit work identified several material discrepancies, including double billing of labor
hours as both direct and indirect costs.
At the direction of the U.S. Attorney's Office, Western District of Texas, an independent
audit of the claims was conducted that identified $1.8 million in questioned or
unsupported costs. A Department of Justice investigation determined that the actual
amount of damages to the Government was approximately $50,000. Under the terms of
the mediated settlement, the Government agreed to only pay Reza $1.1 million and
release Reza from any action under the False Claims Act, and Reza agreed to dismiss the
$3.6 million in claims against the Government, resulting in a $2.5 million cost savings.
This case was conducted jointly with the Small Business Administration OIG and IBWC.
Contractor Agrees to Credit Government $220,358
ManTech Environmental Technology, Inc., a subsidiary of ManTech International
Corporation, of Fairfax, Virginia, agreed on April 29, 2003, to credit the Government for
$220,358 in connection with a building sale.
24
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In 1999, ManTech, an EPA contractor, sold its office building in Research Triangle Park,
North Carolina, for $1,020,000. Based on an initial review of the transaction by the
Defense Contract Audit Agency (DCAA), ManTech charged the Government for a
$333,160 loss on the sale. However, DCAA believed the building was sold for a net gain
and, therefore, asserted the Government was entitled to share in a portion of the gain.
In concert with the U.S. Attorney's Office, Eastern District of Virginia, Civil Division,
and the EPA Contracting Officer, it was determined that ManTech had sold the facility
for a net gain and the Government was entitled to a portion of that gain, resulting in the
$220,358 credit.
Impersonator Pleads Guilty
On July 18, 2003, Steven Wayne Devine pleaded guilty to charges involving defrauding
employment agencies in at least five States of more than $45,000. Specifically, Devine
pleaded guilty in U.S. District Court, Western District of Washington, to 7 counts of
bank fraud and 5 counts of uttering a fictitious obligation of the United States.
Between October 1999 and May 2003, Devine devised a scheme to defraud temporary
employment agencies in Oregon and Washington State. Devine would contact various
agencies using a false name and identify himself as an upper level employee of a
company or government agency, including EPA. He would then contract with the
employment agency to "payroll" a purported employee of the company or agency. For
an agreed-upon fee, the employment agency would handle payroll issues and issue
payroll checks to the purported employee, Devine. The employment agencies would
either mail an invoice to the company or government agency to receive payment for their
services or Devine would appear at the employment agency and present a counterfeit
check to pay for the agency's services.
Chamber of Commerce Director Sentenced
for Embezzlement
On June 10, 2003, Carleen Murphy Moran, former Executive Director for the Hancock
County (Mississippi) Chamber of Commerce, pleaded guilty to embezzlement. She was
sentenced to 10 years in prison, with 9 years suspended and the remaining 1 year to be
served under house arrest. After Moran completes the house arrest, she will be placed on
5 years of supervised release. Moran was also ordered to pay $70,032 in restitution to the
Chamber of Commerce and $12,000 to the State Auditor's Office. This sentencing
follows Moran's April 10, 2003, indictment by the Circuit Court, Hancock County, on
embezzlement charges.
The Hancock County Chamber of Commerce had received a $103,800 grant from EPA
for Community Assistance Support for Model Smart Growth Planning in Coastal
Counties. While employed as the Executive Director, Moran forged endorsements on
numerous checks that were ultimately deposited into her personal bank account.
The Mississippi State Auditor's Office assisted in this investigation.
25
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Public Liaison
OIG Ombudsman Resolving Issues
The OIG Ombudsman office's case activity saw the resolution of citizen complaints
dealing with sites located at Paw Creek, North Carolina; Riviera Beach, Florida; and
Bloomington, Indiana. Significant progress has also been made on many opened cases,
and it is anticipated that case resolution and closure will occur during the next
semiannual reporting period for at least half of the 28 cases currently under review.
The office has been successful in contracting with technical experts to assist in several of
our current cases under review, including Entech Incinerator, Anchorage, Alaska;
Stauffer Chemical Co., Tarpon Springs, Florida; and Industrial Excess Landfill,
Uniontown, Ohio.
During the past 6-month period, the Office of the Ombudsman experienced a
reorganization change with the appointment of a new Acting Ombudsman in June.
Hotline Activity
The following EPA OIG Hotline activity regarding complaints of fraud, waste, and abuse
in EPA programs and operations occurred during the past semiannual and annual
periods:
Complaints Open
Complaints Closed
Complaints Handled by EPA OIG
Complaints Referred to:
EPA Program Offices' - '
EPA Criminal Investigation 0/v,
Other Federal Agencies
' State/Local Agencies
Semiannual Period
(April 1 -
September 30, 2003
15
292
51 x *
- ^ \ V
f
126
,1$ L .*
--,34 , '
Annual Period
(October 1,2002 -
September 30, 2003)
61
571
125
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/\^ 225 ;..- -r\
26
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Testimony
Inspector General Testifies on
Assistance Agreements
In testimony on assistance agreements, the Inspector General told a Congressional
subcommittee that while EPA has acted to improve management of such agreements, it
needs to ensure that adequate resources are devoted to the area and personnel are held
accountable.
Speaking on June 11, 2003, before the U.S. House of Representatives' Subcommittee on
Water Resources and the Environment, Committee on Transportation and Infrastructure,
EPA Inspector General Nikki Tinsley
stated that while EPA has sufficient
policies regarding assistance agreements
it needs to stress adherence to those
policies.
"If EPA is to improve assistance
agreement management, it needs to
ensure that adequate resources are
devoted to the function and that
management and staff are held
accountable for adhering to Agency policies that promote good management of
assistance agreements," Tinsley testified.
Tinsley noted that assistance agreements are the primary mechanism through which the
Agency carries out its mission. In fiscal year 2002 alone, EPA provided approximately
$4.7 billion in grants, which was more than half that year's budget. Therefore, it is
"imperative that the Agency use good management practices in awarding and overseeing
these agreements to ensure they contribute cost effectively to attaining environmental
goals."
The Inspector General told the subcommittee that the OIG's grants management work
has focused on cross-cutting national issues, and has looked at EPA's major program
areas. Based on the OIG's issue area plan, the OIG performed a series of audits "to
identify systemic problems that were preventing the Agency from achieving the
maximum results from the billions awarded in assistance agreements every year."
