United States Office of the Inspector General May 2000
Environmental Protection 1200 Pennsylvania Ave., N W (2421)
Agency Washington, D.C. 20460
EPA's Office of the
Inspector General
OOOR00100
Annual
Superfund Report
to the Congress
for Fiscal 1999
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ANNUAL
SUPERFUND REPORT
TO THE CONGRESS
FOR FISCAL 1999
May 2000
Required by
Section 111 (k) of the
Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (CERCLA),
as amended by the Superfund Amendments and
Reauthorization Act of 1986 (SARA)
OFFICE OF THE INSPECTOR GENERAL
U.S. ENVIRONMENTAL PROTECTION AGENCY
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 i
FOREWORD
This report covers fiscal 1999 activities, and
is our 13th Annual Superfund Report to the
Congress. The Superfund Amendments and
Reauthorization Act of 1986 (SARA) requires
the Office of the Inspector General (OIG) to
audit the Superfund program annually and to
report to Congress annually on these audits.
In addition to reviewing Agency performance,
we also take a proactive role to help the
Environmental Protection Agency (EPA)
prevent future problems. During fiscal 1999,
we assisted EPA management in a number
of ways. We conducted a review to assist
the Agency in developing contract provisions
and a statement of work to foster a more
effective second round of START (Superfund
Technical Assessment and Response Team)
contracts. We did an analysis for the Deputy
Administrator of steps EPA could take to
provide greater assurance that laboratory
fraud will be deterred and detected. We
continued to help the Agency improve its
Superfund environmental data quality by
reviewing draft Agency documents and
meeting with program officials. We reviewed
State cost share documentation for the
Bunker Hill Superfund site for Region 10.
We helped the Agency improve its five-year
review program by commenting on draft
versions of new guidance for the program.
We continued to participate in a number of
work groups and other activities to help the
Agency improve its management of
information resources.
In our eighth and latest audit of the
Hazardous Substance Superfund financial
statements, we found that the financial
statements for the Superfund were fairly
presented, except for the effects, if any, of
adjustments that may have been necessary
to correct the amounts reported as Other
Financing Sources in the Statement of
Changes in Net Position and the related
effects on Equity and Net Costs of
Operations. We qualified our opinion
because of multiple and untimely
submissions, significant errors, and lack of
accounting support. EPA's financial systems
and methodologies to account for costs by
strategic goals cannot be relied on.
Additionally, EPA's security plans for its core
financial systems continued to contain
significant deficiencies.
The Government Performance and Results
Act requires EPA to develop plans on
intended accomplishments, measure how
well it is doing, make appropriate decisions
based on the information gathered, and
communicate information about performance
to Congress and the public. To do this, EPA
developed a strategic plan with ten goals and
during fiscal 1999 began tracking the cost to
achieve each of its goals. We found that the
Agency's methodology for accumulating
costs by goal could not be relied upon.
We previously reported concerns that
security plans for EPA's core financial
systems were not compliant with Federal
financial management system requirements.
Our work continues to show significant
deficiencies for fiscal 1999. As a result, we
continue to report the issue as a
noncompliance with the Federal Financial
Management Improvement Act (FFMIA).
Additional developments for fiscal 1999
support the listing of computer security
controls as a material weakness. EPA's
Acting CFO stated that potential
vulnerabilities in the Agency's mainframe
computer and network servers are an
exception to Agency FFMIA compliance.
Our review of the Agency's program to defer
Superfund sites to the Resource
Conservation and Recovery Act (RCRA)
program found that many of the sites were
not being addressed. Only 2 per cent of the
approximately 3,000 sites deferred have
been cleaned up, and only 29 per cent are in
the RCRA corrective action workload. The
Agency made deferral decisions without
sufficient communication between the
Superfund and RCRA programs. In addition,
the Agency did not issue deferral guidance
until the program was well underway, and
there was either misinterpretation or
inconsistent application of the deferral policy.
In response to our audit, the Agency
indicated it would work with the states to
update site characterizations, determine
which program has available resources and
legal authority to address sites starting with
those posing the highest risk, improve
collaboration between the Superfund and
RCRA programs, and strengthen deferral
procedures.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 ii
We followed up on our 1995 audit of the
Agency's implementation of the statutory
requirement to review every five years
whether site remedies continue to be
protective. We found that the backlog of
uncompleted reviews had increased
substantially in the intervening years. We
also found that several of the reports did not
state conclusions on the protectiveness of
remedies or did not adequately support the
conclusions made. In addition, half of the
reports we reviewed which contained
recommendations to take corrective actions
did not identify who was responsible for
taking these actions. Finally, EPA was
generally not communicating the results of
five-year reviews to those living near these
sites. In response to our audit, the Agency
developed a three-year strategy to eliminate
the backlog of reviews, and took steps to
address the deficiencies in review reports,
and developed procedures to better
communicate review results.
We reviewed the Agency's administrative
reform to encourage greater use of special
accounts to ensure that funds received in
settlements with responsible parties at
Superfund sites were available for future
response actions at those specific sites. EPA
increased the number of special accounts
from 35 to 112 since the reform was
implemented, with continued growth
expected. However, we found a few
weaknesses in the administration of the
accounts. EPA's general ledger balances did
not agree with its special accounts data base,
earned interest was not posted timely,
regions inconsistently used the accounts, and
settlement documents did not always
distinguish between receipts for past and
future costs. In response to our audit, the
Agency is taking steps to address these
weaknesses.
Our Superfund investigative efforts continued
to produce fines, restitutions, recoveries, and
convictions for fraud and other improper
actions of EPA contractors. False claims and
fraud in the analyzing of samples from
Superfund sites continued to be the primary
bases for indictments and convictions related
to Superfund work. Our Office of
Investigations also put considerable effort
into proactive Superfund investigations, with
a special emphasis on contracting for
removals and remediation.
The Administration proposed in its fiscal 1998
budget to eliminate the requirement to issue
this report, along with the specific annual
audits the report is required to summarize.
This report is largely duplicptiye of our
semiannual reports. Elimination of the
specific audit requirements would allow us to
focus our audit efforts each year on those
areas where they can be most productive.
We hope the Congress will take this action.
We will continue to help Agency
management deliver the most effective and
efficient Superfund program through a
comprehensive program of audits,
investigations, fraud prevention, and
cooperative efforts with Agency
management.
Nikki L. Tinsley
Inspector General
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 iii
TABLE OF CONTENTS
PURPOSE 1
BACKGROUND 2
ASSISTANCE TO EPA MANAGEMENT 3
HAZARDOUS SUBSTANCE SUPERFUND 5
Superfund Receives Qualified Opinion on Financial Statements 5
COOPERATIVE AGREEMENTS AND CREDITS 10
Costs Not Allocated Between Sites for New Jersey Cost Share Credit 10
REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES 12
RESPONSE CLAIMS 13
INTERNAL AUDITS AND SPECIAL REVIEWS 14
EPA's RCRA Deferral Program Has Not Maximized Cleanups 14
Backlog of Superfund Five-Year Reviews Increased Nearly Threefold 14
Superfund Special Accounts Understated 15
INVESTIGATIVE ACTIVITY 16
FISCAL 1999 SUPERFUND REPORTS 18
APPENDIX 1: AVAILABILITY OF REPORTS 22
APPENDIX 2: ACRONYMS AND ABBREVIATIONS 23
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 1
PURPOSE
We provide this report pursuant to section
111(k) of the Comprehensive Environmental
Response, Compensation, and Liability Act
(CERCLA) of 1980, as amended. The
Superfund Amendments and
Reauthorization Act (SARA) of 1986
amended that section of CERCLA to add
several annual requirements for the
Inspector General of each Federal agency
carrying out CERCLA authorities. These
requirements include four audit areas and
an annual report to Congress about the
required audit work. This report covers
fiscal 1999 OIG Superfund activities. We
discuss the required four audit areas below.
