EPA-350-R-04-005
November 2004
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Semiannual Report
to Congress
April 1, 2004 - September 30, 2004
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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 and its activities, visit our web site at:
http://www.epa.gov/oig
Cover photos: From top /eft: Rule changes related to New Source Review provisions of the Clean Air Act
impacted enforcement actions against coal-fired power plants (photo courtesy EPA);
pretreatment efforts at the Nation's sewer systems impact clean water, such as at the Deer Island
Wastewater Treatment Plant, Boston, Massachusetts (photo courtesy Massachusetts Water
Resources Authority); the soil mound cover is inspected at the Escambia Wood Treating
Superfund site, Pensacola, Florida (EPA Office of Inspector General photo).
Printed with vegetable oil based inks on 100% recycled paper (minimum 50% postconsumer)
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
INSPECTOR GENERAL
October 29, 2004
SUBJECT: Office of Inspector General Semiannual Report to Congress
TO: Michael O. Leavitt
Administrator
I am pleased to provide you with the Inspector General Semiannual Report to Congress for the 6-month
period ending September 30, 2004. This report discusses the management challenges being faced by the
Agency, and notes the progress that has been made regarding these challenges as well as the areas where
further improvements are needed. Many of our reviews during this semiannual period provided ways the
Agency can address these challenges, and they are also summarized in this report.
The Inspector General Act of 1978, as amended, requires that you forward this report within 30 days
of receipt to the appropriate Congressional committees. In transmitting the report to Congress, the Act
allows you to separately enclose whatever additional comments you deem necessary, and specifies certain
information that should be included (see 5 USC App. 5(b)).
I will be happy to discuss, or provide additional information on, any of the items in this report.
L \L^J2f,f
Nikki L. Tinsley Q
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Message to Congress
In a memorandum provided to the Administrator in April 2004, we noted that for the
10 key management challenges facing the Agency, EPA has made progress in most areas.
EPA's new strategic plan is superior to its previous ones, the Agency has developed
technical and scientific expertise that can forestall potential homeland security threats,
and EPA continues to enhance its Information Security Program. Nonetheless, the list of
management challenges remains largely unchanged from last year, and many of the
challenges had existed prior to 2001.
This year, we noted a new challenge, "Superfund Evaluation and Policy Identification."
A number of recent reports have identified troubling obstacles to the Agency's ability to
effectively meet the Nation's current and future needs for hazardous waste cleanup. We
have provided Congress with details on how, due to shortfalls in the Superfund Trust
Fund balance, the percentage of Superfund appropriations coming from general revenues
has increased. Also, we found that some States are unable to sufficiently address
backlogs in site assessments. Further, as part of our increased focus on EPA partnering
with tribes, we found that while EPA has been a Federal leader in developing tribal
relationships and was in fact the first Federal agency to adopt a formal Indian policy,
EPA should provide its Tribal Superfund program with clearer direction.
For the challenge "Linking Mission and Management," we noted that while EPA's
strategic plan better recognizes partners and emphasizes measuring results, the plan still
lacks sufficient substantive strategies or statements of when it will attain stated goals.
Various reviews noted the Agency needs to more thoroughly integrate human capital
management activities and measures into its core business processes, and that EPA needs
to better coordinate its strategy for integrating children's environmental health efforts
into the Agency as a whole.
More than half of EPA's budget is awarded to other organizations through assistance
agreements, and while EPA has revised some policies and offered some training, the
Agency still needs to do much to address the challenge, "EPA's Use of Assistance
Agreements to Accomplish Its Mission." We noted problems in EPA's oversight of
grants awarded to Alaska for the Village Safe Water Program, due largely to the
perception that earmark grants awarded through the program did not require the oversight
required of other grants. We also questioned unallowable outlays made by Idaho to meet
cost sharing requirements at the Bunker Hill Superfund site, as well as unallowable
outlays made to the Association of Metropolitan Sewerage Agencies related to contract
costs.
The Office of Inspector General met many of its strategic goals during Fiscal 2004.
Regarding our goal to "Contribute to Human Health and Environmental Quality," we
more than doubled our goal measure related to reducing or eliminating environmental
risks, and exceeded our goal for environmental improvements/actions/changes. We need
to increase the number of environmental recommendations, best practices, and risks
identified.
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We also met many of our measures related to our goal to "Improve EPA's Management,
Accountability, and Program Operations." We were successful in our goal measures to
improve business systems and efficiency; identify recommendations, best practices, and
challenges; and take criminal, civil, and administrative actions and reduce risk of loss or
impediments to operational integrity. We need to make further progress on the potential
dollar return as a percentage of the Office of Inspector General budget.
Details on these and other issues are in this semiannual report, including the
"Scoreboard" on our own performance, which is in the Statistical Data section. We look
forward to working with the Agency and Congress as our office continues to strive to be
a catalyst for improving the environment.
Nikki L. Tinsley
Inspector General
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Table of Contents
Highlights
Profile of Activities and Results
igency Management Challenges
Significant OIG Activity ...
Air (helping to make air safe and healthy to breathe) 7
Water (ensuring that drinking water is safe and sources are protected) 10
Land (improving waste management and cleanup - includes Superfund) 13
Cross Media (issues involving overlapping areas - includes homeland security) 16
Grants (improving EPA's use of assistance agreements) 19
Financial Management (improving the Agency's financial management) 23
Business Systems (improving the Agency's business processes and systems) 24
Public Liaison (addressing specific concerns of the public) 27
Investigations (investigating laboratory fraud, financial fraud, and computer crimes) 32
Congressional Requests (providing Congress with specific information) 37
Testimony (providing testimony before Congressional committees) 40
Chemical Safety and Hazard Investigation Board 41
Other Activities 42
Statistical Data
Appendices
Appendix 1 - Reports Issued 50
Appendix 2 - Reports Issued Without Management Decisions
(Available Upon Request)
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Highlights
Rule Change for Coal-fired
Power Plants Questioned
EPA's 2003 New Source
Review change has seriously
hampered the Agency's ability
to enforce against coal-fired
power plants (page 7).
Superfund Administrative
Cost Concerns Noted
Several factors inhibit EPA's
ability to determine, allocate,
manage, and optimize rising
Superfund administrative costs
(page 37).
EPA Should Improve Alaska
Village Program Oversight
EPA needs to improve its
oversight of grants awarded to
Alaska for the Village Safe
Water Program to better
safeguard funds (page 19).
Laboratory President
Convicted at Trial
The president of a Pennsylvania
laboratory was found guilty of
34 counts of mail fraud related
to false and fraudulent test
reports (page 32).
Challenges Remain with
Human Capital Activities
EPA has been implementing
human capital improvements,
but it needs to better align
office-level activities to the
Agency's strategy (page 24).
Electronic Waste Disposal
Needs Greater Attention
EPA has been addressing the
growing problem of electronic
waste disposal, but needs to
better coordinate its efforts
(page 13).
Petroleum Refinery Program
Needs to Improve Tracking
EPA has implemented an
integrated petroleum refinery
process that addresses most
noncompliance problems, but
needs better tracking (page 16).
Precautions Can Be Taken
at Marjol Superfund Site
Review of citizens' concerns
at the Marjol Superfund site
found sufficient actions were
taken but further precautions
may be beneficial (page 27).
Testimony Stresses Better
Measuring of Grants Results
The Inspector General testified
before a subcommittee that
EPA needs to better measure
environmental results generated
by grants (page 40).
Inspector General Helping
to Reduce Computer Misuse
The Inspector General
Computer Crimes Directorate is
helping the Agency identify
and investigate instances of
computer misuse (page 33).
Management Challenges
Provided to Administrator
We provided the Administrator
with details on 10 key
management challenge that the
Agency needs to address
(page 3).
Outlays for Bunker Hill
Cleanup Questioned
We questioned unallowable
outlays of $649,362 made by
Idaho to meet cost sharing
requirements for Bunker Hill
Superfund actions (page 22).
EPA Employee Pleads
Guilty to Various Charges
An EPA Environmental
Scientist pled guilty to charges
of accepting a bribe,
conspiracy, and making a false
statement (page 34).
Effluent Guidelines Program
Effectiveness Uncertain
EPA's effluent guidelines
program has improved, but its
impact on reducing pollutant
discharges to water bodies
remains uncertain (page 10).
Inspector General Develops
New Two-Year Plan
The Office of Inspector General
has aligned planning with
budgeting and strategic goals
by developing a new Two-Year
Plan (page 42).
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Profile of Activities and Results
Audit Operations
fice of Inspector General-Managed Revie
views Performed by EPA, Independent Pi
Accountants, and State Auditors)
April 1,2004 to
September 30, 2004 Fiscal
(dollars in millions) 2004
Questioned Costs *
- Total $2.5 $7.2
-Federal $1.4 $6.1
Recommended Efficiencies *
- Federal $0 $0
Costs Disallowed to be Recovered
-Federal $1.3 $1.8
Costs Disallowed as Cost Efficiency
- Federal $0.02 $0.02
Reports Issued - Office of Inspector
General-Managed Reviews
- EPA Reviews Performed by
Office of Inspector General 39 57
- EPA Reviews Performed by
Independent Public Accountants 0 0
- EPA Reviews Performed by
State Auditors _0 0
Total 39 57
Reports Resolved
(Agreement by Agency officials to
take satisfactory corrective actions)*** 91 142
Audit Operations
Other Reviews
's Performed by Another Federal
>r Single Audit Act Auditors)
April 1,2004 to
September 30, 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) **
$11.4
$2.9
$0.6
$0.2
$0.3
72
109
181
Fiscal
2004
$14.8
$6.3
$0.6
$0.7
$0.3
159
181
340
$3.685 $3.692
Investigative Operations
April 1,2004 to
September 30, 2004
(dollars in millions)
Fines and Recoveries (including civil) **** $0
Cases Opened During Period
Cases Closed During Period
Indictments/Criminal Informations/Complaints
Convictions
Civil Judgments/Settlements/Filings
Administrative Actions Against EPA Employees/Firms
.248
107
71
5
4
1
40
Fiscal
2004
$1 .267
166
147
13
30
4
61
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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Agency Management Challenges
Tierl
Management Challenges Continue to Need Action
In an April 2004 memorandum to the Administrator, we identified 10 key management
challenges. While EPA has made progress in most areas, the list remains largely
unchanged from last year; many existed before 2001. We list the challenges, in the
accompanying table, in tiers based on the order of importance as to how severely we
believe they affect EPA's mission.
A management challenge listed last year, "EPA's Working Relationships with States," is
now under "Linking Mission and Management." Also, we added a new challenge this
year, "Superfund Evaluation and Policy Identification."
Tier 1
Linking Mission and Management
EPA's new strategic plan is superior to its previous ones in that it better recognizes
partners, considers cross-media issues, and has increased focus on measurable results.
Nonetheless, the plan still lacks sufficient substantive strategies or statements of when it
will attain its stated goals. We have noticed a
systematic disconnect between program goals
and performance objectives that EPA developed
to respond to the Government Performance and
Results Act. Some of our recent reports reinforce
the need for continued improvement. For
example, EPA needs to:
Key Management Challenges
Linking Mission and Management
Agency Efforts in Support of Homeland Security
Superfund Evaluation and Policy Identification
Information Resources Management and Data
Quality
EPA's Use of Assistance Agreements to
Accomplish Its Mission
Challenges in Addressing Air Toxics Program
Tier 2
Human Capital Management
EPA's Information Systems Security
Management of Biosolids
Backlog of National Pollutant Discharge
Elimination System Permits
Provide current, accurate data on the extent
of financial and environmental challenges
posed by hard rock mining activities.
Establish effective program strategies, goals,
and specific performance measures and
milestones to successfully promote
purchasing recycled goods.
Collect sufficient workload information and
develop appropriate outcome measures to
gauge the overall sufficiency of funds for
enforcement activities.
We are also concerned that EPA does not have a coordinated strategy integrating
children's environmental health efforts into the Agency as a whole, and that it has not
fully implemented the Executive Order on Environmental Justice because it has not
identified minority and low-income communities.
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Agency Efforts in Support of Homeland Security
While the Department of Homeland Security has the lead in preparing for, preventing,
and responding to potential attacks against the United States, many other agencies,
including EPA, play a vital role as well. In carrying out its mission, EPA has developed
chemical, biological, and radiological technical and scientific expertise that enhances the
ability of the Department of Homeland Security to address potential threats. EPA's
efforts are commendable, but our reviews found that EPA needs to:
Develop better processes for identifying, obtaining, maintaining, and tracking
response equipment necessary for Nationally Significant Incidents.
Take action to assess the adequacy and quality of the water vulnerability assessments
submitted by water utilities.
Formulate a strategy to measure security enhancements in the Nation's water
infrastructure.
Better define its homeland security role in protecting the air from terrorist threats.
Superfund Evaluation and Policy Identification
Over the last several years, a number of reports and reviews of the Superfund program
(from our office and others) have identified troubling obstacles to the Agency's ability to
effectively meet the Nation's current and future needs for hazardous waste cleanup. The
Superfund program cannot meet all of its current reported needs for cleanup, and due to
falling Trust Fund balances the percent of Superfund appropriations coming from general
revenues has increased dramatically. Thus, we have added this challenge to our list this
year. EPA has processes for evaluating and reforming Superfund, but has failed to
identify or communicate the current fiscal and other program management challenges that
are causing great pressure and attention on the program. Early identification,
communication, and evaluation of these types of issues can better prepare the Agency to
manage the Superfund program and keep it directed on efficient and effective
achievement of cleanups.
Recognizing that tribes are important partners in implementing the Agency's strategy for
managing the Superfund program, EPA has undertaken three major initiatives related to
tribes since 1998. However, a recent Office of Inspector General evaluation found key
actions remain incomplete.
Information Resources Management and Data Quality
EPA faces several challenges with the data it uses to make decisions and monitor
progress against environmental goals. While EPA has developed several core registry
systems, it has yet to implement a 1998, agreed-upon Office of Inspector General
recommendation to formally revise its policies and procedures supporting an Agency
standards program. While EPA has developed and formally approved 12 data standards,
some of them will not be fully implemented until Fiscal 2006. Another area needing
attention is data reliability. Prior audits indicate systems used by EPA's Enforcement,
Superfund, and Water programs have inconsistent, incomplete, and obsolete data. A third
area of concern was highlighted in our reviews and investigations, which continue to
show an upward trend in the number of environmental laboratories that are providing
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misleading and fraudulent data to States for monitoring the Nation's public water
supplies.
