EPA-350-K-04-001
May 2004
\.
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Semiannual Report
to Congress
October 1, 2003 - March 31, 2004
The EPA Office of Inspector General recently conducted a review
ofhardrock mining Superfund sites. 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: The Homestake Mine hardrock mining site, Lead, South Dakota (EPA OIG Photo).
Printed with vegetable oil based inks on 100% recycled paper (minimum 50% postconsumer)
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Foreword
Our work during the semiannual reporting period noted several areas of potential
funding problems with regard to Superfund projects.
In response to a Congressional request, we estimated that there was a $174.9 million
shortfall for fiscal 2003 non-Federal Superfund projects. This prevented the
Environmental Protection Agency (EPA) from beginning construction at all sites or
providing the amount of funds believed to be needed in some instances. In addition,
during our audit of EPA's financial statements for fiscal 2003, we noted that the
Superfund Trust Fund transferred funds in excess of the Fund assets available for
transfer by $82.7 million for that year, and that shortfall was subsequently covered by
fiscal 2004 appropriations from the Treasury's general fund.
During the period, we issued a report on hardrock mining (extraction of certain metals
and minerals from the earth, excluding coal). We found 156 hardrock mining sites
nationwide with the potential to cost between $7 billion and $24 billion to clean up (at a
maximum EPA cost of $15 billion), and many of these sites will involve Superfund
work. The EPA costs noted are over 12 times EPA's total annual Superfund budget of
about $1.2 billion for the last 5 years.
We also issued reports regarding EPA's homeland security efforts. We found that EPA
does not have adequate processes for identifying, obtaining, maintaining, and tracking
counter terrorism/emergency response equipment, and needs to do better planning. We
also found that EPA's Office of Homeland Security needs to better define its homeland
security role regarding air protection; while we acknowledge this is a relatively new area
for EPA, we want to stress the importance of clarifying EPA's future roles and
responsibilities.
A review disclosed that EPA has not fully implemented Executive Order 12898 to
provide environmental justice for minority and low income populations. Although
progress has been made at the EPA regional level, definitions and a clear vision need to
be provided at the national level to ensure EPA provides environmental justice in a
consistent and sufficient manner.
EPA earned an unqualified opinion on its fiscal 2003 financial statements, and we did
not note any material weaknesses in internal controls and compliance. When evaluating
internal controls, we noted eight reportable conditions that should be corrected, but we
do not believe they represent material weaknesses that would prevent the fair
presentation of reliable statements.
Details on these issues and others are in this semiannual report.
Co-tĞ~U~
Nikki L. Tinsley
Inspector General
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Table of Contents
Highlights
Profile of Activities and Results ..
2
Significant OIG Activity 3
Air (helping to make air safe and healthy to breathe) 3
Water (ensuring that drinking water is safe and sources are protected) 6
Land (improving waste management and cleanup - includes Superfund) 8
Cross-Media (issues involving overlapping areas - includes homeland security) 13
Grants (improving EPA's use of assistance agreements) 16
Contracts (improving EPA's use of contracts) 19
Financial Reporting (improving the Agency's financial reporting) 21
Business Systems (improving the Agency's information technology) 23
Investigations (investigating laboratory fraud, financial fraud, and computer crimes) 24
Public Liaison (addressing specific concerns of the public) 31
Congressional Requests (providing Congress with specific information) 34
Testimony (providing testimony before Congressional committees) 36
Other Activities 38
Statistical Data
Appendices
Appendix 1 - Reports Issued 51
Appendix 2 - Reports Issued Without Management Decisions
(Available Upon Request)
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Highlights
Environmental Justice Not
Consistently Implemented
EPA has not fully implemented
Executive Order 12898 to
provide environmental justice
for minority and low income
populations (page 13).
Buying Counter Terrorism
Equipment Can Be Improved
EPA does not have adequate
processes for obtaining and
tracking equipment to respond
to terrorist attacks and other
emergency situations (page 19).
EPA Financial Statements
Earn Unqualified Opinion
EPA earned an unqualified
opinion on its fiscal 2003
financial statements, and no
material weaknesses were noted
(page 21).
Sentencing Handed Down in
Child Pornography Case
A former contract employee
was sentenced for possession of
child pornography, after using
an EPA computer to download
the material (page 26).
Superfund Shortfall of
$174.9 Million Reported
In response to a Congressional
request, we issued a report on
Superfund financing that
estimated a $174.9 million
shortfall for non-Federal sites
(page 34).
Lobbying Organization
Inappropriately Given Grant
We questioned $4.7 million in
grant funds given to Consumer
Federation of America, a
lobbying group (page 16).
Financial Impacts of
Hardrock Mining Sites Noted
Hardrock mining sites
identified nationwide may have
major financial impacts on
Superfund resources and States
(page 8).
Drinking Water Goals
Incorrectly Reported
In each of the last 4 years, EPA
incorrectly reported meeting its
drinking water goal since it
relied on flawed and
incomplete data (page 6).
Air Toxics Measurement
Can Be Improved
Although air toxics estimating
methods have been improving,
unvalidated assumptions and
other limitations continue to
impact usefulness (page 3).
Testimony Addresses
Assistance Agreements
During testimony before
several Congressional
subcommittees, we discussed
the need to improve
management of assistance
agreements (page 36).
Bunker Hill Review Notes
Actions Appropriate
A review of complaints
regarding the Bunker Hill
Superfund site and the
surrounding area found that
EPA generally followed laws
and regulations (page 31).
EPA Should Improve
Computer Network Firewalls
While EPA has taken positive
actions to improve computer
system firewalls, additional
areas need to be addressed
(page 23).
Impersonator Sentenced
to Prison Term
A man was sentenced to prison
for impersonating an employee
of EPA and other organizations
to defraud employment
agencies (page 27).
Inspector General Receives
Leadership Award
The EPA Inspector General
was presented with the
Distinguished Federal
Leadership Award from the
Association of Government
Accountants (page 40).
Inspector General Issues
Revised Strategic Plan
The Office of Inspector
General has revised and issued
anew Strategic Plan (page 42).
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Profile of Activities and Results
Audit Operations
Reviews Performed by EPA OIG
October 1,2003 to
March 31, 2004
(dollars in millions)
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)***
$4.7
$4.7
$0
$0.5
$0
18
51
Audit Operations
Other Reviews
(Reviews Performed by Another Federal Agency
or Single Audit Act Auditors)
October 1, 2003 to
March 31, 2004
(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) **
$3.4
$3.4
$0
$0.5
$0
87
72
159
$0.007
Investigative Operations
October 1, 2003 to
March 31, 2004
(dollars in millions)
Fines and Recoveries (including civil) **** $1.0
Cases Opened During Period 58
Cases Closed During Period 75
Indictments/Criminal Informations/Complaints 8
Convictions 26
Civil Actions 3
Administrative Actions Against EPA Employees/Firms 21
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
Helping to make air safe and healthy to breathe.
Air Toxics Measurement Can Be Improved
Although the methods used to estimate air toxics emissions have improved substantially
in recent years, unvalidated assumptions and other limitations underlying the National
Toxics Inventory continue to impact its use as a Government Performance and Results
Act measure.
Toxic air pollutants are harmful substances that are known or suspected to cause cancer
and other serious health problems, and can also have adverse environmental effects.
A vital component related to reducing such pollutants is the National Toxics Inventory,
an estimate made once every 3 years of the total amount of air toxics emitted annually
nationwide.
EPA is not certain how much progress it has actually made in reducing air toxics
emissions since it established its 1993 baseline. Due to improvements in later
inventories, the meaningfulness of comparing new inventories against the 1993 baseline
is questionable. For example, although use of State-validated emissions data is EPA's
preferred calculation methodology, only
3 States provided data to EPA for the 1993
inventory, while 36 States provided data for
the 1996 inventory and 39 for the 1999
inventory. Further, States were not required
to verify their emissions data for any of the
inventories. Agency officials said the Clean
Air Act only required limited scope studies
on a select number of toxic air pollutants
found primarily in urban areas. As a result,
only 33 of the 188 total number of air toxics
have received more in-depth study.
Pollution from an industrial smokestack (photo courtesy
New York State Department of Environmental Conservation).
EPA could also improve its current air
toxics performance measure by including
toxicity information along with tonnage
measures. Currently, EPA aggregates the
tonnage reductions of emissions for all 188 toxic air pollutants, but does not provide
specific measurement information on those pollutants that are most dangerous to human
health and, thus, would be of most interest to EPA, Congress, and the public.
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We recommended that EPA improve the accuracy, reliability, and usefulness of its
current air toxics performance measure by (1) promulgating air toxics reporting
requirements, (2) requiring State and local agencies to periodically report validated
emissions data, and (3) providing increased funding and support for developing more
accurate emissions factors and activity data for the National Toxics Inventory. We also
recommended that EPA supplement the existing tonnage measure with specific measures
regarding health risks. EPA generally agreed with our recommendations, although the
Agency did not agree to use the more reliable 1996 National Toxics Inventory as the
baseline rather than the 1993 inventory. However, we maintain that the 1996 inventory
would be a more reliable baseline measure of EPA's progress in reducing air toxics
emissions.
(Report No. 2004-P-00012, EPA 's Method for Calculating Air Toxics Emissions for
Reporting Results Needs Improvement, March 31, 2004)
Fort Worth Asbestos Demolition Method
Needs Significant Modifications
The current design and methodology of the "Fort Worth Method" for removing regulated
asbestos-containing materials during demolition is not adequate to demonstrate
protection of human health and the environment, and does not meet applicable EPA
criteria. Asbestos is a known human carcinogen.
The City of Fort Worth, Texas,
has proposed an alternative
method - under EPA's Project
XL - for demolishing selected
structures with regulated
asbestos-containing
materials. EPA's Project XL is
a national initiative that
encourages testing of alternative
ways to achieve environmental
results, as long as those results
are superior to those achieved
under current regulations.
In general, the "Fort Worth
Method" calls for thoroughly
wetting a structure with a fire
hose while it is demolished using a bulldozer or back hoe, but does not call for removing
all the regulated asbestos-containing material prior to demolition. Phase I testing
involved demolishing a single family dwelling in 2001. The planned Phase II calls for
demolishing an abandoned hotel, and Phase III would involve multiple demolitions.
Since other cities have shown interest in the Forth Worth Method, it has national policy
implications that could be precedent-setting.
A Fort Worth Method Phase I demolition project (EPA photo).
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We concluded that the current design and methodology of the Fort Worth Method is not
adequate. Significant modifications will be necessary to ensure that the data generated
and used to evaluate this project will be valid. For example, the description of the Fort
Worth Method does not identify the key factors or variables that could be encountered
during demolition, or how the materials would be handled or treated to minimize
potential exposures. We also had concern about the appropriateness and effectiveness of
Fort Worth's proposed ambient air monitoring during demolition activities.
We also found that the Fort Worth Method does not yet meet EPA's Project XL criteria
of superior environmental performance, appropriate regulatory flexibility, adequate
stakeholder involvement, or transferability. Thirteen of the 15 external stakeholder
groups we interviewed indicated they did not think the method was equivalent or
superior to the Asbestos National Emission Standard for Hazardous Air Pollutants. EPA
has yet to make such a determination, and we found that EPA's oversight to date has not
ensured that the Phase II proposal will allow the Agency to reach valid conclusions on
the effectiveness of this method.
We made recommendations for EPA to assist Fort Worth in modifying the method, work
with the City to develop a Final Project Agreement and ensure that Project XL team
concerns are adequately addressed, and develop guidance for conducting oversight.
Although EPA did not concur with all our conclusions, it agreed to implement the
majority of our recommendations, and has already taken some actions that we considered
beneficial.
(Report No. 2004-P-00002, Significant Modifications Needed to Ensure Success of
Fort Worth Asbestos Demolition Method, December 19, 2003)
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Ensuring that drinking water is safe and sources are protected.
EPA Incorrectly Reported Meeting
Drinking Water Goal
In each of the past 4 years, EPA incorrectly reported meeting its drinking water goal
under the Government Performance and Results Act, because it had concurrently
reported that the data used to draw those conclusions were flawed and incomplete.
For fiscal years 1999 through 2002, EPA reported for each year that it had just met its
annual performance goal of having 91 percent of the population served by community
drinking water systems receive drinking water meeting all health-based standards.
However, the Agency did not in fact meet its goals. This was because both EPA and
Office of Inspector General (OIG) reviews indicated that performance was less than what
was reported, due to missing data in EPA's Safe Drinking Water Information System on
violations of drinking water standards.
For example, while EPA's 2002 Annual Performance Report stated EPA met the
91-percent goal, it also indicated that under reporting to EPA of monitoring and
reporting violations was a
significant data quality problem
that limited the accuracy of its
data (see box). EPA's 2003 Draft
Report on the Environment noted,
"the Agency estimated that states
were not reporting 40 percent of
all health-based violations to
EPA."
The most significant data quality problem is under
reporting to EPA of both monitoring and reporting
violations and incomplete inventory characteristics
. . .. Such under reporting of violations limits EPA's
ability to precisely quantify the population served that
are meeting health based standards.
- 2002 Annual Performance Report
Therefore, we believe EPA has not accurately reported its performance to the
approximately 268 million people who drink water from community water systems.
While we must note that this inaccuracy in reporting does not necessarily indicate a
direct or immediate threat to human health, it is important to provide Congress and the
public with accurate information.
We have made suggestions to EPA that it change how it reports under the Government
Performance and Results Act to compensate for known concerns over the reliability of
this measure, but the Agency has not indicated how it will change its reporting.