This report contains chapters on the
mandated audit areas. We also summarize
other significant Superfund audit work,
assistance to EPA management, and
Superfund investigative work. We exceed
the statutory requirements by providing
Congress with the significant results of
other Superfund work we do under our
Inspector General Act authorities, not just
that specifically mandated in section 111 (k)
of CERCLA.
Trust Fund
CERCLA requires ". . . an annual audit of
all payments, obligations, reimbursements,
or other uses of the Fund in the prior fiscal
year. . . ." We now meet this requirement
through the financial statement audit
required by the Government Management
Reform Act.
Claims
CERCLA requires an annual audit to assure
". . . that claims are being appropriately and
expeditiously considered ..." Since
SARA did not include natural resource
damage claims as allowable Fund
expenditures, the only claims provided in
CERCLA, as amended, are response
claims.
Cooperative Agreements
CERCLA requires audits ". . . of a sample
of agreements with States (in accordance
with the provisions of the Single Audit Act)
carrying out response actions under this
title ..." We perform financial and
compliance audits of cooperative
agreements with States and political
subdivisions. Some of our audits also
review program performance.
Remedial Investigations/Feasibility
Studies (RI/FS)
CERCLA requires our". . . examination of
remedial investigations and feasibility
studies prepared for remedial actions
We discuss our approach to this
requirement in a chapter of this report.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 2
BACKGROUND
The Comprehensive Environmental
Response, Compensation, and Liability Act of
1980 (CERCLA), Public Law 96-510, enacted
on December 11, 1980, established the
"Superfund" program. The purpose of the
Superfund program is to protect public health
and the environment from the release, or
threat of release, of hazardous substances
from abandoned hazardous waste sites and
other sources where other Federal laws do
not require response. CERCLA established
a Hazardous Substance Response Trust
Fund to provide funding for responses
ranging from control of emergencies to
permanent remedies at uncontrolled sites.
CERCLA authorized a $1.6 billion program
financed by a five-year environmental tax on
industry and some general revenues.
CERCLA requires EPA to seek response, or
payment for response, from those
responsible for the problem, including
property owners, generators, and
transporters.
The Superfund Amendments and
Reauthorization Act of 1986 (SARA), Public
Law 99-499, enacted October 17, 1986,
revised and expanded CERCLA. SARA
reinstituted the environmental tax and
expanded the taxing mechanism available for
a five-year period. It authorized an $8.5
billion program for the 1987-1991 period. It
renamed the Trust Fund the Hazardous
Substance Superfund. The Budget
Reconciliation Act of 1990 reauthorized the
program for three additional years and
extended the taxing mechanism for four
additional years. Congress has continued to
fund Superfund after expiration of the
authorization and the taxing mechanism.
The basic regulatory blueprint for the
Superfund program is the National Oil and
Hazardous Substances Contingency Plan
(NCP), 40 CFR Part 300. The NCP was first
published in 1968 as part of the Federal
Water Pollution Control Plan, and EPA has
substantially revised it three times to meet
CERCLA requirements. The NCP lays out
two broad categories of response: removals
and remedial response. Removals are
relatively short-term responses and modify
an earlier program under the Clean Water
Act. Remedial response is long-term
planning and action to provide permanent
remedies for serious abandoned or
uncontrolled hazardous waste sites.
CERCLA recognized that the Federal
Government can only assume responsibility
for remedial response at a limited number of
sites representing the greatest public threat.
Therefore, EPA must maintain a National
Priorities List (NPL), updated at least
annually. The NPL consists primarily of sites
ranked based on a standard scoring system,
which evaluates their threat to public health
and the environment. In addition, CERCLA
allowed each State to designate its highest
priority site, without regard to the ranking
system.
CERCLA section 104(c)(3) does not allow
EPA to fund remedial actions unless the
State in which the release occurs enters into
a contract or cooperative agreement with
EPA to provide certain assurances, including
cost sharing. At most sites, the State must
pay 10 percent of the costs of remedial
action. EPA may fund 100 percent of site
assessment activities (preliminary
assessments, site inspections), remedial
planning (remedial investigations, feasibility
studies, remedial designs), and removals.
For facilities operated by a State or political
subdivision at the time of disposal of
hazardous substances, the State must pay
50 percent of all response costs, including
removals and remedial planning previously
conducted.
CERCLA sections 104(c)(3) and 104(d)
authorize EPA to enter into cooperative
agreements with States or political
subdivisions to take, or to participate in, any
necessary actions provided under CERCLA.
A cooperative agreement serves to delineate
EPA and State responsibilities for actions to
be taken at the site, obtains required
assurances, and commits Federal funds.
EPA uses cooperative agreements to
encourage State participation in the full range
of Superfund activities - site assessment,
remedial, removal, and enforcement.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999
ASSISTANCE TO EPA MANAGEMENT
Besides performing audits and investigations,
the OIG responds to EPA management
requests for review of vulnerable program
areas and OIG input in the development of
regulations, manuals, directives, guidance,
and procurements. These are efforts to
prevent problems that might later result in
negative audit findings or investigative
results. The OIG reviews and comments on
draft documents prepared by Agency offices.
OIG staff also participates in conferences
and EPA work groups to provide input. The
OIG continued to be active in fiscal 1999 in
such assistance to EPA management in the
Superfund area. We summarize below some
of our major activities assisting management.
Improvement of START-2 Contracts
The OIG conducted a review to assist
Agency management in developing contract
provisions and a statement of work to foster
more effective START-2 (Superfund
Technical Assessment and Response Team)
contract performance. START contracts
support EPA's site assessment, response,
prevention and preparedness, and some
technical support activities. START-2 is the
second round of these contracts. In an
advisory report (99M0019) dated
September 30, 1999, we suggested EPA
address several areas during the START-2
acquisition process to help optimize
contractor performance:
• EPA should not dictate the use of
dedicated staff in START-2. Dedicated
staff may not always be kept busy. The
use of dedicated staff does not further
the Office of Management and Budget's
performance based-strategy of
specifying the tasks to be performed
rather than the staff or method to
perform the task. The Agency believes
some dedicated staff is necessary but
will work to reduce the use of dedicated
staff based on the contract requirements.
• EPA should develop incentives to
encourage exceptional contractor
performance. The Agency believes that
the performance-focused statement of
work and the use of multiple awards
provide the contractor with sufficient
incentives to perform well.
• EPA should include contract provisions
which address the requirement for the
contractor to implement an EPA
approved quality management plan. It is
important to have a system in place to
ensure data quality since the data is
used in EPA's decision making and
enforcement actions. The Agency
included data quality requirements in the
contract clauses and solicitation.
Laboratory Fraud: Deterrence and
Detection
Following a voluntary disclosure to the
Agency of data integrity problems at a private
laboratory, the Deputy Administrator,
requested that we determine what the
Agency could dp to detect and prevent
fraudulent activities. The laboratory had
analyzed samples from Superfund sites, and
also did analytical work for EPA and other
Federal agencies in connection with other
environmental programs. We worked very
closely with Agency staff in examining this
area in response to this request.
In a memorandum dated June 25, 1999, we
suggested to the Acting Deputy Administrator
steps the Agency could take to provide
greater assurance that laboratory fraud will
be deterred and detected:
• Provide training for Agency or state
pn-site auditors/inspectors, as well as
individuals responsible for reviewing
laboratory data, to incorporate fraud
detection techniques into their daily
work.
• Promote ethics in environmental testing
laboratories through outreach and
training.
• Provide individuals performing
environmental testing with appropriate
contacts to report possible misconduct
(e.g., OIG Hotline).
• Explore emerging electronic methods for
screening laboratory data. In addition,
assume a leadership role in the
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999
standardization of electronic data
deliverables.
• Incorporate accreditation, or a quality
system demonstration, as a mandatory
requirement in all program areas.
• Develop or improve guidance and
training specific to the planning process
to assist data users in determining
laboratory quality assurance/quality
control necessary and appropriate for the
intended use of the data.
• Ensure information systems used to
track laboratory data are current and
complete.