One area of particular concern has been the pre-award review of assistance agreements,
which has been the subject of three audits since 1998. The Inspector General told the
subcommittee that in 1998, OIG issued a report stating that project officers were not
always negotiating work plans with well-defined commitments or adequately
determining and documenting whether costs for the assistance agreement were
reasonable. In March 2002, OIG reported that EPA was awarding assistance agreements
without identifying expected outcomes, quantifying outputs, linking outputs to funding,
27
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or identifying milestone dates for completing work products. In March 2003, OIG again
reported that project officers did not perform all necessary steps when conducting pre-
award reviews.
Tinsley noted that EPA recently issued several orders to improve the management of
assistance agreements in response to our concerns. However, she pointed out that, "the
challenge for EPA now will be to ensure that staff implement, and are held accountable
for following, the new policies and for implementing the new grants management plan.
Many of the deficiencies we found were due to EPA staff not following policies or being
held accountable when they did not."
Tinsley noted that the EPA OIG has not been the only one to notice assistance agreement
weaknesses - EPA itself has identified concerns, and has reported it as an Agency-level
weakness under the Integrity Act. The U.S. General Accounting Office has also noted
problems.
The Inspector General stressed that EPA's management of assistance agreements
directly relates to two Government-wide initiatives in the President's Management
Agenda - improving financial performance, and integrating the budget with
performance."
"We are committed to working with Congress and EPA to ensure that money awarded
every year through assistance agreements is producing the intended environmental and
public health benefits," she said.
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Other Activities
OIG Hosts Delegation of Auditors from Korea
On September 2, 2003, the OIG welcomed an 18-member research team from the Board
of Audit and Inspection (BAI), Seoul, Republic of Korea. The BAI has similar functions
and responsibilities as those of the U.S. General Accounting
Office and our own OIG.
In addition to BAI representatives, the visiting team included
auditors from diverse Korean agencies who were awarded the
"Best Internal Auditors" designation from their agencies. The
agencies included the Ministry of Defense, Ministry of Health
and Welfare, National Tax Service, Korea Customs Service, a
bank, and several city and provincial agencies.
Nikki Tinsley, EPA Inspector General,
greets Byoung-Chul Kim, Director,
BAI (EPA OIG photo)
The intent of the team's visit was to learn about our best
practices that they could apply in their own work. We provided
the team a general presentation, through an interpreter, about
the EPA OIG, including:
An overview of the Inspector General Act and our mission and independence.
Our organizational structure and skill composition.
Our strategic, multi-year, and annual planning process, goals, and how we select
assignments.
Our performance measurement system.
Coordination of our work with the General Accounting Office and other OIGs.
We also discussed significant performance audits and evaluations, and provided policy
and procedural documents governing the conduct of OIG work.
Innovative Techniques Drive Strategic Planning
During this reporting period, the OIG updated its strategic plan for fiscal years 2004
through 2008 by using Strategic Customer Value Analysis to research and collect
information, using surveys and interviews of OIG staff, EPA leadership, and others in
the Federal Government.
We sought to determine the emerging environmental and managerial issues, threats, and
opportunities facing EPA over the next 3 to 5 years. We also sought to determine what
OIG can do to improve its performance, operations, products, and service.
To develop the plan, we used a very innovative approach of categorizing input to a
computer database system by topic (Air, Water, Land, Cross Media, Management, and
OIG Performance) and also by value (Strength, Weakness, Opportunity, and Threat) to
29
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analyze components and synthesize trends of significance. By combining the research of
such external factors as demographics, technology, and the economy, along with Agency
goals and its progress in meeting OIG-reported Management Challenges, we identified
strategies for achieving the following OIG goals:
OIG Strategic Goals
This represents our statutory mission of promoting effectiveness and vision, and of being
catalysts for improving the environment.
This represents our statutory mission of promoting economy and efficiency; and detecting and
deterring fraud, waste, and abuse.
Goal 3
This represents the OIG leadership's commitment to high performance and
continuous improvement.
PCIE Roundtable Develops Guide for
OIG Involvement in PART
The President's Council on Integrity and Efficiency (PCIE) Government Performance
and Results Act Roundtable, chaired by the EPA OIG, has developed a guide for the
involvement of Government OIGs with the Program Assessment Rating Tool (PART).
The PART is designed to focus attention on the performance effectiveness and efficiency
of specific programs, with the intent of promoting more accountability in Federal
programs, greater performance, and an objective basis for resource decisions. Such an
effort is a natural extension of OIG work, and the Office of Management and Budget
(OMB) specifically asked the OIGs to take an active role in PART reviews.
The guide, developed by the EPA OIG with input from the Roundtable members,
discusses several way that OIGs could best assist OMB and its agencies, as follows:
/ Include agency PART assessments in OIG planning process/selection criteria
/ Conduct special OIG PART-related reviews/evaluations
PART is a diagnostic tool that relies on objective data through a series of questions.
OMB's goal is to evaluate 20 percent of all programs each year, so all programs are on a
5-year cycle.
30
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Sustained Effort Needed to Address
Management Challenges
Top 10 Management Challenges
Linking Mission and Management
IW|rmatiph Resources Management and
DataQu'altty - '''%{",- ' /'" -
Human Capital Management
of Assistanfee
t
Protecting Critical Infrastructure from
Non-Traditional Attacks
Cf&).i^|^>iitt.^drQ^h||A|r'T^kibs,; :- 'V
EPA's Working Relationships with States
*,!'&;'* c%, j"J,v>-^'-^->i,,'' >., ' 'fj'-'^g?? "*'-,, * ij'""'-- "~> ^ ' ^
Jn|3_rma|sqrbSecunQf;,r..a/;,>-; ', ^.i : --;
Backlog of National Pollutant Discharge
Elimination System Permits
In a May 2003 memorandum to the Administrator, we
reported that EPA has taken some important actions to
address the top 10 management challenges we identified
in past years, but still needs to continue its efforts.
We found that EPA has taken such actions as issuing
new standards and policies, providing training, and
initiating some cross-cutting strategies in its strategic
plan. Nonetheless, EPA has not taken all actions
necessary, which can impede the Agency's ability to
meet its goals.
For example, despite the Agency issuing new standards
and policies to improve its management of assistance
agreements, we continue to find that EPA is not
adequately overseeing these agreements. To do so, EPA
needs to allocate sufficient resources, hold management
and staff accountable for complying with policies,
establish success measures, and monitor progress.