(Report No. 2004-P-00008, EPA Claims to Meet Drinking Water Goals Despite
Persistent Data Quality Shortcomings, March 5, 2004)
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Improvements Needed in Reporting Industrial
Releases to Wastewater Treatment Facilities
EPA needs to improve its data quality reviews to better identify potential misreporting to
its Toxics Release Inventory System, so that industrial users can more accurately report
the amount of pollutants they release to wastewater treatment facilities.
The Toxics Release Inventory System is a database that contains the information
submitted by facilities related to the release to wastewater treatment facilities of more
than 600 chemicals. However, while conducting a review of the EPA's pretreatment
program, we identified errors in industrial user reporting.
In seven cases, industrial users incorrectly reported transfers of copper, lead, chromium,
and silver to private recovery or recycling companies as transfers to publicly owned
treatment works, resulting in EPA reports on transfers to wastewater treatment facilities
being overstated by 1,165,258 pounds. While the number of errors noted was relatively
small, those errors made a significant impact on determining trends in transfers to
publicly owned treatment works.
Additionally, EPA's Toxics Release Inventory Explorer database did not specifically
identify metals transferred to wastewater treatment facilities. Such a category would
enable the public to better know what is being transferred to a local wastewater facility,
and would assist EPA program staff conducting various evaluations.
According to EPA, Federal, State, and local governments have used the Toxics Release
Inventory System to set priorities, measure progress, and target areas of special and
immediate concern. Also, the public has used the Toxics Release Inventory data to
understand their local environment and to participate in debates of concern. Therefore,
it is important to have accurate and clearly described data for use by both the public and
government agencies.
We recommended that EPA provide a schedule for obtaining corrected forms and make
Toxics Release Inventory System improvements. EPA generally agreed with our
recommendations, and has already taken action to identify metals transferred in its
Explorer database.
(Report No. 2004-P-00004, EPA Should Take Steps to Improve Industrial Reporting to
the Toxics Release Inventory System, February 2, 2004)
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Improving waste management and cleanup - includes Superfund.
Hardrock Mining Sites Pose Significant Challenges
for Superfund Program
Hardrock mining sites identified nationwide may have significant financial impacts on
the Superfund Trust fund and on States. Most of the sites will require decades to clean
up, and the ability of the Superfund program, States, or responsible parties to pay for
generations of sustained cleanup activities needed for many mining sites is questionable.
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Hardrock mining, which is not coal
mining, involves the extraction of
certain metals and minerals from the
earth, including copper, gold, iron ore,
lead, and silver. Hardrock mining can
cause significant adverse impacts on
the environment. EPA has reported
that the metal mining industry was the
largest toxic polluter in 2000, releasing
3.4 billion pounds of toxics, or
47 percent of the total released by
U.S. industry.
Our review identified 156 hardrock
mining sites nationwide that have the
potential to cost between $7 billion and
$24 billion to clean up (at a maximum
total EPA cost of $15 billion). These costs are over 12 times EPA's total annual
Superfund budget of about $1.2 billion for the last 5 years. This suggests potential
difficulties for the Superfund program. Following are some observations:
There is some uncertainty regarding the human health and environmental risks
associated with National Priorities List sites and sites in the Superfund database.
For example, some National Priorities List sites had an unknown current human
health risk, while Non-National Priorities List sites had current medium or high
human health risks. Similarly, half of the National Priorities List mining sites have
current high or medium environmental risks, while nearly two thirds of the
Non-National Priorities List mining sites in the Superfund data base have current
high or medium environmental risks. Agency officials indicated that future risks
may sometimes be greater than current risks based on land use decisions.
Although at least one potentially responsible party has been identified at 83 percent
of the hardrock mining sites, there are uncertainties regarding how many will have
the ability to pay for lengthy cleanup actions.
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For long-term remedial actions
financed by Superfund, EPA
performs these actions for the first
10 years with the State paying
10 percent of costs, after which
responsibility is turned over to
the State. This can have significant
impacts on States.
Hardrock mining sites are not
proportionately distributed
throughout the country - more
than 70 percent of the sites are
located in four EPA Regions (4, 8,
9, and 10). These Regions may
have greater needs for resources.
Additional Superfund Reviews
< In response to a Congressional request,
we issued a report on the fiscal 2003
funding for non-Federal Superfund sites
(see page 34).
< We reviewed grants related to Superfund
cleanups in Idaho and New Mexico
(see pages 17 and 18, respectively).
< A review of complaints regarding the
Bunker Hill Superfund site found EPA
actions to generally be appropriate
(see page 31).
< A subcontractor entered into a settlement
related to cleanup at a Superfund site in
Lock Haven, Pennsylvania (see page 24).
We recommended that EPA report on the long-term sustainability and liability of
businesses involved in hardrock mining operations, the type of remediation technologies
currently available, and promising new technologies. We also recommended continued
support for improving EPA's National Hardrock Mining Framework, and the prioritizing
of efforts based on human health and environmental risks. The Agency agreed with our
recommendations and proposed several actions.
(Report No. 2004-P-00005, National Identification of Hardrock Mining Sites, March 31,
2004)
EPA Response to Petition Against
Idaho Program Supported
Our review of EPA Region 10's response to a petition seeking withdrawal of
authorization for Idaho's Hazardous Waste Program found that the Region supported its
positions on most of the allegations. However, we found several areas of concern.
EPA in 1990 had authorized the Idaho Department of Environmental Quality to manage
the State's Hazardous Waste Program, as authorized by the Resource Conservation and
Recovery Act. A petition filed with EPA by two environmental groups and a citizen
alleged that the State had failed to administer environmental laws at the U.S. Department
of Energy's Idaho National Environmental and Engineering Laboratory in southeastern
Idaho. The site's current mission is to perform research, hazardous and radioactive
waste management, environmental cleanup, and environmental technology development;
nuclear reactors were originally prototyped on the site.
We found that Region 10 generally supported its positions on most of the allegations
with appropriate criteria and documentation and, consequently, did not withdraw
authorization from Idaho. However, we found several areas of concern, resulting in there
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being less assurance that hazardous waste was managed in a safe manner and in
accordance with law. Specifically:
A date for submitting information to correct deficiencies in an application for the
New Waste Calcining Facility Calciner (used to convert liquid radioactive waste into
a dry substance) was not established until 1997 even though permit deficiencies were
identified in 1991. No further action is required, since the unit is currently
undergoing closure, but our finding
supports petitioners' concerns on
Idaho's failure to exercise control in
requiring permits.
A date for submitting information to
address unresolved permit application
deficiencies for the High Level Liquid
Waste Evaporator (used to concentrate
and reduce liquid radioactive wastes)
also was not established as required
by EPA regulation. Further, followup
actions to obtain a complete permit
application for the Evaporator were
not taken until almost 8 years after a
notice of deficiency was issued to
the Department of Energy.
Smoke drifts from the stack of the calciner at the
Idaho National Environmental and Engineering
Laboratory (photo courtesy of Laboratory).
Data had not been collected to determine whether the Process Equipment Waste
Evaporator - also used to concentrate and reduce liquid radioactive wastes - and
associated tank systems were in compliance with emission standards.
We made recommendations for EPA Region 10 to require Idaho to timely address and
resolve Research Conservation and Recovery Act permit application deficiencies, and
evaluate compliance with emissions standards. EPA Region 10 agreed with our
recommendations.
(Report No. 2004-P-00006, Review of EPA 's Response to Petition Seeking Withdrawal
of Authorization for Idaho's Hazardous Waste Program, February 5, 2004)
Office of Underground Storage Tanks
Inadequately Managed Contracts
Our review of a hotline complaint found that EPA's Office of Underground Storage
Tanks had inappropriately used and inefficiently managed contract funds.
EPA's Office of Underground Storage Tanks, which administers cleanup efforts related
to leaking underground storage tanks, uses two primary contracts to perform its mission.
In 1999, the Office awarded a contract to ICF, Incorporated, with a potential maximum
value of $5.4 million. In 2001, the Office issued another contract, this time to the Bristol
10
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Environmental Engineering & Services Corporation, with a maximum potential value of
$11.1 million. The latter contract specifically involves remediation efforts in Indian
Country.
For these two contracts, which the hotline complaint specifically requested we review,
we found that the Office did not always identify the correct appropriations to be charged
when ordering and paying for work. The Office used $218,000 in funds from the
Leaking Underground Storage Tank appropriation when funds from the Environmental
Program Management appropriation should have been used.
We also found that the Office obligated money to contracts but did not order a
commensurate amount of work. The Office allowed approximately $330,000 in funds to
expire because it did not order work from contractors during the life of the appropriation.
We also found that the Office risks losing $483,648 in unliquidated obligations related to
the practice of "parking" funds on contracts (obligating funds to contracts although no
corresponding work has been identified).
Further, based on our limited review of the Office's performance measures, we are
concerned that measures are not transparent (readily understandable) and meaningful.
In March 2003, the Office changed the definition of "Cleanup Completed" and "Cleanup
Initiated" to include sites where an evaluation determines no cleanup is needed, yet its
performance reports do not explain this. We believe the definitions should be provided
in performance reports.
In response to our findings, the Office of Underground Storage Tanks has taken or plans
to take actions that should address our concerns. These actions involve better linking
appropriations to work assignments, and better managing funds to prevent their
expiration. Further, the Office indicated that EPA has initiated various actions to
adequately use all contract funds available and plans to receive additional training in
contract administration. Finally, the Office indicated it has posted performance
measurement definitions on its web site and will link the definitions to future
performance reports.
(Report No. 2004-P-00014, The Office of Underground Storage Tanks: Contract
Administration and Performance Measurement Concerns, March 31, 2004)
Immediate Action Needed for Identifying
Hazardous Waste Sites in Indian Country
In connection with our ongoing evaluation of EPA activities to enhance the role of Indian
tribes in the Superfund program, we noted immediate actions were needed to address
weaknesses in the Agency's development of an inventory of hazardous waste sites in
Indian Country.
In 1999, the Agency started its development of an inventory of hazardous waste sites on
Indian land, and provided funding to the Tribal Association on Solid Waste and
11
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Emergency Response (TASWER) to provide EPA with necessary tribal input. Our
review of EPA's efforts to develop an inventory disclosed some serious shortcomings:
Project mismanagement issues associated with TASWER caused substantial delays.
EPA had not fully defined the inventory-related information needed.
TASWER's methodology for obtaining tribal input had serious limitations.
EPA had not developed a detailed plan for validating, managing, storing, or updating
the baseline inventory.
We believe that these shortcomings, if not substantially revised, will prevent a credible
and reliable inventory from being produced. Moreover, without significant
modifications, EPA will be required to make an additional investment in this effort.
Because TASWER's contractor
was just beginning its tribal input
activities in July 2003, we issued a
"flash" memorandum to the
Agency advising it of the need to
take immediate actions to address
the weaknesses in the inventory
development effort.
We recommended that EPA
provide more oversight to
TASWER; define specific program
information needs; review the
inventory methodology and address
key limitations; and develop a
detailed plan for validating,
managing, storing, and updating
the baseline inventory. EPA
generally indicated our
recommendations were appropriate, but it needs to provide details on how it will
implement our recommendations.
(Report No. 2004-P-00003, Immediate Action Needed to Address Weaknesses in
EPA Efforts to Identify Hazardous Waste Sites in Indian Country, January 30, 2004)
The Upper Columbia River, a hazardous waste site impacting the
Confederated Tribes of the Colville Reservation (EPA OIG photo).
12
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Cross-Media
Issues involving overlapping areas - includes homeland security.
EPA Not Consistently Implementing
Environmental Justice
EPA has not fully implemented Executive Order 12898 to provide environmental justice
for minority and low income populations, nor has it consistently integrated
environmental justice into its day-to-day operations.
In 1994, President Clinton issued Executive Order 12898, "Federal Action to Address
Environmental Justice in Minority Populations and Low Income Populations," to ensure
such populations are not subjected to a disproportionately high level of environmental
risk.
Although EPA has been involved in implementing the Executive Order for 10 years, the
Agency has not identified minority and low income populations or sufficiently defined
"disproportionately impacted." EPA has not developed a clear vision or a
comprehensive strategic plan, and
has not established values, goals,
expectations, and performance
measures for environmental justice.
We did note that the Agency made
an attempt to issue an
environmental justice toolkit,
endorsed environmental justice
training, and required that all
regional and programmatic offices
submit "Action Plans."
Citation from Executive Order 12898
To the greatest extent practicable and permitted by law and
consistent with the principles set forth in the report on the
National Performance Review, each Federal agency shall make
achieving environmental justice part of its mission by identifying
and addressing, as appropriate, disproportionately high and
adverse human health or environmental effects of its programs,
policies and activities on minority populations and low-income
populations in the United States.... (Section 1-101)
In the absence of environmental justice definitions, criteria, or standards from the
Agency, many regional and program offices implemented environmental justice policies
on their own. This has resulted in inconsistent approaches, and environmental justice is
dependent not only on minority and income status but also on the EPA region in which
the person resides. Our comparison of how environmental justice protocols used by
three different regions would apply to the same city resulted in a disparity in what EPA
would designate as a protected population.
Moreover, in 2001, the Agency restated its commitment to environmental justice in a
manner that does not emphasize minority and low income populations, which is the
stated intent of the Executive Order.
We recommended that EPA issue a memorandum reaffirming that Executive Order
12898 is an Agency priority. We made other recommendations regarding definitions,
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goals, measurements, vision, approaches, training, and a comprehensive strategic plan
for environmental justice. The Agency disagreed with our position, and believes it is
sufficiently implementing the Executive Order.