Environmental Data Quality
We continued to work with the Agency as it
implemented recommendations from several
audits we did on environmental data quality in
Superfund. During fiscal 1999, we reviewed
several draft requirements and guidance
documents. We also met with Agency quality
assurance officials to discuss their plans for
improvements
Bunker Hill Cost Share
EPA Region 10 asked us to review the
cumulative cost share credit reported by the
Idaho Division of Environmental Quality for
the Bunker Hill Superfund Site for the year
ended June 30, 1997. The purpose was to
identify any material weaknesses in the
State's methodology and documentation
which could result in a future disallowance of
claimed match credits. Our review identified
several areas where the State needed to
improve its procedures and documentation to
prevent disallowance of claimed match
credits. We provided our results to the
Region in a memorandum (9400006) dated
January 22, 1999.
Five-Year Reviews
During and after our audit of the Superfund
Five-Year Review Program, we commented
on draft versions of the Agency's
Comprehensive Five-Year Review Guidance.
We evaluated the documents and
commented that the draft guidance clearly
described the purpose of the reviews,
program requirements, need for
assessments of remedy protectiveness, and
the importance of communicating with
affected communities. We also indicated that
the site inspection checklist, report template,
and sample report included in the guidance
should prove hejpful to those conducting
reviews. We pointed out, however, that a
planned change in the start date for
conducting the reviews could be a
disincentive for completing the initial five-year
reviews. The Agency planned to take our
concerns into account when developing its
final guidance.
Information Resources Management
We continued to participate in various
Agency-level workgroups associated with
EPA's initiative to Reinvent Environmental
Information. In fiscal 1999, we participated in
work groups addressing environmental data
quality and data gaps. We continued to
participate in the Data Quality Initiative and
the Information Integration Initiative. In
addition, we participated in work groups on
replacing the travel management system,
developing a Budget Allocation System, and
replacing the EPA payroll system.
Better Waste Management Issue Area
Plan
In addition to strategic and annual audit
planning, the OIG uses issue area plans to
identify issues we need to address beyond
the current audit period. At the beginning of
the latest issue area planning effort, we
invited officials from several program offices
to participate with OIG staff during our initial
issue area planning meeting. This approach
ensured that Agency personnel were involved
at the very beginning of our planning
sessions. Their ideas helped identify
significant issues in Superfund and Resource
Conservation and Recovery Act operations
that improved the overall OIG planning
process. By incorporating their viewpoints
and insights early in the process, we were
able to better target our OIG resources in
support of the Better Waste Management
gpal in EPA's Strategic Plan. We also met
with Agency officials after the sessions to
obtain their comments on the draft plan. This
helped ensure that the issues were both
accurately described and significant enough
to merit audit attention.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999
HAZARDOUS SUBSTANCE SUPERFUND
The Government Management Reform Act
requires Federal agencies to prepare annual
audited financial statements. The
requirement for audited financial statements
was enacted to help bring about
improvements in agencies' financial
management practices, systems and controls
so that timely, reliable information is available
for managing Federal programs. One of the
major entities covered by these financial
statements is the Hazardous Substance
Superfund Trust Fund. The EPA QIC's
requirement to audit EPA's financial
statements also meets our CERCLA audit
requirement to annually audit the Superfund
Trust Fund, which we previously referred to
as our Trust Fund audit. The following
summary of our fiscal 1999 financial
statement audit relates to all findings
resulting from our audit of EPA's financial
statements, including the Hazardous
Substance Superfund.
Superfund Receives Qualified
Opinion on Financial Statements
We qualified our opinion on the Agency's
1999 financial statements for Superfund and
the Agency as a whole because of multiple
and untimely submissions, significant errors,
and lack of accounting support. EPA's
financial systems and methodologies to
account for costs by strategic goals cannot
be relied on. Additionally, EPA's security
plans for its core financial systems continued
to contain significant deficiencies.
We Found That
The financial statements fairly presented the:
• assets, liabilities, and net position;
• net costs;
• changes in net position;
• budgetary resources; and
• reconciliation of net costs to budgetary
obligations
for the Superfund Trust Fund as a whole as
of and for the year ended September 30,
1999, in accordance with the applicable basis
of accounting, except for the effects, if any,
of adjustments that may have been
necessary to correct the amounts reported as
Other Financing Sources in the Statement of
Changes in Net Position and the related
effects on Equity and Net Costs of
Operations. This category in the statements
consists primarily of appropriations to EPA
from trust funds held at the Department of the
Treasury, of which the Superfund Trust Fund
is by far the largest.
Material Internal Control Weaknesses
1. Process for Preparing Financial
Statements
Although we were able to render opinions on
EPA's financial statements, weaknesses
existed in the Agency's process for preparing
the fiscal 1999 financial statements that
resulted in the Agency being unable to
provide us with complete, accurate and
reliable statements, footnotes and
supplemental information by the agreed upon
dates.
In addition, the Government Performance and
Results Act requires EPA to develop plans on
intended accomplishments, measure how well
it is doing, make appropriate decisions based
on the information gathered, and
communicate information about performance
to Congress and the public. To do this, EPA
developed a strategic plan with ten goals and
during fiscal 1999 began tracking the cost to
achieve each of its goals. We found that the
Agency's methodology for accumulating costs
by goal could not be relied upon to fairly state
costs by goal. The Agency had originally
planned to present its Statement of Net Cost
by goal. After we expressed concern about
the Agency's ability to fairly present its costs
by goal, Agency management decided to
present EPA's costs for the Superfund Trust
Fund and All Other Appropriated Funds rather
than present the information by goal.
Weaknesses in this area also affect the
quality of cost accounting data Agency
managers have available for decision making.
Although the Agency made some
improvements in its financial statement
preparation processes, the financial
statements provided to us for the purpose of
expressing an opinion were incomplete and
contained significant errors. The financial
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999
statements that we used as a basis for
rendering our opinions were not received until
late February 2000. Further, significant audit
effort was needed to assist the Agency in
improving the presentation of the financial
statements and to resolve preparation issues
in order for the Agency to obtain the best
possible audit opinions by March 1, 2000.
The Agency needed to make further
improvements in its financial statement
preparation process. These improvements
would improve the accuracy and reliability of
financial information used to prepare financial
statements after the end of the year, as well
as the data that is available on an ongoing
basis throughout the year to manage EPA's
environmental programs.
2. Computer Security Controls
The OIG previously reported that security
plans for EPA's core financial systems did
not comply with Federal financial
management system requirements. We
found continued significant deficiencies for
fiscal 1999. As a result, we continued to
report the issue as a noncompliance with the
Federal Financial Management Improvement
Act (FFMIA). Additional developments
supported the listing of computer security
controls as a material weakness. EPA's
Acting Chief Financial Officer (CFO), in his
Management Representation letter to us,
listed potential vulnerabilities in the Agency's
mainframe computer and network servers as
an exception to Agency FFMIA compliance.
Also, a current, more comprehensive review
by the General Accounting Office (GAO)
indicated that EPA weaknesses "pose a
serious threat to the integrity of EPA's
information systems; and if unconnected could
allow unauthorized users to take control of
EPA's network operations." The problems
were of such magnitude that the security
program was rendered ineffective.
Relying on the work of GAO and our efforts,
and considering the concerns noted by the
Acting CFO, we concluded that computer
security controls were a material weakness.
Reportable Conditions
Reportable conditions are significant internal
control weaknesses that could adversely
affect EPA's ability to ensure: (1)
transactions are executed in accordance with
applicable laws; (2) assets are safeguarded
against loss from unauthorized acquisition,
use, or disposition; and (3) transactions are
properly recorded, processed, and
summarized txp permit the preparation of
reliable financial statements and Required
Supplemental Stewardship Information in
accordance with Federal accounting
standards. The reportable conditions we
identified involved the need for improvements
in the following areas:
1. Reviewing Unliquidated Obligations
The Agency did not timely identify and
deobligate unnecessary funds during its
annual review of inactive obligations.