The 10 management challenges, many of which existed
since before 2001, are in the accompanying table.
EPA Improves Its Strategic Plan,
Management Challenges Become Strategies
We commended the Agency for producing a Draft Strategic Plan that is clearly superior
to previous EPA Strategic Plans. One of the most important improvements, besides the
structural difference of reducing the number of goals from 10 to 5, was the integration of
strategies for Partnerships, Information, Innovation, Human Capital, Accountability,
Performance Measures, Science, Homeland Security, and Economic Analysis. These
strategies, which reflect EPA's attention to its Management Challenges as reported by
OIG and others, should promote leadership and cross-cutting improvements. We were
particularly pleased to see that many of the recommendations that the OIG made to the
Office of the Chief Financial Officer in the summer of 2001, and on the previous draft,
were reflected in this latest Draft Strategic Plan. We suggested several areas where the
final version of the plan can still be improved:
New Goal Structure Needs Link to Specific Programs. It is difficult to quickly
determine which programs fit within which of the goals, and a map or link is needed.
Introduction: Management Challenges Should be Acknowledged. The OIG, as
well as the Office of Management and Budget and General Accounting Office, have
reported Major Management Challenges over the years that can or do impede the
31
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Agency from fulfilling its goals and mission. While the new Strategies respond to
these reported challenges, such reported challenges should be acknowledged.
Accountability and Progress Assessment. Cost accountability and efficiency are
not articulated within the current goals or as Cross-Goal Strategies for internal
operations. Also, since EPA delegates more than half its budget each year to States,
local governments, and others through assistance agreements and other methods, we
believe that this Plan needs to emphasize strict performance and financial
accountability, and demonstrate that results clearly contribute to public benefit and
EPA's strategic objectives.
Legislation and Regulations Reviewed
During the reporting period, we reviewed 36 proposed changes to legislation,
regulations, policy and procedures that could affect EPA. We also reviewed drafts of
EPA's program operations manual, directives, and reorganizations.
Section 4(a) of the Inspector General Act requires the OIG to review existing and
proposed legislation and regulations relating to EPA and make recommendations
concerning their impact. We also participate in the President's Council on Integrity and
Efficiency. This Council provides a mechanism for commenting on existing and
proposed legislation as well as regulations that have a government-wide impact.
We provided comments to the Agency on the proposed revision/update of EPA Manual
1900, Contracts Management Manual. We were concerned that the proposed Manual did
not require specific training for Simplified Acquisition Contracting Officers regarding
Federal Supply Schedule purchases, or require contracting officers to document
performing on-site visits and having annual discussions with projects officers regarding
personal services. We also disagreed with the dollar threshold increasing from
$2,000,000 to $25,000,000 for detailed acquisition information; based on some of our
recent audits, we believe there is a need for more detailed acquisition planning, not less.
We also commented that the proposed Office of Management and Budget Federal
Enterprise Architecture Draft Performance Reference Model could be an excellent tool
for planning and measurement of Federal programs beyond the scope of Enterprise
Architecture. We commented that while the Model demonstrated the relationship of
input factors leading to outcomes during an annual cycle, it did not account for the
obvious time to achieve long-term outcomes of public benefit associated with specific
investments. This model also assumed that an agency already has or can install a cost
accounting system to measure process and activity efficiencies. In addition, we noted
that the model assumed that the Federal agency has some control over its performance
relationships. However, when performance is dependent upon grantees, there is
disconnect between control over investments and the outcomes.
Further, for the Office of Management and Budget's Standard Data Elements for
Federal Grant Applications, we generally agreed with the standard set of data elements.
However, we recommended that the assurance statement include a certification that the
applicant will comply with all applicable laws and regulations. This certification should
include a penalty clause.
32
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Statistical Data
Status Report on Perpetual Inventory of Reports in Resolution Process
for Semiannual Period Ending September 30, 2003
Report Category
A. For which no management decision
was made by April 1, 2003"
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management decision
was made during the reporting
period
E. For which no management decision
was made by September 30, 2003
F. Reports for which no management
decision was made within 6 months
of issuance
No. of
Reports
98
246
170
174
76
98
52
Report Issuance
($ in Thousands)
Questioned
Costs
$36,850
32,249
0
69,099
17,382
51,717
19,347
Recommended
Efficiencies
$3,385
748
0
4,133
507
3,627
3,369
Report Resolution
Costs Sustained
($ in Thousands)
To Be
Recovered
$2,039
As
Efficiencies
$16
(Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this
report and our previous semiannual report results from corrections made to data in our audit tracking system.)
33
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Status of Management Decisions on Inspector General Reports
This section presents statistical information as required by the Inspector
General Act Amendments of 1988 on the status of EPA management
decisions on reports issued by the OIG involving monetary
recommendations. As presented, information contained in Tables 1 and 2
cannot be used to assess results of reviews performed or controlled by this
office. Many of the reports were prepared by other Federal auditors or
independent public accountants. EPA OIG staff do not manage or control
such assignments. Auditees frequently provide additional documentation to
support the allowability of such costs subsequent to report issuance. We
expect that a high proportion of unsupported costs may not be sustained.
Table 1 - Inspector General Issued Reports With Questioned Costs for Semiannual Period
Ending September 30, 2003 (Dollar Value in Thousands)
Report Category
A. For which no management decision was made by
April 1,2003"
B. New reports issued during period
Subtotal (A+B)
C. For which a management decision was made
during the reporting period
(i) Dollar value of disallowed costs
(ii) Dollar value of costs not disallowed
D. For which no management decision was made
by September 30, 2003
Reports for which no management decision was made
within 6 months of issuance
Number of
Reports
40
26
66
13
7
6
53
31
Questioned
Costs*
$36,850
32,249
69,099
17,382
2,039
15,343
51,717
19,347
Unsupported
Costs
$7,881
3,701
11,582
856
740
116
10,726
6,883
* Questioned costs include the unsupported costs.
** Any difference in number of reports and amounts of questioned costs between this report and previous semiannual
report results from corrections made to data in our audit tracking system.