(Report No. 2004-P-00007, EPA Needs to Consistently Implement the Intent of the
Executive Order on EnvironmentalJustice, March 1, 2004)
Survey on Water Infrastructure Security
Notes Ways to Improve Vulnerability Assessments
Recent terrorist activities and other incidents, such as the blackout in the midwest and
northeast United States, demonstrated the crucial role of the water sector infrastructure
in the health and economic well-being of the Nation. A survey on water security issues
conducted at our suggestion by the Domestic Working Group - an informal group of
local, State, and Federal auditors - disclosed how various water utilities performed
vulnerability assessments.
We noted five key security activities critiqued
, , , 11-1- / Five Key Security Activities
through the vulnerability assessment process (see
box). A variety of sources provided useful
information to help water utilities prepare
vulnerability assessments. Utilities most
Threat Identification
Detection
Delay
Response and Consequence
Remote Access
frequently cited consultants hired to assist in the
preparation of vulnerability assessments
as sources that provided useful information. This
suggests a possible disadvantage to smaller
utilities, which are required to complete vulnerability assessments by June 2004 but,
unlike larger utilities, may not be able to afford a consultant.
All utilities surveyed had additional concerns and research needs. The utilities indicated
that they still needed additional information regarding potential types of vulnerabilities
that might exist. Further, utilities stated they needed financial assistance to make
necessary security improvements, as well as training, research, and procedural changes.
We noted in a prior report that EPA could use performance indicators to measure
improvements in water security levels, and EPA officials agreed such indicators could be
beneficial. Utilities provided input concerning indicators that EPA could use to measure
changes in water security.
Based on our survey results and observations, we suggested that EPA ensure that small
utilities have access to information gathered by consultants at larger utilities, ensure that
water utilities have access to information on funding security enhancements, and
consider using performance indicators.
(Report No. 2004-M-0001, Survey Results on Information Used by Water Utilities to
Conduct Vulnerability Assessments, January 20, 2004)
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EPA Needs to Better Define Homeland Security Role
Regarding Air
EPA's Office of Homeland Security does not have a framework in place to carry out its
responsibilities as designated by the Administrator. We acknowledge that this Office
was recently created, but want to stress the importance of clarifying EPA's future roles
and responsibilities in this area.
In particular, we found that some of EPA's homeland security roles and responsibilities
related to air protection were limited and not well defined to enable EPA to be prepared
for future events. To have a more coordinated, comprehensive approach to homeland
security, EPA's Office of Homeland Security should first identify EPA's delegated
homeland security responsibilities, and then track and oversee these efforts.
Coordinating efforts amongst the various EPA offices, as well as with other agencies,
is critical in order for success to be achieved.
We recommended that EPA's Office of Homeland Security clarify EPA's future roles
and responsibilities in homeland security to enable it to properly prioritize and commit
resources to its traditional and homeland security missions, and establish and maintain
a database to oversee and track the progress for all EPA homeland security efforts. EPA
generally agreed with our recommendations, although the Agency needs to be more
specific on how it plans to carry out the recommendations.
(Report No. 2004-M-00005, EPA's Homeland Security Role to Protect Air from Terrorist
Threats Needs to be Better Defined, February 20, 2004)
Additional Reviews Addressed
Homeland Security Issues
< We found that EPA needs to improve
management of counter terrorism/
emergency response equipment
(see page 19).
< In response to a Congressional request,
we provided Congress with details on
various enforcement issues, including
new EPA duties related to homeland
security (see page 35).
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Grants
Improving EPA's use of assistance agreements.
Recent testimony by an EPA Assistant Inspector
General before several Congressional
committees addressed a number of issues
involving assistance agreements, including the
inappropriate funding awarded to the Consumer
Federation of America. See page 36.
Lobbying Organization Inappropriately
Received Federal Funds
The Consumer Federation of America, a Washington-based lobbying group, effectively
received Federal funds under EPA cooperative agreements in violation of the Lobbying
Disclosure Act of 1995. Consequently, we questioned $4.7 million in funds provided.
Although EPA awarded five cooperative agreements to the Consumer Federation of
America Foundation based on applications that showed labor and other operating costs,
the Foundation did not have any employees, space, or overhead expenses. Instead, the
Consumer Federation of America
itself, a lobbying organization
described under section 501(c)(4) of
the Internal Revenue Code,
effectively received the EPA funds
and performed the work.
The Lobbying Disclosure Act
prohibits 501(c)(4) lobbying
organizations from receiving
Federal funds under such grants.
Further, our examination disclosed that the financial management system used to account
for the Federal funds was not in compliance with the Code of Federal Regulations, the
procurement standards required by those regulations were not always followed, and sub-
grants were not administered in accordance with the regulations.
We also have serious concerns about the role EPA may have had in the award and
oversight of the subject cooperative agreements. In its response to the draft report, the
Federation alleged that EPA asked the Federation to manage a program on indoor air
quality and to manage a national public service campaign to educate consumers about
health risks of radon. Both awards were initiated by EPA, and EPA determined the need
and the scope of both programs.
We recommended that EPA annul the five subject cooperative agreements and recover
all funds paid to the recipient. We also recommended that EPA suspend work under
current grants or cooperative agreements not covered by this audit, and make no new
awards until the recipient can demonstrate that its financial management practices and
controls over Federal funds comply with all regulatory requirements. Further, we
recommended that EPA require the recipient to prepare and submit performance reports
for current grants or cooperative agreements.
(Report No. 2004-4-00014, Consumer Federation of America Foundation -
Costs Claimed Under EPA Cooperative Agreements CX825612-01, CX825837-01,
X828814-01, CX824939-01, and X829178-01, March 1, 2004)
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Grant for Basin Cleanup Coalition Found to Be
Inappropriate, Subsequently Terminated
Based on our review of a hotline complaint, we found that a technical assistance grant
was inappropriately awarded to the Basin Cleanup Coalition in Coeur d'Alene, Idaho.
Subsequently, as a result of our review, EPA terminated the grant, which would have
totaled $50,000 in Federal funds.
Details on our review of other
complaints regarding cleanup efforts
in the Coeur d'Alene area are on
page 31.
We found that the Coalition was not a qualified grant
recipient because of potential conflicts of interest and
because it did not meet administrative and management
capability requirements. Specifically, based on our review
of the complainant's allegations, we found that:
The Coalition did not have a sufficient membership to have a Board of Directors
and, as a result, was unable to enter into contracts to hire a technical advisor as
required under the grant.
The Coalition was not eligible as a technical assistance grant recipient because it did
not obtain tax exempt status.
While we could not confirm the allegation as to whether the Coalition was the
"creation" of the Coeur d'Alene Chamber of Commerce, the Coalition and the
Chamber did have common characteristics. The Coalition incorporator was also the
President and General Manager of the Chamber, which we considered a conflict of
interest, and the Coalition and Chamber shared the same address. Further, it was the
intent of the Coalition to enter into a contract with the Chamber that would have
enabled the Chamber to act as the grant administrator, in spite of EPA's notification
that such an arrangement was prohibited.
As a result of our meeting with EPA's Region 10 regarding these issues, the Region
notified the Coalition on December 5, 2003, that the grant was being terminated. This
resulted in $50,000 in Federal funds being put to better use, as well as the resolution of
an improper award. Further, the Region agreed with our recommendation to improve
post award procedures.
(Report No. 2004-P-00010, Review of Hotline Complaint Regarding Technical
Assistance Grant No. 1-97025201 Awarded to the Basin Cleanup Coalition, Coeur
d'Alene, Idaho, March 25, 2004)
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Financial Statements for New Mexico Grant Generally
Accurate, But $11,558 in Costs Questioned
An examination of total outlays reported by the New Mexico Environment Department
under an EPA cooperative agreement related to Superfund efforts indicated financial
statements were generally accurate, although we noted $11,558 in questioned costs.
Of $2,919,206 in cumulative total outlays claimed under Cooperative Agreement
V986338-01, we found that the State did not fully match its 10-percent cost sharing
requirements for its core program activities under the agreement, resulting in an $11,558
overdraw of Federal funds. The State agreed with our recommendation that EPA recover
that amount. The State also did not report $29,239 of its State match.
The agreement was authorized under the Comprehensive Environmental Response,
Compensation, and Liability Act to provide financial support for various Superfund
activities, including: pre-remedial activities; EPA-lead management assistance activities;
State-lead activities for Fruit Avenue and North Railroad Avenue plume sites; voluntary
remediation activities; and various core program activities, such as administrative and
legal services.
(Report No. 2004-4-00012, New Mexico Environment Department Costs Claimed Under
Cooperative Agreement No. V986338-01, March 31, 2004)
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Contracts
Improving EPA's use of contracts.
EPA Needs to Improve Management of
Counter Terrorism/Emergency Response Equipment
EPA does not have adequate processes for identifying, obtaining, maintaining, and
tracking equipment needed to respond to terrorist attacks and Nationally Significant
Incidents (events that may exceed the resources of a single EPA region).
Our review disclosed that EPA leadership did not move expeditiously to develop
sufficient EPA capability and capacity to respond to the consequences of multiple major
terrorist acts or Nationally Significant Incidents. Specifically:
EPA took 12 months to identify salient characteristics (the key performance
characteristics needed to actually purchase the items) for 11 of 13 categories of
counter terrorism/emergency response equipment, and had still not obtained almost
40 percent of the items. Further, for more than a year, EPA paid for warehouse
space for equipment not yet obtained.
EPA's older counter terrorism/emergency response equipment on hand has been
poorly maintained, and maintenance records were sometimes inaccurate.
EPA does not have a national system for tracking counter terrorism/emergency
response equipment.
We did note that EPA complied with the Federal Acquisition Regulation when
purchasing counter terrorism/emergency response equipment, and has an adequate
process for moving equipment.
The deficiencies noted occurred
because EPA did not develop a
coordinated plan with aggressive
milestones and points of
accountability for identifying,
obtaining, maintaining, and tracking
this equipment. As a result, EPA's
ability to protect the public health
and the environment in the event of
future terrorist attacks and
Nationally Significant Incidents may
be impaired. Also, since the Agency
had obligated almost $3.7 million for
warehouse space before significant
Emergency Response Demonstration Exercise held in Portland,
Oregon, using counter terrorism/emergency response equipment
(EPA OIG photo).
19
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quantities of equipment were delivered, a portion of that amount was needlessly
obligated.
We recommended that EPA develop a plan with aggressive milestones and points of
accountability, for identifying, obtaining, maintaining, and tracking counter
terrorism/emergency response equipment. EPA generally agreed with our
recommendations.
(Report No. 2004-P-00011, EPA Needs to Better Manage Counter Terrorism/Emergency
Response Equipment, March 29, 2004)
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Financial Reporting
Improving the Agency's financial reporting.
EPA Earns Unqualified Opinion on
Financial Statements
EPA earned an unqualified opinion on its fiscal 2003 financial statements. Further, we
did not note any material weaknesses in internal controls or compliance during our
review.
During our review, we noted that the Superfund Trust Fund, managed by the
U.S. Treasury Bureau of Public Debt, transferred funds to EPA in excess of the assets
available to be transferred by $82.7 million in fiscal 2003. This occurred because the
fund had decreased over several years and because of unanticipated tax refunds. The
$82.7 million shortfall was subsequently covered by fiscal 2004 appropriations from the
Treasury's general fund.
In evaluating EPA's internal controls, we identified eight reportable conditions.
Although we do not believe they represent material weaknesses that would prevent the
fair presentation of reliable financial statement amounts, they are internal weaknesses
that still should be corrected. The eight reportable conditions were as follows:
EPA did not always adequately document standard vouchers for transfer requests
from Treasury to EPA Trust Fund accounts (Superfund and Leaking Underground
Storage Tank Trust Funds) prior to transactions being entered into the Integrated
Financial Management System.
EPA project officers regularly approved invoices without the detailed documentation
to support costs.
EPA did not reconcile the unearned revenue from State Superfund Contracts to the
general ledger, and therefore could not ensure the accuracy of the approximately
$29 million recorded for that account.
EPA did not promptly record approximately $2 million in marketable securities
received in fiscal 2003 from companies in settlement of debts.
The Integrated Financial Management System suspense file was not in compliance
with the requirement that the Application Program Interface provide internal
controls, such as control totals and record counts, to ensure integrity.
Due to system shortcomings, we continued to be unable to assess the adequacy of the
automated internal control structure as it relates to automated input, processing, and
output controls for the Integrated Financial Management System.
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For accounts receivable, we noted numerousinstances where receivables were not
recorded timely due to late submission of supporting documentation from
Department of Justice, Regional Counsel, or program offices. Further, one regional
financial management office did not properly calculate its allowance for doubtful
accounts.
EPA's Financial Systems Branch bypassed the Integrated Financial Management
System manual online data entry controls when making a systemic correction of
erroneous transactions; instead of using the journal voucher process, it reversed
transactions by processing negative debts and positive credits. As a result, the audit
trail for these transactions was hidden and basic evidence requirements for the
transactions were circumvented.
Our tests of compliance with laws and regulations did not identify any instances of
noncompliance with laws and regulations that would materially misstate the financial
statements. However, we identified three noncompliances under the Federal Financial
Management Improvement Act. Although EPA made significant improvements
regarding cost accounting, EPA was not in compliance with the Statement of Federal
Financial Accounting Standards No. 4 that requires EPA to provide full costs per output
to management in a timely fashion. Further, we noted noncompliances related to
reconciliation of intragovernmental transactions and completion of the fiscal 1999
remediation plan. None of these noncompliances met the Office of Management and
Budget's definition of substantial noncompliance.