Therefore, the Agency conducted a "special
review" so it could accurately report its open
obligations in the Agency's financial
statements. The special review identified
$14.6 million of open obligations which should
have been deobligated by September 30,
1999 in addition to $10 million which should
have been deobligated based on the fiscal
1998 special review. Our fiscal 1999 audit
work also identified another $6.3 million which
should have been deobligated by September
30, 1999.
2. Managing Accounts Receivable
During fiscal 1999, the Agency continued its
efforts to improve controls in the accounts
receivable area. However, we continued to
find: (1) accounts receivable that were not
recorded and billed timely, (2) accounts
receivable balances in the Agency's
Integrated Financial Management System
(IFMS) were not reconciled to subsidiary
records, (3) outstanding receivables were not
timely followed up on and written off, and (4)
collection transactions were not properly
recorded. Consequently, some accounts
receivable may not be correctly valued and
timely collected. These problems were
primarily caused by Offices of Regional
Counsel and program offices not timely
forwarding documentation needed to manage
accounts receivable to the financial
management offices.
3. Approving Interagency Agreement
Invoices
Some Agency project officers were not
fulfilling one of their program oversight duties,
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999
timely reviewing and approving interagency
agreement invoices. Some project officers
were also not obtaining and reviewing
supporting cost documentation for amounts
billed by other agencies. The Agency
needed to continue making improvements in
this area, so that it could be sure that
payments are only made for costs billed that
are valid and allowable under the terms of its
interagency agreements.
4. Accounting for Capitalized Property
For a number of years, we have reported that
EPA needed to improve accounting for its
property. Although the Agency has been
addressing weaknesses in its accounting for
property, our fiscal 1999 audit work disclosed
the need for further corrective actions. We
again found some property that was either
not recorded at all or not recorded timely and
accurately. In addition, we found
weaknesses in the reconciliation of property
information in the Agency's accounting
system with information contained in the
property subsystem. When property is not
accurately accounted for, it increases the risk
of theft, loss or misuse of the property.
5. Documenting Automated Controls
Within the Agency's Accounting
System
We continued to be unable to assess the
adequacy of the automated internal control
structure as it related to automated input,
processing and output controls for the
accounting transactions contained in IFMS.
The Agency initiated a work group to replace
the Agency payroll system, and the Agency's
budget request indicated a desire to replace
IFMS in the near future. An active data
dictionary would simplify conversion of data
in implementing future financial systems.
Noncompliance Issues
We did not identify any instances of
noncompliance with laws and regulations that
would result in material misstatements to the
audited financial statements. However, we
did note the following significant
noncompliance issues:
1. EPA made disbursements for grants that
were funded from more than one
appropriation using the oldest available
funding (appropriation) first which may or
may not have been the appropriation that
benefitted from the work performed.
Thus, EPA was not complying with Title
31 U.S.C. 1301 which requires EPA to
match disbursements to the benefitting
appropriation. Even though this instance
of noncompliance did not result in a
material misstatement of EPA's financial
statements, it was a significant issue the
Agency must address.
2. During fiscal 1999, the Agency reviewed
its user fees in accordance with the
requirements of the CFO Act and
provisions of Office of Management and
Budget (OMB) Circular A-25, User
Charges. The Acting CFO still needed to
follow through to either institute, revise,
or update its user fees or obtain
exceptions from OMB for the user fees
identified during the 1997 review, as
updated by the 1999 review.
3. The Federal Financial Management
Improvement Act (FFMIA) requires us,
during our annual financial statement
audits, to determine whether EPA's
financial management systems
substantially comply with Federal
financial management system
requirements, applicable accounting
standards, and the Standard General
Ledger at the transaction level.
We found EPA was not in substantial
compliance with the FFMIA requirements
because of weaknesses in: (1) the
Agency's process for preparing financial
statements, and (2) its computer security
controls. We also identified the fojlowing
instances of substantial noncompliance
with FFMIA requirements.
* EPA's methodology for accumulating
and reporting costs by the Agency's
ten strategic goals could not be
relied upon to fairly state the
Agency's costs to achieve each goal.
Weaknesses in this area affected
the quality of cost accounting data
EPA managers had available during
fiscal 1999 to manage their
programs. In addition, the Agency
was not in compliance with
Statement of Federal Financial
Accounting Standards (SFFAS) No.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 8
4 that requires EPA to: (1)
determine the full costs of its
activities, (2) accumulate and report
cost of activities on a regular basis
for management information
purposes, and (3) use appropriate
costing methodologies to
accumulate and assign costs to
outputs.
f EPA was unable, in most cases, to
report its intra-governmental assets
and liabilities by trading partner
because finance offices were not
coding transactions to show this
information. The Treasury Financial
Manual requires agencies to report
trading partner information, so
Treasury can eliminate intra-
governmental transactions when it
prepares the Financial Report of the
United States Government.
Agencies also need this information
to manage their assets and
liabilities.
PRIOR AUDIT COVERAGE
During previous financial audits, we reported
weaknesses that impacted our audit
objectives in the areas of:
• the Agency's process for preparing
financial statements, including the
Statements of Budgetary Resources and
Financing;
• recording unbilled Superfund oversight
costs;
• accounting for and managing Superfund
accounts receivable;
• accounting for and controlling property;
• recording accrued liabilities for grants;
• approving payments for interagency
agreements;
• identifying, tracking and reporting EPA's
environmental liabilities;
• recording revenue for Superfund state
contracts;
• documenting IFMS;
• complying with federal financial
management system security
requirements;
• accounting for payments for grants
funded from multiple appropriations;
• reconciling the components of Superfund
net position;
• identifying and allocating indirect costs;
• reviewing Agency fees; and
• allocating costs to the Superfund Trust
Fund.
The Agency has taken many actions and
initiatives to resolve prior financial statement
audit issues. We recognize that the issues
are complex and require extensive, long-term
corrective actions and coordination by the
CFO with other parts of the Agency before
they can be completely resolved. However,
we noted that a number of issues remained
unresolved after several years.
On January 13, 2000, the Office of the Chief
Financial Officer (OCFO) and the OIG jointly
sponsored a meeting with a number of
Agency senior managers to discuss our
concerns about the audit management
process and the length of time management
was taking to complete corrective action on
some of our older audit recommendations.
The purpose of this meeting was to ensure a
clear understanding of the roles,
responsibilities and processes needed to
implement a quality audit management
program.
We acknowledge that EPA updated its policy
in fiscal 1999 to enhance the audit
management process (EPA Order 2750,
Audit Management Process, revised
December 3, 1998). Nevertheless, the
Agency's Audit Follow-up Official, OCFO,
agreed on a number of additional actions to
ensure senior management devotes
appropriate resources and priority attention to
our prior audit issues and that management's
semiannual reports to Congress appropriately
discuss progress and status on these issues.
Because of OCFO's efforts to further
strengthen and enhance the audit
management process, we will monitor
progress during fiscal 2000 to determine if we
need to make any audit recommendations
concerning the audit follow-up process and
management's reporting of progress made on
corrective action plans to Congress. Our
office will continue to work with the OCFO in
helping them to resolve all audit issues
resulting from our financial statement audits.
What Action Was Taken
We issued our final report (00100231) to the
Acting CFO on February 29, 2000. In
responding to our draft report, the Acting
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999
CFO agreed that EPA needed to make
further improvements to its process for
preparing financial statements. However, he
did not agree that weaknesses we identified
in the financial statement preparation process
warranted categorization as a material
weakness, or indicated that the Agency was
unable to provide managers with accurate
and reliable information for use on a day-to-
day basis to manage Agency programs. The
Acting CFO also disagreed with our
conclusion that the Agency is in
noncompliance with the requirements of
SFFAS No. 4, Managerial Cost Accounting
Concepts and Standards for the Federal
Government. The Acting CFO agreed with
many of the recommendations and indicated
corrective actions are planned or ongoing to
implement those recommendations.
