February 1994
   vvEPAOfficeofthe
    Inspector General
    Report to Congress
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    Fiscal 1993
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Office  of  Inspector  General
The Inspector General Act of 1978, as amended, created Offices of Inspector
General (OIG) to consolidate existing investigative and audit resources in
independent organizations headed by Inspectors General. For fiscal 1993, the
EPA OIG received $42.8 million and a funded staffing level of 414 FTE. The
Inspector General (IG) is appointed by, and can be removed only by, the
President. The mission of the OIG, as stated in the Act, is to:
    •  Conduct  and supervise  independent  and objective  audits  and
       investigations relating to agency programs and operations.
    •  Promote economy, effectiveness, and efficiency within the agency.
    •  Prevent and detect fraud, waste, and abuse in agency programs.
    •  Review and make recommendations regarding existing and proposed
       legislation and regulations relating to agency programs and operations.
    •  Keep the agency head and the Congress fully and currently informed of
       problems  in agency programs.
To ensure objectivity, the Act provides the IGs:
    •  Independence to determine what reviews to perform.
    •  Access to all information necessary for the reviews.
    •  Authority  to publish findings and recommendations based on the
       reviews.
We believe that the OIG has always taken a cooperative approach with EPA
management in resolving and implementing results of our audits and investiga-
tions. In this regard, the OIG has  begun to place even greater emphasis on
building  relationships with agency program managers based on a shared
commitment to improving operations. Currently, for example, in response to
               Office of Inspector General
                        Inspector General
                        John C. Martin

                        Deputy Inspector General
                        Anna Hopkins Virbick
   Office of Audit
   Kenneth A. Konz
   Assistant Inspector General
   James O. Rauch
   Deputy
Office of Management
John C. Jones
Assistant Inspector General
Office of Investigations
Daniel S. Sweeney
Assistant Inspector General
Michael J. Fitzsimmons
Deputy
    » Acquisition & Assistance Audits
     ElissaR Karpf
    • Internal i Performance Audits
     Michael D. Simmons
    > ADP Audits and Support
     Craig Silverthorne
    • Planning & Resource Management
     Kenneth D- Hockman
    » Engineering & Science
     Walter G. Gilbert
   • Program Management Division
    John T Walsh
    Director
   • Resources Management Division
    Michael J. Binder
    Director
  OIG Divisional Inspectors General are listed on the inside back panel.

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congressional requests for broad, top-level reviews of EPA's financial manage-
ment and information resources management program, we are working with
Agency personnel to catalog all significant causes of EPA's problems in these
areas and to make recommendations to the Administrator for effective solu-
tions.
      TheOIG has taken or planned a number of other initiatives to enhance
this cooperation, such as:
    •  The OIG will solicit and consult with  program management and
       employees to get more of their input on our strategic and annual work
       plans to ensure that our focus is on the critical areas of the Agency's
       operations.
    •  More OIG resources are being directed  to conducting performance
       audits to analyze how  well programs are meeting their goals and
       recommending changes in program design and managementtechniques
       to increase efficiency and improve program results. We will focus more
       on causes of problems.
    •  Our reports will expand on examples of successful program management
       practices that can be adapted for use in other agency programs.

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Profile  of Activities  and  Results
Information reported in the semiannual report for the period ending March 31,
1993, may have been adjusted subsequent to the end of that period. Conse-
quently, totals for the semiannual periods ending March 31  and September
30, 1993, may not add up to the fiscal year totals presented below.

Audit Operations (dollars in  millions)	Fiscal 1993

•  Questioned Costs (Ineligible, Unsupported and Unnecessary/
   Unreasonable)
    Total*                                                $387.3
   - Federal Share                                         $276.6
•  Recommended Efficiencies (Funds be Put to Better Use)
    Total*                                                $73.9
   - Federal Share                                         $63.2
•  Costs Disallowed to be Recovered
   - Federal Share                                         $78.2
   (costs which EPA management agrees are unallowable
   and is committed to recover or offset against future payments)
•  Costs Disallowed as Cost Efficiency
   - Federal Share                                         $13.0
   (funds made available by EPA management's commitment
   to implement OIG recommendations)
•  Recoveries from Audit                                    $43.1
   Resolutions of Current and Prior Periods (cash collections
   or offsets to future payments)**
•  EPA Reviews Performed/Issued by OIG                    1,572

