AEPA Office of
  Inspector General
  Report to Congress
 IG
fU
n

o
 Fiscal 1988

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Office of Inspector General
   The Inspector General Act of 1978 (P.L. 95-452) created
   the Office of Inspector General to consolidate existing
investigative and audit resources in independent
organizations headed by Inspectors General.
  The OIG's role is to review EPA's financial transactions,
program, and administrative activities; investigate
allegations or evidence of possible criminal and civil
violations; and promote economic, efficient, and effective
operations within the Agency.
  The EPA Inspector General reports directly to the
Administrator and the Congress and has the authority to:
• Initiate and carry out independent and objective audits
and investigations,
• Issue subpoenas for evidence and  information,
• Obtain access to any  materials in the Agency,
• Report serious or flagrant problems to Congress,
• Select and appoint OIG employees, and
• Enter into contracts.
  The Inspector General is  appointed by, and can be
removed only by, the President. This  independence
protects the OIG from interference and allows it to
function as the Agency's fiscal and operational watchdog.

   Office of Inspector General - Headquarters

Office of Audit
Ernest E. Bradley III
Assistant Inspector General
Kenneth A. Konz
Deputy
Michael D. Simmons
Special Assistant
Inspector General
John C. Martin
Acting Deputy
Inspector General
Anna Hopkins Virbick

Office of Management
and Technical Assessment
Anna Hopkins Virbick
Assistant Inspector General


Office of Investigations
John E. Barden
Assistant Inspector General
Daniel S. Sweeney
Deputy
     Operations Staff
     Edward Gekosky
     Director

     Technical Services Staff
    | James 0. Rauch
     Director
Technical Assessment and
Fraud Prevention Division
John C. Jones
Director

Administrative and
Management Services Division
Edwin N. Canady
Director
          Divisional Inspectors General
Headquarters
Kenneth Hockman
Internal Audit
(FTS or 202] 382-4930
Francis C. Kiley
Investigations
(FTS or 2021382-4934
Regions 1 and 2
Paul McKechnie
Audit
(617)722-0036
Robert M. Byrnes
nvestigations
(FTS or 212) 264-0399

Region 3
Paul R. Gandolfo
Audit
(FTS or 21 5) 597-0497
Martin Squitieri
Investigations
(FTS or 2 15) 597-9421

Regions 4, 6 & 7
Vacant
Audit
(FTS] 257-3623 or (404) 347-3623
James F. Johnson
Investigations
(FTS) 257-2398 or
(404)347-2398
Region 5
Anthony C. Carrollo
Audit
(FTS or 31 21 353-2486
Alex Falcon
Investigations Acting
(FTS or 31 2) 353-2507

Regions 8, 9 & 10
Truman R. Beeler
Audit
(FTS) 454-7084 or (415) 974-7084
J. Richard Wagner
Investigations
(FTS) 454-81 51 or
(415) 974-8151

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        Profile of Activities and Results
Environmental Protection Agency
Office of  Inspector General
                                      Fiscal 1988  FY83 thru 88
Audit Operations
 • Questioned Costs*—Total           $484 2 million
                    —Federal Share   $211.5 million
  (expenditures found not allowable by OIG)
               $ 1 05 bilhon
 •  Set-Aside Costs'—Total            S558 5 million   $ 1 62 billion
                   —Federal Share    $526 3 million
 (expenditures which are insufficiently
 supported to determine their allowability)

 •  Sustained Costs for Recovery and    $ 53.0 million $ 282 4 million
 Savings—Fed Share (costs which EPA
 management agrees are unallowable  and
 is  committed to recover or offset against
 future payments)
  • Cost Efficiencies or Deobligations    $ 47.7 million
  (funds made available by EPA management's
  commitment to implement recommendations
  in OIG audits)
              $ 89 7 million
  • Recoveries from Audit Resolutions
  of Current and Prior Periods (cash
  collections or offsets to future payments)**

  • EPA Audits Performed'lssued by the OIG

  • Audit Reports Resolved (agreement
  by Agency officials to take  satisfactory
  corrective action)
$ 42 9 million $ 1264 million
      1.929

      2,031
7.913

7,625
  Investigative Operations

  • Fines and Recoveries (including civil

  • Indictments/Convictions

  • Administrative Actions Taken
  Aga'nst EPA Employees
 $1,655,026  $10,202,961

         67         323
         20         206
  Fraud Detection and Prevention Operations

  •  Debarments, Suspensions, Voluntary        150         517
  Exclusions, and Settlement Agreements
  (actions to deny persons or firms from
  participating in EPA programs or operations
  because of misconduct or poor performance)

  • Hotline Complaints Received                 56         403

  • Proposed Legislative and Regulatory         165        1,038
  Items Reviewed

  • Personnel Security Investigations           605         2,937
  Adjudicated

  * Questioned and  set-aside costs are subiect to change pending
  further review in the audit resolution process
  "Information was provided by  the EPA Financial Management
  Division and is unaudited
                               1

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 Audit Activities
 Questioned and Set-Aside by Type of Audit - FY 88
Examples of
Significant Audits

The following represents examples of some of our most
significant types of findings. They should not be
considered representative  of the overall adequacy of EPA
management.