We continue to support the Agency's efforts
to improve its processes for preparing timely,
reliable financial statements. In particular,
we look forward to working with the Agency
to improve the cost accounting information
available to Agency managers to use in
carrying out their environmental programs.
We did not change our classification of the
reported material weakness and
noncompliance issues. The Agency's
response to our final report is due by May 30,
2000.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 10
COOPERATIVE AGREEMENTS AND CREDITS
In fiscal 1999, we issued three reports reviewing costs on cooperative agreements with states,
and one report on credits claimed as State cost share. The combined financial results of these
reviews were as follows:
FINANCIAL RESULTS OF F
COOPERATIVE AGREEMENT A!
^^^^^^^^^^^^^•^^•••^'••••••''•^^^^^^•^^^^^^^^^^^^•••••^^•^^^•^^^^
Amount audited
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
SCAL1999SUPERFL
YD CREDITS COST Rl
^ .^^ _ _ ^_^_ _^^^_
Federal Share
$1,598,140
2,093
601,756
46,400
IND
EPORTS
•••••'•^^^^^^•^^^^^^^^^^^^^•i""'
Total Costs
$1,786,857
2,326
668,618
53,653
1 . Costs questioned because of an alleged violation of a provision of a law, regulation, contract, grant,
cooperative agreement or other agreement or document governing the expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by adequate
documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
We summarize the State credits report
below.
Costs Not Allocated Between
Sites for New Jersey Cost Share |
Credit
EPA Region 2 requested we audit the costs
claimed by the New Jersey Department
Environmental Protection's (NJDEP) as
credit for its required State cost share for
Superfund remedial action at the Bridgeport
Rental and Oil Services, Inc. site. CERCLA
allows States to be credited for costs spent
on remedial action at sites before they were
listed on the Superfund National Priorities
List. NJDEP claimed a credit of $678,555
for costs of a water line extension which
provided an alternative water supply to
residences affected by contaminated water.
The water line extension was necessary
due to contamination from both this site and
the Chemical Leaman Tank Lines, Inc. site,
for which EPA had conducted a removal
action.
We Found That
The State incurred most of the costs,
$668.618, for a contract with Logan
Township. We were not provided with the
information needed to allocate Logan
Township's costs between the sites and
determine which costs met CERCLA criteria
for cost share eligibility, so we questioned
all of those costs as unsupported. In
addition, we questioned $2,326 in State
indirect costs as ineligible since CERCLA
only allows direct, out-of-pocket
expenditures to count as credits toward
State cost shares.
We Recommended That
The Regional Administrator, Region 2:
• Disallow the questioned costs.
• Complete a technical evaluation of the
contract activities before granting credit
for eligible costs claimed. Any costs
related to investigation or design
should be disallowed.
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EPA Office of the Inspector General Annuaj Superfund Report to the Congress for Fiscal 1999 11
What Action Was Taken agreement from NJDEP to provide the
documentation needed to close this audit,
We issued our final report (9910223) to the and plans to visit NJDEP in May 2000 to
Regional Administrator, Region 2, on July obtain this documentation.
14, 1999. EPA Region 2 has obtained
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 12
REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES
During the ten-year period from 1988 to 1998
the OIG's Engineering and Science Staff
(ESS) issued two dozen reviews of remedial
investigations and feasibility studies (RI/FS).
These reviews focused on the Agency's
conformance with National Contingency Plan
(NCR) requirements primarily at Fund-lead
Superfund sites for which a Record of
Decision had been issued. At these sites,
the RI/FS planning process had been
completed for one or more Operating Units.
While each report of review contained
suggestions for improvements in the planning
process that could be implemented in
subsequent site planning, we generally found
RI/FS planning for the reviewed sites was
generally consistent with the NCR.
As a part of these reviews, we determined
the availability of sampling and analysis plans
(SAPs), as required by the NCR. SAPs
consist of Quality Assurance Project Plans
(QAPPs) and Field Sampling Plans. We
reviewed these plans for applicability and
coverage of individual site characterization
activities. However, we generaljy did not
critically review these plans against available,
and sometimes emergent Agency quality
assurance guidance.
In 1994, the OIG's Central Audit Division,
encouraged by Region 8 quality assurance
staff, undertook a review of the thoroughness
and completeness of sampling and quality
assurance planning at Superfund sites in the
Region. We reported on this review in
January 1995. This was the first of a series
of reviews to determine the pervasiveness of
less than full adherence to the NCP
requirements and Agency guidance and
policies regarding preplanning of
environmental data collection. We have
since issued seven additional audit reports
addressing quality assurance in the
Superfund program, including a
comprehensive national report issued in
September 1999. This effort involved several
OIG field divisions and the ESS.
As we have indicated in our reports
addressing quality assurance in Superfund
site cleanups, proper planning for site data
collection is critical. Development of data
quality objectives (DQOs) and associated
QAPPs enables collection of the appropriate
amount and type of site data of sufficient
confidence for cleanup decisions. When this
planning stage has been inadequate, site
remediation decisions have been based on
data of unknown quality. In addition, we
have identified instances of the misuse of
public funds in production of unusable data,
necessitating resampling and analysis.
While we have not recently conducted the
type of RI/FS review we did in prior years, the
OIG has continued to examine quality
assurance and other aspects of Superfund
site characterization and evaluation of
remedial action alternatives. We have also
assisted the Agency by reviewing drafts of
guidance documents on the quality
assurance process. We intend to continue
with this approach.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 13
RESPONSE CLAIMS
Section 111(a)(2) of CERCLA, as amended
by SARA, authorizes EPA to pay any claim
for response costs incurred by "any other
person" as a result of carrying out the NCR.
Additionally, section 122(b)(1) of CERCLA,
as amended by SARA, authorizes the
President to reimburse Potentially
Responsible Parties (PRPs) for "certain costs
of actions under the agreement that the
parties have agreed to perform but which the
President has agreed to finance." The
President delegated this authority to the EPA
Administrator under Executive Order 12580,
January 26, 1987, who further delegated it to
EPA's Office of Solid Waste and Emergency
Response. Authority for decisions regarding
claims against the Fund is currently
delegated to the Director, Office of
Emergency and Remedial Response.
PRPs are required to enter into a
Preauthorized Decision Document (PDD)
with EPA to cover work for which some costs
will be reimbursed. The PDD specifies the
work to be performed, the portion of the cost
that EPA will reimburse, and the procedures
through which the PRPs can make claims for
reimbursement.
During fiscal 1999, we issued one
memorandum concerning our review of a
response claim. Other response claims were
pending for our review during the year, but
we had not received the information needed
to complete those reviews. Our response
claim reviews are not audits, but rather follow
instructions in the Agency's claims guidance
for the claims adjuster.
Bypass 61 Groundwater
Contamination Site
We reviewed claimed costs of $1,476,285 for
work performed to clean up the Bypass 601
Groundwater Contamination site in Concord,
North Carolina. Under the PDD for the site,
the MSR Site Remediation Group cleaning up
the site is entitled to submit up to three
claims covering 30.84 per cent of eligible
costs, not to exceed a total of $3,754,000.
This was the first claim submitted, and was
for costs incurred from February 17, 1994 to
March 13, 1998.
The purpose of our review was to determine
if the MSR Group: (1) submitted a perfected
claim; (2) developed an accounting system
which adequately recorded, segregated, and
supported all claimed costs; and (3) assured
that all claimed costs were reasonable,
allowable, and allowable under provisions of
the Federal Acquisition Regulation. In our
memorandum of June 14, 1999, we reported
that the claim was supported except for an
overstatement of $1,000 due to a math error.
The MSR Group agreed with our finding. We
recommended that the claim be accepted,
with the reduction of $1,000 in the total
claimed costs.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 14
INTERNAL AUDITS AND SPECIAL REVIEWS
In addition to reviews required by CERCLA,
as amended, we conduct other reviews of
EPA's management of the Superfund
program. We summarize below some
particularly significant internal audits
completed in fiscal 1999 not summarized
elsewhere in this Report.