34
-------
Table 2 - Inspector General Issued Reports With Recommendations That Funds
Be Put To Better Use for Semiannual Period Ending September 30, 2003
(Dollar Value in Thousands)
Report Category
A. For which no management decision was made by April 1 , 2003"
B. Which were issued during the reporting period
Subtotal (A+B)
C. For which a management decision was made during the reporting period
(i) Dollar value of recommendations from reports that were agreed to by management
(ii) Dollar value of recommendations from reports that were not agreed to by management
(iii) Dollar value of non-awards or unsuccessful bidders
D. For which no management decision was made by September 30, 2003
Reports for which no management decision was made within 6 months of issuance
Number of
Reports
5
4
9
2
1
1
0
7
4
Dollar
Value
$3,385
748
$4,133
507
15
492
0
3,627
$3,369
** Any difference in number of reports and amounts of questioned costs between this report and previous semiannual report
results from corrections made to data in our audit tracking system.
Audits With No Final Action as of September 30, 2003,
That Are Over 365 Days Past OIG Report Issuance Date
Audits
Programs
Assistance Agreements
Contract Audits
Single Audits
Financial Statement Audits
Total
Total
23
65
24
19
1
132
Percentage
17.4%
49.2%
18.1%
14.3%
1.0%
100.0%
35
-------
tigative Results
me-^dtmfr ;Ar,r>,! - t
Summary of Investigative Activity During Period
Cases open as of March 31, 2003
201
Cases opened during period
71
Cases closed during period
89
Cases pending as of September 30, 2003
183
Investigations Pending by Type
as of September 30, 2003
Contract
Assistance Agreement
Employee Integrity
Program Integrity
Computer Crime
Lab Fraud
Other
Total
Superfund
15
5
3
3
0
20
2
48
Management
25
34
21
22
12
12
9
135
Total
40
39
24
25
12
32
11
183
Results of Prosecutive Actions
Indictments / Criminal Informations / Complaints
Convictions
Civil Judgments / Settlements
Fines and Recoveries
10
7
2
$3,544,138
Personnel and Administrative Actions
Termination
Suspension
Reprimands
Suspension and Debarments
Cost Savings
Other
Total
1
2
4
4
1
3
15
36
-------
XW/ F/sca/ Year 2003 results reported are as of October 28, 2003, with some results not available due to
time lag: as reported in the OIG Performance Measurement and Results System
Strategic Goal; With Annual Performance
Target Compared to FY 03 Results Reported
Supporting Measures
^^llonfeul.teEriyffonfe^pa^an'd Human Health [ . 4 h*"t ^M*" i,
Environmental Improvements/Actions/Changes
Target 60; Reported 47; (78%)
Environmental Risks Reduced or Eliminated
Target 20; Reported 9; (45%)
Environmental Recommendations, Best Practices,
Risks Identified
Target 80; Reported 48; (60%)
0 Legislative changes/decisions
1 Regulatory changes/decisions
37 EPA Policy, process, practices change
5 Examples of environmental improvement
4 Best environmental practice implemented
8 Environmental Risks reduced/eliminated
1 Certifications/validations/verifications
27 Environmental recommendations
3 Environmental best practices identified
18 Environmental risks identified
Goa^iw^llpWsJ^ - ( lIjjM, iff
Return on Investment: Potential dollar return as
percentage of OIG budget ($48 million)
Target 150%; Reported; 856%
($411 million = over 8. 5 times OIG FY 03 budget)
Criminal, Civil & Administrative Actions Reducing
Risk of Loss/Operational Integrity
Target 50; Reported 83; (1 66%)
Improvements in Business/Systems/Efficiency
Target 75; Reported 138; (1 84%)
Recommendations, Best Practices, Challenges
Identified
Target 155; Reported 264; (1 70%)
Collaborative Products/Partners 56
Requests to Testify/External Presentations 28
Assignments Performed By Request 51 %
Milestones (time/budget) Met 71%
Customer Value Rating
(Dollars in Millions)
$ 37.3 Questioned costs
$ 1.1 Recommended efficiencies, costs saved
$372.6 Fines, recoveries, settlements
16 Criminal Convictions
31 Indictments/informations/complaints/arrests
4 Civil judgments/settlements
32 Administrative actions
55 Policy process, practice, control changes
1 Corrective action on FMFIA/Mgt Challenge
6 Best practices implemented
76 Certifications/validations/verifications/
allegations disproved
253 Recommendations
8 Best practices identified
3 FMFIA/Management Challenges identified
"^"*fiS'* t** r fc *- S^Ť*< - J
SSliJwM&Si
*Rl?IKiM[5'
-------
38
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Appendix 1 - Reports Issued
THE INSPECTOR GENERAL ACT REQUIRES A LISTING, SUBDIVIDED ACCORDING TO SUBJECT MATTER, OF EACH REPORT ISSUED BY
THE OFFICE DURING THE REPORTING PERIOD AND FOR EACH REPORT, WHERE APPLICABLE, THE DOLLAR VALUE OF QUESTIONED COSTS
AND THE DOLLAR VALUE OF RECOMMENDATIONS THAT FUNDS BE PUT TO BETTER USE.
