905
ntal Protection
i DC 20460
350R83101
Office of
ictor General
»rt to Congress
11 f 1 983 to
imberSO, 1983
/NaJJ
imental Protection Agency
rtibrary
t Dearborn Street
Illinois 60604
is a digest version of the most'fecent
'report to Congress issued by the Office of
>r General. Its purpose is to inform EPA em-
did the public about our work in order to devel-
ir awareness and understanding of our re-
tifS.and activities.
the past months, we have received tremen-
6(1 and cooperation from the Administrator
Iff as we pursued our mission of improving
>my and efficiency of EPA programs and
.eliminate fraud, waste and abuse from the
operations. We have developed a strong inter-
program and improved our investigative pro-
btrt much remains to be done.
itly solicit the cooperation of all EPA em-
our work, for only with this help can we hope j
I. Listed on the back page of IG Highlights
imes, locations and phone number of the Di-
ispectors General for Audit and Investigations
kit the country. Please contact them or the
line if you desire to bring any matter to my
Mention.
tin
r General
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Profile of Activity and Results
Environmental Protection Agency
Office of Inspector General
Amount April 1, 1983,
to September 30, 1983
Audit Operations
Questioned and Set Aside Costs $158 Million
(Costs which are ineligible or lacking proper
support)
Sustained Costs for Recovery and Saving's $34 Million
(Costs which EPA management agrees are in-
eligible and is committed to recover or offset
against future payments )
Cost Efficiencies or Deobligations $11 9 Million
(Funds made available by implementing rec-
ommendations from OIG Internal and Man-
agement audits )
Total Amount Audited $2,475 Million
(Reported or proposed expenditures or
claims )
Audit Reports Resolved 882
(Agreement by Agency officials to take satis-
factory corrective actions )
Investigation Operations
Fines $75,000
Investigation Cases Opened 93
Investigation Cases Closed 51
Investigation Cases Pending (9/30/83) 223
Investigation Cases Referred for Prosecution 20
Indictments/Convictions 15
Personnel and Administrative Actions Initiated or
Taken Against EPA Employees 31
Fraud Detection and Prevention Operation
Debarments, Suspensions. Voluntary Exclusions and
Settlement Agreements 57
(Actions to deny persons'or firms frcyn participating in
EPA programs or operations because of misconduct
or poor performance)
Hotline Complaints Received 48
Hotline Complaints Processed and Closed 66
Proposed Legislation and Regulations Reviewed 54
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Investigative Activities
Distribution of Open Investigation Cases By Type
Total Cases Open As of September 30, 1983 = 223
Fraud Against the Government
I120
Antitrust
Administrative and Privacy Act Violations
Coiruption and Other
Conflict of Interest
BH15
Theft or Abuse of Government Property or Resources
HIM15
0 TO 20 50 ?00 130
Distribution of Open Investigation Cases By Office
Total Cases Open As of September 30, 1983 = 223
143
Number of cases
0 10 20 50 100 150
Examples of New Prosecutive Actions
Conspiracy to Rig Bids
The OIG staff initiated an investigation of bidirigging on
waste water treatment facilities, beginning with con-
tractors who previously had been indicted and con-
victed under Department of Transportation programs
By analyzing numerous construction contracts in North
and South Carolina, we identified a pattern of con-
spiracy by contractors to rig bids resulting in 10 in-
dictments and 6 convictions Bidnggmg investigations
are currently being conducted in Florida, Georgia, Ala-
bama, and Tennessee, and will be expanded to addi-
tional states during fiscal 1984
False Claims
The former city engineer of Moultne, Georgia was sent-
enced on September 15, 1983, to 3 years in jail, a
$10,000 fine and 2 years probation after pleading guilty
of conspiring to approve payments of $90,000 based on
false claims for an EPA funded project The city engi-
neer approved payments for raising and replacing man-
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hole covers and pavement, cleaning, inspecting, testing,
and grouting of sewer pipe joints without the work
being performed In return the engineer received a
motorcycle from the contractor
Embezzlement
A former executive secretary of the South Dakota
Association of Conservation Districts was sentenced in
August 1983, for embezzling over $30,500 in State and
EPA funds The executive secretary pleaded guilty to
writing checks to himself, changing dollar amounts on
checks written to him, filing fraudulent travel vouchers
and false postage charges, and maintaining a secret
checking account from which he withdrew funds for
personal use. He was sentenced to 60 days under a
work release program and two and one half years pro-
bation.
Administration Actions
Four examples of administrative actions taken during
the semiannual reporting period are shown below
A former high-level EPA regional official made restitu-
tion to the Agency in the amount of $985 for personal
use of a Government telephone credit card during a 13-
month period
A regional office director resigned his position and
reimbursed the Agency $1,811 for false travel voucher
claims
A high-level EPA official improperly charged 69 per-
sonal long-distance commercial calls to his Agency tele-
phone credit card EPA was reimbursed $480 by the
employee
A former employee reimbursed the Agency $229 in
connection with an allegation that she altered her time-
card on two occasions to reflect regular work hours in-
stead of sick leave
Distribution of Administrative and Prosecutive Actions
By Type
1 Resignation
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Fraud Control Activities
The Inspector General participates in various activities
to promote economy and efficiency in the administra-
tion of EPA operations and prevent and detect fraud,
waste, and abuse in EPA programs. During this
reporting period the DIG:
provided the Administrator with technical assistance
to implement the Federal Managers' Financial Integrity
Act and revised OMB Circular A-123, and, conducted an
independent evaluation of the Agency's progress in im-
plementing the act;
conducted audits, investigations, and engineering
studies resulting in the debarment or suspension of 57
recipients or contractors because of misconduct or poor
performance; and,
reviewed'54 pieces of! proposed legislation and
regulations topdentify potential improprieties or vulner-
,abilities for fraud, waste, or mismanagement.