EPA's Use of Assistance Agreements to Accomplish Its Mission
More than half of EPA's Fiscal 2003 budget, approximately $4.4 billion, was awarded to
organizations through assistance agreements. We have reviewed how EPA has
administered these agreements, and found that despite several policies being revised and
training being offered, systemic weaknesses continue. For example:
While EPA had developed corrective actions to improve oversight controls over the
agreements, oversight continues to be a weakness.
Project officers did not perform all necessary steps when conducting pre-award
reviews of assistance agreement applications.
EPA staff did not always follow EPA policies regarding reviews they were to
perform prior to and after the agreements were awarded, and were not held
accountable.
Challenges in Addressing Air Toxics Program
Toxic air pollution is one of the more significant health and environmental problems in
the United States, causing cancer and neurological, immunological, and other serious
health problems. EPA's goal is to reduce air toxics emissions and the associated risks to
public health and the environment substantially by 2010. Since 1990, EPA has been
implementing a two-phased program to reduce emissions of 188 air toxics from 174
categories of major stationary sources. Phase 1 is a technology-based approach to
reducing air toxics, while Phase 2 assesses the level of health risk remaining after the
Phase 1 controls are in place. No Phase 2 standards have been issued to date. Significant
data gaps and uncertainties exist in estimating human exposure to air toxics and the risks
associated with differing levels of air toxic exposures for the 188 air toxics.
Tier 2
Human Capital Management
EPA continues to make progress in its human capital efforts and has indicated a strong
commitment to reaching its goals in accordance with the President's Management
Agenda initiative on Human Capital Management. The Agency remains committed to
ensuring its workforce is high performing, results oriented, and aligned with its strategic
goals and objectives. However, management acknowledges several areas in which it
needs to improve, including the need to:
Hold senior leaders accountable for implementing human capital strategies;
Develop and carry out good succession plans.
Effectively communicate planned strategies across the Agency.
Establish a comprehensive accountability plan and consistently implement it.
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EPA's Information Systems Security
EPA continues to enhance its Information Security Program. However, the dynamic
nature of security requires continued emphasis and vigilance, and additional actions are
needed to protect EPA's information and systems. For example, EPA needs to:
Establish a systematic monitoring and evaluation program to allow management to
place reliance on collected data and make informed investment decisions.
Implement security and configuration improvements to further ensure that EPA's
information resources are adequately secured.
Improve security practices within EPA's network to prevent misusing Government
resources and detect potential attacks by network users.
Develop and ensure implementation of a training program.
Establish a process to ensure that the Agency's information security plan is practiced
throughout the life cycle of information technology systems.
Establish a policy and management framework to support developing up-to-date
contingency plans for Agency information systems and testing critical components
under circumstances relative to actual deployment.
Management of Biosolids
About 6 million tons of sewage sludge (biosolids) are produced annually by sewage
treatment plants in the United States. With inadequate treatment, these biosolids may
contain a wide variety of chemicals and pathogens. Although a number of biosolids
activities are underway or planned, the Agency has taken the position that biosolids
management is a low-risk activity. We believe that EPA does not know whether current
regulations, when adhered to, are protecting public health. Further, we do not believe
EPA has an overall understanding of the magnitude and quality of biosolids production
and disposal practices, or knows whether the enforcement and compliance resources
committed to managing biosolids are adequate to ensure regulations are adhered to.
Backlog of National Pollutant Discharge Elimination System Permits
The Clean Water Act specifies that National Pollutant Discharge Elimination System
(NPDES) permits expire in 5 years. If the permitting authority receives a renewal
application but does not reissue the permit prior to expiration, the permit may be
"administratively continued." These "backlogged" permits are a major concern because
conditions may have changed since the original permit was issued, and new restrictions
on permits may now apply. EPA has recognized the backlog of NPDES permits is a
nationwide problem and has developed a corrective action plan. EPA's goal has been to
reduce the backlog of NPDES permits to 10 percent for major and minor permits by the
end of calendar year 2004. Although the Agency no longer expects to meet its 2004 goal,
it now says that it is on track for correction by Fiscal 2005.
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Significant OIG Activity
Helping to make air safe and healthy to breathe.
New Source Review Rule Change Found to Harm
Enforcement Efforts Against Coal-fired Utilities
EPA's October 2003 New Source Review (NSR) rule change has seriously hampered the
Agency's ability to enforce against coal-fired power plants.
The NSR provisions of the Clean Air Act require that power plants take steps to install
and operate lower-emitting pollution control technologies when modifications
significantly increase emissions. However, under the NSR rule change, utilities would be
able to undertake projects up to 20 percent of the cost of the power-generating unit
without being subject to NSR requirements. In addition to the rule change eliciting
Congressional interest, 14 States, several cities, and environmental groups sued EPA over
the 2003 NSR rule change, resulting in a December 2003 court stay.
Prior to the proposed rule change, EPA had made substantial progress in reducing
emissions. NSR settlements with 7 companies as of the date of our report were projected
to reduce annual sulfur dioxide emissions by more than 440,000 tons and nitrogen oxide
by more than 210,000 tons. EPA also has a number of cases against coal-fired utilities
that, if fully pursued, could result in additional emissions reductions of more than
1,750,000 tons of sulfur dioxide and 625,000 tons of
nitrogen oxide. Both pollutants are associated with
adverse health effects, including respiratory disease
and infection.
EPA Office of Air and Radiation officials said the
20-percent threshold should not impact ongoing
litigation and development of new cases with utilities.
According to former key enforcement officials, the
NSR rule change impacted EPA's ongoing litigation,
out-of-court settlements, and new enforcement actions
because it weakened their leverage. In January 2004,
the (then) Assistant Administrator for Enforcement and
Compliance Assurance said that establishing a routine
maintenance threshold of 20 percent will "eviscerate
the air enforcement program,"particularly as it impacts
coal-fired utilities.
Emissions from power generation (photo courtesy
U.S. Department of the Interior)
EPA recently announced plans to reconsider the 2003 NSR rule change, and we
recommended that EPA address the rule's impact on enforcement in an open, public, and
transparent manner, including the environmental impact of a definition of routine
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maintenance at any threshold above the threshold desired by key enforcement officials of
the Office of Enforcement and Compliance Assurance of 0.75 percent. We also
recommended that EPA continue to vigorously pursue ongoing enforcement cases, as
well as identify additional coal-fired utilities in violation of the NSR requirements prior
to the October 2003 rule change.
EPA generally disagreed with our report. Many of their comments centered around other
ways the Agency proposes to achieve emissions reductions, which were outside the scope
of our review. Agency officials believe the Clean Air Interstate Rule, under development,
will be more cost-effective than NSR enforcement at reducing emissions. Our review
focused on the NSR rule change, and although we noted some of the Agency's concerns
in our report, we maintain that the October 2003 rule change hampered EPA's NSR
enforcement efforts against coal-fired utilities for both ongoing cases and the
development of new cases.
(Report No. 2004-P-00034, New Source Review Rule Change Harms EPA 's Ability to
Enforce Against Coal-fired Electric Utilities, September 30, 2004)
Sufficient Progress to Reduce Ozone Not Made
in Some Major Metropolitan Areas
Despite national and regional progress, some major metropolitan areas have not achieved
the ozone precursor emission reductions required by the 1990 Clean Air Act
Amendments.
Ground level ozone, the most pervasive urban air pollutant, has been linked to respiratory
illnesses and other serious health problems, such as asthma and heart disease. Over 100
million Americans still live in areas that do not meet EPA's ozone standards.
Photographs of Houston from a 68th floor monitoring location under clear (left) and smoggy
conditions (EPA photo)
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Ozone precursor emissions are those emissions - such as nitrogen oxide and volatile
organic compounds - that cause ozone and thus need to be reduced.
Our analysis of EPA emissions data for "serious," "severe," and "extreme" ozone
nonattainment areas indicated that some major metropolitan areas may not have achieved
the required 3-percent annual emission reductions in ozone precursor emissions, and
some may have even experienced increases. While EPA air trends have emphasized that
ozone levels are declining nationally and regionally, only 5 of the 25 nonattainment areas
designated serious to extreme have experienced substantial downward trends in ozone
levels. Recent downward trends may have been related to changes in weather patterns.
EPA and States encountered numerous difficulties in developing and implementing
adequate emission control plans for reducing precursor emissions. Also, States may have
used inaccurate data, assumptions, and projections of emissions growth, resulting in
fewer reductions planned than required. Additionally, a 1997 EPA policy allowing
nonattainment areas to claim emission reductions from selected sources outside of the
nonattainment areas can potentially result in double-counting, and does not ensure that
reductions do more than just offset growth.
Further, EPA and States have not adequately measured whether the Nation's worst ozone
nonattainment areas have made acceptable progress, and there is no reliable method to
determine whether precursor emissions reduction efforts have been successful.
The Agency generally agreed with our findings; although EPA officials expressed
concern about implementing some of our recommendations, the Agency agreed to
explore implementing some of them.
(Report No. 2004-P-00033, EPA and States Not Making Sufficient Progress in Reducing
Ozone Precursor Emissions in Some Major Metropolitan Areas, September 29, 2004)
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Ensuring that drinking water is safe and sources are protected.
Effectiveness of Effluent Guidelines in Reducing
Pollutant Discharges Uncertain
EPA's effluent guidelines program underwent a number of changes in the 1990s. While
improvements occurred, the impact of those guidelines in reducing pollutant discharges
and meeting Clean Water Act goals remains uncertain.
Effluent guidelines are national technology regulations
that limit the discharge of pollutants to surface waters and
publicly owned treatment works. Guidelines are to be
taken into account as part of the renewal of National
Pollutant Discharge Elimination System permits for
individual facilities' discharge permits.
In the 1990s, EPA began covering a broader range of
pollutants, over a broader array of industries, and issued
guidelines at a faster pace. However, the impact of these
guidelines remains uncertain because data were not
available for us to determine whether newer effluent
guidelines reduced pollutant discharges. In general, EPA
has not systematically collected data to evaluate the
program as a whole.
Our review of permits issued for three types of industry
(pesticide manufacturing; pharmaceutical manufacturing;
and pulp, paper, and paperboard) indicated a lag in issuing
new permits. A high proportion of the expired permits had
been expired for years. These delays slowed the implementation and thus the benefits
(and costs) of effluent guidelines. However, once permits were reissued, permit limits
were derived from effluent guidelines to a very large extent.
Additionally, EPA does not measure the
effectiveness of either the effluent guidelines
program or individual effluent guidelines.
Although our work showed significant pollutant
discharge reductions in a few facilities, EPA has
not systematically collected data to evaluate this
program as a whole.
We recommended that EPA collect and monitor
effluent guidelines data more
Effluent from pulp mills being
discharged into the Columbia
River in Longview, Washington
(EPA photo)
Status of Permits
at 80
«L>
- 60
3.
1 ,
E
z
Fac
Nev
69
36
4
lities with Expired Permits Permits Utilizing
v Permits The Previous
Guideline
Status of permits as of December 31, 2002, for three
industries: pesticide manufacturing; pharmaceutical
manufacturing; and pulp, paper, and paperboard.
10
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systematically, and develop performance measures based on that data. EPA agreed with
our recommendations and is planning to perform retrospective analyses and develop
better performance measures.
(Report No. 2004-P-00025, Effectiveness of Effluent Guidelines Program for Reducing
Pollutant Discharges Uncertain, August 24, 2004)
EPA Needs to Reinforce Pretreatment Efforts
The reductions in industrial waste discharges to the Nation's sewer systems that
characterized the early years of the pretreatment program have not continued. As a result,
progress in meeting Congress' goal of eliminating toxic discharges that can harm water
quality has stalled.
EPA's pretreatment program strives to prevent industrial pollutants from interfering with
wastewater treatment facility operations or passing through facilities untreated into water
bodies. It is a core part of the Clean Water Act's National Pollutant Discharge
Elimination System program.
Because the pretreatment program had been successful in reducing discharges of harmful
pollutants, EPA has directed fewer resources and attention to the program in recent years.
Little progress has occurred since the middle of the 1990s (see chart); further progress is
needed to safeguard public health.
Discharge Reductions Have Leveled
Since 1
Cfl
O
Q.
100,000,000 -
50,000,000 -
_
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-
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1987 1989 1991
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1997 1999 2001
anufacturing
For publicly owned treatment work facilities reviewed, those with approved pretreatment
programs experienced about half the pass-through/interference events as those without
approved programs. Therefore, EPA should attempt to increase the number of facilities
with approved pretreatment programs.
Without more visible leadership from EPA, improved programmatic information, and
adoption of results-based performance measures, EPA's pretreatment program is at risk
11
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of losing its early gains. EPA has delayed finalizing guides and regulations intended to
update the program.
We recommended that EPA determine meaningful performance measures and provide the
necessary resources and guidance for the pretreatment program. A long-term strategy also
needs to be developed. EPA indicated it has undertaken various steps to assess and
improve its efforts in this area.
(Report No. 2004-P-00030, EPA Needs to Reinforce Its National Pretreatment Program,
September 28, 2004)
Source Water Assessments Providing Benefits,
But Many Not Meeting Deadlines
The Source Water Assessment Program was established under the Safe Drinking Water
Act Amendments of 1996 to have States analyze existing and potential threats to public
drinking water quality. The intent was to prevent contaminants from getting into a
drinking water system in the first place, which is often easier and more cost effective than
removing contaminants through treatment after the fact.
Only 40 percent of the States had fully completed their community water system
assessments and made them publicly available by September 2003. Still, this was
significant progress over prior years, and the
States we visited were working hard toward
completing the task. Limited human resources,
data issues, and public participation were
among the reasons for delay.
States With Completed Assessments
as of September 30, 2003
The assessments appear to have been beneficial.
While State approaches differ, the consensus is
that the information obtained and the quality of
the assessments can lead to protection efforts
and be incorporated into other quality
management programs. Nonetheless, some
stakeholders raised concerns about the
usefulness of some assessments.
Percent
Completion
100
90 to 99
50 to 89
10 to 49
1 to 9
none
Washington, DC
and Puerto Rico
No. of
States*
20
8
12
2
3
5
was at 100 percent
at 17 percent.