Investigative Operations	Fiscal 1993

•  Fines and Recoveries (including civil)                      $20.5
•  Investigations Opened                                    286
•  Investigations Closed                                     297
•  Indictments of Persons or Firms                             29
•  Convictions of Persons or  Firms                             22
•  Administrative Actions Taken against EPA Employees           35

Fraud Detection and Prevention Operations

•  Debarments, Suspensions, and Compliance Agreements      106
   (actions to deny persons or firms from participating in  EPA
   programs or activities because of misconduct or
   poor performance)
•  Hotline Cases Opened                                      82
•  Legislative and Regulatory Items Reviewed                  158
•  Personnel Security Investigations Adjudicated                840
  * Questioned Costs and Recommended Efficiencies are subject to change in the audit
   resolution process.
 ** Information on recoveries is provided by the EPA Financial Management Division and
   is unaudited.
*** Reports resolved are subject to change pending further review.              fm

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Audit Activities
    Questioned Costs and Recommended Efficiencies
            by Type of Assignment - Fiscal 1993
         Construction    Superfund
Other
                                                  D Non-Federal
                                                     Recommended
                                                     Efficiencies
                                                    I Federal Share
                                                    Recommended
                                                    Efficiencies
                                                    I Non-Federal
                                                    Questioned
                                                    I Federal
                                                     Questioned
Examples of Significant Audits
The following represents some of our most significant findings. They should not
be considered representative of the overall adequacy of EPA management.

Better Oversight Needed of Athens of Laboratory's Contracts and
Assistance Agreements
EPA's Environmental Research Laboratory (ERL), Athens, Georgia, improperly
used extramural resources by: (1) awarding repetitive sole-source Small Busi-
ness Act, section 8(a) contracts to retain  long-term  on-site contractors, (2)
avoiding the $3 million competition threshold established for  sole-source
contracts under the 8(a)  set-aside  program, (3) having contractor personnel
perform inherently governmental  functions, and  (4) improperly awarding
cooperative agreements  (CA) and  interagency agreements, rather than con-
tracts, to obtain services for the direct benefit of ERL research projects, including
a $5.2 million CA awarded to the University of Georgia (UGA) under which at
least 14 UGA employees worked on-site in 1992. The Agency had planned or
already initiated corrective actions, including the following. The Agency stated
that it had implemented  revised procedures for 8(a) procurements, including
specific requirements for careful scrutiny of program requests. Also, the Agency
sent special  letters of instruction to all contractors and project officers address-
ing the subject of inherently governmental functions.  In addition, the Agency
indicated that it was updating guidance on distinguishing between grants and
contracts, the proper use of CAs, and had  strengthened it review process for
lAGs.

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Stronger Enforcement Needed Against Small Water Supply
Systems
EPA Region 1 and the States of Vermont and New Hampshire did not take timely
and effective enforcement actions against small public water supply systems
which violated Safe Drinking Water Act (SDWA) requirements. The majority of
the nation's population is served by large public water supply systems. Most
violations of SDWA requirements are by small systems. From a sample of 29
systems, we found that the Region or the States had not issued final enforcement
actions for 10 systems that had been in significant noncompliance for at least
6 months and took from 9 months to over 2 years to execute final enforcement
orders to correct violations by 8 other systems. The remaining 11 systems had
either returned to compliance or had a timely enforcement action taken against
them. The Region was taking some corrective actions.

EPA Agrees To Include Options for  Public Involvement in
Pesticide Risk Reduction Decisions
To reduce the length of the special review process for potentially hazardous
pesticides, the Office of  Pesticide Programs (OPP) began to use alternatives
more frequently, especially negotiation  of risk reductions with registrants.
However, the opportunity for public involvement,  emphasized  in the special
review process, was lessened since OPP did not develop guidelines to ensure
it. The Agency agreed to develop guidelines for  negotiating risk  reduction
actions with the registrants, including options for public  participation.