Hotline Activities
Sources of the 90 cases
opened as of the end
of the period.
GAO
11 Complaints
Disposition of the 66 cases
cl.osed this period.
9 Valid Complaints
EPA Employees
40 Complaints
57 Unsubstantiated
Complaints
Hotline complaints found to be valid result in corrective ad-
ministrative or prosecutive action
If you are aware of any Fraud, Waste, or Mis-
management, please contact the EPA Inspector General
Hotline or the appropriate Divisional Inspector General
Information is confidental.
Caller may be anonymous.
Cash awards for cost saving disclosure.
e- Call can be made from anywhere toll free.
300-2124-4000/202 (or 8 if FTS) 382-4977
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design and construct wastewater treatment works
although the agency was not legally authorized to do
so We recommended that payments to the agency be
halted until the agency obtains appropriate legal author-
ity for grant eligibility
Untimely Review and Response to Proposed
Actions May Render the Environment
Unprotected.
The Office of Federal Activities (OFA) was not meeting
its responsibility under Section 309 of the Clean Air Act
to provide comments on environmental impact state-
ments and other proposed Federal actions to ensure
that such actions do not threaten public health and the
environment. OFA failed to issue comments in 22 of 74
cases reviewed even though draft comments were pre-
pared for at least 10 of those 22 cases We recom-
mended that a control log be used to track the receipt
and response to all requests, and that the Director of
OFA be apprised of and be held accountable for the dis-
position of each case
Contractor Billed EPA $600,000 in
Excessive Costs.
Several Contractors performing emergency cleanup ac-
tions under the Superfund program overcharged the
EPA more than $600,000 by billing at rates that were
excessive compared to those charged on similar con-
tracts. The problem of excessive rate charging was
chronic because contractors were employed on an
emergency basis before negotiation of terms. We rec-
ommended that proper contracting and procurement
controls be implemented and enforced
Grantees Overcharge $3.9 Million For Waste
Water Treatment Projects.
In separate grant awards, Dade County Florida, Delano,
California, and Houston, Texas, charged the Waste
Water Treatment Works Construction Grants Program
$2 4 million, $1 1 million, and $400,000 respectively for
ineligible costs beyond the scope of the project or un-
approved change orders We recommended recovery of
these costs.
Audit Resolution
OIG staff and Agency officials have worked hard to re-
solve more than 882 reports during this semiannual
reporting period in agreeing to recover $34 2 million and
deobligate $11 9 million of questioned costs However,
the inventory of unresolved audit reports at the end of
this period has increased from 388 to 602, requiring
additional future efforts by the OIG and Agency officials
to resolve all audit reports within six months This in-
crease is primarily due to the issuance of 265 more au-
dit reports this six month period than the last
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Audit Activities
Distribution of Audit Reports
Issued By Type
Total Audits Issued = 1,089
51,642
Superfund
28 Audits
Internal and
Management
52 Audits
Grant and
Contract
491 Audits
Distribution of Audited Costs and Amounts
Questioned or Set Aside
By Type of Audit
S811
S123
L I Audited Costs
Questioned
or Set Aside
Construction
S30
IHI
Grant and Contract
S22
$'5
Superfund
Examples of Significant Audits
Delays in Construction Starts Cost Agency
Over $400 Million.
EPA's failure to enforce its regulations for timely con-
struction starts has resulted in preconstruction delays
exceeding 18 months on 634 grant projects and delays
exceeding four years on 22 of these grant projects De-
lays have increased EPA project costs by more than
$400 million while also increasing costs to local com-
munities and denying water quality benefits to the pub-
lic. We recommended that Agency management issue
and enforce more stringent regulations, increase its
effort to monitor delays and regional performance, and
establish management accountability to ensure prompt
construction of grant projects.
EPA Awards $2 Million to Ineligible Grantee.
The San Jacmto Mountain Area Water Study Agency in
California was awarded more than $2 million to plan,
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Divisional Inspectors General
Eastern Division (New York)
Audits Sanford Wolfe 264-5730
Investigations George Markham 264-5730
Mid Atlantic Division (Philadelphia)
Audits Paul Gandolfo 597-8636
Investigations James Hagen 382-4934
Southern Division (Atlanta)
Audits Leslie Buie 257-3623
Investigations Herbert Hinchman 257-3623
Northern Division (Chicago)
Audits Anthony Carrollo 353-2486
Investigations Thomas Boockmeier 353-2507
Western Division (San Francisco)
Audits Truman Beeler 454-7084
Investigations Jonathan Sweeney 454-8151
All numbers are FTS
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