EPA agreed with our recommendations to continue developing measures that better
capture the program's results and develop guidance to help States address uncertainties
regarding what assessment information should be released to the public in light of recent
security concerns.
(Report No. 2004-P-00019, States Making Progress on Source Water Assessments, But
Effectiveness Still to Be Determined, May 27, 2004)
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Improving waste management and cleanup - includes Superfund.
Disposal of Electronic Waste Needs
More National Direction
EPA has made various efforts to address the growing problem of electronic waste
(E-waste), but the potential benefits of its efforts have not been fully realized because the
projects have not been implemented or coordinated in support of a clear set of goals and
measures. In the absence of clear national guidelines, States are actively pursuing their
own mechanisms to regulate E-waste.
Use of electronic devices (computers, cellular phones, televisions, etc.) has increased
dramatically in recent years, and there are significant environmental concerns related to
disposing of such waste due to the hazardous chemicals they often contain. The
electronic waste stream is growing about three times faster than the municipal waste
stream. Two million tons of E-waste are estimated to be generated each year that may
contain high volumes of heavy metals,
including an estimated 300 million pounds
of lead. Due to current laws, household
E-waste can be disposed of in municipal
landfills (although California and
Massachusetts ban such practices).
In response to the growing challenge of
E-waste, EPA's Office of Solid Waste has
implemented or participated in many
recent projects, at a cost of over $2
million, that have enhanced the general
awareness of the issues and included a
wide range of stakeholders. However, that
Office has not defined its E-waste goals or
measures.
Further, projects were developed without
apparent coordination at the national level,
and in the absence of a defined national E-
waste policy, States have adopted varying
approaches to address this issue.
Computer equipment at a landfill (photo courtesy Snohomish
County, Washington)
Also, existing data collected on E-waste, including volumes of E-waste from household
sources, are inadequate to support program management decisions. Consequently, any
program efforts are forced to rely upon speculative data.
We recommended that EPA define the E-waste program, goals, performance measures,
and data requirements; ensure that future E-waste projects are linked to those goals and
are coordinated; and take action to collect needed data. EPA generally agreed with our
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recommendations and indicated it will enhance its communications and coordination with
stakeholders, and take steps to improve how it addresses E-waste.
(Report No. 2004-P-00028, Multiple Actions Taken to Address Electronic Waste,
But EPA Needs to Provide Clear National Direction, September 1, 2004)
EPA Should Provide Tribal Superfund Program
with Clearer Direction
EPA has been a Federal leader in efforts to develop tribal relationships, and was the first
Federal agency to adopt a formal Indian policy. EPA has undertaken various efforts since
1998 to enhance the tribal role in the Superfund program. However, EPA has still not
fully developed its tribal strategy in relation to Superfund, even though the strategy was
initiated in 2002, and the Agency needs to do so.
EPA's tribal strategy lacks a detailed implementation plan, including milestones,
priorities, targets, and measures. Also, strategy completion has been hindered because of
little emphasis from top leadership, a lack of clear goals, missing critical information, and
EPA regions not being included in its
development. In the absence of clear
direction, EPA regions have
developed divergent regional tribal
programs. This makes it difficult for
EPA to consult with and protect tribal
interests when making Superfund
decisions.
Superfund Obligations by Region
(Fiscal 1996-2003)
Millions of dollars obligated
Region 2
8.2%
Region 1
$0.04
0.2%
Region 10
17.2%
Region 9
22.6%
Region 6
35.4%
Region 8 J
11.9%
Note: In Region 3, there are no Federally recognized tribes.
In Region 7, no tribal Superfund dollars were obligated.
During case studies of six tribes, we
noted that the stronger and more
effective relationships demonstrate
four important characteristics:
frequent and timely communication,
appropriate information sharing,
addressing issues raised by tribes, and
operating in a government-to-
government relationship. Ultimately,
successful partnerships create more
effective decisions.
The Agency concurred with our
recommendations and agreed to take
actions to finalize its tribal strategy,
with tribal and regional input, during
Fiscal 2005.
(Report No. 2004-P-00035, Tribal Superfund Program Needs Clear Direction and
Actions to Improve Effectiveness, September 30, 2004)
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Some States Unable to Address Assessment Needs
and Face Future Superfund Challenges
Some States need to address backlogs in site assessments in order to improve their
hazardous waste site cleanup programs, and need to increase their capacity to take
cleanup actions at additional sites in the future.
Although the five States reviewed (Kansas, Michigan, New Jersey, Pennsylvania, and
Washington) have all implemented processes for identifying, assessing, investigating, and
prioritizing hazardous waste sites similar to
EPA's remedial process for the Superfund
program, three of the States had a total backlog of
423 sites awaiting site assessment, and one of the
remaining two States also appeared to have a
backlog (see table).
State Assessment Backlogs
Until these backlogs are eliminated, the States
cannot assure that sites posing the greatest threat
to human health and the environment are being
addressed promptly, and the backlogs may limit
the States' capacity to address future hazardous
waste sites, including those on the National
Priorities List.
State
Sites Pending
Assessment
Kansas
New Jersey
Washington
Total
92
52
279
423
Pennsylvania officials indicated a
backlog of approximately 90 sites,
but we could not confirm that backlog.
Michigan did not have a backlog.
The five States reviewed have developed cleanup standards based on risk and sound
science that should be sufficiently protective of the environment, but their processes are
more streamlined than the baseline approach established by EPA. Therefore, if EPA
wants the States to assume a larger role in addressing National Priorities List sites, it
should consider giving the States greater flexibility regarding the approaches to use.
Additional Superfund Reviews
Idaho outlays of $649,362 for the Bunker Hill
cleanup were questioned (see page 22).
Additional measures were suggested for the
Marjol Battery site (see page 27).
The remedy at the Stauffer site was found to
be adequate, but opportunities for
improvement exist (see page 28).
Appropriate actions were generally taken at
the Escambia site (see page 28).
Radioactive contamination was properly
discounted at the Industrial Excess Landfill
site (see page 29).
In response to a request, we provided
Congress with details on Superfund
administrative costs (see page 37).
Over the next 10 years, States will be assuming
additional operation and maintenance responsibilities
for long-term response actions at many sites, but
many States may not have the resources needed to
undertake these future obligations because of
declining budgets.
We made various recommendations to help EPA in
enhancing the role of States as co-implementers of
the Superfund program, and EPA and the States
reviewed generally agreed with our
recommendations.
(ReportNo. 2004-P-00027, Some States Cannot
Address Assessment Needs and Face Limitations in
Meeting Future Superfund Cleanup Requirements,
September 1, 2004)
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Cross-Media
Issues involving overlapping areas - includes homeland security.
Petroleum Refinery Compliance Program
Progressing But Needs Tracking Improvement
EPA's national refinery compliance program, which began in 1996, has led to a
succession of useful tools and strategies as the program evolved and as EPA identified
specific compliance problems. EPA and the U.S. Department of Justice have developed
and implemented an integrated refinery compliance strategy that addresses the most
important noncompliance problems.
EPA's integrated strategy includes compliance assistance, inspections, enforcement, and
compliance incentives. As of March 2004, the program resulted in refineries agreeing to
invest more than $1.9 billion in pollution control technologies, pay civil penalties of
$36.8 million, and implement supplemental environmental projects valued at
approximately $25 million. EPA projects annual reductions of approximately 44,000
tons of nitrogen oxide and 95,000 tons of sulfur dioxide.
However, EPA's performance measurement
and reporting approach for the national
petroleum refinery program has not provided
useful and reliable information necessary to
effectively implement, manage, evaluate, and
continuously improve program results. EPA has
not established and communicated clear
goals, systematically monitored refinery
program progress, reported actual outcomes, or
tracked progress toward achievement of
consent decree goals.
A petroleum refinery (EPA photo)
EPA learned several important lessons that it
should apply to its refinery program and
perhaps other enforcement and compliance assurance programs. These include focusing
on specific enforcement concerns and encouraging EPA regional and headquarters staff
to effectively work together.
We made various recommendations to EPA regarding improving goals and improving
consent decree implementation and tracking. EPA agreed with the majority of the
recommendations, but expressed concern that our report did not reflect the amount of
progress made.
(Report No. 2004-P-00021, EPA Needs to Improve Tracking of National Petroleum
Refinery Compliance Program Progress and Impacts, June 22, 2004)
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EPA Efforts to Protect Children Need Better
Coordination
We noted several impediments to the effectiveness of EPA's Office of Children's Health
Protection (OCHP), including the lack of a permanent director since April 2002 and no
overall, coordinated strategy.
OCHP, established in 1997, is responsible for integrating the Agency's efforts on behalf
of children, who are more vulnerable than the general population to environmental health
hazards such as air pollution to lead-based paints.
While OCHP is responsible for implementing EPA's national agenda to protect children,
it was not directly responsible for many of the agenda's goals. Further, no overall,
coordinated strategy integrated children's environmental health efforts into the Agency as
a whole, and no active communication process existed between the various EPA offices.
We recognize that OCHP, along with several EPA program and regional offices, have
taken actions in several areas related to children's health protection, but there needs to be
a focus on results rather than activity.
EPA designated OCHP as its lead for the Agency's Aging Initiative following
announcement of the initiative in October 2002. Although children and the elderly are
both considered susceptible populations, we question whether the same office should be
responsible for both, particularly if sufficient additional resources are not provided.
In response to our recommendations, the Agency agreed to improve its coordination,
communication, and planning efforts; and expedite appointing a permanent director for
OCHP. Regarding our recommendation to reconsider what office should be responsible
for the Aging Initiative, EPA decided to continue having OCHP be responsible.
(Report No. 2004-P-00016, The Effectiveness of the Office of Children's Health
Protection Cannot Yet Be Determined Quantitatively, May 17, 2004)
Key Actions Taken by EPA Related to Children's Health
1995: EPA Issued Agency-Wide Policy to ensure that EPA consistently
and explicitly evaluates environmental health risks of infants and children.
1996: EPA Announced National Agenda to Protect Children's Health from
Environmental Threats, in which the Agency called for a national commitment to
i a healthy future for children.
1997: Office of Children's Health Protection Established by EPA to formalize
and integrate the Agency's efforts on behalf of children.
1998: Children's Health Research Program Initiated by the Office of
Research and Development to conduct research and provide methods to
reduce uncertainties in EPA risk assessments for children.
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EPA Should Use Vulnerability Assessments to
Update Water Security Research Action Plan
As a result of the Public Health Security and Bioterrorism Preparedness and Response
Act of 2002, EPA awarded $51 million in grants to help large utilities prepare
vulnerability assessments required under the Act. Pursuant to the Act, the Office of
Water's Water Security Division stores and limits access to the vulnerability assessments.
Despite the breadth, expense, and proximity of the water utility vulnerability assessments,
EPA's Office of Research and Development had not requested access from the Office of
Water to these assessments, which may contain valuable information that would allow
EPA's research staff to update and make the Agency's Water Security Research Action
Plan more effective against potential terrorist attacks.
We recommended that EPA's Office of Research and Development seek, and the Office
of Water grant, access to the water utilities' vulnerability assessments, and EPA agreed.
(Report No. 2004-P-00023, EPA 's Final Water Security Research and Technical Support
Action Plan May Be Strengthened Through Access to Vulnerability Assessments, July 1,
2004)
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Grants
Improving EPA's use of assistance agreements.
EPA Needs to Improve Oversight of
Alaska Village Safe Water Program
EPA Region 10 needs to improve its oversight of grants awarded to Alaska for the
Village Safe Water Program to better safeguard those funds and ensure effective results.
Over the past 10 years, EPA awarded Alaska 15 grants, totaling $232 million, to
construct water and sewer systems in rural Alaskan villages. In January 2004, the Alaska
State Legislature Division of Legislative Audit issued a report raising a number of issues
regarding Alaska's management of the program, which led to our audit.
The lack of oversight was due to the Region's perception that the earmark grants awarded
for the program were pass-through funds and did not require the oversight and
management required of other grants. Consequently, pre- and post-award reviews often
were not conducted.
Examples of Problems Noted
The Region was unaware of deficiencies in the State of Alaska's
administration of the program as outlined in the Alaska
Legislative Auditor's report.
The State had an excessive cash balance of more than
$13 million as of June 30, 2002.
The Region could not determine whether environmental and
health objectives were met.
The Region was unable to determine whether grants met
legislative objectives to improve health and sanitation conditions
and provide training, technical assistance, and educational
programs.
The Region was unable to determine whether funds were
properly allocated between facilities construction and training for
operations and maintenance.
outcomes. The Region agreed with our
various corrective actions.
Further, the Region did not have an overall
plan for implementing, conducting, and
monitoring the grants for the program, and
did not develop goals, objectives, and
measures for the grants, as required. The
Region did not place the needed emphasis
on the program as it evolved from a small
pilot project to a large, continuing
program. Examples of the problems noted
are in the table.
We recommended that the Region 10
Administrator improve Village Safe Water
Program oversight through increased
emphasis on grants management and
establishing goals, objectives, and
recommendations and has taken or is planning
(Report No. 2004-P-00029, EPA Oversight for the Alaska Village Safe Water Program
Needs Improvement, September 21, 2004)
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Environmental Measures Needed for
Clean Water State Revolving Fund
EPA needs to increase its leadership role in measuring the environmental benefits of the
Clean Water State Revolving Fund.
As of 2003, the Clean Water State Revolving Fund, designed to provide loans to States
for achieving clean water, had $47 billion available for projects. While EPA for years has
had good indicators to measure the Fund's
financial performance, the Agency has not
developed environmental outcome measures.
While EPA has been working on developing
environmental measures since 1998, EPA
and the States have not established a uniform
set of specific measures. Further, EPA has
not developed a comprehensive plan for
measuring the results of the Fund (see box).
Questions EPA Needs to Answer to Measure
Clean Water State Revolving Fund Results
What measures are feasible?
How will the measurements be conducted and funded?
Who will be responsible for collecting, organizing, and
analyzing data?
How will the environmental results be integrated into planning
and budgeting decisions by EPA, the States, and Congress?
As a result, EPA did not know the actual
environmental impact of the Clean Water
State Revolving Fund, and could not
compare the impact of individual water
quality programs and make informed resource allocations. We recommended that EPA
develop a plan for establishing measures. EPA agreed and has a goal of developing a
suite of proposed indicators by February 2005.