EPA Needs  More Reliable Information on the Production  of
Ozone-Depleting Chemicals
To comply with the Clean Air Act and the Montreal Protocol, an international
agreement to protect the ozone layer, EPA was required to reduce the amount
of carbon tetrachloride produced in the United States. The Montreal Protocol
also restricted the trading  of chlorofluorocarbons (CFC) production allowances
and the exporting of ozone-depleting chemicals. Based on inadequate informa-
tion concerning producers' 1989 production, EPA established flawed baseline
allowances that were used in 1991 and  1992  to measure reductions in the
production of carbon tetrachloride. Also, EPA did not document its reviews of
international trades of CFC production allowances or have a system to monitor
exports  of  ozone-depleting chemicals.  The Agency agreed to correct the
problems.

EPA's Involvement in the Sale of Quality Assurance Materials
May Conflict with Its  Regulatory Role
In 1991, the Environmental Monitoring Systems Laboratory in Cincinnati, Ohio,
(EMSL-Cin) entered into Cooperative Research and  Development Agreements
(CRADA) with five companies to develop, manufacture,  and sell "EPA Certi-
fied" quality assurance (QA)  materials.  Laboratories use these materials to
calibrate and test equipment that analyzes samples for hazardous chemicals in
the environment. EMSL-Cin would receive a percentage of the companies'
proceeds from the sales  of these materials. This created  conditions for a
Government-controlled market and could compromise EPA's ability to admin-
ister fair and equitable regulations. The Agency proposed several actions which
it would take to determine whether CRADAs are the best way to continue the
program.

More Improvements Needed in Accounting
Systems and Controls
We found key weaknesses in  EPA's accounting systems  and controls which
affected  the reliability of  the Agency's fiscal 1992 financial statements. For
example, the Superfund Trust Fund financial records had to be adjusted to

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decrease assets by $57.5 million, decrease liabilities by $499.3 million, and
increase equity by $441.8 million. In addition, EPA made unsupported adjust-
ments totaling $181.3 million and $21.2 million, respectively, to the Federal
Insecticide,  Fungicide, and Rodenticide Act and Tolerance Fund general
ledgers. We disclaimed opinions on the statements for the Superfund Trust Fund
and the Pesticides Revolving Funds and qualified or disclaimed our opinions on
statements of the Leaking Underground Storage Tank Trust Fund and the
Asbestos Loan Program. The Agency was taking corrective actions.

Nearly $104 Million of Questioned Costs Claimed for
New York City Projects Not Fully Operational
EPA awarded  17 grants totaling  nearly $1.3 billion to the New York City
Department  of Environmental  Protection for designing and constructing the
North River  and Red  Hook wastewater treatment facilities. We questioned
$41,632,671  of the costs claimed by the  grantee as ineligible, including
architectural engineering, construction, force account, and innovative and
alternative technology costs and $40,256,461 of unsupported costs. We also
questioned $22,109,417 as unnecessary or unreasonable because, among
other things, one project's laboratory had not been used and its computerized
control room was not operating as planned and the other project's computer-
ized process control distribution system was not operational.

More Than $9.2 Million of San Diego,  California,
Project Costs Questioned
A 2-mile long pipeline broke about 3,000 feet from shore, allowing over 170
million gallons of partially treated sewage from the City of San Diego's Point
Loma wastewater treatment plant to be discharged daily in about 35 feet of
water. The City claimed $9,084,891  of ineligible costs under a grant EPA
awarded to repairthe outfall, including $8,500,000 of construction, engineer-
ing, and other costs incurred because the grantee did not credit the grant with
insurance proceeds for the required repairs and $584,891 of construction costs
due to  a conflict of interest resulting from common ownership of the prime
contractor and the subcontractor  responsible for the outfall repair. We also
questioned $122,810 of unsupported construction costs.