In its response to our draft report, the Office of the Chief Financial Officer generally
concurred with our recommendations and noted the completion or planning of a number
of corrective actions. Regarding our concerns related to the Superfund Trust Fund
shortfall and the decline in cost recoveries, the Office of the Chief Financial Officer
indicated the Superfund program will continue to operate as long as Congress continues
to appropriate funds for it, and noted that EPA's fiscal 2003 appropriation came from
Trust Fund assets and the general fund.
(Report No. 2004-1-00021, Audit of EPA 's Fiscal 2003 and 2002 Financial Statements,
November 21, 2003)
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Business Systems
Improving the Agency's information technology.
EPA Needs to Improve Administration of
Computer Network Firewalls
While the Office of Environmental Information has taken positive actions to properly
implement EPA's computer system firewalls, additional areas need to be addressed to
provide greater assurance that the Agency's information resources are adequately
secured.
EPA uses "firewall" technology, in combination with other network security devices, as
the foundation to secure information resources. EPA's "physical" security practices for
the firewalls, which include continuity of operations practices and procedures, were
adequate. However, logical and configuration improvements are needed. Specifically:
Several of the workstations used to remotely administer EPA's firewall need to be
configured to maximize network security.
EPA's firewall enforcement point servers (i.e., Public Access and Agency) need to
be properly maintained to prevent malicious attacks on the network.
As a result, hackers could circumvent EPA's network security, allowing them the
potential to negatively affect integrity, confidentiality, and availability of EPA systems
and data on the network.
These weaknesses occurred
because of problems related
Firewall Weaknesses occurred because:
EPA management had not established a standard
configuration requirement for workstations used to
remotely administer firewalls.
The firewall change and patch management process
does not define a procedure to ensure that when
changes or patches are applied they do not adversely
affect previously applied fixes.
EPA relied on an ineffective methodology for scanning
the National Computer Center's network infrastructure.
to remote administration,
the change and patch
management process,
and scanning methodology
(see box).
To provide greater
assurance that information
resources are adequately
secured, we recommended
several improvements assigned to firewall components. These include establishing a
standard configuration requirement related to remote administration, modifying the
change and patch management processes, and modifying the network vulnerability
assessment methodology regarding scanning of all firewall components. EPA agreed to
take appropriate corrective actions.
(Report No. 2004-P-00013, EPA 's Administration of Network Firewalls Needs
Improvement, March 31, 2004)
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Investigations
Investigating laboratory fraud, financial fraud, and computer crimes.
Laboratory Fraud
Laboratory President Suspended
On November 18, 2003, EPA's Debarring Official issued a Notice of Suspension to
Edward V. Kellogg, President and Quality Control Manager of Johnson
Laboratories, Inc., New Cumberland, Pennsylvania. This suspension notice was
issued as a result of a May 2003 indictment in U.S. District Court, Eastern District of
Pennsylvania, for 34 counts of mail fraud.
The indictment alleged that from May 1998 through July 2000, Kellogg engaged in a
scheme to defraud Johnson Laboratories' customers by creating and billing
customers for false and fraudulent environmental test reports. Johnson Laboratories
provided analytical testing services to the EPA at the Bruin Lagoon Superfund Site
in Bruin, Pennsylvania, as well as to commercial clients. The Notice of Suspension
is a temporary action pending completion of the investigation and any legal
proceedings that may ensue.
This investigation is being conducted jointly with the EPA Criminal Investigation
Division, the U.S. Army Criminal Investigation Command, and the Pennsylvania
Attorney General's Office.
Subcontractor Agrees to $260,605 Settlement
The government, through its prime contractor, entered into a contractual settlement
with Environmental Chemical Corporation (ECC), Cincinnati, Ohio, resulting in a
savings to the government of $260,605. ECC was a subcontractor that provided
laboratory testing services for an EPA-funded, U.S. Army Corps of Engineers
contract to perform cleanup work at the Drake Chemical Superfund Site in Lock
Haven, Pennsylvania.
During the course of the contract, it was determined that ECC was involved in
laboratory testing improprieties, such as not following its own established policies
and procedures for testing and false calibrations, which resulted in ECC losing its
Lab Validation and resulted in harm to the government. The government and ECC,
through the prime contractor, agreed that if ECC would close out its subcontract and
not seek payment of $260,605 of previously billed but unpaid costs, the government
would consider that just compensation for the potential ECC fraud.
This case was conducted jointly with the U.S. Army Criminal Investigation
Command and the Defense Criminal Investigative Service.
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Computer Crimes
Twelve Plead Guilty in Software Piracy Case
In December 2003, 12 defendants pleaded guilty before a U.S. District Court judge,
in the District of Nevada, to charges of conspiracy to commit copyright infringement.
The defendants were members of a computer software piracy group known as the
"Rogue Warriorz," a secretive underground group that illegally altered and
distributed copyrighted software, movies, and games over the Internet.
The defendants were among 21 persons indicted in June 2002, as part of "Operation
Bandwidth," a 2-year-long, multi-agency undercover operation, to identify and
prosecute entities and individuals involved with illegal access to computer systems
and piracy of proprietary software utilizing storage sites in the Internet. At least
18 group members were hackers who had illegally accessed EPA computer systems
to further the reproduction and distribution scheme.
The defendants entered into a "group plea" to the charge of conspiracy to commit
copyright infringement and have agreed to pay full restitution to the victims of their
offense. The defendants have also agreed to surrender the unlawfully obtained
copyrighted works and all of the computer equipment they used to commit these
offenses.
Robert L. Maersch, who previously pleaded guilty to conspiracy to commit copyright
infringement, was sentenced on January 12, 2004, in the U.S. District Court, District
of Nevada, to 6 months of electronically monitored home detention and 4 years
probation. In addition, he was ordered to pay a $5,000 fine and a $100 special
assessment. As part of his sentencing, Maersch was ordered to forfeit 595 computer
and computer-related items.
Network Penetration Laboratory Established
In 2003, the Computer Crimes Directorate launched its Network Penetration Laboratory,
providing tools and investigative expertise to support the EPA in meeting Federal Information
Security Management Act standards. With its first series of tests of the Office of the Chief
Financial Officer network, an accurate assessment of system security was obtained and the
information was used by that office to improve its security.
The Federal Information Security Management Act requires that network information security
controls and techniques be periodically tested and evaluated to ensure that they are effectively
implemented. Further, each government agency is required to perform an independent evaluation
of the information security program and practices of that agency to determine the effectiveness of
such programs and practices, including testing of the effectiveness of information security
policies, procedures, and practices of a representative subset of the agency's information systems.
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Daniel Withrow was sentenced in U.S. District Court, District of Nevada, on
February 27, 2004, and placed on 3 years probation and ordered to pay a $200
special assessment. Withrow previously pleaded guilty to criminal infringement of a
copyright and interfering with government communication systems.
This investigation is being conducted jointly with the Federal Bureau of
Investigation and the Defense Criminal Investigative Service.
Former EPA Contract Employee Sentenced
for Possession of Child Pornography
On March 1, 2004, John Mirisola, a former contract employee working at the EPA
New England Regional Laboratory, Chelmsford, Massachusetts, pleaded guilty and
was sentenced in Middlesex Superior Court, Commonwealth of Massachusetts, for
possession of child pornography. Mirisola was sentenced to 2 years probation and
ordered to pay a $90 fee. Mirisola must register as a sex offender, undergo sex
offender evaluation and/or treatment, and have no unsupervised contact with
children under the age of 16.
While working at the EPA laboratory, Mirisola accessed various internet sites using
his government-owned computer and downloaded pornographic material. An
extensive computer forensic examination was conducted by the OIG Computer
Crimes Directorate that documented instances of Mirisola downloading
inappropriate material, including child pornography. Lockheed Martin, Mirisola's
employer, was notified of his activity and he was subsequently terminated.
Former Contract Employee Found Guilty of
Unauthorized Access into EPA Computer
On February 5, 2004, Antoine Michael Perry was found guilty by a Federal jury in
U.S. District Court, District of Columbia, of unauthorized access to a computer
causing damage. Perry is currently awaiting sentencing in this matter.
Perry was temporarily employed as a subcontractor to work as a computer systems
administrator at the EPA in Washington, D.C. On September 24, 1999, Perry was
terminated from his position. During the following weekend, he connected on
multiple occasions, without authorization, to the EPA computer network through a
remote computer connection from his home. During these connections, Perry
intentionally deleted several programs that controlled the network's printers and
caused other unauthorized damage to the computer network. As a result of his
actions, the computer network had to be shut down for repair, which prevented the
EPA employees using that network from carrying out their responsibilities related to
the cleanup of environmentally contaminated sites around the country.
This case was conducted jointly with the Federal Bureau of Investigation.
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Financial Fraud
Impersonator Sentenced for Defrauding
Employment Agencies
On October 3, 2003, Steven Wayne Divine was sentenced in U.S. District Court,
Western District of Washington, to serve 33 months in prison, followed by 5 years of
probation, on charges related to defrauding employment agencies. In addition,
Devine must pay $35,411 in restitution and a $1,200 special assessment.
Between October 1999 and May 2003, Divine devised a scheme to defraud
temporary employment agencies in Oregon and Washington State. Divine would
contact various agencies using a false name and identify himself as an upper level
employee of a company or government agency, including the 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, Divine. The
employment agencies would either mail an invoice to the company or government
agency to receive payment for their services or Divine would appear at the
employment agency and present a counterfeit check to pay for the agency's services.
Multiple Defendants Sentenced in Kickback
Scheme
Several officials from Ebasco Services, Inc., a major government contractor, as well
as officials from one of Ebasco's subcontractors, have been sentenced in connection
with a kickback scheme.
Ebasco provided power generation, environmental remediation, hazardous waste
processing, and construction services to numerous government agencies, including
the EPA and the Department of Defense. In connection with those contracts, Ebasco
entered into subcontracts with various vendors and suppliers to provide the goods
and services needed to perform the contracts.
Frederic DiNonno, a manager in Ebasco's graphics department; Lawrence Towers, a
supervisor in Ebasco's graphics department; and Vincent Patuto, an Ebasco facilities
management supervisor, awarded subcontracts to several vendors in exchange for
kickbacks. DiNonno and his co-conspirators established at least two companies to
receive the kickback payments from the various vendors. More than $2.6 million in
kickbacks were paid to DiNonno and his co-conspirators in exchange for favorable
treatment. Approximately $800,000 of the kickbacks were in connection with
government contracts. These kickback payments were charged to the government
through Ebasco's invoices for payment under the contracts.
Robert J. Strom and Thomas M. Costas, Sr., co-owners of Action Reprographics,
Inc. were sentenced in U.S. District Court, District of New Jersey, on December 3,
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2003, and December 13, 2003, respectively. Each was placed on probation for
5 years, including 6 months of home detention, and ordered to perform 40 hours of
community service. In addition, each was fined $24,000 and a $200 special
assessment. Both Strom and Costas previously pleaded guilty to charges of
conspiracy to violate the Anti-Kickback Act of 1986 and filing a false income tax
form. In 2002, each entered into a $100,000 civil settlement with the
U.S. Government for his part in the kickback scheme.
On November 5, 2003, Vincent Patuto was sentenced in U.S. District Court, District
of New Jersey, to 2 years probation, and ordered to pay a $1,000 fine and a $100
special assessment. Patuto pleaded guilty in September 2001 to conspiracy to violate
the Anti-Kickback Act and subscribing to false income tax returns.
Frederic DiNonno pleaded guilty in 2001 to charges of conspiracy to violate the
Anti-Kickback Act of 1986 and filing a false tax return. Lawrence Towers pleaded
guilty in 2001 to charges of violating the Anti-Kickback Act and aiding DiNonno in
filing a false tax return. Sentencing for both is still pending.
This case was conducted with the U.S. Postal Service, Office of Inspector General;
the Defense Criminal Investigative Service; the Internal Revenue Service, Criminal
Investigations Division; and the National Aeronautics and Space Administration,
Office of Inspector General.
Two University Employees Sentenced for Theft
On December 16, 2003, in Superior Court, State of Connecticut, Shili Liu,
Laboratory Director, and Robert Carley, Director, Environmental Research Institute
(ERI), University of Connecticut, were found guilty of conspiracy to commit larceny
in the first degree. Liu was also found guilty of larceny in the first degree.
Both Liu and Carley were sentenced to 12 months in the Accelerated Rehabilitation
Program (Pre-trial diversion), ordered to perform 100 hours of community service,
and fined $100. In addition, Liu and was ordered to return $62,772 to the university.
Liu and Carley had been receiving rent monies from visiting scholars at ERI, even
though the scholar's housing was provided and paid for by the University of
Connecticut under Federal grant monies awarded to ERI by the EPA.
This case was conducted with the assistance of the University of Connecticut Police
Department.
Questionable Expenses Result in
$30,000 Settlement
On February 9, 2004, a settlement agreement was reached between Sherman Titens,
Titens Consulting Group, and the U.S. Government, relating to questionable
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expenses charged to EPA cooperative agreements by Mr. Titens, former President of
the Coordinating Committee for Automotive Repair (CCAR). This agreement was
facilitated by the U.S. Attorney's Office in Wichita, Kansas. In the settlement,
Titens and Titens Consulting Group agreed to pay $30,000 to the government and be
voluntarily debarred for a period of 3 years.