(Report No. 2004-P-00022, Stronger Leadership Needed to Develop Environmental
Measures for Clean Water State Revolving Fund, June 23, 2004)
Missouri Clean Water State Revolving Fund
Weaknesses Noted
We issued an unqualified opinion on the financial statements of the State of Missouri
Department of Natural Resources Clean Water State Revolving Fund for the year ended
June 30, 2003, but issued a qualified opinion on the compliance requirements.
Missouri did not maintain an adequate accounting system to account for State Revolving
Fund activities in accordance with the Clean Water Act, resulting in the qualified
compliance opinion. The system only accounted for the fund's cash balance, and did not
account for loans receivable, construction loan funds, revenue bonds, bond reserves, EPA
capitalization grants, and other accounts. Total loans receivable alone for the period
(excluding reserve loans) were approximately $773 million.
We also noted several matters involving the internal control structure and its operations
that we considered material weaknesses. Subsidiary systems did not provide adequate
controls of the Clean Water State Revolving Fund balance and activities, and
management was unable to access payroll/time charges in regional offices.
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Missouri recognized the accounting system shortcomings and was in the process of
developing and implementing a new system. Missouri also agreed to correct the other
deficiencies noted.
(Report No. 2004-1-00057, Auditor's Report for the State of Missouri Department of
Natural Resources Clean Water State Revolving Fund for the Year Ended June 30, 2003,
is sued May 6, 2004)
Sewerage Association's Cooperative Agreement
Outlays of $681,413 Questioned
We questioned unallowable outlays of $681,413 made to the Association of Metropolitan
Sewerage Agencies related to contract costs because the Association did not perform an
adequate analysis to support that the price paid was reasonable. The questioned outlays
were part of $1,159,516 in outlays provided under three cooperative agreements.
The Association had received the funding for various projects involving municipal
wastewater treatment facilities, such as developing a vulnerability assessment tool to help
the facilities develop safeguards against potential terrorist attacks.
We questioned the $681,413 in contract costs because the Association's price analysis for
a sole source contract was not sufficient to show that the contract costs paid were
reasonable and allowable in accordance with Federal regulations. We also reported on
several instances of noncompliance with Federal regulations.
We concluded that the Association needs to:
Prepare written accounting procedures for direct and indirect costs.
Ensure cash draws are limited to actual and immediate need.
Perform acceptable cost or pricing analyses for all procurement actions.
Incorporate required contract provisions into all contracts.
Submit required financial and performance reports.
Submit an acceptable indirect cost proposal.
We recommended that EPA recover the $681,413 and ensure needed corrective actions
are implemented.
(Report No. 2004-4-00038, Association of Metropolitan Sewerage Agencies -
Costs Claimed Under EPA Cooperative Agreements X827577-01, X828302-01, and
X829595-01, August 31, 2004)
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Idaho Outlays of $649,362 for Bunker Hill Cleanup
Questioned
We questioned unallowable outlays of $649,362 that Idaho made to meet cost sharing
requirements for Federally funded remedial actions at the Bunker Hill Superfund site.
Of the $7,936,605 in outlays made by Idaho under Cooperative Agreement No.
V990431-01, we questioned $649,362, as shown in the following table:
Questioned Costs
Unallowable costs incurred before award of cooperative agreement $366,649
Unsupported payroll costs 116,490
Unallowable pre-remedial action costs 29,933
Duplicate costs 82,933
Excess costs reported for institutional controls program 53,357
Total $649,362
In our opinion, because of the questioned costs, the outlays reported on the State's
Financial Status Report do not present fairly, in all material respects, the allowable
outlays incurred in accordance with the criteria set forth in the agreement.
We recommended that EPA disallow the questioned costs. A response from EPA
Region 10 is pending.
(Report No. 2004-4-00016, Idaho Superfund Credit Claim Under EPA Support Agency
Cooperative Agreement No. V990431-01, June 2, 2004)
Testimony on Grants
On July 20, 2004, Inspector General Nikki Tinsley testified before a Congressional committee
on the need for EPA to improve how it measures environmental results from the Clean Water
State Revolving Fund as well as other grant programs (see page 40).
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Financial Management
Improving the Agency's financial management.
EPA Earns Unqualified Opinion for
Pesticides Fund Financial Statements
EPA received an unqualified opinion on its Fiscal 2003 Pesticides Reregistration and
Expedited Processing Fund (known as the FIFRA Fund) financial statements. Fees
collected to expedite pesticide reregistration are deposited in the FIFRA fund.
In our opinion, the financial statements presented fairly the assets, liabilities, net position,
budgetary resources, financing activities, and reconciliation of net costs to budgetary
obligations of the FIFRA fund, as of and for the years ended September 30, 2003 and
2002, in accordance with generally accepted accounting principles.
While we found no material weaknesses, we identified three reportable conditions:
We could not assess the adequacy of the automated internal control structure as it
related to automated input, processing, and output controls for the Integrated
Financial Management System.
We could not attest to the accuracy of performance measure outcomes disclosed in
the report, including whether certain accomplishments reported were final and
completed.
The timing of issuing performance measure reports and the fiscal year did not
coincide, since information from a report generated several months into Fiscal 2004
was used.
We recommended that EPA better explain the reported progress in reducing the number
of required reregistration studies.
(Report No. 2004-1-00071, Fiscal 2003 and 2002 Financial Statements for the Pesticides
Reregistration and Expedited Processing Fund, June 3, 2004)
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Business Systems
Improving the Agency's business processes and systems.
EPA Implementing Human Capital Activities
But Challenges Remain
EPA offices are prepared to implement strategic human capital management activities to
ensure that employees possess appropriate skills needed for mission accomplishment, but
an alignment of the office-level activities to the Agency's Strategy for Human Capital is
lacking.
Based on a January 2004 survey, senior executives are familiar with and committed to the
Agency's human capital initiatives. However, we noted widespread variation among
headquarters and regional offices in implementing the strategy (see table). Such activities
have not been fully integrated into the Agency's core business processes.
EPA offices have widespread variation in activities related to:
Human capital strategic plan development and implementation.
Workforce planning, analysis, and deployment.
Communicating human capital activities.
Use of human capital performance measures.
Establishment of human capital accountability systems.
Ultimately, if EPA does not fulfill its human
capital vision of having "people with the
right skills, in the right place, at the right
time to protect human health and the
environment," its ability to achieve its
environmental mission may be impeded.
^^^^^^^^^^^_^^^^^^^^^^^_ We made various recommendations for
EPA to more thoroughly integrate human
capital management activities and measures
into its core business processes. The Agency concurred with our recommendations and
noted several planned and ongoing activities, although in some cases EPA needs to better
describe the commitment to implementing corrective actions.
(Report No. 2004-P-00024, EPA Prepared to Implement Strategic Human Capital
Management Activities But Challenges Remain, September 20, 2004)
Change Controls for Integrated Financial
Management System Need Strengthening
We found a general breakdown in security controls for EPA's Integrated Financial
Management System (IFMS) that could undermine the integrity of the system's software
libraries and financial system data.
Duties were not adequately segregated, individuals used an inappropriate ID or continued
to have system access after no longer needing it, and contractor personnel were granted
access to IFMS without successful security screening. The potential for unauthorized or
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unapproved changes places the Agency at risk that the availability, confidentiality, and
integrity of EPA's accounting and financial reporting functions could be compromised.
Also, EPA was not properly managing the contract for IFMS software modifications,
involving the Change Management System. Further, EPA continued to use contract
practices that gave the appearance of an improper personal service relationship with the
contractor, as evidenced by orally instructing the contractor to improperly modify
$222 million in IFMS transactions.
We made various recommendations for improving IFMS controls, including performing a
risk assessment of IFMS's off-the-shelf general support system used to develop, test, and
maintain IFMS libraries and software. The Chief Financial Officer generally concurred
with our recommendations. However, the Office of Administration and Resources
Management did not concur with our recommendations concerning contractor
background investigations, asserting that such screenings are not required for Federal
contractors. Management stated its existing, interim procedures were sufficient to guide
offices that chose to initiate background investigations. We continue to maintain that
contractor personnel with access need the same level of screening as Agency personnel.
(Report No. 2004-P-00026, EPA Needs to Improve Change Controls for Integrated
Financial Management System, August 24, 2004)
Federal Information Security Management Act
Review Notes Positive Actions
In our report on the Fiscal 2004 status of EPA's computer security program, as required
under the Federal Information Security Management Act, we found that in general the
Agency has taken positive actions to secure information resources.
EPA has developed, implemented, and is managing an adequate, Agency-wide plan of
action and milestones process. The Agency's Certification and Accreditation process
generally complies with Federal guidance. The Agency's incident detection and handling
practices comply with documented policies and procedures. EPA continues to make
improvements in providing and recording training to ensure security training and
awareness of all employees, including contractors.
The Agency has implemented adequate physical security controls to protect its network
firewalls, although we noted logical and configuration control weaknesses that need to be
improved. We also noted a general breakdown of security controls that could undermine
the integrity of one system - EPA's Integrated Financial Management System, including
inadequate segregation of duties and use of inappropriate identifications.
(Report No. 2004-S-00007, Federal Information Security Management Act:
Fiscal Year 2004 Status of EPA 's Computer Security Program, September 30, 2004)
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Federal Financial Management Improvement Act
Issue Noted
The Federal Financial Management Improvement Act requires us to report on the
Agency's progress to remediate significant weaknesses in financial management systems.
Last year, we stated that EPA had taken all necessary actions to correct security
weaknesses in the 1999 Remediation Plan, except for a significant weakness related to
establishing a background check program for non-Federal personnel, including
contractors, by 2002.
Although the Chief Financial Officer issued policy to require the appropriate personnel
screening for non-Federal employees accessing EPA's Integrated Financial Management
System, recent audit work disclosed that the policy was not being fully implemented in
that some contractor personnel had inappropriate access. Formalizing Agency-wide
procedures would bring needed structure and consistency to the personnel screening
process.
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Public Liaison
Addressing specific concerns of the public.
Additional Measures Needed at Marjol Battery Site
Our review of citizens' concerns regarding the Marjol Battery Site in northeastern
Pennsylvania found that sufficient actions were taken at the site, although additional
precautionary measures can be taken.
Approximately 5,500 people live within a one-mile radius of the site, located in the
Borough of Throop. Polyaromatic hydrocarbons (PAHs), polychlorinated biphenyls
(PCBs), and lead were identified in the surface soil in the site's former operational areas.
Prior to the site being a battery
processing facility, coal mining had
been done at the site.
A technical expert - a mining
engineer - with whom we contracted
concluded that excavating all
material in the northern portion of
the site and placing the remaining
soil under permanent solidified caps
will be sufficiently protective. Also,
although residents were concerned
about the potential for mine fires in
two underground coal seams, the
expert indicated that the chance of
these two seams having been mined extensively is low. Therefore, the risk of mine fires
in these two seams would be low.
Aerial view of Marjol Battery Site (EPA photo)
Nonetheless, the expert said that potential surface strains should be calculated at the site
and compared to allowable strains for the permanent solidified cap. Also, a consultant for
the Borough said the objection to the proposed final remedy will be removed if 8 to 12
additional boreholes are drilled through the 2 seams of concern, to ensure the seams have
not been mined extensively and thus are not susceptible to mine fires. Consequently, to
allay residents' concerns, we recommend that the drilling be done, even though no
specific evidence indicates it is necessary.
EPA agreed with our recommendation to calculate the surface strains, and in its final
response (subsequent to report publication) agreed to work with the Borough to evaluate
the potential for mine fires at the site.
(Report No. 2004-P-00017, Ombudsman Review of the Marjol Battery Site, Throop,
Pennsylvania, May 18, 2004)
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Remedy at Stauffer Superfund Site Adequate,
But Opportunities for Improvement Exist
We found that EPA followed required procedures for remedy selection, oversight, and
community involvement at the Stauffer Chemical Company Superfund Site in Tarpon
Springs, Florida. However, additional action can be taken regarding findings in recent
studies as well as to enhance community relations.
Phosphorus sludge has been removed from above-ground storage tanks at the site, and
EPA has signed a record of decision addressing heavy metals and radiation in soil and
waste. However, citizens are concerned, among other things, that old and forming
sinkholes could cause structures at the site to subside and thus create pollutant pathways.
An independent expert - a hydrogeologist - retained by the OIG concluded that EPA's
selected remedy is feasible. However, the remedy is only feasible if the design
incorporates cautionary recommendations included in the June 2003 draft report on the
geophysical study, and if additional groundwater characteristics information and analysis
are addressed.
We concluded that EPA Region 4 appropriately monitored site activity, early geophysical
and groundwater studies, and site contaminant identification. However, EPA should have
ensured that the subsequent 2001-2003 studies were completed earlier to better address
the potential for sinkholes.
Although Region 4 generally met community involvement requirements, a segment of the
community was dissatisfied with EPA efforts. More site visits and increased efforts to
obtain community input may have improved community relations.
EPA agreed with our recommendations to implement cautionary recommendations from
previous geological studies, study groundwater further, and revise its community
relations plan for the Stauffer site.
(Report No. 2004-P-00018, Review of Actions at Stauffer Chemical Company Superfund
Site, Tarpon Springs, Florida, June 3, 2004)
Appropriate Actions Generally Taken at
Escambia Site
We found that EPA cleanup planning, relocation of residents, and community relations
were appropriately conducted at the Escambia Wood Treating Superfund site, Pensacola,
Florida, although we noted several potential areas for improvement.
The Escambia site in EPA Region 4 is an abandoned wood preserving facility where
various health risks were identified and about 358 households were permanently
relocated. This case was transferred to us by the Agency's former National Ombudsman.
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Overall, EPA took appropriate cleanup planning actions at the site. EPA plans to conduct
a remedial action to address the contaminated soil mound and contaminated ground
water. We noted that it could be beneficial for the Region to include State, local
government, and community concerns in future sampling and analysis plans.
The U.S. Army Corps of Engineers effectively implemented a very large and complex
residential relocation project at the site. To enhance future relocations, Region 4 should
continue to require the Corps to
provide appraisal details to
property owners, more closely
monitor housing inspections, and
allow residents a period of time to
report replacement housing
problems and obtain
reimbursement for legitimate
repairs.