Questioned Costs
Final Report Ineligible Unsupported
Rpport Number Title Issued Costs Costs
2003-P-00010 Mega EPA's National Hardrock Mining Framework 07-AUG-03
2003-P-00011 closed: General Security Controls at EPA 29-MAY-03
Finance Centers
2003-P-00012 EPA's Response to the World Trade Center 19-AUG-03
Collapse
2003-P-00013 Effectiveness of RCRA Procurement Preference 16-SEP-03
Programs
2003-P-00014 Survey of Air Quality Issues 26-SEP-03
2003-P-00015 EPA's Use of FSS Schedule Contracts 26-SEP-03
2003-P-00016 Adequacy of Ambient Air Monitoring Networks 30-SEP-03
and Data
2003-P-00017 EPA's Computer Security Self -Assessment 30-SEP-03
Process
2003-P-00018 DRINKING WATER CAPACITY 30-SEP-03
2003-P-00019 Use of STAR Grants in Achieving EPA's 30-SEP-03
Strategic Goals
TOTAL PERFORMANCE REPORTS = 10 0 0
2003-1-00110 AA 2002 DWSRF Utah 03-JUN-03 $0 $0
2003-1-00138 AA-South Carolina Drg . Water SRF-6/30/2002 17-SEP-03
2003-1-00139 AA-South Carolina Clean Water SRF-6/30/2002 17-SEP-03
2003-1-00143 Stringfellow Cooperative Agreement 1983-1995 30-SEP-03 $24,135,237 $0
2003-2-00012 Richmond Beach/Carkeek Const Grant Projects 30-JUN-03 $301,781 $84,953
2003-2-00015 Richmond Beach/Carkeek Const. Grant Projects 23-SEP-03 $221,894 $0
2003-4-00101 Audit of GDNR Cooperative agreement number 26-JUN-03 $16,559
VC984299980
2003-4-00119 Costs for Tribal Assoc.on Solid Waste & 19-SEP-03 $0 $2,357,376
Emergency Response
2003-4-00120 Geothermal Heat Pump Consortium, Inc. -Costs 30-SEP-03 $1,153,472
Claimed
TOTAL ASSISTANCE AGREEMENT REPORTS = 9 $24,675,471 $3,595,801 0
2003-3-00092 Latimer, City of Ol-APR-03
2003-3-00093 Twenty-Nine Palms Band of Mission Indians Ol-APR-03
FY 2000
2003-3-00094 TWENTY-NINE PALMS BAND OF MISSION INDIANS Ol-APR-03 $31,890
FY 2001
2003-3-00095 Iowa Rural Water Association Ol-APR-03 $51,952
2003-3-00096 Civil Engineering Research Foundation Ol-APR-03
2003-3-00097 Wayne State University Ol-APR-03
2003-3-00098 Northwest Regional Planning Commission 17-APR-03
2003-3-00099 Northwest Regional Planning Commission n-APR-03
2003-3-00100 Northwest Regional planning Commission 17-APR-03
2003-3-00101 Louisiana, State of 03-APR-03
2003-3-00102 Virginia, Commonwealth of 03-APR-03
2003-3-00103 Oregon, State of 03-APR-03
2003-3-00104 Tonasket, City of 07-APR-03
2003-3-00105 Columbus, City of 07-APR-03
2003-3-00106 Bad River Band of Lake Superior Chippewa 17-APR-03
Indians
2003-3-00107 Maricopa County 17-APR-03
2003-3-00108 Alaska, State of 22-APR-03
2003-3-00109 Alaska, State Of 22-APR-03
2003-3-00110 Maine, State of 22-APR-03
2003-3-00111 Idaho, State of 23-APR-03
2003-3-00112 American Indian Science and Engineering Soc. 23-APR-03
2003-3-00113 American Indian Science and Engineering Soc. 23-APR-03 $104,760
2003-3-00114 American Indian Science and Engineering Soc. 23-APR-03 $58,365
2003-3-00116 Big Sandy Rancheria 30-APR-03
2003-3-00117 Stevens Village Council 30-APR-03 $94,229
Recommended
Efficiencies
Unreasonable (Funds Be Put
Costs To Better Use)
$0
0 0
$16,281
$0
$0 211,863
$0
$228,144
39
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Report Number Title
2003-3-00118
2003-3-00119
2003-3-00120
2003-3-00121
2003-3-00122
2003-3-00123
2003-3-00124
2003-3-00125
2003-3-00126
2003-3-00127
2003-3-00128
2003-3-00129
2003-3-00130
2003-3-00131
2003-3-00132
2003-3-00133
2003-3-00134
2003-3-00135
2003-3-00136
2003-3-00137
2003-3-00138
2003-3-00139
2003-3-00140
2003-3-00141
2003-3-00142
2003-3-00143
2003-3-00144
2003-3-00145
2003-3-00146
2003-3-00147
2003-3-00148
2003-3-00149
2003-3-00150
2003-3-00151
2003-3-00152
2003-3-00153
2003-3-00154
2003-3-00155
2003-3-00156
2003-3-00157
2003-3-00158
2003-3-00159
2003-3-00160
2003-3-00161
2003-3-00162
2003-3-00163
2003-3-00164
2003-3-00165
2003-3-00166
2003-3-00167
2003-3-00168
2003-3-00169
2003-3-00170
2003-3-00171
2003-3-00172
2003-3-00173
2003-3-00174
2003-3-00175
2003-3-00176
2003-3-00177
2003-3-00178
2003-3-00179
2003-3-00180
2003-3-00181
2003-3-00182
2003-3-00183
2003-3-00184
2003-3-00185
2003-3-00186
2003-3-00187
Nebraska, State of
Maryland, University System of
Maryland, University System of
Associtation of State and Interstate Water
Pol. Control Ags
Leech Lake Reservation
Leech Lake Reservation
East Moline, City of
Onondaga County
North Carolina, State of
Virginia, Commonwealth of
Connecticut, State of
Wisconsin, State of
Oregon, State of
San Antonio, City of
San Antonio. City of
San Antonio, City of
Metropolitan Government of Nashville s,
Davidson County
Honolulu, City and County of
Council of Athabascan Tribal Government
Olivenhain Municipal Water District
Parkinson's Institute
White Mountain Apache Tribe
Pit River Tribe
Karuk Tribe of California
Public Health Institute
Native Village of Mekoryuk IRA Council
CIRCLE VILLAGE COUNCIL
Lake Chelan Sewer District
Eight Northern Indian Pueblos Council
Environmental Quality, Michigan Department of
Environmental Quality, Michigan Department of
Texas, State of
Texas, State of
Texas, State of
Resources for Human Development, Inc
Pawnee Tribe of Oklahoma
Northwestern University
Brigham and Women's Hospital, Inc
Sokaogon Chippewa Community Mole Lake Band
Louisiana, State of
Kentucky, Commonwealth of
Wyoming, State of
Miami University
Canton, City of
Toledo, City of
Harvard University
CORNELL UNIVERSITY
Virgin Valley Water District
Mason City, City of
Denver, University of (Colorado Seminary)
Michigan, University of
Missouri, University of
Nebraska, State of
Delaware River Basin Commission
Cocopah Indian Tribe
NATIONAL EDUCATION ASSOC. HEALTH INFO. NTWK.
Camden, City of
Augustine Band of Cahulla Mission Indians
Shoemakersville, Borough of
Alice Hamilton Occupational Health Ctr. Inc.