Some  Improvements Made in Timeliness and
Controls Over Responsible Party (RP) Cleanups
The Agency's use of RPs to clean  up Superfund sites has been hampered by
numerous problems, including delays in initiating searches for RPs and nego-
tiating settlement agreements after RPs were  identified and lack of aggressive
enforcement actions. Instead of pursuing stipulated penalties, EPA primarily
relied on verbal negotiations and  warning letters to encourage RPs' compli-
ance. EPA had made progress in getting RPs involved in cleaning up Superfund
sites and taking  responsibility for their share of costs associated with  the
cleanups. However, there had not been a marked increase in enforcement
efforts against noncomplying RPs. The Agency had initiated several corrective
actions.

Improperly Classified Superfund  Costs May Affect
Recovery From Responsible Parties
In Regions 3, 6, and 7, $1,601,200, or  39 percent, of reviewed costs charged
to accounts for assessing the need for Federal action at sites, should have been
charged to specific site accounts or general program accounts. Of that amount,
$540,800 of site specific costs were incorrectly recorded in the site assessment
accounts and may not be recovered from RPs. On the other hand, including
these site specific costs in the site assessment accounts could inflate the indirect
cost rate, resulting in other RPs paying EPA more than their fair share of incurred

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cleanup costs. Further, because Agency policy was unclear, $ 1,060,400, or 26
percent of the reviewed costs, were improperly included in the site assessment
accounts  rather than the general program accounts. As a result, RPs could be
asked to  repay EPA incorrect amounts for the Agency's cleanup efforts. The
Agency agreed to take corrective actions on all of our recommendations.

Cleanup of Leaking Underground Storage Tanks
Still Needed in Yosemite National Park
Neither the National Park Service (NFS) nor its concessioner had cleaned up 44
leaking underground storage tank (LUST) sites in  Yosemite  National Park,
California. Many of the sites were discovered more than 7 years ago. TheNPS's
concessioner was responsible for 26 sites, including 12 sites which affected
groundwater. The concessioner had not met  established time frames for
cleaning  up the high-priority sites. Yet, neither Region  9, State Boards, or
counties  responsible for oversight had put the concessioner under an enforce-
ment order. In response to our December 2,1992, report, a State regional board
issued a  cleanup-and-abatement order to the  concessioner. However, the
concessioner had not initiated remedial action at all ground water contaminated
sites by  September 30, 1993,  when  its  concessioner ownership contract
expired. Also, NPS had missed deadlines established by the regional board for
cleaning  up 18 LUST sites, sometimes by over 1 year. The Region  stated that
although  work had not been completed in a timely manner in the past, cleanup
was now progressing according to negotiated timetables.
 Report Resolution
 During fiscal 1993, the Office of Inspector General issued 1,572 reports and
 closed 487. Of the 331 reports in the follow-up system at year end, 100 reports
 remained for which no management decision had been made within 6 months
 of issuance.
      For the reports closed, $78.2 million of questioned costs were disal-
 lowed for recovery, and $13 million were agreed to by EPA management as
 funds that could be put to better use. The Agency reported cost recoveries from
 current and prior periods of $9.6 million in cash collections and $33.5 million
 in offsets against billings.

 Major Improvements Made to Dispose of
 Banned Pesticides Properly
 In September 1990, we reported that EPA had not ensured that holders of three
 banned pesticides—Ethylene Dibromide, 2,4,5-T/silvex, and dinoseb—safely
 controlled their  stocks and complied with disposal  rules. Regions and States
 could not fully identify and inspect all  known banned  pesticide storage
 locations. Also, emergency planners and fire officials were not aware of banned
 pesticide storage locations or emergency handling procedures. Our March
 1993 follow-up report concluded that the Office of Prevention, Pesticides and
 Toxic Substances (OPPTS) had initiated or proposed actions to address the
 findings and recommendations in our 1990 report. Although OPPTS can now
 require registrants to recall banned pesticides,  the Office had not completed
 new regulations for their storage and disposal.