EPA made efforts to inform the
community and keep them abreast
of activities at the site. To bolster
community relations in the future,
EPA should consider reviewing
and updating the site Community A condemned property near the Escambia site (EPA OIG
Involvement Plan, conducting photo)
more public meetings, and
providing compact disks and courtesy copies of future administrative record documents
to community representatives.
(Report No. 2004-P-00032, Review of Actions at Escambia Treating Company Site,
Pensacola, Florida, September 30, 2004)
Radioactive Contamination Properly Discounted
at Industrial Excess Landfill Site
We found that EPA Region 5 had properly discounted radioactive contamination at the
Industrial Excess Landfill Superfund site, Uniontown, Ohio. We also concluded that the
remedy selected was in accordance with policy.
Citizens brought these issues to our attention because of concerns that the landfill was
contaminated with radioactive waste, and that the method used to clean up the ground
water was inappropriate. That method, monitored natural attenuation, involves a variety
of processes that act without human intervention to reduce the contaminants in soil or
ground water.
In the early 1990s, the landfill was tested for radioactivity; in 1995, EPA's Science
Advisory Board concluded it was unlikely that radioactive contamination was present at
the site. A radiation expert, retained by the Office of Inspector General, determined that
2000 and 2001 ground water tests met the requirements for drinking water, with respect
to radioactivity, and that the water did not pose a danger to public health.
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A 1997 photo of Industrial Excess Landfill, with site fence and boundary
noted and arrow indicating direction north (photo from September 2003
"Remedial Design Plan for the IEL Site," prepared by Sharp and
Associates, Inc., for Responding Companies)
We also found that EPA policy was followed in selecting monitored natural attenuation,
that the landfill site was appropriately sampled and analyzed, and that contaminants from
the site that could pose a danger to public health were being appropriately monitored.
(Report No. 2004-P-00031, Review of Actions at Industrial Excess Landfill Superfund
Site, Uniontown, Ohio, September 29, 2004)
Additional Public Liaison Reviews Conducted
The Office of Inspector General successfully resolved 16 complaint cases submitted to
our Ombudsman office, including Hotline complaints.
Most complaints dealt with issues surrounding Agency cleanup decisions or matters of
public health. For example, the Ombudsman review of the accidental emission of high
levels of vanadium pentoxide by the Wyoming Refinery, Newcastle, Wyoming,
concluded that the release may have contributed to the higher incidents of pulmonary
disease, such as asthma, lung fibrosis, and reactive airway disease. At least 22 citizens
reported adverse health effects. The Ombudsman office referred the matter to the Agency
for Toxic Substances and Disease Registry, recommending that a public health
assessment be performed to determine the extent of exposure to the residents of
Newcastle. The Agency for Toxic Substances and Disease Registry subsequently
announced its intention to conduct an assessment.
The Ombudsman review of the hazardous waste incinerator of Von Roll/Waste
Technologies Industries, East Liverpool, Ohio, addressed public and Congressional
concerns surrounding potential toxic emissions and failure to meet permit conditions.
We found that the Agency took a number of steps to address the public's concerns about
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facility emissions, which included conducting five rounds of ambient air sampling and
two rounds of soil testing in the East Liverpool community. Our Field Engineer
independently observed successful stack test burns.
Hotline Activity
The following EPA Office of Inspector General Hotline activity regarding complaints
of fraud, waste, and abuse in EPA programs and operations occurred during the past
semiannual and annual periods:
Semiannual Period Annual Period
(April 1- (October 1,2003-
September 30, 2004) September 30, 2004)
Inquiries and Complaints
Received During Period 436 927
Issues Handled by
EPA Office of Inspector General
Complaints Open
Beginning of Period 6 6
Inquiries Addressed 103 182
Complaints Opened 13 37
Complaints Closed 2 26
Complaints Open End of Period 17 17
Issues Referred to Others
EPA Program Offices 76 209
EPA Criminal Investigation Div. 3 6
Other Federal Agencies 55 97
State/Local Agencies 175 385
Note: The Office of Inspector General's Hotline receives many informational "inquiries," not all of
which relate to EPA activities, as well as "complaints" about specific EPA programs and
operations. Inquiries are typically addressed without the need for a formal assessment,
whereas complaints are evaluated and may result in detailed reviews.
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Investigations
Investigating laboratory fraud, financial fraud, and computer crimes.
Laboratory Fraud
Laboratory President Convicted at Trial
On August 17, 2004, following a jury trial, Edward V. Kellogg, President, owner, and
Quality Control Officer of Johnson Laboratories, Inc., New Cumberland, Pennsylvania,
was found guilty of 34 counts of mail fraud. The charges were filed in May 2003 in
U.S. District Court, Eastern District of Pennsylvania.
The indictment charged that from May 1998 through July 2000, Kellogg engaged in a
scheme to defraud customers of Johnson Laboratories by creating and billing customers
for false and fraudulent environmental test reports. Sentencing is scheduled for January
2005.
Johnson Laboratories provided analytical testing of environmental samples, including
water and wastewater, to municipalities and commercial clients required to comply with
environmental laws and regulations administered by EPA. Among the tests prepared by
Johnson Laboratories were tests for volatile organic compounds (VOCs), a contaminant
whose presence in water is regulated by EPA. VOCs can contaminate drinking water, and
VOCs in wastewater may be discharged into rivers and streams, which affect fish,
wildlife, and potential drinking water sources.
As the head of the business, Kellogg allowed environmental test results to be fraudulently
prepared and billed to customers. These test reports were false in that they purported to
contain the results of VOC testing performed in accordance with EPA method 601/602,
when in fact Kellogg knew this testing method had not been used. Instead, VOC testing
had been performed under the lesser inclusive EPA method 624. Johnson Laboratories
did not have the necessary laboratory instruments to perform the tests in accordance with
EPA method 601/602 as reported to customers.
This investigation was conducted jointly with the EPA Criminal Investigation Division,
the Pennsylvania Attorney General's Office, and the Pennsylvania Department of
Environmental Protection.
Petroleum Refiner and Affiliates Debarred
On June 14, 2004, Jet-Pep, Inc., an Alabama refiner of conventional gasoline, was
debarred for 3 years as a result of its August 2003 criminal conviction for making a false
statement to the EPA in violation of the Clean Air Act. In addition, Robert G. Norris,
President, and four affiliates of Jet-Pep were also debarred for 3 years each. The
affiliates were Tee's Enterprises; Myrt, Inc.; Morris Oil Co., Inc.; and R D S Properties,
Inc.
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Jet-Pep had been required to submit an annual report to EPA enumerating the gallons of
gasoline produced or transferred, along with compliance results of the blendstocks.
Among the compliance calculation results that had to be reported was the average T90
value of the gasoline (the distillation characteristic reflecting the measure at which
90 percent of gasoline evaporates). From 1995 through 1998, Jet-Pep failed to perform
the T90 analysis on any of its blendstocks, and a Jet-Pep employee falsified all of the
requisite distillation results. As a result, from 1996 through 1999, Jet-Pep submitted its
annual report to the EPA knowing each report contained a false T90 value.
This investigation was conducted jointly with the EPA Criminal Investigation Division.
Computer Crimes
Office of Inspector General Partners with Agency
to Reduce Computer Misuse
The Office of Inspector General Computer Crimes Directorate (CCD) has partnered with
the Office of Environmental Information in an effort to identify and investigate instances
of computer misuse by EPA network users.
During the last 6 months, the CCD assessed incidents involving unauthorized software
installed on EPA computers and networks, access to inappropriate Internet sites by
employees and contractors, and other actions that exposed the Agency to such dangers as
viruses, worms, trojans, and theft of information. The CCD has also been involved in
supporting the Agency as it deals with misuse issues, including support in developing
incident response training and awareness programs for Agency personnel.
As a result of this partnership and Office of Inspector General investigative efforts,
during this semiannual period, one EPA employee was suspended for 5 days for
downloading pornographic material onto his Agency-issued computer, and a contract
security guard was removed from an EPA facility for using the Agency's computers to
access pornographic web sites.
CCD Penetration Laboratory Supports 18 Tests
of EPA Systems
The CCD Penetration Laboratory, with the assistance of the Office of Environmental
Information, provides support to EPA in its efforts to secure Agency computer networks
by performing penetration testing of the systems to identify and reduce system
weaknesses and vulnerabilities.
During this semiannual reporting period, the Agency performed 18 penetration tests
using specialized equipment and software tools available in the CCD Laboratory. The
systems tested included several major environmental and business databases, the Agency
payroll system, and other network assets that contain information significant to the
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mission of EPA. The availability of the CCD laboratory and its tools facilitates more
frequent system testing at a significantly lower cost to the government.
The Penetration Laboratory is currently taking steps to improve its services by becoming
certified and accredited by best practice industry standards within the next year. Also, the
CCD is taking an active role in making the Agency aware of the need for testing of
systems by attending security conferences and demonstrating the abilities of the
Penetration Laboratory.
Financial Fraud
EPA Employee Pleads Guilty to Accepting Bribe,
Conspiracy, and Making False Statement
On September 29, 2004, Lawrence M. Fradkin, a GS-15 Environmental Scientist with the
EPA Office of Research and Development, pled guilty in U.S. District Court, Southern
District of Ohio, to charges of accepting a bribe, conspiracy, and making a false
statement.
Fradkin was employed as the Federal Technology Transfer Coordinator at the Andrew
W. Breidenbach Environmental Research Center in Cincinnati, Ohio. In that position,
Fradkin oversaw multi-year, multi-million dollar cooperative agreements between EPA
and outside parties that promoted the transfer of environmental technology to the
marketplace.
In late 2000, Fradkin urged a contractor to create a job under a contract he oversaw,
encouraged an acquaintance to apply for that job, and then encouraged the contractor to
hire the acquaintance for the $60,000-a-year job. Fradkin then demanded that the
acquaintance pay Fradkin $10,000 per year for his assistance in getting and keeping the
job. Fradkin also required the acquaintance to teach college courses and perform personal
work for him at his home for no compensation.
Further, in the Spring of 2002, Fradkin recommended that another contractor whose
contract he oversaw enter into a $160,000 subcontract with a university to develop a
database that identified EPA scientists and their areas of expertise for use by the private
sector. Fradkin recommended that the university hire a particular person to develop the
database. Fradkin then conspired with that person to defraud the government of $60,000,
of which Fradkin took $30,000. Fradkin had developed the database on EPA time and
sent it to the person, who then submitted it to the university. Fradkin's fraud caused the
EPA to pay the subcontractor for a database that Fradkin developed on government time.
Because of his government position, Fradkin was required to annually submit an official
form to EPA disclosing any outside employment. Fradkin admitted that from 1994
through 2002 he filed nine false disclosure forms in which he failed to disclose his
outside employment. The total amount of income from the unreported outside
employment was $147,284.
A sentencing date has not been set.
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Sentencing Occurs in Counterfeit Pesticide
Trafficking Case
On April 21, 2004, William C. Murphy was sentenced to 41 months in prison, followed
by 3 years probation, and ordered to pay $45,305 in restitution and a $1,525 special
assessment. The sentencing occurred in U.S. District Court, Northern District of
Alabama. Murphy, President of Sierra Chemical Corporation, Anniston, Alabama, used
counterfeit EPA certified labels and sold counterfeit insecticides. In May 2003, Murphy
was charged with 32 counts of trafficking in counterfeit goods or services and
distribution/sale of adulterated or misbranded pesticides.
This investigation was conducted jointly with the EPA Criminal Investigation Division,
the Federal Bureau of Investigation, and the Alabama Department of Agriculture and
Industry.
EPA lexicologist Sentenced for
Naturalization Fraud
On August 6, 2004, a former Toxicologist with the EPA Office of Research and
Development was convicted of naturalization fraud and sentenced to 3 years probation
and ordered to pay a $500 fine and a $100 special assessment. As a result of this
conviction, the former employee's naturalization certificate was revoked and declared
void, and the former employee was ordered to surrender to the Department of Homeland
Security for deportation.
This sentencing, in U.S. District Court, Eastern District of Virginia, is the result of a
guilty plea to a charge of Naturalization Fraud. On May 14, 2004, the employee resigned
from EPA.
This investigation determined that the former employee provided falsified documentation
to gain United States citizenship. The employee also provided falsified documents to
obtain employment with the EPA in 1998, indicating the employee was a U.S. citizen.
The employee did not become a naturalized U.S. citizen until 2002.
This investigation was conducted jointly with the Federal Bureau of Investigation and the
Bureau of Immigration and Customs Enforcement, due to National Security/Homeland
Security implications.
Contractor Sentenced for Making False Statements
to EPA
On April 15, 2004, Dorothy Hayes, President and owner of Coastal Lead and Asbestos
Abatement, Inc. (Coastal), Baltimore, Maryland, was convicted and sentenced to 2 years
probation and ordered to pay a $2,500 fine and a $100 special assessment. On the same
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day, Coastal was also convicted and sentenced to 2 years probation and ordered to pay a
$30,000 fine and a $400 special assessment.
These sentencings, in U.S. District Court, District of Columbia, are the result of criminal
charges and guilty pleas unsealed on April 15, 2004, in connection with false statements
made to EPA. On May 27, 2004, Hayes and Coastal were suspended by EPA from
participating in government procurement activities.
In June 2001, Hayes submitted a notarized affidavit to EPA at a hearing concerning the
proposed debarment of Coastal. In the affidavit, Hayes certified that she was not involved
in, nor knew anything about, the purchase of fraudulent asbestos abatement training
certificates. The affidavit also stated that her husband, Edwin Hayes, never worked for
Coastal and had no interest, financial or otherwise, in the company. Based on these
assertions, EPA determined that the debarment of Coastal was not warranted.
However, Hayes knew at the time she submitted the affidavit that she had received
fraudulent training certificates and used those certificates to obtain licenses from the
States of Virginia and Maryland. Hayes also knew her husband conducted work on behalf
of Coastal and was a signatory of Coastal's bank accounts. From June 2001 until
December 2003, Coastal received approximately $43,000 from asbestos-related jobs on
which they would not have been able to work had they been debarred by the EPA.
This investigation was conducted with the Federal Bureau of Investigation and the
EPA Criminal Investigation Division.
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Congressional Requests
Providing Congress with specific information.
Limitations Found in EPA's Management of
Superfund Administrative Costs
Several factors inhibit EPA's ability to effectively determine, allocate, manage, and
optimize rising Superfund administrative costs, according to information we gathered as
part of a Congressional request.