In 2001, a joint proactive effort between the EPA OIG Office of Audit and Office of
Investigations was initiated to assess various cooperative agreements for
vulnerabilities. The cooperative agreements issued to CCAR were selected for
review in EPA Region 7. CCAR received approximately $2 million in cooperative
agreements from the EPA. During the assessment, it was discovered that Titens had
submitted approximately 40 questionable claims for travel reimbursement. Titens
resigned his CCAR position before the review began.
Impersonator Sentenced for Copying Official
Seals
On February 6, 2004, Steven L. Nagy was sentenced in U.S. District Court, Northern
District of Texas, to 46 months in prison, followed by 3 years of supervised release,
in connection with charges related to impersonation. Nagy was also ordered to pay
$218,656 in restitution and a $200 special assessment.
Nagy, the owner and operator of Earth Source Environmental Management,
Sallisaw, Oklahoma, created copies of professional engineering seals bearing the
names and license numbers of at least four professional engineers. Nagy used the
forged credentials to write, sell, and distribute fraudulent Spill Prevention Control
and Countermeasure Plans.
Under Federal regulation, Spill Prevention Control and Countermeasure Plans are
required to be signed and certified by a licensed professional engineer and
maintained on file at certain facilities. If a facility does not have a signed and
certified plan, they are fined $5,000 regardless of the quality of the plan. Nagy
admitted to producing Spill Prevention Control and Countermeasure Plans for more
than 100 customers since 1991 using the forged credentials.
Professor Settles Civil Complaint
On February 13, 2004, Richard B. Schlesinger, professor of environmental medicine,
New York University School of Medicine, entered into a civil settlement in U.S.
District Court, Southern District of New York, to settle a false claims case. In the
settlement, Schlesinger agreed to pay the United States $17,500. From 1999 to
August 2001, Schlesinger submitted numerous fraudulent reimbursement requests to
New York University. These reimbursement requests were paid from monies
provided by Federal grants funded by the EPA. Schlesinger used the illegally
obtained funds to support his personal hobby of stamp collecting.
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EPA Employee Sentenced in Credit Card Case
On March 1, 2004, Laticia Cunningham, Information Management Assistant, Office
of Executive Support, EPA Office of the Administrator, was sentenced in U.S.
District Court, District of Maryland, to 3 years probation and ordered to pay $4,278
in restitution and a $25 special assessment. This sentencing is a result of
Cunningham's guilty plea to conversion of government property. Cunningham's
aunt, an employee of the Department of Health and Human Services, National
Institutes of Health, stole a government purchase card from the National Institutes of
Health mail room. Cunningham admitted to using this stolen purchase card to make
personal purchases at local retail stores.
This case was conducted with the Department of Health and Human Services, Office
of Inspector General.
Former Finance Director Sentenced
for Embezzlement
On December 1, 2003, Debra P. Strickland, former Finance Director, Lower
Mississippi River Conservation Committee (LMRCC), was sentenced in U.S.
District Court, Southern District of Mississippi, to 33 months in prison, followed by
3 years of probation, on charges related to embezzlement. She was ordered to pay
$637,855 in restitution to LMRCC and a $100 special assessment. LMRCC received
Federal grant monies from the EPA as well as the U.S. Fish and Wildlife Service.
Strickland, as the Finance Director, was the only person who had signature authority
on the LMRCC bank account. Strickland would write checks for cash from the
LMRCC bank account and keep the proceeds.
This case was conducted jointly with the Department of Interior, Office of Inspector
General.
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Public Liaison
Addressing specific concerns of the public.
Review at Bunker Hill Site Found EPA Actions to
Generally Be Appropriate
An EPA OIG review of complaints regarding the Bunker Hill Superfund site and the
surrounding Coeur d'Alene Basin area found that EPA followed laws and regulations in
listing the site and met community involvement standards. However, we found that the
site's Lake Management Plan could better address cleanup.
The OIG conducted a review of issues that citizens brought to our attention regarding the
Bunker Hill/Coeur d'Alene Basin site, primarily located in northern Idaho.
We found that EPA followed laws and regulations in listing the site, and concluded that
EPA made a logical decision to first do cleanup work in the Bunker Hill "Box" (where
the mines and smelter were located) and then later pursue further cleanup as needed in
the overall Basin. EPA is permitted to address the most critical areas first, and we
consider that a logical decision.
Another concern raised was whether the Comprehensive Environmental Response,
Compensation, and Liability Act authorizes the Basin Environmental Improvement
Commission to plan, prioritize, and
perform response/remedial actions,
as specified in the September 2002
Record of Decision. The Act does
not address the creation of such an
independent body. However, the
National Contingency Plan - the
Federal Government's blueprint for
responding to hazardous substance
Aerial photo of former Bunker Hill smelter facility (EPA photo).
releases - encourages and allows
the involvement of such a
commission.
We found that the Coeur d'Alene Lake Management Plan could better address cleanup
under the Clean Water Act. The management actions recommended in the Plan lack
detail, and do not fully support an EPA decision to conduct a partial deletion of the Lake
from the National Priorities List. We recommended better implementation of the plan.
Further, due to the lack of dedicated funding for Plan implementation, we recommended
that EPA, the State of Idaho, and the Coeur d'Alene Tribe form a consensus about
dedicating the funds. EPA indicated it will respond to the specific recommendations
after the final report is published; a response is due in June 2004.
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Although concerns were raised about EPA properly following laws and regulations in
handling community involvement during the Superfund process, we concluded that
community involvement met standards. We found many instances where EPA took
positive steps to involve the community, and noted considerable input by the community
for the remedial design work for the overall Coeur d'Alene Basin. Also, we found
evidence that EPA took steps to help alleviate the economic downturn in Shoshone
County, which includes the Bunker Hill Box and much of the Coeur d'Alene Basin.
(Report No. 2004-P-00009, Ombudsman Review of Bunker Hill and Coeur d'Alene Basin
Superfund Actions, March 24, 2004)
Additional Public Liaison Reviews Conducted
In addition to a review of citizen complaints regarding the Bunker Hill Superfund site,
we conducted several other reviews of citizen complaints and provided our conclusions
to interested parties.
Regarding the Lemon Lane Landfill, part of the Westinghouse PCB (Polychlorinated
Biphenyls) Site Cleanup, Bloomington, Indiana, we concurred with EPA and the State
that there was no potential health risk to the immediate public, since the landfill is not
accessible to the public. It should be noted that EPA and the State had determined that
there is a risk of PCB contamination of several springs, and we agreed. We also
concluded that studies equivalent to remedial investigation/feasibility studies had been
performed for the various Westinghouse site locations, and that the Lemon Lane Landfill
was remediated to Comprehensive Environmental Response, Compensation, and
Liability Act standards.
Our review of complaints surrounding the Lowery Landfill Site, Arapahoe County,
Colorado, found that EPA has taken appropriate steps to protect public health and the
environment. Extensive sampling has not shown the exceeding of stringent standards for
radionuclides, and we determined that bi-weekly sampling will continue to ensure safety
and protection of public health and the environment. Also, we found that an early
warning monitoring system is in place for detecting the presence of radionuclides in the
groundwater.
For the Solitron Devices site, Riviera Beach, Florida, regarding concerns about the
burden for payment of the maintenance of the air stripper used to clean the city's
drinking water, we determined that there was agreement that the cost will be borne by
EPA rather than the community. Further, it appears that groundwater contaminated by
volatile organic compounds will be properly treated, and EPA will conduct the necessary
sampling to design the chemical oxidation system. Lastly, EPA completed the additional
data collection pertaining to groundwater testing at the site.
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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 period:
Complaints Open
Complaints Closed
Complaints Handled by EPA OIG
Complaints Referred to:
EPA Program Offices
EPA Criminal Investigation Div.
Other Federal Agencies
State/Local Agencies
Semiannual Period
(October 1,2003 -
March 31, 2004
30
461
111
129
2
40
209
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Congressional Requests
Providing Congress with specific information.
OIG Provides Congress Details on $174.9 Million
Superfund Shortfall
In response to a Congressional request, we issued a report on the fiscal 2003 funding
needs for non-Federal Superfund sites, and estimated a $174.9 million shortfall. During
fiscal 2003, this limited funding prevented EPA from beginning construction at all sites
or providing the amount of funds needed to address sites in a manner believed necessary
by regional officials. This caused projects to be segmented in phases and/or scaled back.
Category
New start construction projects not funded
Remedial projects not sufficiently funded
Removal projects not sufficiently funded
Pipeline projects not sufficiently funded
Total (difference due to rounding)
Estimated 2003
Funding Shortfall
(millions)
$118.5
40.8
9.4
6.1
$174.9
A breakdown of the estimated
$174.9 million shortfall is shown in
the table. Removal funding involves
emergency and time-critical actions;
pipeline funding involves
pre-construction activities, such as
studies and remedy selection; and
remedial funding is for remedial
construction, long-term response
actions, non-time critical removals,
and five-year reviews.
EPA emphasized the funding of ongoing construction over new construction starts. For
fiscal 2003, the National Risk Based Priority Panel considered 35 new start projects and
determined that 9 should receive remedial funds. Of the remainder, 15 did not receive
remedial funds, and 11 were determined not ready for various reasons, including
enforcement issues, changed site conditions, and design complications.
When calculating amounts obligated for fiscal 2003 removal, pipeline, and remedial
projects, we included not only the amounts from EPA's fiscal 2003 and prior year
appropriations, but also the amounts from State Superfund contracts and from potentially
responsible parties in response to Consent Decrees. For fiscal 2003, EPA regions
obligated $160.3 million for removal projects, $107.6 million for pipeline projects, and
$369.3 million for remedial projects.
Our shortfall estimate only considers the regions' use of extramural resources (funds
for contractors and others outside EPA), and does not address intramural resources
(obligations involving the labor and travel of EPA personnel that are obligated to
specific Superfund sites).
(Report No. 2004-P-00001, Congressional Request on Funding Needs for Non-Federal
Superfund Sites, January 7, 2004)
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Special Request Report Details
Enforcement Information
The OIG provided Congress with details on specifically requested information on EPA
enforcement issues, addressing such topics as new EPA duties related to homeland
security, funding, and case loads.
EPA has shifted priorities, budget, and personnel to activities that would support
homeland security. EPA's Office of Enforcement and Compliance Assurance criminal
enforcement staff has worked on homeland security investigations, assisted in the
anthrax investigation at the U.S. Capitol, and provided training and other information to
local and State water authorities. For fiscal 2003, the Office of Enforcement and
Compliance Assurance was provided about $4 million to support homeland security.
Regarding funding, for fiscal 2003 as of August 28, 2003, EPA had spent approximately
$318 million on its goal to ensure full compliance with laws intended to protect human
health and the environment. Although we had noted funding shortfalls in certain areas in
the past, EPA lacked sufficient information on workload and results that would allow us
to evaluate the overall sufficiency of funds for EPA's enforcement activities, and EPA
needs this results information.
As noted in the table, EPA
had 3,858 enforcement cases
open in August 2003.
Sometimes there were delays
in pursuing a case. Various
factors were cited for such
delays, including insufficient
resources, assigning staff to
work on major disasters (such
as the World Trade Center
collapse), coordinating with
State authorities, and various
legal issues.
Contrary to recent news accounts, we found no indication that EPA has loosely defined
"agent" to inflate its numbers of Criminal Investigation Division agents. We also found
that there were policies in place governing the Division's work performed, although it
appeared that the management systems for tracking leads, time, results, and training
needed improvement.
(Report No. 2003-S-00001, Congressional Request on EPA Enforcement Resources and
Accomplishments, October 10, 2003)
Type of Case No.
Criminal (as of August 26, 2003) 1,190
Civil (as of August 9, 2003)
Clean Air Act 1,041
Resource Conservation and Recovery Act 874
Clean Water Act 753
Total 3,858
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Testimony
Providing testimony before Congressional committees.
Assistant Inspector General Testifies on
Assistance Agreement Efforts
During testimony before several Congressional committees, an OIG Assistant Inspector
General stated that EPA needs to continue to improve the way it manages assistance
agreements.
"It is imperative that the Agency use good management practices in awarding and
overseeing these agreements to ensure that they effectively contribute to attaining
environmental goals," Melissa Heist, the OIG's Assistant Inspector General for Audit,
told members of the Senate's Committee on Environment and Public Works during
testimony on March 3, 2004.
Heist noted assistance agreements are a primary means EPA uses to carry out its mission
of protecting human health and the environment. The approximately $4.4 billion in
assistance agreements awarded during fiscal 2003 encompassed more than half of that
year's Agency budget.
In addition to reviewing management of specific grants, Heist noted OIG has also looked
at overall systemic problems.
It is imperative that the Agency use good management
practices in awarding and overseeing these
agreements to ensure that they effectively contribute to
attaining environmental goals.
- Melissa Heist, Assistant Inspector General for Audit
March 3, 2004
"Our grants management work has focused on
crosscutting national issues and has included
grants made to States, local and tribal
governments, and nonprofit organizations. . . .
We designed our work to identify systemic
problems preventing the Agency from
achieving the maximum results from the
billions of dollars awarded in assistance
agreements every year," she said.
Heist noted that we reported in 2003 that project officers did not perform all the
necessary steps when conducting pre-award reviews. "Without complete pre-award
reviews of proposed projects, there was insufficient assurance that the funded projects
would accomplish program objectives or desired environmental results. There was also
insufficient assurance that proposed costs were reasonable, and that recipients were
technically capable of performing the work. EPA may also have lost the opportunity to
fund other projects that would have better achieved its mission," Heist pointed out.