 Despite Improvements in SITE Demonstration Program,
Additional Actions Still Needed
Our March 1990 report concluded that the Superfund Innovative Technology
Evaluation (SITE) Demonstration Program was seriously hindered by problems
locating sites and issuing reports on completed  projects. Also, contractor cost
controls were inadequate and technology developers were discouraged from
participating in the program by high demonstration costs and a lack of Federal
funding assistance. While EPA had made a variety of improvements to the SITE

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program, some corrective actions agreed to had either not been implemented
or had not corrected the noted deficiencies. Continuing problems included (1)
a systematic approach to matching technologies to sites had not been devel-
oped, (2) the evaluation  reports regarding SITE'S innovative technologies were
not consistently meeting established reporting time frames, (3) concerns over
ensuring adequate contractor performance and cost control needed to be re-
addressed, and (4) EPA had not relayed information to developers on how to
receive assistance. The Agency agreed to implement corrective actions.

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 Investigative  Activities
 During this fiscal year, our investigative efforts resulted in 29 indictments, 22
 convictions and $20.5 million of fines and recoveries from persons or firms who
 defrauded the Agency.

 $11.6 Million Settlement Reached in Pennsylvania
 Superfund  Case
 Chemical Waste Management (CWM), Inc., of Oak Brook,  Illinois, entered a
 guilty plea and paid $11.6 million in a settlement with the Government in
 October 1992, regarding the Lackawanna Refuse Superfund Site in Lackawanna
 County, Pennsylvania. In the late 1970s, thousands of 55-gallon drums contain-
 ing hazardous substances such as solvents, paint thinners, organic acids and
 toxic metals  were illegally dumped at the site. CWM employees intentionally
 crushed many drums containing over one inch of material rather than placing
 them in 85 gallon overpacks for shipment to landfill facilities as specified in its
 contract with EPA. The hazardous substances leaked out and contaminated the
 site. This investigation was done jointly with the Defense Criminal Investigative
 Service, U.S. Army Criminal Investigation Command, and  Defense Contract
 Audit Agency.

 Major EPA Contractor Pleads Guilty
 Booz-Allen & Hamilton, Inc., (BAH) a major Agency contractor, pleaded guilty
 to two counts of submitting false claims to EPA and was fined $1 million. The
 OIG investigation revealed that some of the contractor's employees charged
 time against Agency contracts, although they did not perform work on these
 contracts. BAH also paid the Government $638,000 under a civil settlement
 agreement.

 Company and Its President Guilty of Bribery Attempt
 Environmental Health, Research, and Testing, Inc., of Lexington, Kentucky, and
 its owner, Dr. Pritam S. Sabharwal, pleaded guilty in August 1993 to charges of
 offering a bribe to an EPA official to obtain privileged information on a building
 to be constructed for EPA at Research Triangle Park, North Carolina. The EPA
 employee who received the $18,000 bribe was cooperating with the OIG. The
 company agreed to pay a criminal fine of $1  million.

 metaTRACE Pays $2.4 Million Settlement
 The Inspector General Division (IGD), EPA Office of General Counsel, working
 with the Departments of Justice, Army, and Air Force, negotiated an agreement
 under which TRC Companies, and its former subsidiary,  metaTRACE, Inc.,
 agreed to pay the Government $2,425,000 to settle a potential False Claims Act
 case. EPA's share of the settlement was $225,000 to cover EPA's payments for
 analyses that could not be relied on and for additional resampling. metaTRACE
 and two of its officers were previously convicted of submitting false statements
 to EPA. One metaTRACE employee, Carol Byington, was sentenced to 5 years
 in jail and fined $20,000; and another employee,  Kenneth Baughman, was
 sentenced to 5 years probation and fined $10,000.

 Computer Sciences  Corporation Pays Over
$2.1 Million Settlement
As the result of an OIG audit and investigation, EPA's Suspension and Debar-
ment Division, working with the IGD, negotiated a compliance agreement to
resolve the suspension of the  Applied  Technology  Division of Computer
Sciences Corporation (ATD-CSC).  CSC agreed to (1) pay  the Government

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$1,147,856 to resolve a potential False Claims Act case;(2) pay EPA$1,002,291
to resolve EPA contract disputes; (3)  the debarment of the ATD-CSC vice
president for 2 years; (4) the exclusion of other ATD-CSC employees from all
government contract work for 2 years;  and (5) the implementation of the CSC
Proposal Integrity Program to ensure that all proposals worth more than $25
million are reviewed by a senior CSC official for accuracy and lack of ambiguity.
EPA had previously suspended ATD-CSC and three of its executives based on
information developed by the OIG.