Although money remains and continues to be appropriated for Superfund, the Superfund
appropriations have declined. The Superfund Trust Fund has diminished so significantly
that, in 2004, all Superfund appropriations were financed from general tax revenues.
Superfund Overall Expenditures Declining
(constant 2003 dollars - in millions)
$1,800
$1,500
$1,200
$900
$600
$300
$0
$1,714 $1,719
$1.564
_$/L52fi,
FY1999 FY2000 FY 2001 FY 2002 FY 2003
From 1999 to 2003, EPA's inflation-
adjusted Superfund expenditures declined
about 11 percent, from $1.71 billion in 1999
to $1.52 billion in 2003. During those 5
years, Superfund expenditures averaged
75 percent programmatic and 25 percent
administrative. While administrative
expenditures increased $36.8 million,
programmatic expenditures decreased about
$174 million. Personnel-related
expenditures accounted for nearly
80 percent of the total known administrative
expenditures. According to EPA, personnel
costs are rising and funded to some degree
by program resources.
We found that there is no central, integrated source of information on Superfund
administrative costs, which hampers the Agency's ability to effectively manage them.
EPA's Environmental and Management Appropriation absorbed an additional
$370 million in Superfund support costs over the 5 years, but these additional Superfund
costs are not identified
as such in EPA's Superfund Administrative Expenditures Increasing
accounting system. (constant 2003 dollars - in millions)
Also, Superfund
administrative
requirements are largely
based on prior years'
allocations and a 1987
Agency workload
model. Further,
functional management
inhibits EPA's ability
FY1999 FY2000 FY2001 FY2002 FY2003
D Personnel-related D Non-Personnel related
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to manage effectively and optimize resources. For example, EPA's Office of Solid Waste
and Emergency Response only has full authority over about half of the Agency's
Superfund full-time or equivalent staff, due to functional administration of Superfund
dollars.
Despite efforts to make improvements, inefficiencies remain regarding contracting and
special accounts, as well as recovering unspent obligations. Further, EPA does not follow
up to see if corrective actions solved problems. Consequently, repeated recommendations
on how to improve the program's efficiency and effectiveness may not achieve desired
results.
(Report No. 2004-S-00004, OIG Response to Congressional Request on Superfund
Administrative Costs, September 15, 2004)
Brownfields Program Making Progress,
But Further Actions Needed
Although stakeholders were generally pleased with the brownfields program, designed to
restore and revitalize contaminated properties, EPA experienced a number of problems.
Estimates on the number of brownfields sites range from 450,000 up to one million.
During Fiscal 2003, for which EPA announced over $73 million in competitive
assessment, revolving loan fund, and brownfields cleanup grants, we noted concerns
regarding untimely and unclear guidance, the need for additional guidance, a time-
consuming grant application review process, and limitations in providing applicant
feedback.
EPA's Office of Brownfields Cleanup and Redevelopment responded to and addressed
these concerns in Fiscal 2003 and made progress. However, we noted that the applicant
and site eligibility determination process lacked documentation. We also noted required
Jenkins Hatn?Site
Bricp
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property ownership deadlines being questionably extended, problems regarding travel
funds, and EPA not implementing environmental performance measures for brownfields.
While EPA received a significant increase in funding compared with Fiscal 2002,
Congressional authorizations to carry out the brownfields program fell short of EPA's
requests in both Fiscal 2003 and 2004, as shown in the table. Further, the workload
model prepared to estimate the
resources needed only included
the regions; it did not include
resources needed at
headquarters or other support
offices, and it did not consider
resources for all brownfields-
funded activities.
Recommendations to EPA included developing a process for sampling applications to
conduct more detailed eligibility evaluations, implementing environmental performance
measures, and evaluating the current workload model to ensure new responsibilities of
the expanded brownfields program are reflected in the model. EPA agreed with most of
our recommendations.
(Report No. 2004-P-00020, Substantial Progress Made, But Further Actions Needed in
Implementing Brownfields Program, June 21, 2004)
EPA Enforcement Data Provided to Congress
In response to a Congressional request, we provided information on EPA enforcement
resources and accomplishments for Fiscal 2003. For the year, EPA spent $406.3 million
and used 2,374 full-time equivalent positions on enforcement activities. During the year,
EPA reported 146.2 years of incarceration imposed, $71.3 million in fines assessed, and
600 million pounds of pollutants reduced.
(Report No. 2004-S-00002, Congressional Request on Updating Fiscal 2003
EPA Enforcement Resources and Accomplishments, August 3, 2004)
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Testimony
Providing testimony before Congressional committees.
Inspector General Emphasizes Need to Improve
Measuring of Grants Results
On July 20, 2004, Inspector General Nikki Tinsley testified on the need for EPA to
improve how it measures environmental results generated by grants.
"Our work indicates that while EPA has made progress in this area over time, more can
be done to ensure that grants awarded are better managed and that they produce their
intended results," Tinsley said, speaking before the U.S. House of Representatives'
Subcommittee on Water Resources and the Environment, Committee on Transportation
and Infrastructure.
Tinsley noted EPA uses grants as the primary means of fulfilling its mission of protecting
human health and the environment, and the $4.4 billion in 2003 grants represented more
than half the Agency's budget. EPA awards grants to State, local, and tribal governments;
universities; and non-profit organizations. "Given this large amount, it is imperative that
EPA be able to measure how these grants contribute toward fulfilling its mission,"
Tinsley said.
In recent audits and evaluations, the Office of Inspector General noted several common
reasons for insufficient measuring (see table). Tinsley said EPA project officers often did
not identify in grant award documents expected
results or a means of measuring whether the
results were achieved. "It is important to establish
requirements to measure grant results prior to
awarding the grant. This is when EPA is most
able to influence how recipients measure and
report their results."
Three Common Reasons for Lack of
Grants Measurement Success
Not identifying expected results and means to measure
results.
Not working with grant recipients or being unable to
reach agreement on measurement data needed.
Not including environmental performance measurement
component when establishing new programs.
Also, Tinsley said EPA program managers had
not worked with grant recipients or had been
unable to reach an agreement on what measurement data was needed and how it would be
used. For example, she noted that while EPA has spent $47 billion over the years on the
Clean Water State Revolving Fund, "EPA is struggling to determine how it will measure
program results." She stressed the need to work with State partners to agree on results to
be achieved and a means for measuring those results. Further, Tinsley said EPA program
managers did not include an environmental performance measurement component when
establishing new grants programs.
EPA is taking action to improve the measurement of grant results, in part in response to
Office of Inspector General recommendations, Tinsley said. EPA developed a goal in
2003 to "Support Identifying and Achieving Environmental Outcomes." Now, she said
EPA must determine what data is needed and how that data will be used, and then hold
staff accountable for using the information.
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Chemical Safety and Hazard Investigation Board
The U.S. Chemical Safety and Hazard Investigation Board (CSB) was created by the
Clean Air Act Amendments. The Board's mission is to investigate accidental chemical
releases at facilities, to report to the public on the root causes, and to recommend
measures to prevent future occurrences.
In Fiscal 2004, Congress designated the EPA Office of Inspector General to serve as the
Inspector General for the CSB. As a result, the EPA Office of Inspector General has the
responsibility to audit, evaluate, inspect, and investigate CSB's programs, and to review
proposed laws and regulations to determine their potential impact on CSB's programs
and operations. This includes an annual evaluation of CSB's information security
program and practices.
Chemical Safety and Hazard Investigation Board
Information Security Deficiencies Noted
An evaluation of the CSB's information security program and practices noted continuing
security program weaknesses. This evaluation was conducted by a contractor on behalf of
the EPA Office of Inspector General.
The CSB was reported as having four significant deficiencies in policies, procedures, and
practices for Fiscal 2004 that are recurring from Fiscal 2003. They involve:
Implementing essential technical controls such as file and e-mail encryption and
completing risk assessments for information technology.
Establishing an information technology security awareness program to provide
training to all personnel.
Documenting and approving incident-handling procedures.
Conducting certification and accreditation reviews of all systems.
CSB also documented a fifth significant deficiency involving instituting a formal patch
management process. According to CSB officials, the significant deficiencies existed due
to lack of funding. A plan of action and milestones was established and documented for
each deficiency.
(Report No. 2004-S-00006, Evaluation of U.S. Chemical Safety and Hazard Investigation
Board's Compliance with the Federal Information Security Management Act (FISMA) for
Fiscal 2004, September 28, 2004)
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Other Activities
New Two-Year Plan Aligns Current Priorities
with Strategic Goals
The EPA Office of Inspector General took another step in aligning its performance
planning process with budgeting and strategic goals in developing a new Two-Year Plan.
The Two-Year Plan is based on a new process of scoring and ranking potential topics and
assignments based on objective criteria of public benefit (Office of Inspector General
goals, Yellow Book Standards, and customer/stakeholder interests). The Plan identifies
current and emerging priorities in relation to estimated costs and available resources as a
cost-benefit ratio.
The Two-Year Plan closely links assignments and topics by Office of Inspector General
product line to both EPA and Office of Inspector General Strategic Plans through
interrelated key questions. The answers to these questions provide measurable
performance results for accountability in relation to the Office of Inspector General
Annual Performance Goals.
This new planning process is designed to continuously consider the most current and
emerging issues, to identify the highest relative priorities, build and support Office of
Inspector General budgets, and provide a basis for internal accountability. It will be
updated as new priorities are identified and considered, and will be implemented through
Office of Inspector General audits, evaluations, investigations, and public liaison reviews.
The Two-Year plan is available athttp:/www.epa.gov/oig/reports/2004/20040930-OIG-
Two-Year-Plan.pdf
EPA Office of Inspector General Staff
Share Expertise
An Office of Inspector General employee addressed the Joint Hazardous Waste/Solid
Waste Session at the Association of State and Territorial Solid Waste Management
Officials mid-year conference in April. This employee, Virginia Roll, described concerns
about the adequacy of some landfill financial assurance mechanisms and limiting landfill
post-closure care to 30 years.
Another employee, Michael Binder, addressed the Mid-Atlantic Intergovernmental Audit
Forum in April with a presentation on using the art of persuasion through briefings and
written products to build constructive audit relations and get action.
Binder also addressed the Mid-Western Intergovernmental Audit Forum (May) and the
South West Intergovernmental Audit Forum (August) in separate presentations on
"Adding Value for Return on Investment." The presentation featured a demonstration of
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the Logic Model approach to planning and performance measurement, emphasizing the
role of customer and stakeholder input to help define value and expectations. It also
demonstrated how linked measures can be used in groups and in mathematical
relationships to show relative efficiency, effectiveness, and return on investment.
Similar presentations were also given to other EPA and Inspector General offices, and
additional requests to provide training have been received.
EPA Inspector General Leads PCIE Roundtable
into New Territory
Under the leadership of Nikki Tinsley, EPA Inspector General, the President's Council
on Integrity and Efficiency (PCIE) Government Performance and Results Act Roundtable
pushed into new frontiers through its most ambitious year of activities and new
initiatives.
During Fiscal 2004, the Roundtable conducted 10 events, highlighted by certifying
Continuing Professional Education credits for Roundtable participants; taking the
Roundtable on the road to Philadelphia and Chicago (the first PCIE events held in
Federal regional cities); and forming a partnership with the Intergovernmental Audit
Forum to include city, State, and local auditors.
Topics presented and discussed this reporting period included:
The Government Performance and Results Act 10 Years Later: Progress,
Achievements, Challenges and Recommendations.
Issues and Opportunities on Proposed Amendments to the Government Performance
and Results Act.
Harvesting the Results of Office of Inspector General Work Through Effective
Followup.
Progress and Challenges in Human Capital Issues in Performance Planning and
Results.
A number of leaders and national experts from the Government Accountability Office,
the Inspector General community, Congressional staff, Office of Management and
Budget, universities, and other institutions spoke at the roundtables.
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
Office of Inspector General, as well as our participation on the President's Council on
Integrity and Efficiency.
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During the reporting period, we reviewed 28 proposed changes to legislation, regulations,
policy, and procedures that could affect EPA. We also reviewed drafts of Office of
Management and Budget Circulars, program operations manuals, directives, and
reorganizations. Details on several items follow.
Draft, 25th Anniversary Inspector General Act Amendments: As the role of the Office
of Inspector General has expanded in both mission and complexity, it has become clear
that new personnel practices and policies are needed. We commented that Offices of
Inspector General needed personnel flexibilities, such as direct hire authority to fill
critical need positions. Under this authority, an Office of Inspector General can hire
directly, without regard to many statutory examining provisions, although Offices of
Inspector General would have to comply with public notice provisions regarding
Government-wide listing of open positions.
H.R. 3826, Program Assessment and Results Act: This bill would require the review of
Federal Government programs at least once every 5 years for purposes of evaluating their
performance. We commented that such reviews should consider not only management
but cost effectiveness when evaluating a program's performance. We also commented
that the bill should take into account that many program benefits may not be recognizable
or measurable in the short term but only after many years.
Proposed Enterprise Architecture Policy: We commented that the proposed policy was
vague in that it did not identify the program offices' roles and responsibilities for
implementing the policy. The policy should not be issued without well defined
procedures that have been coordinated with the affected program offices and have gone
through the Agency's directive clearance review process. The policy stated that it applied
to grantees and contractors. However, the policy was unclear how EPA intends to ensure
grantees and contractors comply with these provisions.
Proposed Revision to Resource Management Directives System, Chapter 14,
Superfund Accounts Receivable and Billings: We commented that policies and
procedures can be further strengthened and additional procedures developed to ensure all
settled agreements stipulating amounts due EPA are forwarded to the respective Financial
Management Officer and subsequently recorded timely in the Integrated Financial
Management System. Specifically, we recommended that Financial Management Officers
(1) perform monthly reconciliations of accounts receivable (2) develop a methodology
for providing notifications of agreements not forwarded or received; and (3) follow up to
ensure proper forwarding of documents.