EPA's RCRA Deferral Program
Has Not Maximized Cleanups
Since 1983 Superfund officials have
transferred cleanup responsibility to the
Resource Conservation and Recovery Act
(RCRA) program for approximately 3,000
sites. The intent of the policy was to
maximize the overall number of cleanups by
deferring sites to RCRA, thus preserving the
CERCLA Trust Fund for sites for which no
other cleanup authorities were available.
Since only 29 percent of the deferred sites
are in the RCRA corrective action workload,
the remaining 71 percent are not likely to be
cleaned up in the near future. The Resource
Conservation and Recovery Act Information
System (RCRIS) indicates that less than 2
percent of deferred sites have been cleaned
up. About one-third of the deferred sites in
our sample would be potentially eligible for
placement on the National Priorities List.
Our review of sites not in the corrective
action workload found that in the four regions
sampled almost 67 percent (210 of 313) of
the sites should not have been deferred from
Superfund to RCRA. Deferral decisions were
made without sufficient communication
between RCRA and Superfund program
officials to determine which authority would
best address the site. In addition, the
Agency did not issue deferral guidance until
the program was well underway, and there
was either misinterpretation or inconsistent
application of the deferral policy. The
sampled sites have been in EPA's inventory
for 17 years on average, and less than 1
percent of them have been cleaned up.
Almost 10 percent of the total number of sites
coded as deferred to the RCRA program
were not found in RCRIS because of coding
errors, system incompatibilities with
CERCLIS, insufficient communication
between the two programs, and weak
deferral procedures. EPA is generally
unaware of the status of cleanups. For some
sites, the states informed us that actions had
been taken or were underway which were not
reflected in RCRIS.
We recommended that the Acting Assistant
Administrator for Solid Waste and
Emergency Response work with states to
update site characterizations; determine
which program has available resources and
legal authority to address sites starting with
those that pose highest risk; improve
communication and collaboration between
Superfund and RCRA officials; and
strengthen procedures for deferring sites.
Agency Action
We issued the final report (9100116) to the
Acting Assistant Administrator for Solid
Waste and Emergency Response on
March 31, 1999. In response to the draft
report, the Acting Assistant Administrator
indicated that the recommendations would
improve the efficiency of the deferral
process, and his Office was prepared to
reassess many of the site management
decisions to ensure that EPA and state
responses protect human health and the
environment. In response to the final report,
he provided milestones for implementing
report recommendations.
Backlog of Superfund Five-Year
Reviews Increased Nearly
Threefold
I
The Superfund statute requires that remedial
actions, where hazardous substances,
pollutants, or contaminants remain on-site,
be reviewed every five years to assure that
human health and the environment continue
to be protected. Some of EPA's five-year
reviews have found that corrective actions
were needed.
In March 1995, we reported that EPA had not
performed a substantial number of reviews
because of the low priority Agency
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 15
management gave them. Our follow-up audit
found that the backlog of reviews had
increased from 52 to 143 overdue reviews.
Further, a growing number of sites will
require the reviews since the use of
containment remedies has been increasing.
To effectively address the backlog, EPA may
need to spend approximately $1 million
above the current spending level each year
for the next three years.
As of March 1999, EPA issued 63 percent of
reviews an average of 17 months after
required due dates. As a result, EPA did not
inform those in affected communities or the
Congress about whether corrective actions
were warranted as early as it should have.
In nine of 32 five-year reports we examined
EPA did not state conclusions on the
protectiveness of site remedies or did not
adequately support the conclusions made.
Half of the reports reviewed which contained
recommendations did not identify who was
responsible for taking corrective actions.
We recommended that the Assistant
Administrator for Solid Waste and
Emergency Response designate the backlog
of five-year reviews as a weakness under the
Federal Managers' Financial Integrity Act;
consider the need for a Government
Performance and Results Act performance
measure for the reviews; and ensure that
reports contain an adequately supported
statement of protectiveness.
Agency Action
We issued the final report (99P0218) to the
Assistant Administrator for Solid Waste and
Emergency Response on September 30,
1999. In response to the draft report, the
Assistant Administrator generally agreed with
the findings and most of the
recommendations. He provided milestones
for implementing the recommendations. In
response to the final report, he reaffirmed
those milestones and provided milestones for
one recommendation we revised between the
draft and final reports.
Superfund Special Accounts
Understated
j
In October 1995, EPA announced its
intention to encourage greater use of special
accounts as a means to ensure that
settlement funds received, and interest
earned, were available for future response
actions for a specific site. This administrative
reform assists in providing an incentive for
early settlement with Potentially Responsible
Parties (PRP) and, thereby, reducing
litigation costs. Through June 1998, EPA
had established 112 special accounts with
settlement receipts of $383 million, an
additional $64 million in earned interest, and
$41 million in disbursements. Since the
reform was implemented, the number of
accounts opened increased from 35 to 112 or
320 percent, with continued growth expected
in the future.
We found that EPA's general ledger
balances did not agree with its special
account data base, earned interest had not
been posted for six months, there was
inconsistent use of the accounts between
regions, and PRP settlement documents did
not always delineate between what should be
past or future cost receipts. General ledger
balances were understated by $93 million in
settlement receipts, $8 million in earned
interest, and $96 million in disbursements.
Also, regional personnel were not always
aware of special accounts.
We made recommendations to the Chief
Financial Officer (CFO) and to the Assistant
Administrator for Enforcement and
Compliance Assurance (OECA) that would
improve the use and administration of special
accounts.
Agency Action
We issued the final report (99P0214) to the
CFO and Assistant Administrator for OECA
on September 28, 1999. In response to the
draft report, the CFO and OECA agreed with
some of our recommendations and indicated
some actions they were taking to improve the
administration of special accounts. In
response to the final report, the Agency
provided timetables for corrective actions for
most of our recommendations.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 16
INVESTIGATIVE ACTIVITY
The OIG Office of Investigations (Ol)
continued a major proactive investigative
effort in the Superfund program. Over the
last four years, monetary fines, restitution,
and recoveries resulting from investigations
totaled more than $14 million. The Ol
continued to focus on all stages of the
Superfund program, with a special emphasis
on contracting for removals and remediation.
As a result of Ol proactive efforts in prior
years, we continued to initiate criminal
investigations across the nation. We saw a
corresponding increase in the number of civil
cases filed as a result of this investigative
activity. We expect to see a continued
increase in significant civil actions as Ol's
investigative emphasis on major Agency
contracting continues to increase.
During fiscal 1999, our Superfund
investigative efforts resulted in five
indictments, five convictions, and nine civil/
administrative actions. Monetary fines,
restitution, and recoveries resulting from
investigations totaled $2,900. At the end of
fiscal 1999, we had 69 active Superfund
investigations, 36 percent of all active OIG
investigations at EPA.
We give examples of Superfund investigative
activity with results in fiscal 1999 in the
following synopses.
Former California Lab Supervisor Pled
Guilty to Falsifying Laboratory Testing
Data
On November 19, 1998, Gene Kong Lee, a
former supervisor at Anlab Analytical
Laboratories, a Sacramento company that
specialized in water and waste water testing,
pled guilty to one count of falsifying
laboratory test data. In July 1998, Lee was
indicted in U.S. District Court, Eastern District
of California, on charges that he falsified test
results and submitted a false claim of
$10,500 to EPA for payment. The testing
was performed during the cleanup of a
Superfund site in Davis, California. Lee, a
gas chromatography/mass spectrometry
supervisor at Anlab, manipulated the
computer-generated test data to make the
results appear to meet quality assurance
criteria and to avoid performing quality
control measures. Also, Lee falsely reported
the sampling analyses were done within
specified holding times when he knew this
was untrue. Previously, two operators Lee
supervised at Anlab, Xiaomang Pan and
Brett Huffman Williams, pled guilty to
misdemeanor charges of fraudulent demand
and aiding and abetting for their action in
falsifying the laboratory results by
manipulating the data. This investigation was
conducted jointly by the EPA OIG and the
EPA Criminal Investigation Division.