Contract Laboratory Program Investigation
Laboratory  analyses under the Contract Laboratory Program (CLP) are the
empirical basis for the  entire Superfund program.  Based on testing for the
presence of hazardous chemicals by these laboratories, the Superfund program
decides which cleanups to initiate and how to carry them out. Fraudulent
analyses could result in  a danger to the public health and the environment as
well as the unnecessary expenditure of cleanup funds. In addition, fraudulent
analyses could hinder the Department of Justice's efforts to collect the cost of
cleanups from the responsible parties.
      Several actions resulting from the contract lab investigations are de-
scribed below.

   • Lab Pleads Guilty to False  Claim
      NETGulfCoast, Inc. (NETCC), pleaded guilty to one count of submitting
      false claims to EPA. NETCC admitted that its Dallas laboratory falsified
      test data and submitted false claims for payment over a 3-year period.
      NETGC paid  a $50,000 fine and agreed to provide $200,000 to the
      Federal Law  Enforcement Training Center in Clynco,  Georgia, for
      training law enforcement officers in detecting fraud.

   • Laboratory  Pleads Guilty to Fraud
      Environmental Industrial Research Associates, Inc. (EIRA), was sen-
      tenced in March 1993 after  EIRA and three of its employees pleaded
      guilty to conspiracy to defraud the Government. EIRA, through the
      employees who pleaded guilty,  manually overrode the Gas Chromato-
      graph/Mass Spectrometer (GC/MS) instruments' calibration readings to
      falsely reflect that the instruments were properly calibrated. The analyti-
      cal results of soil and water samples taken from Superfund sites were
      compromised, resulting in EIRA's submission of false data and  false
      claims. EIRA was fined $174,000, which was suspended, and placed on
      5 years probation.

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Fraud  Prevention Activities
Suspension and Debarment Activities
EPA's policy is to do business only with contractors and grantees who are honest
and responsible. EPA enforces this policy by suspending or debarring contrac-
tors or grantees, or individuals  within those organizations, from further con-
tracts or assistance for acting improperly, having a history of substandard work,
or willfully failing to perform on EPA or other federally-funded activities. Both
procurement and nonprocurement debarments or suspensions by one agency
are effective in all  agencies.
       In fiscal 1993, 106 debarment, suspension,  or compliance agreement
actions were taken, including the following:
    •  EPA debarred Cavour Yeh and EMtec Engineering, Inc. (EMtec), his
       affiliate, from participating  in any Federal assistance, loan, and benefit
       programs for 2 years, based on Mr.Yeh's conviction for mail fraud and
       making false statements. Mr. Yeh had submitted fraudulent time sheets
       under  several federally-funded research projects  conducted  at the
       University of California at Los Angeles.
    •  EPA debarred the National  Award Center (MAC), also known as Sante
       Enterprises Inc.  (SEI), for 3 years after  the criminal convictions of
       Douglas Raymond Cox and Saul Calindo, two of the Directors of the
       Center, and numerous other employees. In a telemarketing scheme to
       sell water purifiers, NAC/SEI falsely represented that EPA approved the
       purifiers  and that  EPA was sponsoring  a  bill  in the House  of
       Representatives  to require all households  to have a water filtration
       system.
    •  EPA suspended Caribe General Constructors, Inc. (Caribe); Osvaldo J.
       Ortiz, itspresident;and)oseM. Bonnin, its vice president for operations.
       An OIG investigation indicated that Caribe had submitted false claims
       to EPA  in connection with the construction of an EPA-funded sanitary
       sewer system in Ponce, Puerto Rico. Subsequently, Caribe paid EPA
       $75,000, twice the amount of the alleged fraud, and agreed to strong
       compliance measures.
    •  EPA suspended the Appl ied Technology Division of Computer Sciences
       Corporation (ATD-CSC), along with several key officials. CSC used false
       and misleading  statements regarding  employee qualifications in  its
       proposal for the Technical and Operational Support Services contract.
       Under a compliance agreement to resolve the suspension, CSC agreed
       to (1) pay  the Government $1,147,856  to resolve a potential False
       Claims Act case, (2) pay  EPA $1,002,291  to  resolve  EPA contract
       disputes, (3) the debarment of the ATD-CSC vice  president and the
       exclusion of other ATD-CSC employees from all government contract
       work for 2 years, and (4) the implementation  of a proposal integrity
       program.
Personnel Security Program
The Personnel Security Program is one of the Agency's first lines of defense
against fraud, using background investigations to review the integrity of EPA
employees and  contractors. During fiscal  1993, 840  investigations  were
reviewed.