Swimonish Indian Tribal Community
Lake Michigan Directors Consortium
Iowa Tribe of Oklahoma
Smith River Rancheria
Athabascan Tribal Government, Council of
Trinidad Rancheria
Trinidad Rancheria
Clarksburg, City of
Iowa Rurtal Water Association
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Issued Costs Costs Costs To Better Use)
Ol-MAY-03 $34,528
Ol-MAY-03
Ol-MAY-03
07-MAY-03 $3,986
07-MAY-03
07-MAY-03
08-MAY-03
08-MAY-03
08-MAY-03
19-MAY-03
19-MAY-03
19-MAY-03
19-MAY-03
19-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
27-MAY-03
28-MAY-03
28-MAY-03 $190,600
28-MAY-03
28-MAY-03
28-MAY-03
28-MAY-03
28-MAY-03
03-JUN-03 $7,850
03-JUN-03 $61,089
03-JUN-03
03-JUN-03
04-JUN-03
04 JUN-03
10-JUN-03
10-JUN-03
10-JUN-03
ll-JUN-03
ll-JUN-03
ll-JUN-03
ll-JUN-03
ll-JUN-03
12-JUN-03
12-JUN-03
12-JUN-03
18-JUN-03
18-JUN-03 $28,992
18-JUN-03 $173,346
18-JUN-03
18-JUN-03
09-JUL-03
09-JUL-03 $427,920
09-JUL-03
09- JUL-03
09-JUL-03
09-JUL-03
29-JUL-03
29-JUL-03
30-JUL-03
31-JUL-03
12-AUG-03
12-AUG-03
12 AUG-03
13-AUG-03
04-SEP-03 $1,751,662
13-AUG-03
04-SEP-03 $98,536
23-SEP-03
23-SEP-03
23-SEP-03
23-SEP-03
23-SEP-03
40
-------
Questioned Costs
Recommended
Efficiencies
Report Number Title
2003-3-00188 Guam, Government of
2003-3-00189 Guam, Government
2003-3-00190 Indian Township Tribal Government
2003-3-00191 Conrad, City of
2003-3-00192 National Academy of Public Administration
Foundation
Final Report
Issued
23-SEP-03
23-SEP-03
23-SEP-03
23-SEP-03
25-SEP-03
Ineligible
Costs
$222,907
Unsupported Unreasonable (Funds Be Put
Costs Costs To Better Use)
TOTAL SINGLE AUDIT REPORTS = 100 $3,338,626
2003-1-00104 Guardian FY 1999 6, FY 2000 Incurred Cost 12-MAY-03 $0
2003-1-00142 Avantl Corporation - '95 - '98 Incurred Cost 23-SEP-03 $39,244
Audit
2003-2-00011 Ecology & Environment - Region 6 START 30-APR-03
Billing Rates
TOTAL DIG ISSUED CONTRACT REPORTS = 3 $39,244
TechLaw Inc.-CACS 68-W4-0019 18-APR-03
Midwest Research Instltute-FY2002 OMB A-133 18-APR-03
& Indirect Rates
Midwest Research Institute-CAS 418 18-APR-03
Midwest Research Institute-CAS 410 18-APR-03
Battelle Memorial Institute-FY2003 18-APR-03
Compensation Sys Int Con
CH2M Hill Inc-FY2003,2004,2005 Forward 21-APR-03
Pricing Indirect Rate
CH2M Hill Constructors, Inc-FY2003,2004,2005 21-APR-03
Forward Pricing
Battelle Memorial Institute-FY2003 Billing 21-APR-03
Syst- Int Control
Weston Solutions-Follow-up Info Tech Sys Gen 21-APR-03
Internal Control
Cadmus Group Inc. FY 2000 Incurred Cost 25-APR-03
InfoPro, Inc.-FY2000 Incurred Cost 28-APR-03
Booz Allen & Hamilton- CACS 68-WO-0039 29-APR-03
Shaw Environmental Inc.-Preaward PR-CI-02- 14-MAY-03
11291 CPFF
Integrated Laboratory Systems - RFP No. 14-MAY-03
PR-CI-0211291
Vista Computer Services-FY 1997 Incurred Cost 16-MAY-03
Scientific Consulting Group, Inc.-FY 2000 23-MAY-03
Incurred Cost
Shaw Environmental & Infra-FY2003 Equip & 23-MAY-03
Pre Equip Rates
SAIC-CACS 68-D2-0183 06-JUN-03
DynCorp Info 6. Eng Tech-CACS 68-D9-0035 12-JUN-03 $450,226
International Consult.-FY1999 Incurred Cost 12-JUN-03
Universe Tech., Inc.-FY2000 Incurred Cost 23-JUN-03
International Consult.-FY2000 Incurred Cost 23-JUN-03
IT Group-FY2001 Incurred Cost 23-JUN-03
Southwest Research lnstitute-FY2002 Inc. Cost 02-JUL-03
Dynamac Corporation-FY2000 Incurred Cost 03-JUL-03
CH2M Hill Inc.-FY2001 Incurred Cost 03-JUL-03
Roy F. Weston-FY2001 Incurred Cost 03-JUL-03
CH2M Hill liE Business Group-FY2001 Incurred 08-JUL-03
Cost
2003-1-00122 CH2M Hill Companies, Ltd-FY2001 Incurred Cost 08-JUL-03
Home Office
2003-1-00123 Lockheed Martin Tech Svcs Bus Area-FY2001 08-JUL-03
Incurred Cost
2003-1-00124 Black & Veatch Holding Company-FY2001 08-JUL-03
Corporate Incurred Cost
2003-1-00125 Lockheed Martin Services Group (LMSI)-FY2001 09-JUL-03 $26,271
Incurred Cost
2003-1-00126 Arthur D. Little Inc-FY2000 I/C-Cancelled 16-JUL-03
Bankrp. Report reed
2003-1-00127 Midwest Research Instltute-OMB A-133 & FY2001 17-JUL-03
Indirect Rates
2003-1-00128 Foster Wheeler Environmental Corp.-FY2001 Inc 17-JUL-03
Incurred Cost
2003-1-00129 Marasco Newton Group LTD-CAS Disclosure 23-JUL-03
Statement Rev #3
$93,986
$0
$0
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
2003-
1-00092
1-00093
1-00094
1-00095
1-00096
1-00097
1-00098
1-00099
1-00100
1-00101
1-00102
1-00103
1-00105
1-00106
1-00107
1-00108
1-00109
1-00111
1-00112
1-00113
1-00114
1-00115
1-00116
1-00117
1-00118
1-00119
1-00120
1-00121
$491,044
41
-------
Questioned Costs
Recommended
Efficiencies
Report Number Title
2003-1-00130 RICARDO, Inc.-FY2002 Incurred Cost
2003-1-00131 Metcalf & Eddy Inc.-FYs 96,97 4 98 RAC
68-W6-0042