EPA Is Not Effectively Controlling Importation of
Unapproved Pesticides
EPA has not implemented oversight and control
procedures for monitoring the 6,000 pesticide products
imported each year,  greatly increasing the risk that illegal
foreign pesticide products will expose the environment
and the general public to unnecessary dangers.
Specifically,  EPA and the U.S. Customs Service have not
executed a written interagency  agreement even though
the responsibilities for controlling the import of pesticide
products have been  shared since 1970. The Assistant
Administrator for Pesticides and Toxic Substances
responded to our draft report that he will continue to
prioritize pesticide issues based on potential risk. As a
result, other activities will  continue to receive higher
priority than control of imports.  He will consider our
recommendations as program guidance is revised or
updated.

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Region 4 Spent $5.4 Million of Superfund on
Unsuccessful Hazardous Waste Cleanups

EPA Region 4 spent $5.3 million of the Superfund on
prototype cleanup technologies at two hazardous waste
sites, General Refining  in Georgia, and Peak Oil in Florida
that remained contaminated. It also discouraged the
State's involvement in the cleanup of the Peak site while
not properly pursuing the responsible party's participation
in the cleanup costs of General Refining. Region 4
continued unwarranted immediate removal activities after
stabilizing the two sites that no longer constituted
emergencies. However, the Region misrepresented the
sites as having emergency conditions to obtain
Headquarters approval for exemptions from the statutory
$1  million and 6-month limitations for removal actions. The
Region spent an additional $5.3 million from the Superfund
on  unwarranted removal actions, supporting commercial
testing and development of two unproven prototype
technologies to the benefit of their manufacturers.  Yet, the
sites remained contaminated with lead and PCBs—the
hazardous materials that initially attracted EPA's attention
to the site.
Ineffective Oversight Delays Cleanup of Chesapeake
Bay
In December 1983, EPA entered into an agreement with
Pennsylvania, Maryland, Virginia, and the District of
Columbia to implement a coordinated plan for restoring
and protecting the waters and living resources of the
Chesapeake Bay. In fiscal years 1985 through 1987, EPA
awarded $23.7 million in matching grants, about 31
percent to each State and 7 percent to the District of
Columbia, to reduce the amount of pollutants reaching the
Bay.
  A requirement was established that 75 percent of the
grant  and matching funds be used to control agricultural
runoff, which was determined to be a major source of
nutrient pollutants such as nitrogen and phosphorus.
  Region 3 was not adequately  monitoring the grantees'
performance or restricting grants for nonperformance. As  a
result, State agencies violated EPA procurement
regulations, letter-of-credit procedures,  and cost sharing
requirements. While 41 percent of the  263 cleanup
projects funded were not completed as required by the
grant, no action was taken for failure to complete a project
and each State was awarded new grants despite the
significant amount of incomplete work. We also found that
the allocation and management of funds did not ensure
that the pollution abatement goals were being efficiently
achieved.
  The Regional Administrator, Region 3, generally agreed
with the findings of our draft report.

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Money Due EPA Not Recorded or Collected
Our auditors found that Agency accounts receivable
balances were frequently incorrect. We estimated that 25
percent of all recorded receivables were understated by
$5.4 million and  14 percent were overstated by about $3
million. The most common error was the failure to
compute and record additional  charges, such as interest on
delinquent debts. Other errors  included mismatching
accounting entries, multiple accounting entries on the
same transaction, and lack of documentation to support
the validity of receivables.We also found that the Agency
was not aggressively or quickly acting to collect money it
was owed, nor were all debts owed the Agency such as
penalties for environmental violations recorded as accounts
receivables.


PCB Fires Could Threaten Public

Because EPA did not conduct an effective awareness
program for firefighters and commercial building owners
describing the danger of fires involving polychlorinated
biphenyls (PCBs), the  public is  at risk to exposure from the
highly toxic byproducts of such fires. EPA published a
Transformer Fires Rule in July  1985 designed to prevent
fires and limit exposure during  PCB transformer fires. But
EPA's monitoring compliance and programs to promote
awareness of the rule's requirements were not
comprehensive enough to make the rule effective. In
response to our  recommendations, the Agency agreed  to
develop an enhanced  PCB awareness program.

EPA Not Policing Export of Hazardous Wastes
Agency officials  did not know the extent of noncompliance
with EPA's requirements  that exporters submit notification
of intent to export hazardous wastes, as well as annual
reports stating the actual  amount of hazardous waste
exported. Also, Agency officials had not coordinated with
the Customs Service to establish an effective program  of
spot checks at ports of export.  Part of the problem was
unclear regulations concerning  the amount of information
exporters should provide. Another problem was that the
hazardous waste export program did not receive enough
attention from Agency management officials.
  In  response to our draft report, the Agency issued an
enforcement strategy  for  hazardous waste exports which
focuses on enforcement of the hazardous waste export
regulations, methods for improving compliance, and
information management. The Agency  has identified ports
of exit with frequent hazardous waste shipments and
provided this information to the Customs Service.