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Hotline Activities
The OIG Hotline Center opened 82 new cases and completed and closed 74
cases during fiscal 1993. Of the 74 cases closed, 14 resulted in environmental,
administrative, or prosecutive action. We also referred 7,778 callers to the
appropriate program office, State agency, or other Federal agency for assis-
tance.
      The following are examples of corrective action  resulting from calls to
the OIG Hotline Center:
    •  A complainant alleged that a company was fraudulently violating
       vehicle emission and safety laws. A review of the complaint disclosed
       that the company had tampered with emission control equipment. As
       a result, a notice of violation was issued  to  the company for  11
       tampering violations and the company was fined $16,500.
    •  A complainant alleged that an inspector for a State agency used undue
       influence to  secure  a subcontract on  an EPA-funded project for a
       company in which the inspector had a financial interest. In addition, the
       complainant stated that the inspector falsified records so that the
       company could obtain funds in excess of the contract price. A review
       of the complaint disclosed violations which resulted in the State taking
       action against three individuals. The inspector resigned rather than be
       terminated, another  State official was suspended without pay for 8
       weeks, and a third State official pleaded guilty to a misdemeanor and
       was suspended without pay for 12 weeks.
    •  A complainant alleged that an employee inflated two local travel claims
       and received payment. A review  of the complaint disclosed that the
       employee had submitted 2 fraudu lent local travel claims. As a resu It, the
       employee was liable under the Program Fraud Civil Remedies Act and
       repaid the Government more than 10 times the  amount of the fraud.
    •  A complainant alleged a conflict of interest and abuse of travel funds by
       an EPA employee. A review of the complaint disclosed that a supervisor
       created an appearance of favoritism toward another employee,  in
       violation of ethical requirements.  The supervisor received a written
       reprimand.
If you are aware of any fraud, waste, or mismanagement, please contact the
EPA  Inspector General  Hotline or the appropriate  Divisional Inspector
General listed on the back panel.
    •  Information is confidential.
    •  Calls can be made toll free on (800) 424-4000. Callers in area code 202
       should use 260-4977.
                         Remember:
         Act  Like It's Your Money—It Is!

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Divisional Inspectors General
Region
Headquarters
Subject
Name
Audit Edward Cekosky
(Headquarters Audit Division)
Audit Melissa Heist
(Financial Audit Division)
Investigations Francis C. Kiley
(Washington Field Division)

1 & 2
3
4 &6
5
5, 7 &8
7 & 8
9 & 10
Investigations
(Procurement
Audit
Investigations
Audit
Investigations
Audit
Investigations
Audit
Investigations
Audit
Audit
Investigations
Emmett Dashiell
Fraud Division)
Paul McKechnie
Robert M. Byrnes
Paul R. Candolfo
Martin Squitieri
Mary Boyer
Vacant
Anthony C. Carrollo
Allen Fallin
Nikki Tinsley
Truman R. Beeler
H. Brooks Griffin
Telephone
(703) 308-8222
(202)260-1479
(703) 308-8282
(703) 308-8813
(617) 565-3160
(212) 264-0399
(215)597-0497
(215) 597-9421
(404) 347-3623
(404) 347-2398
(312) 353-2486
(312) 353-2507
(913)551-7824
(415) 744-2445
(415)744-2465
Cover: Yosemite National Park, California
                (Photo by Kathy Thompson,
                 EPA/OIC, Sacramento, CA)

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