Oversight of assistance agreements after they are awarded is also an area of concern.
Heist noted that while the Agency has developed policies and training to improve
oversight, it did not ensure that the policies were followed consistently. "The challenges
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for EPA will now be to ensure that staff implement, and are held accountable for,
following the new policies and for implementing the new grants management and
training plans," she said.
Heist also provided examples of problems with specific assistance agreements that show
how EPA's lack of review and oversight can contribute to problems with the grantee.
She noted an instance of a $4.7 million grant that the OIG questioned because the work
was performed by an ineligible lobbying organization. For another grant, we questioned
$1.7 million in costs claimed because the recipient did not have an adequate time
distribution system and an indirect cost rate, as required.
Previously, on October 1, 2003, Heist testified on assistance agreements before the
House Transportation and Infrastructure Subcommittee on Water Resources and the
Environment. She discussed how the OIG has issued hundreds of audits on assistance
agreements over the past few years, involving millions of dollars of questioned costs.
One particular issue she addressed during that testimony was that some grant recipients
continued to have problems in the procurement of contractual services, noting that
recipients did not have sufficient knowledge of procurement regulations, and often
procured services as a result of familiarity and long-term relationships with contractors.
"Competition in procuring services is important to ensure that the government is getting
the best product, at the best price, from the most qualified firms. Competition also
promotes innovation and new ideas in solving environmental problems. EPA needs to
ensure project officers are adequately monitoring recipients' procurements," the
Assistant Inspector General said.
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Other Activities
OIG Conference Stresses Importance of
Helping Agency Improve
The need for the EPA OIG to help the Agency better protect the environment was urged
by a number a speakers at the OIG National Training Conference held in December 2003
in Washington, B.C., including key EPA officials.
"You're helping the Agency chart a course for improvement - to
do the right thing," EPA Acting Deputy Administrator Stephen L.
Johnson told the conference attendees.
"We need to make sure we're delivering results, delivering the
goods," Johnson said, pointing out the OIG needs to help the
Agency do so better.
Johnson noted the OIG has already had "some impressive results"
in improving Agency functions. "A number of you have really
helped to set the stage as scouts, to help us focus," Johnson said,
citing in particular the OIG's work in helping EPA improve its
financial management systems.
EPA Acting Deputy Administrator
Stephen L. Johnson addressed the
OIG staff (EPA OIG photo).
The three-day conference featured a number of speakers from the OIG, the Agency, and
other government organizations. David M. Walker, Comptroller General of the United
States, emphasized during his presentation
that the entire OIG community "needs to focus
more on results rather than best efforts."
Walker told the EPA OIG attendees, "you're
on the front lines of fighting fraud, waste, and
mismanagement," and stressed they need to do
their best to help government operate more
effectively.
Further, Walker pointed out that due to a
crisis in the public's confidence of the audit
community's private sector following several
recent scandals, "we have an opportunity in
the public sector to be the Gold Standard,"
and therefore need to set a good example.
EPA Inspector General Nikki Tinsley (left) and
U.S. Comptroller General David M. Walker at
the OIG conference (EPA OIG photo).
Inspector General Nikki Tinsley, in her opening remarks, stressed that the OIG's mission
is to "add value" as well as "inspire public confidence." She noted that the EPA OIG "is
probably better placed than anyone else in the country to make sure EPA is doing its
job," and the OIG needs to do its best to fulfill that role.
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Inspector General Community Celebrates
25th Anniversary
October 12, 2003, marked the 25th Anniversary of the enactment of the Inspector General
Act. On the occasion of the its Silver Anniversary, the Inspector General community
marked its accomplishments by, among other things, meeting with the President of the
United States.
President George W. Bush met with the Inspectors General on October 14, 2003, to
honor and recognize their community. He commended the Inspectors General for their
dedication to the mission of combating fraud, waste, and abuse, and making programs
work better for the taxpayers. He also commended the community's vigilance to remain
"agents of positive change."
Also, on October 8, 2003, the House Government Reform Subcommittee on
Government Efficiency and Financial Management held a hearing to examine the
progress of the Inspector General Act since it was passed, and expressed interest in
discussing what legislative changes were needed to help the Inspector General
community perform its mission.
President George W. Bush meets with the Executive Council on the 25th anniversary of the IG Act.
From left, Johnnie Frazier, IG, Department of Commerce; Barry Snyder, IG, Federal Reserve Board;
Ken Mead, IG, Department of Transportation; Gaston Gianni, IG, Federal Deposit Insurance
Corporation; President Bush; Greg Friedman, IG, Department of Energy; Nikki Tinsley, IG,
Environmental Protection Agency; Patrick McFarland, IG, Office of Personnel Management; and
Clay Johnson, Deputy Director for Management, Office of Management and Budget.
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On October 16, 2003, the President's Council on Integrity and Efficiency/Executive
Council on Integrity and Efficiency held its annual award ceremony. This ceremony was
planned and coordinated by the EPA OIG, with EPA Inspector General Nikki Tinsley as
the Mistress of Ceremonies for the second consecutive year.
Further, on December 1, 2003, President Bush signed S.J. Res. 18, a joint Congressional
Resolution, commending the Inspectors General for their efforts to prevent and detect
fraud, waste, abuse, and mismanagement, and to promote economy, efficiency, and
effectiveness in the Federal Government during the past 25 years.
Inspector General Receives Leadership Award
EPA Inspector General Nikki Tinsley was presented with the Distinguished Federal
Leadership Award from the Association of Government Accountants at the group's
national leadership conference in February 2004.
Tinsley, a member of the Association's Northern Virginia Chapter, received the award in
recognition of her "extraordinary vision, dedication and impact on governmental
financial management and performance systems, and her personal leadership in
advancing the profession and demonstrating the value of governmental auditing
programs."
The Distinguished Federal Leadership Award was established "To formally recognize
elected or Presidentially-appointed federal officials who exemplify and promote
excellence in government management and have demonstrated outstanding leadership in
enhancing sound financial management legislation, regulations, practices, policies and
systems."
Tinsley was appointed as the EPA Inspector General in November 1998. She had joined
EPA's Office of Inspector General in 1990, after working with the Department of the
Interior's Mineral Management Service and the U.S. General Accounting Office.
Tinsley serves as a member of the President's Council on Integrity and Efficiency and
chairs the Council's Human Resource Committee. She is also a member of the Advisory
Council on Government Auditing Standards and the Comptroller General's Domestic
Working Group.
Agency Reports on Actions in Federal Managers'
Financial Integrity Act Report
In its recommended actions on EPA's management weakness for its fiscal 2003 Federal
Managers' Financial Integrity Act report, Agency senior managers did not support an
OIG recommendation to declare "Improved Management of Assistance Agreements" a
material weakness.
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While the Agency indicated further improvement is still needed to correct this current
Agency-level weakness (which, unlike a material weakness, does not merit the attention
of the President and Congress, and only required Agency attention), EPA indicated it has
made significant progress in addressing the concerns raised by the OIG. Specifically,
EPA has noted it has:
Established the new long-term Grants Management Plan as the framework for
ensuring that EPA grant programs meet the highest management and fiduciary
standards and further the Agency's strategic goals.
Enhanced training programs.
Increased competitive grants awarded to non-profit organizations.
Expanded post-award monitoring.
Developed a new comprehensive approach to grants management reviews.
Implemented measures to heighten accountability, such as the ongoing review of
grants management performance standards.
The Agency has reported progress on other Agency-level weaknesses previously noted
by the OIG, and recommended closure of these weaknesses. Specifically, EPA indicated
it has sufficiently increased the pace of cleanups of properties subject to the Resource
Conservation and Recovery Act. Further, by mid-2003, the Agency reported it had
completed all corrective actions related to Results-Based Information Technology
Investment Planning. In addition, the Agency has indicated it has completed corrective
actions to develop and implement security tools and processes that mitigate risks to
EPA's data and systems.
In addition to carrying over 10 existing Agency weaknesses, EPA agreed to add an
additional weakness at the suggestion of the OIG, involving assuring implementation of
the Agency Information Security Program. To address this new weakness, the Agency
plans to establish and validate a robust quality assurance program, a security training
program for those with significant security responsibilities, a process to ensure that the
Agency's information security plan is practiced throughout the life cycle of information
systems, and a policy and management framework to support development and testing of
up-to-date contingency plans for Agency information systems.
While the Agency reported taking corrective actions related to Results-Based
Information Technology Investment Planning, we are concerned that all actions have not
been completed. In particular, we suggest that the Agency complete actions to
implement monitoring and evaluation phases in its Capital Planning Investment Control
process. These phases expand on how Information Technology investments, once
initiated, will be controlled to achieve intended cost, schedule, and performance
outcomes, and how EPA will evaluate performance to maintain a positive return on
investment. EPA states that it is acquiring additional resources and extramural contract
support to help implement best practices for these two essential investment control
phases. Further, EPA is still developing procedural guides to provide a framework to
manage the Information Technology portfolio in a more effective manner. Because these
actions are not complete, we believe EPA should add an Agency-level weakness in
fiscal 2004.
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OIG New Strategic Plan Revises Goals,
Defines New Directions
The OIG revised and, in February 2004, issued a new Strategic Plan, applicable for
fiscal years 2004-2008. This plan sets a new direction, featuring three goals instead of
the previous four, and updates OIG's values and presents broad new strategies.
The Strategic Plans's three new goals are:
1. Contribute to Improved Human Health and the Environment.
2. Contribute to Improved Agency Business Practices and Accountability.
3. Continuously Improve OIG Products and Services.
The Plan is built on a Logic Model concept, "starting with the end in mind," to fulfill the
requirements of the Inspector General Act and EPA's goals, based on several cross-
cutting themes:
Change is a way of life;
Emphasize Environmental Conditions, Risks, Opportunities and Impacts;
Link Performance Planning and Measures with Costs and Benefits;
Collaborate Across Media and Government Entities; and
Apply a Systems Approach to Ask the Right Questions.
This Plan was formulated using an innovative technique based on research and input
from OIG staff and leadership, EPA leadership, the Office of Management and Budget,
Congressional staff, State Agencies, key EPA stakeholders, the U.S. General Accounting
Office, and key associations. Responses to key questions were electronically categorized
by topic and characterization to synthesize priorities and common themes, to help
identify new opportunities. The Strategic Plan link is:
http://www.epa.gov/oig/reports/2004/20040201-EPA-350-R-001.pdf
Annual Performance Report Highlights
Return on Investment
The OIG issued its Annual Performance Report for fiscal 2003, the third of it kind,
presenting actual results compared to our fiscal 2003 annual performance targets, as well
as cumulative progress compared to our Strategic Goals from fiscal 2001 through 2003.
The report demonstrates how a linked series of measures within each goal roll up to
support the OIG Vital Few Measures and Results reported to the Office of Management
and Budget and Congress through the EPA Annual Performance Report. This OIG
report features a Balanced Scorecard of outputs, intermediate outcomes, and impact
outcomes for each of the OIG goals. It also presents related performance results from
measures of customer value, partner/collaborative efforts, staffing, development,
diversity, timeliness of work products, innovation and use of technology, operational
activity, and application of financial resources.
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In addition to the quantitative measures and results, this report provides qualitative
examples of significant actions, outputs, and actions that, together, combine to
demonstrate the total value added by the OIG, and provide accountability for the return
on investment of OIG resources.
Also, for the first time, the OIG has prepared an Executive Summary version of the
Annual Performance Report to present graphical and narrative summary highlights of the
OIG's fiscal 2003 performance results. Both the Annual Performance Report and the
Executive Summary are at OIG's web site.
PCIE GPRA Roundtable Leads OIG Community
Through Performance Issues
The President's Council on Integrity and Efficiency (PCIE) Government Performance
and Results Act (GPRA) Roundtable, chaired and coordinated by the EPA OIG, has
presented a series of events demonstrating best practices in planning, measurement, and
accountability.
At the GPRA Roundtable on "OIG Involvement in the Program Assessment Rating Tool
(PART)," the Office of Management and Budget announced that while OIGs themselves
would not be subject to PART reviews, it is relying on the OIG community to assist in
PART assessments of their respective agencies, and requested that OIGs help define that
role. The instructions for the fiscal 2006 budget PART assessment now specifically
include references to OIG independent evaluations.
During the reporting period, other GPRA Roundtable events covered such topics as
designing, deploying, and using customer surveys for planning, measurement, and
performance improvement; and implementing cost accounting in OIGs. A measures fair
was also held. Minutes from PCIE GPRA Roundtable events are available at
www.IGnet.gov.
The GPRA Roundtable was highlighted in the PCIE Progress to the President for Fiscal
2003 as a major achievement in the effort to improve Federal programs and operations,
and in promoting budget and performance integration.
Legislation and Regulations Reviewed
Section 4 (a) of the Inspector General Act requires the Inspector General to review
existing and proposed legislation and regulations relating to the program and operation
of EPA and to make recommendations concerning their impact. The primary basis for
our comments are the audit, evaluation, investigation, and legislative experiences of the
OIG, as well as our participation on the President's Council on Integrity and Efficiency.
During the reporting period, we reviewed 28 proposed changes to legislation,
regulations, policy, and procedures that could affect EPA. We also reviewed drafts of
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EPA's strategic plan, program operations manual, directives, and reorganizations.
Details on several items follow.