Chemist and Supervisor Pled Guilty to
Falsifying Laboratory Analyses
On July 21, 1999, Valerie Smith, a laboratory
chemist, and Mark Bevan, a laboratory
supervisor, each pled guilty in United States
District Court, Eastern District of North
Carolina, to making a false statement and
aiding and abetting others in the commission
of making a false statement. In May 1999,
Smith and Bevan, employees of
CompuChem Environmental Corporation of
Gary, North Carolina, were charged with
conducting improper gas chromatograph/
mass spectrometer analyses on samples
taken from hazardous waste sites nationwide
and falsely certifying that the analyses
complied with all EPA contract requirements.
The EPA relies on the testing data provided
by laboratories participating in the Contract
Laboratory Program to assess threats to
public health and the environment and to
determine where and when remedial action is
needed.
California Laboratory Owner/Officer
Charged with Submitting False
Analytical Data
On February 3, 1999, Blayne Hartman, owner
and officer of Transglobal Exploration
Geochemistry, was indicted in U.S. District
Court, Central District of California. The
indictment charged that Hartman submitted
analytical data relating to soil gas samples
collected at the Mayco Pump property,
located in the San Fernando Valley
Superfund site, to the Los Angeles Regional
Water Quality Control Board. Hartman
claimed that the laboratory equipment had
been properly calibrated to analyze for
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 17
various contaminants when he knew that the
equipment had not been properly calibrated
and had falsified a portion of the calibration
data. On February 11, 1999, EPA
suspended Hartman from participation in
federal assistance, loan, and benefit
programs and from all federal procurement.
Between February 16 and March 1, 1999,
EPA also suspended Transglobal Exploration
Geochemistry and suspended Transglobal
Exploration & Geoscience, Inc.; Transglobal
Environmental Geochemistry, Inc.; and HP
Labs as affiliates of Hartman. Subsequently,
EPA lifted the suspension of HP Labs as the
result of an interim compliance agreement.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 18
FISCAL 1999 SUPERFUND REPORTS
Exhibit 1
Page 1of4
NOTE: The EPA-OIG changed information systems during fiscal 1999 from the Prime
Audit Tracking System (PATS) to the Inspector General Operations Reporting (IGOR)
system. All reports issued in fiscal 1999 have IGOR numbers, but many were originally
issued with PATS numbers. We include both numbers for these reports. We are using
here a standard format for the IGOR number, but the front of these reports sometimes
presents the number in a different format.
Internal and Management Reports
IGOR PATS
Number Number Description
Reviews Related to Statutory Requirements (other than IG Act)
99P0172 9100024 Superfund Annual Report to Congress Review-Fiscal 1995-96
99P0173 9100084 Superfund Annual Report to Congress Review-Fiscal 1997
Other Performance Audits
99P0193 9100116 Deferrals to RCRA Program
99P0218 Flve-Year Reviews
99M0002
99P0214
Orphan Share - Region 5
Special Accounts
99P0070 9100109 State Superfund Contracts - Region 4
Advisory and Assistance Reviews
99S0075 9400006 Bunker Hill, ID, Site Matching Funds Reporting
99S0073 9400007 Removals Quality Assurance Guidance
99M0019 START 2 Contractor Performance
Date
1/27/99
3/16/99
3/30/99
9/30/99
5/19/99
7/31/99
3/16/99
1/22/99
1/25/99
9/30/99
Cooperative Agreement Reports
9920212
9910223
99M0013
9910215
AZ Department of Water Resources 8/27/99
NJ Dept. of Environmental Protection - Bridgeport Credits 7/11/99
TX Natural Resource Commission - remedial responses 8/11/99
TX Natural Resource Commission - Sikes Disposal Pit 7/16/99
Interagency Agreement Reports
J
9910191 9100075 Agency for Toxic Substances & Disease Registry-Fiscal 1997 1/13/99
9910312 Army Corps of Engineers - Fiscal 1998 9/30/99
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 19
FISCAL 1999 SUPERFUND REPORTS
Contract Reports
IGOR PATS
Number Number Audi tee/Description
Initial Pricing Reviews (Preaward Audits)
99S0008 9400011 C&C Johnson & Malholtra, DC
9910007 9100082 Lockheed Marietta, NJ
9910212 S & D Environmental Services, Inc. - Accounting System
9920212 Westinghouse Remediation Services, Inc., FL
Incurred Costs
9910016 9100086 Bechtel Group, Inc. - 1995
9910232 Black & Veatch Special Projects Corp., MO - 1997
9910238 Camp, Dresser & McKee - Fiscal 1996-97
9910216 Camp, Dresser & McKee - Fiscal 1997 Corporate
9910226 COM Federal Programs Corp., VA - Fiscal 1996-97
9910018 9100010 CET Environmental Services, Inc. CO - 1992
9910020 9100011 CET Environmental Services. Inc. CO - 1993
9910019 9100009 CET Environmental Services, Inc. CO - 1994
9910299 CET Environmental Services, Inc. CO - 1995
9910297 CET Environmental Services, Inc. CO - 1996
9910298 CET Environmental Services, Inc. CO - 1997
9910017 9100031 CH2M Hill, Inc., CO - 1994
9910214 CH2M Hill, Inc., CO - 1995
9910021 9100007 DPRA, Inc., KS - 4/1/96-3/31/97
9910023 9100113 Dynamac Corp., MD - 1996
9910249 Dyncorp, Inc. - Fiscal 1996
9910220 Earth Technology Remediation Service, VA - Fiscal 1996
9910010 9100049 Ebasco Services, Inc., NY - 1993
9910235 Ebasco Services, Inc. (Foster Wheeler), NJ - 1997
9910311 Ecology & Environment, Inc., NY - Fiscal 1993
9910011 9100037 EENSP (Viar), VA - 1995
9910027 9100124 Environmental Technology, Inc., VA - 1/1/95-8/25/95
9910067 9100131 Environmental Quality Management, Inc., OH - 1995
9910218 Environmental Quality Management, Inc., OH - 1996
9910307 Environmental Quality Management, Inc., OH - 1997
9910032 9100001 Four Seasons Industrial Services, NC - 1996
9910025 9100036 Four Seasons Industrial Services, NC - 1997
9910012 9100023 Hazardous & Medical Waste, MD - 1995
9910014 9100008 Hughes STX Corp., MD - Fiscal 1994
9910013 9100002 Hughes STX Corp., MD - Fiscal 1995
9910022 9100121 Integrated Lab/RAO Enterprises, NC - Fiscal 1997
9910250 IT Corp. - Fiscal 1996
9910031 9100028 Lockheed Martin Environmental Services, TX - 1995
9910242 Malcolm Pirnie, Inc. - Fiscal 1992
9910308 Malcolm Pirme, Inc. - Fiscal 1993
9910026 9100138 OHM Remediation Services Corp., OH - 1997
9910029 9100137 OHM Remediation Services Corp., OH - 1998
9910015 9100087 Resource Applications, Inc., VA - 1995
9910009 9100052 Rust Environmental & Infrastructure, Inc., NC - 1993
9910028 9100130 S-Cubed, CA - 6/1/94-7/31/95
9910024 9100125 Sverdrup Corp., MO - 1997
Exhibit 1
Page 2 of 4
h
Date
27 8/99
1/27/99
7/15/99
8/11/99
21 8/99
7/23/99
7/28/99
7/19/99
7/21/99
10/15/98
10/15/98
10/15/98
9/24/99
9/24/99
9/24/99
10/28/98
7/15/99
107 7/98
3/26/99
8/31/99
7/21/99
11/13/98
7/26/99
9/30/99
117 2/98
47 8/99
4/30/99