44
-------
Statistical Data
Audit Report Resolution
Status Report on Perpetual Inventory of Reports in Resolution Process
for Semiannual Period Ending September 30, 2004
Report Category
A. For which no management decision
was made by April 1 , 2004**
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management decision
was made during the reporting
period
E. For which no management decision
was made by September 30, 2004
F. Reports for which no management
decision was made within 6 months
of issuance
No. of
Reports
107
220
131
196
91
105
54
Report Issuance
($ in Thousands)
Questioned
Costs
$56,966
4,283
0
61 ,249
8,357
52,293
48,893
Recommended
Efficiencies
$3,598
575
0
4,173
592
3,581
3,581
Report Resolution Costs 1
Sustained 1
($ in Thousands)
To Be
Recovered
$1 ,404
45
1,449
As
Efficiencies
$315
315
** 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.
45
-------
Status of Management Decisions on Inspector General Reports
This section presents statistical information as required by the Inspector
General Act of 1978, as amended, 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.
Table 1 - Inspector General-Issued Reports With Questioned Costs for Semiannual Period
Ending September 30, 2004 (Dollar Value in Thousands)
Report Category
A. For which no management decision was made by
April 1 , 2004"
B. New reports issued during period
Subtotal (A+B)
C. For which a management decision was made
during the reporting period
(i) Dollar value of disallowed costs
(ii) Dollar value of costs not disallowed
D. For which no management decision was made
by September 30, 2004
Reports for which no management decision was made
within 6 months of issuance
Number of
Reports
50
24
74
23
8
15
51
34
Questioned
Costs*
$56,996
4,283
61 ,279
8,357
1,449
6,908
52,923
48,893
Unsupported
Costs
$10,573
0
10,573
2,913
1,272
1,641
7,660
7,660
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
-------
Table 2 - Inspector General-Issued Reports With Recommendations That Funds
Be Put To Better Use for Semiannual Period Ending September 30, 2004
(Dollar Value in Thousands)
Report Category
A. For which no management decision was made by April 1 , 2004**
B. Which were issued during the reporting period
Subtotal (A+B)
C. For which a management decision was made during the reporting period
(i) Dollar value of recommendations from reports that were agreed to by management
(ii) Dollar value of recommendations from reports that were not agreed to by management
(iii) Dollar value of non-awards or unsuccessful bidders
D. For which no management decision was made by September 30, 2004
Reports for which no management decision was made within 6 months of issuance
Number of
Reports
6
2
8
3
1
2
0
5
5
Dollar
Value
$3,598
575
4,173
592
315
277
0
3,581
3,581
Any difference in number of reports and amounts of questioned costs between this report and previous semiannual report
results from corrections made to data in our audit tracking system.
Audits With No Final Action as of September 30, 2004,
That Are Over 365 Days Past
Office of Inspector General Report Issuance Date
Audits
Program
Assistance Agreements
Contract Audits
Single Audits
Financial Statement Audits
Total
Total
27
42
25
29
2
125
Percentage
21 .6%
33.6%
20.0%
23.2%
1.6%
100.0%
47
-------
Summary of Investigative Results
Cases open as of March 31, 2004
Cases opened during period
Cases closed during period
Cases pending as of September 30, 2004
202
Investigations Pending by Type
as of September 30, 2004
Contract
Assistance Agreement
Employee Integrity
Program Integrity
Computer Crime
Lab Fraud
Other
Total
Superfund
12
1
4
3
0
12
1
33
Management
23
35
35
22
13
32
9
169
Total
35
36
39
25
13
44
10
202
Crimma ndictments/ nformations
Civil Judgments / Settlements / Filings
Fines and Recoveries
Suspension / Debarments/ Compliance Agreements
48
-------
Scoreboard of Results Compared to
Fiscal 2004 Strategic Performance Targets
All results reported in Fiscal 2004, from current and prior year's work, in OIG Performance Measurement
and Results System. (Except where noted, information verified and subject to OIG Data Quality Policy.)
Strategic Goal; With Government Performance
and Results Act Annual Performance Goals
Compared to Fiscal 2004 Results Reported Supporting Measures
Goal 1. Contribute to Human Health and Environmental Quality
Environmental Improvements/Actions/Changes
Target: 42; Reported: 49 (1 1 7%)
Environmental Risks Reduced or Eliminated
Target: 18; Reported: 45 (250%)
Environmental Recommendations, Best Practices
Risks Identified
Target: 80; Reported: 116 (145%)
0 Legislative changes/decisions
3 Regulatory changes/decisions
46 EPA policy, process, practices changes
0 Examples of environmental improvement
0 Best environmental practices implemented
25 Environmental risks reduced/eliminated
1 1 Certifications/validations/verifications
9 Critical Congressional/public issues addressed
70 Environmental recommendations
1 Environmental best practice identified
45 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: $72 million (150%); Reported: $24 million (33%)
Criminal, Civil, and Administrative Actions
Reducing Risk of Loss/Operational Integrity
Target: 80; Reported: 108; (135%)
Improvements in Business/Systems/Efficiency
Target: 100; Reported: 133 (133%)
Recommendations, Best Practices, Challenges
Identified
Target: 240; Reported: 380 (1 58%)
(Dollars in Millions)
$ 22.0 Questioned costs
$ 0.6 Recommended efficiencies, costs saved
$ 1.3 Fines, recoveries, settlements
30 Criminal convictions
13 Indictments/informations/complaints
4 Civil judgments/settlements/filings
61 Administrative actions
55 Policy process, practice, control changes
2 Corrective actions on FMFIA/mgt. challenge
17 Best practices implemented
49 Certifications/validations/verifications/
allegations disproved
10 Critical Congressional or public mgt. concerns
addressed
358 Recommendations
17 Best practices identified
0 FMFIA/management challenges identified
5 Referrals for OIG or Agency Action
Goal 3. Continuously Improve OIG Products and Services (Internally Reported - Not Audited)
Product/services in collaboration with partners 36
Requests to testify at hearings/presentations 34
Management innovations implemented 30
Assignments performed by request/mandate 73%
Peer review opinion Unqualified
Savings from mgt. improvements $100,000
Products electronically accessible * 75+%
PCIE projects/activities led 15
Legs/regs/policies reviewed/timely 56/100%
Expiring funds used 99.9%
'For issued products not containing confidential or restricted information.
49
-------
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
Final Report
Issued
Ineligible
Costs
Questioned Costs
Unsupported
Costs
Recommended
Efficiencies
Unreasonable (Funds Be Put
Costs To Better Use)
PERFORMANCE REPORTS:
2004-P-00015 Closed: EPA's Computer Security Self-Assessment
Process
2004-P-00016 Evaluation of Children's Environmental Health
Initiative
2004-P-00017 Marjol Battery Site - Throop PA
2004-P-00018 Stauffer Chemical-Tarpon Springs/FL -Ombudsman
Review
2004-P-00019 Source Water Assessments and Protection
2004-P-00020 Brownfields Management Review: Program
Implementation
2004-P-00021 Evaluation of EPA's Petroleum Refinery
Enforcement and Compliance
2004-P-00022 AA - Clean Water State Revolving Fund Results
2004-P-00023 Homeland Security: Evaluation of EPA Research
Action Plan
2004-P-00024 EPA's Human Capital Management Strategic
Planning & Analysis
2004-P-00025 Effluent Guidelines Evaluation 2 - Subjfl
2004-P-00026 Financial Application Change Controls
2004-P-00027 Role of Superfund National Priorities List:
State Cleanup Program Evaluation
2004-P-00028 Review of Management and Recycling Programs
for E-Waste
2004-P-00029 EPA Oversight of Alaska Village Safe Water
Program
2004-P-00030 EPA's Pretreatment Program
2004-P-00031 Ombudsman - Industrial Excess Landfill Site
2004-P-00032 Escambia
2004-P-00033 Effectiveness of Strategies to Reduce Ozone
Precursors
2004-P-00034 New Source Review
2004-P-00035 Superfund Issues in Indian Country
TOTAL PERFORMANCE REPORTS =21
$0
$0
$0
$0
ASSISTANCE AGREEMENT REPORTS:
2004-1-00057 AA-Missouri CWSRF and DWSRF 6/30/2003
2004-1-00067 AA-Washington Clean Water SRF June 30 2003
2004-4-00016 Idaho SF Credit Claim - Cooperative Agreement
V990431-01
2004-4-00038 Association of Metropolitan Sewerage Agency
Audit
$0
$0
$0
$0
TOTAL ASSISTANCE AGREEMENT REPORTS = 4
$793,130
$0
$0
$0
SINGLE AUDIT REPORTS:
e Palms Band of Mission Indians
Rancheria Band of Porno Indians
ronmental Research Foundation
o Aqueduct and Sewer Authority
o Aqueduct and Sewer Authority
unty Water Authority
o Department of Health
o Department of Health
or Medical Sciences, University of
Tribe
epartment of Health, State of
epartment of Health, State of
ity of
al Council
al Council
50
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
-3-00095
-3-00088
-3-00089
-3-00096
-3-00097
-3-00098
-3-00099
-3-00100
-3-00101
-3-00102
-3-00103
-3-00104
-3-00105
-3-00106
-3-00107
-3-00108
-3-00109
-3-00110
-3-00111
-3-00112
-3-00113
-3-00114
-3-00115
-3-00116
-3-00117
-3-00118
-3-00119
-3-00120
-3-00121
-3-00122
-3-00123
-3-00124
-3-00125
-3-00126
-3-00127
-3-00128
-3-00129
-3-00130
-3-00131
-3-00132
-3-00133
-3-00134
-3-00135
-3-00136
-3-00137
-3-00138
-3-00139
-3-00140
-3-00141
-3-00142
-3-00143
-3-00144
-3-00145
-3-00146
-3-00147
-3-00148
-3-00149
Hoonah Indian Association
New Hampshire, State of
Wyoming, State of
Industrial Technology Center
Standing Rock Sioux Tribe
Missouri, State of
Oregon, State of
Nevada, State of
New Mexico - Environment Department, State of
New Mexico - Environment Department, State of
Boise State University
Flint, City of
Hoonah Indian Association
North Dakota rural Water Association
Washoe County of Nevada and California
Albany, County of
Albany, County of Fiscal Year 2002
California, State of
North Carolina, State of
National Association of School Nurses
Boise State University
Tampa BayWatch, Inc.
Louisiana, State of
Wyoming Energy Council
Iowa, State of
Colorado, State of
Prairie Island Indian Community
Quartzsite, Town of
Valdese, Town of
Connecticut, State of
Wisconsin, State of
Arkansas, State of
Bexar Metropolitan Water District
Brigham & Women's Hospital, The
Denver, University of
Ute Indian Tribe
Calumet, Charter Township of
American YouthWorks
Shelby, City of
Fresno, City of
Tanacross Village Council
Fort Independence Indian Reservation
Aleut Community of St. Paul
Aleut Community of St. Paul
Morehouse School of Medicine Inc. & Affiliate
Michigan, Regents of the University of
National Fish and Wildlife Foundation
Salt Lake Organizing Committee 2002 Olympics
Institute of Transportation Engineers
Institute of Transportation Engineers
Atmautluak Traditional Council
Yale University
Wake Forest University
Augustine Band of Cahuilla Mission Indians
National Tribal Environmental Council
Association of Village Council Presidents Inc
Pilot Point Traditional Council
19-MAY-04
03 -MAY- 04
03-MAY-04
19 -MAY- 04
19 -MAY- 04
20 -MAY- 04
25-MAY-04
27-MAY-04
02-JUN-04
02-JUN-04
10-JUN-04
10-JUN-04
29-JUN-04
29-JUN-04
29-JUN-04
30-JUN-04
30-JUN-04
12-JUL-04
12-JUL-04
21-JUL-04 $19,000
26-JUL-04
26-JUL-04 $27,092
26-JUL-04
26-JUL-04
26-JUL-04
26-JUL-04
27-JUL-04
27-JUL-04
27-JUL-04
27-JUL-04 $137,109 $0 $0
27-JUL-04
27-JUL-04
27-JUL-04
25-AU6-04
25-AU6-04
25-AU6-04
25-AU6-04
25-AU6-04
25-AU6-04
25-AU6-04
25-AUG-04
27-AU6-04
27-AU6-04
27-AU6-04
23-SEP-04
23-SEP-04
23-SEP-04
23-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
24-SEP-04
TOTAL SINGLE AUDIT REPORTS = 72
$322,166
$0
$0
DIG ISSUED CONTRACT REPORTS:
2004-1-00084 ESE FY2003 Personal Computer System
2004-1-00091 E. H. Pechan & Assoc.-FY1999 and FY2000
Incurred Cost Audit
2004-1-00092 Contract Audit Closeout - Contract No.