Proposed Revision to EPA Order 5700.6, Policy on Compliance Review and
Monitoring: We commented on our concerns that the EPA Order does not specifically
reference the guidance for grants management self assessment, and that the frequency of
self assessments was changed from 2 to 3 years. With a 3-year cycle, it is important that
there is followup to ensure that corrective actions are taken. The Grants Management
Division needs to update its review guidance and establish tracking and followup
procedures on issues previously identified. EPA agreed to make changes regarding our
concerns.
General Accounting Office's Draft Strategic Plan: We commented that, overall, this
Draft Strategic Plan significantly improved on the prior plan. Our suggestions for
improvements included: emphasizing partnering opportunities with Federal Office of
Inspectors General to share knowledge and work on common objectives; acknowledging
the expanding role of States, tribes, local governments, and third parties; streamlining the
Plan by including an Executive Summary of the External Factors and Consultations; and
adding annual performance targets.
Proposed Revision to EPA Delegation 1-6-A, Security; and a New EPA Order,
National Security Information: We commented that the EPA Office of Administration
and Resources Management should have the overall responsibility for the National
Security Information program. However, as an independent entity, OIG should be
delegated authority to operate its own such program. We also expressed concern that
EPA's Chief Information Officer appears to have been excluded from having any
responsibility for contributing to policy and maintaining a program for classified national
security information.
Proposed Long-Term Grants Management Training Plan: We believe this Plan is a
foundation of EPA's sincere effort to turn a long-time Management Challenge into a
strength. As such, the Office of Grants and Debarment should consider this plan a "work
in progress" that will need to be re-evaluated and revised with experience. We made
several suggestions for improvement: all goals should be incrementally phased by fiscal
year (some only had a 100-percent target); the outcome/impact measures of the training
should be linked to improved outcome performance measures built into agreements; and
grantee "compliance" should not be used as a valid performance measure of the training
since it is not closely related to training quality.
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Statistical Data
Status Report on Perpetual Inventory of Reports in Resolution Process
for Semiannual Period Ending March 31, 2004
Report Category
A. For which no management decision
was made by October 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 March 31 , 2004
F. Reports for which no management
decision was made within 6 months
of issuance
No. of
Reports
98
177
117
158
51
107
56
Report Issuance
($ in Thousands)
Questioned
Costs
$51,717
$8,120
$0
$59,837
$2,841
$56,966
$45,688
Recommended
Efficiencies
$3,627
$0
$0
$3,627
$29
$3,598
$3,598
Report Resolution Costs I
Sustained 1
($ in Thousands)
To Be
Recovered
$1 ,086
As
Efficiencies
** 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.
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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 March 31, 2004 (Dollar Value in Thousands)
Report Category
A. For which no management decision was made by
October 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 March 31 , 2004
Reports for which no management decision was made
within 6 months of issuance
Number of
Reports
53
19
72
22
13
9
50
34
Questioned
Costs*
$51,717
$8,120
$59,837
$2,841
$1 ,086
$1 ,755
$56,996
$45,688
Unsupported
Costs
$10,726
$0
$10,726
$153
$42
$111
$10,573
$10,573
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.
46
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Table 2 - Inspector General Issued Reports With Recommendations That Funds
Be Put to Better Use for Semiannual Period Ending March 31, 2004
(Dollar Value in Thousands)
Report Category
A. For which no management decision was made by October 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 March 31 , 2004
Reports for which no management decision was made within 6 months of issuance
Number of
Reports
7
0
7
1
0
1
0
6
6
Dollar
Value
$3,627
$0
$3,627
$29
$0
$29
$0
$3,598
$3,598
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 March 31, 2004,
That Are Over 365 Days Past OIG Report Issuance Date
Audits
Programs
Assistance Agreements
Contract Audits
Single Audits
Financial Statement Audits
Total
Total
23
50
24
25
2
124
Percentage
18.5%
40.3%
19.3%
20.2%
1 .7%
100.0%
47
-------
Summary of Investigative Results
Cases open as of September 30, 2003
Cases opened during period
Cases closed during period
Cases pending as of March 31, 2004
Investigations Pending by Type
as of March 31, 2004
Contract
Assistance Agreement
Employee Integrity
Program Integrity
Computer Crime
Lab Fraud
Other
Total
Superfund
14
3
3
3
0
14
2
39
Management
23
28
19
16
17
16
8
127
Total
37
31
22
19
17
30
10
166
Indictments / Criminal Informations / Complaints
Personnel and Administrative Actions
Termination
Restitutions
Resignations
Suspension and Debarments
Other
Total
Cost Savings
1
2
3
5
10
21
$309,355
48
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Scoreboard of Results: At Mid-Year (March 31, 2004)
Compared to Fiscal 2004 Annual Performance Goal Targets
All results are of those reported, and do not include all followup actions of previous periods - unaudited
Strategic Goal; With Fiscal 2004
Performance Targets Compared to Results Reported
Supporting Measures
Goal 1. Contribute to Improved Human Health and Environmental Quality
Influence environmental improvements/
actions/ changes
Target: 42; Reported: 17 (40%)
Reduce or eliminate environmental or
infrastructure risks and challenges
Target: 18; Reported: 5 (28%)
Environmental recommendations, best practices,
risks identified
Target: 80; Reported: 22 (28%)
0 Legislative changes/decisions
0 Regulatory changes/decisions
17 EPA policy, process, practices change
0 Examples of environmental improvement
0 Best environmental practice implemented
4 Environmental risks reduced/eliminated
1 Certifications/validations/verifications
6 Environmental recommendations
0 Environmental best practices identified
16 Environmental risks identified
Goal 2. Improve EPA's Management, Accountability, and Program Operations
Return on investment: Potential dollar return as
percentage of OIG budget ($48 million)
Target: 150%; Reported: $9.2 million; (13%)
Improve operational integrity: Criminal, civil,
and administrative actions reducing risk of loss/
operational integrity
Target: 80; Reported: 60 (75%)
Improvements in business/systems/efficiency and
resolve public concerns/management challenges
Target: 100; Reported: 38 (38%)
Recommendations, best practices, challenges
identified for operational improvements
Target: 240; Reported: 103 (43%)
Dollars in Millions
$ 8.1 Questioned costs
$ 0.1 Recommended efficiencies, costs saved
$1.0 Fines, recoveries, settlements
26 Criminal convictions
9 Indictments/informations/complaints/arrests
3 Civil judgments/settlements
22 Administrative actions
18 Policy process, practice, control changes
1 Corrective action on FMFIA/mgt. challenge
6 Best practices implemented
1 3 Certifications/validations/verifications/
allegations disproved
95 Recommendations
6 Best practices identified
0 FMFIA/management challenges identified
2 Referrals for OIG or Agency action
49
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Preceeding Page Blank
Precee
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.
Report Number Title
2004-P-00001 Boxer/Dingell Congressional Request - 2003
2004-P-00002 Project XL Asbestos /Demolition
2004-P-00003 Superfund Issues in Indian Country
2004-P-00004 EPA's Pretreatment Program
2004-P-00005 Mega Financial Responsibilities at Superfund
Mine Sites
2004-P-00006 Idaho National Eng. & Env . Lab Petition
Special Review
2004-P-00007 Emissions Credit Trading and Environmental
Justice
2004-P-00008 Review of SDWIS GPRA Measure
2004-P-00009 Coeur d ' Alene/Bunker Hill Ombudsman Audit
2004-P-00010 Hotline Complaint - Basin Cleanup Coalition
2004-P-00011 EPA Equipment Purchases for Counter Terrorism
P repa rednes s
2004-P-00012 Evaluation of Air Toxics Emissions for GPRA
Reporting
2004-P-00013 EPA's Implementation of Network Firewalls
2004-P-00014 Review of Hotline Allegation (OUST)
Final Report
Issued
07-JAN-04
19-DEC-03
20-JAN-04
02-FEB-04
04-FEB-04
05-FEB-04
Ol-MAR-04
05 -MAR- 04
22-MAR-04
25-MAR-04
29-MAR-04
31-MAR-04
31-MAR-04
31-MAR-04
Recommended
Questioned Costs Efficiencies
Ineligible Unsupported Unreasonable (Funds Be Put
Costs Costs Costs To Better Use)
$0
TOTAL PERFORMANCE REPORTS
14
$0
$0
$0
$0
2004-4-00014 Consumer Federation of America Foundation-
Costs Claimed
2004-4-00015 New Mexico Environment Department SF
Cooperative Agreement
TOTAL ASSISTANCE AGREEMENT REPORTS = 2
Ol-MAR-04
31-MAR-04
$4,714,638
$11,588
$4,726,226
$0
$0
$0
$0
$0
2004-3-00001 Thlopthlocco Tribal Town 27-OCT-03 $47,217
2004-3-00002 South Carolina, State of 27-OCT-03
2004-3-00003 Delaware, State of 27-OCT-03 $350,244
2004-3-00004 Pyramid Lake Paiute Tribe 28-OCT-03 $521,591
2004-3-00005 Alliance for the Chesapeake Bay, Inc. 28-OCT-03
2004-3-00006 St. George Traditional council 31-OCT-03
2004-3-00007 Blackfoot, City of 31-OCT-03 $332,461
2004-3-00008 Middletown Rancheria 31-OCT-03
2004-3-00009 Hampshire College 31-OCT-03
2004-3-00010 Combes, City of 31-OCT-03
2004-3-00011 Northway Village Council 31-OCT-03 $69,393
2004-3-00012 Ute Indian Tribe 19-NOV-03
2004-3-00013 NATIVE VILLAGE OF MEKORYUK IRA COUNCIL 19-NOV-03
2004-3-00014 Chitina Traditional Indian Village Council 20-NOV-03
2004-3-00015 Chitina Traditional Indian Village Council 20-NOV-03
2004-3-00016 Montgomery County Combined Health District 12-DEC-03
2004-3-00017 Leech Lake Band of Ojibwe 18-DEC-03
2004-3-00018 LEECH LAKE BAND OF OBJIBWE - 2001 18-DEC-03
2004-3-00019 Chickaloon, Native Village 31-DEC-03
2004-3-00020 Shoemakersville, Borough of 31-DEC-03
2004-3-00021 National Senior Citizen Edu. & Research 31-DEC-03
2004-3-00022 Colorado, State of 31-DEC-03
2004-3-00023 California, State of 15-JAN-04
2004-3-00024 Commonwealth of the Northern Mariana Islands 21-JAN-04
2004-3-00025 Sssociation of State & Interstate Water Pol. 21-JAN-04 $77,566
Cont. Adim.