2003-1-00132 Midwest Research Institute-FY2002 OMB A-133 &
Indirect Rates
2003-1-00133 SAIC Company 1 - FY2002 Incurred Cost
2003-1-00134 DCT, Inc.-FY2001 Incurred Cost
2003-1-00135 XEnergy Inc.-FY1997 Incurred Cost
2003-1-00136 International Fuel Cells Company- FY2 001
Incurred Cost
2003-1-00137 Versar, Inc.-CACS 6S-D3-0013
2003-1-00140 Black & Veatch Spec Pro] Corp-FY99 RAC VII
68-W5-0004
2003-1-00141 Automotive Testing Laboratories-FY2001
Incurred Cost
2003-1-00144 Battelle Memorial Institute-Columbus-FY2002
Incurred Cost
2003-1-00145 XEnergy Inc.-FY1998 Incurred Cost
2003-1-00146 Tetra Tech EM, Inc.-FY2002 Billing System
2003-2-00009 Techlaw Inc.- Preaward PR-CI-02-11291
2003-2-00010 Shaw Environmental & Infrastructure, Inc-
FY2003 Direct Labor
2003-2-00013 FEV Engine Technology-Preaward PR-CI-03-10417
2003-2-00014 CH2M Hill Inc.-FYs 1996-2000 RAC Close-out
68-W6-0025
2003-2-00016 IT Group (Shaw Environ. ) -DACA45-98-D-0003 04
2003-4-00051 Toeroek Associates-FY2001 Incurred Cost
2003-4-00052 InfoPro Incorporated- FY 1999 Incurred Cost
2003-4-00053 Bristol Envtl. & Eng . Services Corp.-
Accounting System
2003-4-00054 Foster Wheeler Environmental Corp-FY2002
Accounting System
2003-4-00055 Foster Wheeler Environmental Corp.-FY2002
Billing System
2003-4-00056 Foster Wheeler Environmental Corp.-FY2002
Estimating System
2003-4-00057 Foster Wheeler Environmental Corp.-FY2002
Budget System
2003-4-00058 Foster Wheeler Environmental Corp.-FY2002
Travel Admin Opera
2003-4-00059 Foster Wheeler Environmental Corp-FY2002 EDP
LogicalSecurity
2003-4-00060 Foster Wheeler Environmental Corp-FY2002 EDP
General Control
2003-4-00061 Foster Wheeler Environmental Corp.-FY2002
Indirect & ODC Sys
2003-4-00062 Foster Wheeler Environmental Corp-FY2002
Master FileVenderlD
2003-4-00063 Foster Wheeler Environmental Corporation-
FY 2002 CAS 416
2003-4-00064 Foster Wheeler Environmental Corp.-FY2002
MAAR 6 Floorcheck
2003-4-00065 IT Group-FY2002 CAS 416 Insurance Costs
2003-4-00066 Black & Veatch Corporation-CAS 403
2003-4-00067 CH2M Hill Inc.-FY2002 Labor Floorcheck
2003-4-00068 Midwest Research Institute-FY2001 Floorcheck
MAAR 6
2003-4-00069 Dynamac Corporation-FY2002 Floorcheck
2003-4-00070 Tetra Tech Inc.-FY2002 Financial Capability
2003-4-00071 Marasco Newton Group LTD-Cost Impact Analysis
2003-4-00072 ABT Associates Inc.- Revised Disclosure
Statement No. 5
2003-4-00073 ABT Associates Inc. -CAS 420
2003-4-00074 Midwest Research Institute-FY2002 CAS 403
Home office alloca
2003-4-00075 Integrated Laboratory Systems-Accounting Sys.
2003-4-00076 ASRC Aerospace Corporation-FY2003 Floorcheck
2003-4-00077 Tetra Tech, Inc. -CAS 408
2003-4-00079 Tetra Tech NUS-Billing System
2003-4-00081 Tetra Tech NUS-CAS 408
2003-4-00082 Tetra Tech, NUS-FY 2000 Floorcheck
2003-4-00083 PRC Environmental Management Inc.-FY2000
MAAR 6 Floorcheck
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Issued Costs Costs Costs To Better Use)
23-JUL-03
23-JUL-03
23-JUL-03
31-JUL-03
13-AUG-03
13-AUG-03
29-AUG-03
29-AUG-03
22-SEP-03
22-SEP-03
26-SEP-03
26-SEP-03
26-SEP-03
21-APR-03
21-APR-03
15-AUG-03
22-SEP-03
26-SEP-03
18-APR-03
25-APR-03
25-APR-03
2S-APR-03
25-APR-03
25-APR-03
28-APR-03
28-APR-03
28-APR-03
28-APR-03
28-APR-03
28-APR-03
28-APR-03
28-APR-03
28-APR-03
29-APR-03
29-APR-03
29-APR-03
07-MAY-03
07-MAY-03
08-MAY-03
09-MAY-03
13-MAY-03
13-MAY-03
13-MAY-03
13-MAY-03
16-MAY-03
16-MAY-03
16-MAY-03
16-MAY-03
22-MAY-03
42
-------
Recommended
Report
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
2003
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
-4
2003-4
2003
2003
2003
2003
2003
2003
2003
2003
2003
-4
-4
-4
Number Title
-00084
-00085
-00086
-00087
-00088
-00089
-00090
-00091
-00092
-00093
-00094
-00095
-00096
-00097
-00098
-00099
-00100
-00102
-00103
-00104
-00105
-00106
-00107
-00108
-00109
-00110
-00111
-00112
-00113
-00114
-00115
-00116
-00117
-4-00118
-1
-S
-S
-S
-00085
-00005
-00006
-00007
-S-00008
PRC Environmental Management Inc.-FY2000 MAAR
PRC Environmental Management Inc -FY2000 ICAP
Compensation
PRC Environmental Management Inc. -CAS 408
Bionetics Corporation-CAS 420
Tetra Tech EMI-FY2003 CAS 414
Abt Associates Inc. -CAS 420
Abt Associates Inc. -CAS 415
Tetra Tech EMI-FY2002 Compensation
Tetra Tech EMI-FY2002 Financial Condition
Risk Assessment
Roy F. Weston-DACA45-98-D-0004 #5
Tetra Tech EMI -Purchasing Existence
Tetra Tech EMI- (3) Floorchecks
ManTech Systems Engineering Corp. -Revised
Disc Statment 1/03
Syracuse Research Corp.-FY2002 Floorcheck
Transcontinental Enterprises, lnc.-FY2002
MAAR 6 Floorcheck
EC/R Incorporated-FY2001 Floorcheck