68-D3-0035
2004-4-00031 ICF Consulting Segment Disclosure Statement
Revision
2004-4-00033 ICF Consulting Home Office Disclosure
Statement Revision
2004-4-00035 Non Compliance with Cost Accounting Standard 25-AU6-04
402
2004-4-00036 Non Compliance with Cost Accounting Standard 31-AUG-04
402
TOTAL OIG ISSUED CONTRACT REPORTS = 7
$0
$0
51
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
DCAA CONTRACT REPORTS:
2004-1-00049 EERGC-FYEs 6/30/2000 and 2001 Incurred Cost-
Canceled by OAM
2004-1-00050 Project Resources, Inc.-FYE 12/31/2001
Incurred Cost
2004-1-00051 Battelle Columbus Operations-CAS 414
COM-Noncompliance FY 2000
2004-1-00052 Transcontinental Enterprises, Inc-
FYE 9/30/2001 Incurred Cost
2004-1-00053 CH2M Hill, Ltd.-FY 2004 Revised CAS D/S Effec 23-APR-04
Effect 1/2002-2004
2004-1-00054 Battelle Columbus Operations-CAS 417 28-APR-04
Noncompliance - FY 2000
2004-1-00055 Battelle Memorial Institute/BCD-FYE 9/30/2001 13-MAY-04
I/C
2004-1-00056 Integrated Laboratory Systems -FYE 9/30/2001 23-APR-04
Incurred Cost
2004-1-00058 Cadmus Group Inc.-FYE 4/30/2001 Incurred Cost 23-APR-04
2004-1-00059 WRS Infrastructure s Environ. Inc- 13-MAY-04
FYE 12/31-2002 Incurred Cost
2004-1-00060 EGSG Tech Svs. Inc. -CACS 68-W8-0126 Rev 17-MAY-04
Final Voucher 119
2004-1-00061 INDUS Corporation-FYE 12/31/2000 Incurred Cost 18-MAY-04
2004-1-00062 CH2M Hill Inc.-FY 5/2002 to 3/2004 Labor 18-MAY-04
Accounting System
2004-1-00063 Black s Veatch Special Proj Corp.- 18-MAY-04
FYE 12/31/2000 I/C
2004-1-00064 Shaw ESI (formerly IT Group) FY 2004 Fin 21-MAY-04
Capability
2004-1-00065 Cadmus Group Inc.-CAS Disclosure Statement 24-MAY-04
Revision #6
2004-1-00066 Tetra Tech, Inc.- Preaward PR-CI-03-1033 25-MAY-04
[4/2004 thru 3/2009]
2004-1-00068 Black S Veatch Spec Proj Corp-CAS 410, 418, 27-MAY-04
420 FYE 12/31/02
2004-1-00069 Metcalf S Eddy Inc. - FYE 9/30/2004 CAS 410 27-MAY-04
GSA Allocation
2004-1-00070 Neptune s Company Inc.-FYE 12/31/1999 Incurred 27-MAY-04
Cost
2004-1-00072 Matrix EnvironmentalSGeotech.Svcs-FY 12/31/01 03-JUN-04
Incurred Cost
2004-1-00073 Neptune s Company, Inc.-FY 12/31/2000 Incurred 03-JUN-04
Cost
2004-1-00074 Midwest Research Institute-FYE6/30/03 OMB 08-JUN-04
A-133/Incurred Cost
2004-1-00075 Tetra Tech NUS, Inc.-FYE 9/30/2001 Incurred 08-JUN-04
Cost
2004-1-00076 TN S Associates- FYE 12/31/2002 Incurred Cost 08-JUN-04
2004-1-00077 CH2M Hill Inc.-FY2001 CAS Accounting Change 08-JUN-04
Cost Impact
2004-1-00079 Versar, Inc.-FYE 6/30/2002 Incurred Cost 09-JUN-04
2004-1-00080 CH2M Hill Inc. (INC)- CFY 2003 CAS 410-Alloc 14-JUN-04
of Bus Unit GSA
2004-1-00082 CH2M Hill ISE-D/S Rev 5a-b (Effec 1/1/01), 15-JUN-04
6a-b (Eff 1/1/02)
2004-1-00085 Cadmus Group, Inc-Disclosure Statement-Rev.#9 21-JUN-04
Effect! 5/1/04
2004-1-00086 MACTEC Fed Prog Inc(formerly Pacific Environ 21-JUN-04
Svcs-FYlO/01 1C
2004-1-00087 Weston Solutions, Inc.-FYE 12/31/2002 Incurred 21-JUN-04
Cost
2004-1-00088 Southwest Research Institute- FYE 9/30/2003 24-JUN-04
Incurred Cost
2004-1-00089 Toeroek Associates, Inc. - Preaward RFP 24-JUN-04
#PR-R4-04-10086
2004-1-00090 DCT, Inc.-FY 12/31/2002 Incurred Cost 24-JUN-04
2004-1-00093 Earth Technology Remediation Svc-FYE 9/22/2000 05-AUG-04
Incurred Cost
2004-1-00094 Bechtel Group Inc-FY 1997 Incurred Cost 06-AUG-04
2004-1-00095 Zedek Corp.-FYE 10/31/2001 Incurred Cost 06-AUG-04
2004-1-00096 Tetra Tech EMI-FY 9/30/2001 Annual Close-out 10-AUG-04
RAC 68-W6-0037
2004-1-00097 Metcalf s Eddy, Inc.-FYE 9/30/2002 Incurred ll-AUG-04
Cost
2004-1-00098 CH2M Hill, Inc.- CFYE 12/31/2002 Incurred Cost 12-AUG-04
2004-1-00099 Lockheed Martin Services Group -FYE 12/31/2002 23-AUG-04
Incurred Cost
52
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
2004-1-00100 Acurex Environmental c/o ARCADIS Geraghty- 24-AUG-04
FY 1999 Incurred Cost
2004-1-00101 Shaw ESI Findlay Joint Ventur-FY2002 Preaward 24-AUG-04
PR-CI-02-10152
2004-1-00103 Roy F. Weston, Inc.-CFY 12/31/1996 (S 1995) 31-AUG-04
ARCS 68-W9-0015
2004-1-00104 SciComm, Inc.- FYE 12/31/2002 Incurred Cost 09-SEP-04
2004-1-00105 Battelle Memorial Institute-SCO Columbus 09-SEP-04
FY 2003 Incurred Cost
2004-1-00106 Earth Technology Remediation Service-FY 1999 10-SEP-04
Incurred Cost
2004-1-00107 EC/R Incorporated- FYE 12/31/2001 Incurred 10-SEP-04
Cost
2004-1-00108 Griffin Services Inc-FYE 1/31/2000 Incurred 13-SEP-04
Cost
2004-1-00109 Industrial Economics, Inc.- FYE 12/31/2001 22-SEP-04
Incurred Cost
2004-1-00110 Gram, Inc.-FY2002 Incurred Cost
2004-1-00111 Aqua Terra Consultants-FY2002 Incurred Cost
(see 2004-000475)
2004-1-00112 Metcalf S Eddy Inc.- CFY 2002 RAC 68-W6-0042 24-SEP-04
2004-1-00113 GeoLogics Corporation-FYE 12/31/2001 Incurred 24-SEP-04
Cost
2004-1-00114 Trinity Engineering Associates- FYE 12/31/2002 27-SEP-04
Incurred Cost
2004-1-00115 Welso Federal Services LLC - Incurred Cost 27-SEP-04
FYE 9/30/2003
2004-1-00116 Industrial Economics, Inc.-FY2002 Incurred 28-SEP-04
Cost
2004-1-00117 Cadmus Group Inc.-FY2002 Incurred Cost 28-SEP-04
2004-1-00118 Environmental Quality Management, Inc.- FY2002 30-SEP-04
Incurred Cost
2004-2-00030 EC/R, Inc. -- FY 2004 Floorcheck on 3/23/2004- 29-APR-04
MAAR 6
2004-2-00031 Zedek Corporation-FYE 10/31/2000 Incurred Cost 23-APR-04
2004-2-00032 I.C.E.S. Ltd.-FYE 12/31/2001 Incurred Cost 19-MAY-04
2004-2-00033 CMC, Inc-FYs 1998-2002 Daily Equipmt Rates 24-MAY-04
Review 68-S7-4006
2004-2-00034 Arcadis Geraghty S Miller-Preaward PR-CI-03-1 25-MAY-04
0335 [3/04-2/08
2004-2-00035 Neptune S Company Inc. - FYE 12/31/2002 27-MAY-04
Incurred Cost
2004-2-00036 Matrix EnvironmentalSGeotechnical Svcs- 03-JUN-04
FY 12/31/00 I/C Review
2004-2-00037 CH2M Hill Inc.-Invoice Review on Invoice #120- 09-JUN-04
CFYs 1995-1996
2004-2-00038 Tetra Tech Foster Wheeler (TTFW)- FY 2004 24-JUN-04
MAAR 6 Floorcheck
2004-2-00039 Indtai, Inc. - Preaward PR-R4-04-10086 S Acct 06-JUL-04
Sys Survey
2004-2-00040 Weston Solutions, Inc (Roy F. Weston)-FY 1999 02-AUG-04
ARCS 68-W9-0057
2004-2-00041 DCT, Inc. - FY 2003/2004 Financial Capability 03-AUG-04
Audit
2004-2-00042 Aarcher, Inc.- Preaward PR-R4-04-10086/ 05-AUG-04
Pre-Award Acctg Sys
2004-2-00043 Weston Solutions, Inc.-FYE 12/31/1998 ARCS 12-AUG-04
68-W9-0057
2004-2-00044 Weston Solutions, Inc.-FY 12/31/99 RAC 13-AUG-04
Close-Out 68-W7-0026
2004-2-00045 FEV Engine Technology - Preaward - PR-CI-04- 13-AUG-04
10472
2004-2-00046 Tetra Tech Inc/BSV SPC Joint Venture-FYl999 16-AUG-04
RAC 68-S7-3002
2004-2-00047 Tetra Tech Inc/BSV SPC Joint Venture-FYl999 17-AUG-04
RAC 68-S7-3002
2004-2-00048 Gruzen Samton - FYE 12/31/2001 Incurred Cost 15-SEP-04
2004-2-00049 Information Experts-Preaward Indirect Rates 23-SEP-04
PR-NC-04-10221
2004-2-00050 CH2M HILL, Inc. -FY 2001 RAC Annual Close-out 24-SEP-04
68-W6-0025
2004-2-00051 CH2M Hill Inc - FY 2002 RAC Annual Close-out 24-SEP-04
68-W6-0025
2004-4-00020 SecTek, Inc. - CFYE 9/30/2002 Incurred Cost 06-JUL-04
2004-4-00021 Environmental Restoration, LLC - FY 2004 06-JUL-04
MAARs 6 Floorcheck
2004-4-00022 Environmental Restoration, LLC-FY2004 MAAR 13 06-JUL-04
Purchases Exis
53
-------
Recommended
Questioned Costs Efficiencies
Final Report Ineligible Unsupported Unreasonable (Funds Be Put
Report Number Title Issued Costs Costs Costs To Better Use)
2004-4-00023 Marasco Newton Group aka SRA Corp-Rev 3/5/03 08-JUL-04
Cost Impact Pro
2004-4-00024 Zedek Corporation - FY2004 MAARs 6-Floorcheck 02-AUG-04
2004-4-00025 Shaw E s I- FY 2004 Voucher Direct Pay Review 04-AUG-04
(Direct billing)
2004-4-00026 Shaw E s I -- FY 2004 Accounting System as of 06-AUG-04
5/24/2004
2004-4-00027 Lockheed Martin Svcs, Inc.-FY 2004 Indirect/ 06-AUG-04
CDC as of 5/2004
2004-4-00028 Metcalf S Eddy Inc. - FY2004 MAAR# 6 Floor- 06-AUG-04
check as of 4/2004
2004-4-00029 Tetra Tech FW -FY2004 CAS 418 (period 10/2003 12-AUG-04
thru 5/2004)
2004-4-00030 Metcalf S Eddy Inc. - FYE 9/30/2004 CAS 420 16-AUG-04
IRSD/BSP
2004-4-00032 Eastern Research Group - FY 2004 Financial 16-AUG-04
Capability
2004-4-00034 Systems Research s Applications - FY2004 19-AUG-04
MAAR 6 Floorcheck
2004-4-00037 Toeroek Associates, Inc. - FY 2004 Floorcheck 30-AUG-04
- 8/4/2004
2004-4-00039 Syracuse Research Corp-FY 2004 Floor Check 09-SEP-04
MAAR 6 (July 2004
2004-4-00040 Eastern Research Group - FY2004 Floorcheck 09-SEP-04
(conducted 4/2004
2004-4-00041 Alpha-Gamma Tech., Inc.-- FY 2004 Floorcheck- 10-SEP-04
MAAR 6
2004-4-00042 Integrated Laboratory System -- FY 2004 Floor- 10-SEP-04
check - MAAR 6
2004-4-00043 Environmental Quality Management - FY2004 14-SEP-04
Floorchecks
2004-4-00044 Tetra Tech EMI FY 2004 Floorcheck (MAAR 6)
2004-4-00045 Tetra Tech EMI-Memo FY04 Purchases Existence
s Consump(MAAR13)
2004-4-00046 DPRA, Inc. - FY 2004 Floorcheck (Ending
03/31/2004)
2004-4-00047 Eastern Research Group - FYE 12/31/2003
CAS 416 Compliance
2004-4-00048 Eastern Research Group - FY Jan-May, 2004
CAS 408 Compliance
2004-4-00049 Metcalf S Eddy Inc. - FY2004 MAARs 13 Purchase 28-SEP-04
Existence
2004-4-00051 Stratus Consulting Inc - FY 2004 Labor System 30-SEP-04
Review
TOTAL DCCA CONTRACT REPORTS = 109 $2,585,659 0 0 $575,447
FINANCIAL STATEMENT REPORTS:
2004-1-00071 FY 2003 FIFRA Financial Statement Audit 03-JUN-04 00 00
TOTAL FINANCIAL STATEMENT REPORTS =1 $0 $0 $0 $0
SPECIAL REVIEW REPORTS:
2004-S-00002 Update to Congressional Request on EPA
Enforcement Resources
2004-S-00003 ESE State Income Tax Allocation FYs 1990
Through 2001
2004-S-00004 SF Mandate: Administrative Support Issues
2004-S-00005 Ecology s Environment Revised Disclosure
Statement Review
2004-S-00007 Fiscal 2004 FISMA Evaluation
2004-S-00008 ESE Floorcheck FY 2003
TOTAL SPECIAL REVIEW REPORTS = 6 $582,126 $0 $0 $0
TOTAL REPORTS ISSUED = 220 $4,283,081 $0 $0 $575,447
54
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Office of Inspector General
Mailing Addresses and Telephone Numbers
Headquarters
Environmental Protection Agency
Office of Inspector General
1200 Pennsylvania Ave. NW (2410T)
Washington, DC 20460
(202) 566-0847
OIG Public Liaison Hotline
Address
U.S. Environmental Protection Agency
Office of Inspector General Hotline
1200 Pennsylvania Ave. NW (2491T)
Washington, DC 20460
Fax
202-566-2549
E-mail
OIG_Hotline@epa.gov
Atlanta
Environmental Protection Agency
Office of Inspector General
6 IForsyth Street, SW
Atlanta, GA 30303
Audit: (404) 562-9830
Investigations: (404) 562-9857
Offices
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
Boston
Environmental Protection Agency
Office of Inspector General
One Congress St., Suite 1100
Boston, MA 02114-2023
Audit: (617) 918-1470
Investigations:(617) 918-1481
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) 541-1027
Chattanooga
Environmental Protection Agency
Office of Inspector General
c/o
6 IForsyth Street, SW
Atlanta, GA 30303
Investigations: (423) 240-7735
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) 947-4500 (SF)
Chicago
Environmental Protection Agency
Office of Inspector General
77 West Jackson Boulevard
13th Floor (IA-13J)
Chicago, IL 60604
Audit: (312) 353-2486
Investigations: (312) 353-2507
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) 947-4500
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/SOIG-195
Seattle, WA 98101
Audit: (206) 553-4033
Investigations: (206) 553-1273
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