2004-3-00026 National Asian Pacific Center on Aging 03-FEB-04
2004-3-00027 National Asian Pacific Center on Aging 03-FEB-04 $151,942
2004-3-00028 Pennsylvania, Commonwealth of 29-JAN-04
2004-3-00029 New Mexico Environment Department, State of 29-JAN-04
2004-3-00030 Calumet, Charter Township of 29-JAN-04
2004-3-00031 Southeastern States Air Resource Managers Inc 29-JAN-04
2004-3-00032 Association of Metropolitan Sewerage Agency 29-JAN-04
2004-3-00033 Jasper, County of 29-JAN-04
2004-3-00034 Howard University 29-JAN-04
51
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
2004-3-00035 New Jersey, State of 30-JAN-04
2004-3-00037 Michigan-Department of Agriculture, State of 30-JAN-04
2004-3-00038 Alaska, State of 03-FEB-04
2004-3-00039 Chautauqua, County of 06-FEB-04
2004-3-00040 Austin, City of 06-FEB-04
2004-3-00041 Hawaii Department of Health, State of 09-FEB-04
2004-3-00042 Vermont, State of 09-FEB-04 $56,643 $0 $0
2004-3-00043 Pennsylvania, University of 09-FEB-04
2004-3-00044 delaware River Basin Commission 12-FEB-04
2004-3-00045 Alaska Inter-Tribal Council 12-FEB-04
2004-3-00046 The Pacific American Foundation 12-FEB-04
2004-3-00047 Association of Farmworker Opportunity Program 12-FEB-04
2004-3-00048 Alabama, University of 19-FEB-04
2004-3-00049 Otoe-Missours Tribe of Indians 19-FEB-04
2004-3-00050 National Alliance for Hispanic Health 19-FEB-04
2004-3-00051 Sherwood Valley Band of Porno Indians 19-FEB-04
2004-3-00052 Yukon River Inter-Tribal Watershed Council 19-FEB-04
2004-3-00053 Cuyapaipe Band of Mission Indians 19-FEB-04
2004-3-00059 United States Virgin Islands, Government of 27-FEB-04
2004-3-00060 United States Virgin Islands, Government of 27-FEB-04
2004-3-00061 United States Virgin Islands, Government of 27-FEB-04
2004-3-00062 Illinois, State of 03-MAR-04 $951,659 $0 $0
2004-3-00063 Inter-Tribal Council of Michigan, Inc. 04-MAR-04
2004-3-00064 Vermont State Colleges 04-MAR-04
2004-3-00065 Blackfeet Tribe of the Blackfeet Indian 04-MAR-04
Reservation
2004-3-00066 Lovelock, City of 04-MAR-04
2004-3-00067 Lovelock, City of 04-MAR-04
2004-3-00068 Academy of Natural Science of Philadelphia 04-MAR-04
2004-3-00069 Tyrone, Borough of 04-MAR-04
2004-3-00070 West Virginia, State of ll-MAR-04 $347,518
2004-3-00071 West Virginia, State of ll-MAR-04
2004-3-00072 Florida, State of 16-MAR-04 $4,806 $0 $0
2004-3-00073 Florida, State of 16-MAR-04 $36,413 $0
2004-3-00074 New Mexico - Department of Health, State of 18-MAR-04
2004-3-00075 New Mexico - Department of Health, State of 18-MAR-04
2004-3-00076 Puerto Rico - Department of Health, 23-MAR-04
Commonwealth of
2004-3-00077 Clark Atlanta University 24-MAR-04
TOTAL SINGLE AUDIT REPORTS = 72 $2,962,753 $000
TOTAL OIG ISSUED CONTRACT REPORTS =0 $000 0
2004-1-00001 OMNIPLEX World Services Corp.-FY1999 Incurred Ol-OCT-03
Cost
2004-1-00002 Acurex Environmental c/o Arcadis Geragh- Ol-OCT-03
FY2000 Incurred Cost
2004-1-00003 CET Environmental Services Inc.-FY2001 Ol-OCT-03
Incurred Cost
2004-1-00004 Tetra Tech EMI-FY2002 Labor Internal Control 10-OCT-03
2004-1-00005 Northbridge Envtl Mgmt Consultant-FY2001 30-OCT-03 $3,985
Incurred Cost
2004-1-00006 Foster Wheeler Envtl. Corp.-FY2003 Accounting 16-OCT-03
System
2004-1-00007 TAMS Consultants, Inc.-FY 1999 Incurred Cost 20-OCT-03
2004-1-00008 DynCorp Inc.-FY2001 Incurred Cost 20-OCT-03
2004-1-00009 FEV Engine Technology-FY2002 Incurred Cost 03-NOV-03
2004-1-00010 Welso Federal Services LLC-FY2002 Incurred 03-NOV-03
Cost
2004-1-00011 Malcolm Pirnie, Inc.-FY 1998 Incurred Cost 03-NOV-03
2004-1-00012 ManTech Environmental Tech, Inc. (METI)- 03-NOV-03
FY2001 Incurred Cost
2004-1-00013 Black & Veatch Special Projects Corp.-FY2000 06-NOV-03
Incurred Cost
2004-1-00014 Stratus Consulting Inc-FY2000 Incurred Cost 06-NOV-03
2004-1-00015 Parsons Engineering Science-FYs 2000-2001 07-NOV-03
Incurred Cost
2004-1-00016 WRS Infrastructure & Environmental Inc-FY2001 07-NOV-03
Incurred Cost
2004-1-00017 Omni-Cube(OMNIPLEX World Services Corp)- 07-NOV-03
FY2001 Incurred Cost
2004-1-00018 Tetra Tech EM,Inc.-CAS 410-Alloc of Bus Unit 10-NOV-03
52
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
2004-1-00019 Eastern Research Group-FY2001 Incurred Cost 10-NOV-03
2004-1-00020 Acurex Environmental c/o Arcadis, Gerap- 10-NOV-03
FY2001 Incurred Cost
2004-1-00022 Computer Based Systems-FY2000 Incurred Cost 24-NOV-03 $3,958
2004-1-00023 Tetra Tech EMI, Inc.-FY2002 Estimating System 24-NOV-03
Internal Contr
2004-1-00024 SAIC-Closeout #68-D4-0098 17-DEC-03
2004-1-00025 Industrial Economics Inc-FY2003 System Review 17-DEC-03
2004-1-00026 Resource Management Concepts, Inc.-FY2001 17-DEC-03
Incurred Cost
2004-1-00027 RS Information Systems, Inc.-FY2001 Incurred 17-DEC-03
Cost
2004-1-00028 Tetra Tech EM, Inc. (TTEMI)- FY2001 Incurred 29-DEC-03
Cost
2004-1-00029 URS Group, Inc.-FY 2003 Billing Practices on 31-DEC-03
EPA 68-W-98-228
2004-1-00030 Black & Veatch Spec Proj Corp (BVSPC)-FY 2000 31-DEC-03 $8,781
68-W9-9043
2004-1-00031 Consol. Safety Services, Inc.-FY 2002 I/C 31-DEC-03
(Included FYs 00-01
2004-1-00032 Environmental Quality Management (EQM)-FY2000 31-DEC-03
Incurred Cost
2004-1-00033 SoBran, Inc. - CFY2002 Incurred Cost (FYE 06-JAN-04
9/30/02)
2004-1-00034 SAIC-Closeout 68-D3-0030 16-JAN-04
2004-1-00035 Environmental Health & Engineering-FY2000 21-JAN-04
Incurred Cost
2004-1-00036 Great Lakes Environmental-FY2002 Incurred 30-JAN-04
Cost
2004-1-00037 IT Group-FY2002 Incurred Cost 02-FEB-04
2004-1-00038 SECTEK, Inc.--FY 2000 Incurred Cost 09-FEB-04
2004-1-00039 WRS Infrastructure & Environ., Inc. - FYE 09-FEB-04
12/31/2000 I/C
2004-1-00040 ESE (Harding ESE, Inc.)- FYE 10/31/2001 25-FEB-04
Incurred Cost
2004-1-00041 Metcalf & Eddy Inc-FYE 9/30/2001 Incurred 02-MAR-04
Cost
2004-1-00042 Weston Solutions, Inc. - Preaward PR-CI-03-10 02-MAR-04
595
2004-1-00043 Lockheed Martin Svc.- Preaward REAC PR-CI-03- 03-MAR-04 $414,160
10595
2004-1-00044 Environmental Management Support (EMS)-CY2001 03-MAR-04
Incurred Cost
2004-1-00045 Environmental Quality Management (EQM- FY2001 04-MAR-04
Incurred Cost
2004-1-00046 DPRA, Inc. - FYE 3/31/2003 Incurred Cost 08-MAR-04
2004-1-00047 Perrin Quarles Associates, Inc.- FYE 12/31/02 18-MAR-04
Incurred Cost
2004-1-00048 Metcalf & Eddy Inc.- FYE 2001 RAC 68-W6-0042 18-MAR-04
2004-2-00001 Alpha-Gamma Technologies Inc.-FY1998 Incurred Ol-OCT-03
Cost
2004-2-00002 Alpah-Gamma Technologies Inc.-FY1999 Incurred Ol-OCT-03
Cost
2004-2-00003 Malcolm Pirnie, Inc.-FY1999 Incurred Cost Ol-OCT-03
2004-2-00004 Lockheed Martin Services, Inc.-CAS 401 & 402 30-OCT-03
2004-2-00005 FEV Engine Tech - FY2003 Material Purch/ 03-NOV-03
Consumptio (MAAR 13)
2004-2-00006 FEV Engine Technology - FY 2003 Floorcheck 03-NOV-03
(MAAR 6)
2004-2-00007 ManTech Environmental Tech Inc.(METI) - CACS 03-NOV-03
68-D5-0057
2004-2-00008 Metcalf & Eddy Inc.-Floorcheck 04-NOV-03
2004-2-00009 CH2M Hill Inc.-FYs 2000-2001 Annual RAC 05-NOV-03
Close-out 68-W9-8225
2004-2-00010 Arrowhead Contracting Inc.-Financial Cap. 06-NOV-03
Risk Assessment
2004-2-00011 Stratus Consulting, Inc-FY2001 Incurred Cost 06-NOV-03
2004-2-00012 Integrated Laboratory Systems-FY2003 10-NOV-03
Floorcheck (MAAR 6)
2004-2-00013 CH2M Hill Inc.-FY1996 through 2000 RAC 10-NOV-03
68-W6-036
2004-2-00014 Tetra Tech, Inc.-Quick Closeout CACS 68-W8- 21-NOV-03
00-92 FYS1988-2000
2004-2-00015 Foster Wheeler Environmental Corp.-FY2001 26-NOV-03
RAC 68-W9-8214
2004-2-00016 Kerr & Associates, Inc-FY1994-1998 Assist 18-DEC-03
Audit I/C Subcontr
2004-2-00017 Tetra Tech NUS, Inc.-FYs 1996-1998 RAC 18-DEC-03
Close-out 68-S6-3003
53
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
2004-2-00019 Weston Solutions, Inc. -DACA45-98-D-0004 03-MAR-04
Delivery Order ttl
2004-2-00020 Tetra Tech EM, Inc. (EMI)- Preaward PR-CI-03- 03-MAR-04
10595
2004-2-00021 URS Operating Svcs & URS Group, Inc.-Preaward 03-MAR-04
PR-CI-03-10595
2004-2-00022 Tetra Tech, Inc. A&E Div (TTI Div)-Floorcheck 04-MAR-04
thru 3/2003
2004-2-00023 Versar, Inc.-CACS 68-01-7053 & Follow-up 08-MAR-04
Audit complet 2/2004
2004-2-00024 Tetra Tech Inc./B&V SPC Joint Venture-FY2000 16-MAR-04
RAC 68-S7-3002
2004-2-00025 Universe Technologies, Inc.-FYE 12/31/2001 16-MAR-04
Incurred Cost
2004-2-00026 Ricardo, Inc. - CFY 2003 Incurred Cost 16-MAR-04
(6/30/03)
2004-2-00027 Marasco Newton Group Ltd.- FYE 12/31/2001 18-MAR-04
Incurred Cost
2004-2-00028 GE Energy & Environmental Research Corp.- 18-MAR-04
FY2001 I/C Review
2004-4-00001 Sierra Research Inc.-FY 2002 Incurred Cost 17-DEC-03
2004-4-00002 Scientific Consulting Group, Inc.-FYFY2003 18-DEC-03
Floorcheck
2004-4-00003 Eastern Research Group- FY 2003 Floorcheck 31-DEC-03
2004-4-00004 Environmental Quality Management-FY2003 Time/ 31-DEC-03
Floorcheck
2004-4-00005 Bionetics Corporation - FY2002 Incurred Cost 06-JAN-04
2004-4-00006 Limno-Tech, Inc.-FY 2003 Incurred Cost 06-JAN-04
2004-4-00007 Clean Air Vehicle Tech Center- CFY 2002 06-JAN-04
Incurred Cost(FYE3/31/02)
2004-4-00008 Clean Air Vehicle Technology Center - FY 2003 06-JAN-04
Incurred Cost
2004-4-00009 CH2M Hill, Inc.-FY 2004 CAS D/S Revision lla, 07-JAN-04
effective 1/1/04
2004-4-00010 DPRA, Inc.- Financial Capability Assessment 07-JAN-04
as of 9/30/2004
2004-4-00011 Eastern Research Group- CAS 412/413 07-JAN-04
Compliance FYE 12/31/02
2004-4-00012 Automotive Testing Laboratories Inc.-FY2002 13-JAN-04
Incurred Cost
2004-4-00013 SECTEK, Inc.--FY 2001 Incurred Cost 09-FEB-04
TOTAL DCCA CONTRACT REPORTS = 87 $430,884 $0 $0 $0
2004-1-00021 FY 2003 Agency F/S Preparation & Reporting 21-NOV-03
(sub)
TOTAL FINANCIAL STATEMENT REPORTS =1 $0 $0 $0 $0
2004-S-00001 ENFORCEMENT RESOURCES AND ACCOMPLISHMENTS 10-OCT-03
TOTAL SPECIAL REVIEW REPORTS =1 $0 $0 $0 $0
TOTAL REPORTS ISSUED = 177 $8,119,863 $0 $0 $0
54
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OIG Mailing Addresses and Telephone Numbers
Headquarters
Environmental Protection Agency
Office of Inspector General
1200 Pennsylvania Ave. NW (2410T)
Washington, DC 20460
(202) 566-0846
Dallas
Environmental Protection Agency
Office of Inspector General (6OIG)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-2733
Audit: (214) 665-6621
Investigations: (214)665-2790
Philadelphia
Environmental Protection Agency
Office of Inspector General
1650 Arch Street, 3rd Floor
Philadelphia, PA 19103-2029
Audit: (215) 814-5800
Investigations: (215) 814-5820
Atlanta
Environmental Protection Agency
Office of Inspector General
61 Forsyth Street, SW
Atlanta, GA 30303
Audit: (404) 562-9830
Investigations: (404) 562-9857
Denver
Environmental Protection Agency
Office of Inspector General
999 18th Street, Suite 300
Denver, CO 80202-2405
Audit: (303) 312-6872
Investigations: (303) 312-6868
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) 541-0517
Boston
Environmental Protection Agency
Office of Inspector General
One Congress St.
SuitellOO(Mailcode)
Boston, MA 02114-2023
Audit: (617) 918-1470
Investigations:(617) 918-1481
Kansas City
Environmental Protection Agency
Office of Inspector General
901 N. 5th Street
Kansas City, KS 66101
Audit: (913) 551-7878
Investigations: (312) 353-2507 (Chi.)
Sacramento
Environmental Protection Agency
Office of Inspector General
80II Street, Room 264
Sacramento, CA 95814
Audit: (916) 498-6530
Investigations: (415) 947-8711 (SF)
Chicago
Environmental Protection Agency
Office of Inspector General
77 West Jackson Boulevard
13th Floor (IA-13 J)
Chicago, IL 60604
Audit: (312) 353-2486
Investigations: (312) 353-2507
Los Angeles
Environmental Protection Agency
Office of Inspector General
P.O. Box 826
La Miranda, CA 90627-0826
Investigations: (714) 521-2189
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
Cincinnati
Environmental Protection Agency
Office of Inspector General
MS : Norwood
Cincinnati, OH 45268-7001
Audit: (513) 487-2360
Investigations: (312) 353-2507 (Chi.)
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
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
OIG Public Liaison Hotline:
1-888-546-8740 or (202) 566-2476
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