S&E Services, Inc-Preaward Accounting System
Survey
DPRA, Inc.-FY2003 Floorcheck
Kevric Company- FY2000 Incurred Cost
Abt Associates Inc. -CAS 414
Tetra Tech, Inc. -CAS 403
Scientific Consulting Group - FY2001 Incurred
Cost
Environmental Quality Management-FY2003
Accounting System
Eastern Research Group- CAS 404
Battelle Memorial Institute-FY2003 ODC System
& Internal Cntrl
IT Corporation QATS Segment -FY2000 Incurred
Cost
IT Group (Shaw Environmental) -DACA45-98-D-
0003 t>4
Tetra Tech, Inc. -Accounting System FY 2003
Pacific Environmental Service Inc.-FY2000
Incurred Cost
Eastern Research Group-CAS 418-Allocation of
Direct & Indire
Syracuse Research Corporation-FY2003 MAAR 13
Matl Consumptio
Syracuse Research Corp-FY 2003 Floorchecks
MAARS 6
Industrial Economics, Inc.-FY2003 Floorcheck
Midwest Research Institute-FY2003 Maar 6
TOTAL DCCA CONTRACT REPORTS = 119
FY 2002 FIFRA Financial Statement Audit
TOTAL FINANCIAL STATEMENT REPORTS = 1
Parker Landfill Response Claim III
Congressional Request - Review of EPA Action
on Grant Report
Missouri Electric Works CERCLA Claim
2003 Federal Information Security Management
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Issued Costs Costs Costs To Better Use)
22-MAY-03
22-MAY-03
22-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
23-MAY-03
06-JUN-03
06-JUN-03
13-JUN-03
13-JUN-03
13-JUN-03
23-JUN-03
23-JUN-03
24-JUN-03
24-JUN-03
30-JUN-03
30-JUN-03
02-JUL-03
02-JUL-03
03-JUL-03
16-JUL-03
16-JUL-03
23-JUL-03
30-JUL-03
30-JUL-03
31-JUL-03
28-AUG-03
29-AUG-03
$476,497 0 0 $491,044
03-APR-03
0 0 00
29-APR-03
23-JUL-03
30-JUL-03 $15,518 $11,568 $2,012 $29,098
12-SEP-03
Act
TOTAL SPECIAL REVIEW REPORTS = 4
TOTAL REPORTS ISSUED - 246
$15,518 $11,568
$28,545,356 $3,701,355
$2,012 $29,098
$2,012 $748,286
43
-------
OIG Mailing Addresses and Telephone Numbers
(OIG Hotline: 1-888-546-8740 or (202) 566-2476)
Headquarters
Environmental Protection Agency
Office of Inspector General
1200 Pennsylvania Ave. NW (2410T)
Washington, DC 20460
(202) 566-0846
Atlanta
Environmental Protection Agency
Office of Inspector General
61 Forsyth Street, SW
Atlanta, GA 30303
Audit: (404) 562-9830
Investigations: (404) 562-9857
Boston
Environmental Protection Agency
Office of Inspector General
One Congress St.
Suite HOO(Mailcode)
Boston, MA 02114-2023
Audit: (617) 918-1470
Investigations:^ 17) 915-1481
Chicago
Environmental Protection Agency
Office of Inspector General
77 West Jackson Boulevard
13th Floor (IA-13J)
Chicago, IL 60604
Audit: (312) 353-2486
Investigations: (312) 353-2507
Cincinnati
Environmental Protection Agency
Office of Inspector General
MS: Norwood
Cincinnati, OH 45268-7001
Audit: (513) 487-2360
Investigations: (312) 353-2507 (Chicago)
Dallas
Environmental Protection Agency
Office of Inspector General (6OIG)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-2733
Audit: (214) 665-6621
Investigations: (404) 562-9857 (Atlanta)
Denver
Environmental Protection Agency
Office of Inspector General
999 18th Street, Suite 500
Denver, CO 80202-2405
Audit: (303) 312-6872
Investigations: (312) 353-2507 (Chicago)
Kansas City
Environmental Protection Agency
Office of Inspector General
901 N. 5th Street
KansasCity,KS66101
Audit: (913) 551-7878
Investigations: (312) 353-2507 (Chicago)
New York
Environmental Protection Agency
Office of Inspector General
290 Broadway, Room 1520
New York, NY 10007
Audit: (212) 637-3080
Investigations: (212) 637-3041
Philadelphia
Environmental Protection Agency
Office of Inspector General
1650 Arch Street, 3rd Floor
Philadelphia, PA 19103-2029
Audit: (215) 814-5800
Investigations: (215) 814-2361
Research Triangle Park
Environmental Protection Agency
Office of Inspector General
Mail Drop N283-01
Research Triangle Park, NC 27711
Audit: (919) 541-2204
Investigations: (919) 541-1027
Sacramento
Environmental Protection Agency
Office of Inspector General
801 I Street, Room 264
Sacramento, CA 95814
Audit: (916) 498-6530
Investigations: (415) 744-2465 (SF)
San Francisco
Environmental Protection Agency
Office of Inspector General
75 Hawthorne St. (IGA-1)
7th Floor
San Francisco, CA 94105
Audit: (415) 947-4521
Investigations: (415) 947-8711
Seattle
Environmental Protection Agency
Office of Inspector General
1200 6th Avenue, 19th Floor
Suite 1920, M/S OIG-195
Seattle, WA 98101
Audit: (206) 553-4033
Investigations: (206) 553-1273
44
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IT'S YOUR ENVIRONMENT
ITS YOUR MONEY
U.S. Environmental Protection Agency
Region 5, Library (PL-12J)
77 West Jackson Boulevard, 12th Float
Chicago, IL 60604-3590
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