7/20/99
9/29/99
107 1/98
117 2/98
10/21/98
10/15/98
107 1/98
47 8/99
97 7/99
10/28/98
8/10/99
9/30/99
4/30/99
4/30/99
21 8/99
11/13/98
4/23/99
4/15/99
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 20
Exhibit 1
Page 3 of 4
FISCAL 1999 SUPERFUND REPORTS
Contract Reports (Continued) ;
IGOR PATS
Number Number Audi tee/Descrl pti on
Incurred Costs (Continued)
9910195 JAMS Consultants, Inc., NY - 1997
9910279 Technology & Management Service, Inc., MD - Fiscal 1990-94
9910281 Technology & Management Service, Inc., MD - Fiscal 1990-94
9910278 Technology & Management Service, Inc., MD - Fiscal 1995-96
9910262 Tetra Tech, Inc., CA - Fiscal 1996
9910033 9100056 Tetra Tech Env. Mgmt., Inc./PRC Env. Mgmt., Inc., IL - 1994
9920030 9200004 URS Consultant Corp., CA - 11/1/95-10/31/96
Final (Closeout) Audits
9910227 Acurex Corp., CA - Contract 68-W8-0100
9910035 9100057 Black & Veatch Special Projects Corp., MO - ARCS - 1995
9910233 Black & Veatch Special Projects Corp., MO - ARCS - 1995
9910040 9100090 CMC, Inc., KY - Team Subcontractor
9910037 9100062 Foster Wheeler Environmental Corp., NJ - ARCS - 1994/95
9910036 9100063 Foster Wheeler Environmental Corp., NJ - ARCS - 1996
99S0068 9400005 PEI Associates, OH - ERCS
9910034 9100051 Roy F. Weston, Inc., PA - 11/1/82-12/31/88
9910260 Roy F. Weston, Inc., PA - Contract No. 68-01-7367
9910180 9100029 TAMS Consultants, Inc., NY - ARCS - 1993
9910181 9100030 TAMS Consultants, Inc., NY - ARCS - 1994
9910038 9100045 TAMS Consultants, Inc., NY - ARCS - 1995
9910039 9100098 Techlaw, Inc., CO - 11/16/89-9/30/94
Date
6/23/99
9/17/99
9/21/99
9/17/99
9/ 7/99
11/19/98
3/ 5/99
7/22/99
11/19/98
7/26/99
2/17/99
12/16/98
12/16/98
1/15/99
11/13/98
9/ 1/99
10/28/98
10/28/98
III 5/98
3/ 5/99
Internal Controls
99S0186 Ecology & Environment, Inc., NY - Delinquent Disc. Statemts 8/ 4/99
99S0187 Ecology & Environment, Inc., NY - Floorcheck 9/29/99
9920255 Westinghouse Remediation Services, Inc., FL - Acctg. System 9/ 1/99
Cost Accounting Standards
9910047
9910048
9910219
9910241
9910240
9910046
99M0009
99S0076
9910269
9910271
9910272
9910273
9100140
9100139
9100044
Bechtel National
Bechtel System &
DPRA, Inc.,
DPRA, Inc. ,
DPRA, Inc.,
DPRA, Inc.,
KS -
KS -
KS -
KS -
, Inc
., CA
- Di
Infrastructure
CAS
CAS
CAS
CAS
Ecoloqy & Environment
9400002
Reidel Envi
URS Greiner
URS Greiner
URS Greiner
URS Greiner
ronmental
, WA
, WA
. WA
, WA
- CAS
- CAS
- CAS
- CAS
408 Fiscal
412
416
418
, Inc
Servi
404
408
410
418
., NY
ces,
sclosure Statement
, Inc.,
1999
- Revi
CA
sed
OR - Dloxln
- Disc
Disc.
. Statement
Statement
Consulting
4/30/99
4/30/99
7/21/99
7/29/99
7/29/99
III 4/98
11 8/99
10/21/98
9/ 9/99
9/10/99
9/10/99
9/10/99
Assistance to Agency
99S0069 9400001 Environmental Quality Mgmt., Inc., OH-Prime definitlzation
107 8/98
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 21
FISCAL 1999 SUPERFUND REPORTS
Exhibit 1
Page 4 of 4
Contract Reports (continued)
J
IGOR PATS
Number Number Auditee/Descr1pt1on
System
9910043
99M0018
9910045
9910276
9910041
9910203
9910042
9910270
9910263
9910264
9910292
9910044
Surveys and Other Contract Audits
9100085 Environmental Engineering, CO - Accounting system
Malcolm Pirnie, Inc. - 1999 Floorcheck
9100014 Roy F. Weston. Inc.
Roy F. Weston, Inc.
9100041 Sverdrup Civil, Inc.
PA - 1998 Floorcheck
PA - Disclosure Statement Cost Impact
MI - 1997 Floorcheck
Sverdrup Civil, Inc., MI - 1999 Floorcheck
9100040 Sverdrup Environmental, Inc., MI - 1997 Floorcheck
TAMS Consultants, Inc., NY - 1999 Floorcheck
CA - Accounting System and Billing System
CA - Accounting System and Billing System
CA - Accounting System and Billing System
Tetra Tech,
Tetra Tech,
Tetra Tech,
Inc.
Inc.
Inc.
9100114 Toeroek Associates, CO - Accounting review
Date
21 8/99
9/28/99
10/19/98
9/15/99
III 3/98
7/12/99
III 3/98
9/10/99
9/ 7/99
9/ 7/99
9/23/99
3/26/99
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 22
APPENDIX 1: AVAILABILITY OF REPORTS
Most of the internal and management audit reports we issue are available to the public
upon request. Many of our financial reports contain Confidential Business Information and are
not available for full public release.
We make audit reports for which we expect the widest public interest available on the
World Wide Web at . Printed copies of reports may
be requested from:
U.S. Environmental Protection Agency
Office of the Inspector General
Office of Audit (Mail Code 2421)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
(202)260-1106
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 23
APPENDIX 2: ACRONYMS AND ABBREVIATIONS
Acctg. Accounting
ARCS Alternative Remedial Contracting Strategy
AZ Arizona
CA California
CAS Cost Accounting Standard
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended
CFO Chief Financial Officer
CO Colorado
Corp. Corporation
DC District of Columbia
Dept. Department
Disc. Disclosure
DQO Data quality objective
Env. Environmental
EPA Environmental Protection Agency (U.S.)
ERCS Emergency Response Cleanup Services (EPA contracts)
ESS Engineering and Science Staff (EPA OIG)
FFMIA Federal Financial Management Improvement Act
FL Florida
GAO General Accounting Office
ID Idaho
IFMS Integrated Financial Management System (EPA)
IG Inspector General
IGOR Inspector General Operations Reporting (EPA OIG)
IL Illinois
Inc. Incorporated
KS Kansas
KY Kentucky
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EPA Office of the Inspector General Annual Super-fund Report to the Congress for Fiscal 1999 24
MD Maryland
Mgmt. Management
Ml Michigan
MO Missouri
NC North Carolina
NCP National Oil and Hazardous Substances Contingency Plan, 40 CFR Part 300
NJ New Jersey
NJDEP New Jersey Department of Environmental Protection
NPL National Priorities List
NY New York
OCFO Office of the Chief Financial Officer (EPA)
OECA Office of Enforcement and Compliance Assurance (EPA)
OH Ohio
Ol Office of Investigations (EPA OIG)
OIG Office of the Inspector General
OMB Office of Management and Budget
OR Oregon
PA Pennsylvania
PATS Prime Audit Tracking System (EPA OIG)
PDD Preauthorized Decision Document
PRC Planning Research Corporation
PRP Potentially Responsible Party
QAPP Quality Assurance Project Plan
RCRA Resource Conservation and Recovery Act
RCRIS Resource Conservation and Recovery Act Information System
RI/FS Remedial Investigation/Feasibility Study
SAP Sampling and Analysis Plan
SARA Superfund Amendments and Reauthorization Act of 1986
SFFAS Statement of Federal Financial Accounting Standards
START Superfund Technical Assessment and Response Team (EPA contract)
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1999 25
TX Texas
U.S. United States
U.S.C. United States Code
VA Virginia
WA Washington
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