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 Plan to Ship Philadelphia Municipal Incinerator Ash to
 Panama Halted
 The city of Philadelphia planned to export up to 250,000
 tons of incinerator ash to Panama, where it was to be
 used as a road bed through a wetlands. The ash presented
 a potential danger to human  health and  the environment
 due to high concentrations of dioxm. Samples of the ash
 have also been shown to contain levels of lead  and
 cadmium  which exceeded hazardous waste thresholds.
 Significant amounts of these substances in the
 ash would have very likely washed directly into the
 wetlands  and aquatic environments, possibly damaging or
 killing aquatic life and entering the human food  chain.
  We recommended EPA involvement even though most
 municipal incinerator ash is not currently regulated by  EPA
 because it is not classified as a  hazardous waste. We  also
 recommended that EPA ensure that the most complete,
 current analyses of the ash be provided to the appropriate
 Panamanian officials so a fully informed decision would be
 made regarding acceptance and use of  the ash.
  EPA agreed,  upon request, to provide any accepting
 country with all available data on the ash.

 Asbestos Removal/Renovation Projects Faulted

 EPA, State and local agencies were not effectively
 enforcing  the National Emission Standards for Hazardous
 Air Pollutants for asbestos. We  found that delegated State
 and local agencies in Regions 4, 5, and  9 were  not
 inspecting asbestos demolition/renovation projects in
 accordance with EPA's enforcement policy and inspections
 were inadequate. For example, at one local agency
 telephone inquiries were counted as inspections; it was
 estimated that 50 percent of asbestos  removals were
 being conducted without prior notification of the
 appropriate Federal or State agency, penalties were not
 always or consistently assessed and were short of the
 $25,000 per day allowed by the Clean Air Act;  inspectors'
 safety equipment was insufficient because EPA had not
 issued clear guidelines; and the regions' reports to EPA
 Headquarters were inaccurate or misleading.
  EPA officials  have taken action to improve management
 of the asbestos  removal program.

 Grantee Claims Millions of  Dollars of  Unnecessary
 Costs
 EPA awarded grants to assist the city of Stockton,
 California,  construct a main water quality control plant  and
 tertiary additions. The Stockton Record reported that the
grantee was intentionally delaying the EPA's audit of its
 records and contracts on  the project and that millions of
dollars may have been spent inappropriately. We found

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that the grantee claimed over $12 million on unnecessary
construction, services that were  unreasonable  or
unauthorized, and unallowable arbitration costs. We also
set aside over $15 million pending certification by the
California State Water Resources Control Board that
operational problems were corrected. The grantee's
response to the audit consistently demonstrated a
lack of understanding or agreement with the EPA grant
regulations.
  As a result of the audit recommendations, the Agency
sustained for recovery the entire  $18,357,974 federal
share of the costs we questioned and set-aside.

Hawaiian County Claims Over $9 Million for Unused,
Uncompleted Facilities
EPA awarded five grants to  Kauai County, Hawaii, to plan,
design and construct interceptor sewers to transport
wastes and expand the existing sewage treatment plants
to accommodate flow from  cesspools. Three of the project
were underused because they were operating significantly
below project flow levels. We questioned $6.6 million and
set  aside another $3.1 million. By not accomplishing its
grant objectives, the grantee failed to eliminate potential
health hazards from failing cesspools, protect the
underground water,  streams, and near shore waters of
Kauai.
As a result of our recommendations, the Agency sustained
for  recovery $4,926,024 of the federal share that we
questioned and set aside.

San Jose Claims $6.6 Million of Ineligible Costs

EPA awarded grants to the city of San Jose, California for
upgrading and expanding its existing treatment facility and
other equipment, and for design improvements. We
questioned $6.6 million of costs claimed including $4.2
million received by the grantee from a settlement but not
offset against the grant, $2  million of engineering costs in
excess of the approved amounts, ineligible, or incurred
after the authorized completion date, and $.4 million of
unapproved or unsupported  costs.
  As a result of our recommendations, the Agency
sustained for recovery $2,809,340, of the $5 million federal
share  we questioned.

Region 3 Is Not Enforcing  Safe Drinking  Water
Standards for Non-Community Water Systems (NCWS)
In Region 3, drinking water  suppliers did not test their
water supply or did not test with the frequency

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established by both State and Federal regulations. When
tests revealed that the drinking water was contaminated,
suppliers did not comply with Federal regulations by
properly retesting or notifying the public of the
contamination. Four States did not take required
enforcement actions against violators. Two States were
not reporting violations and a third State was reporting
erroneous information. EPA was  not enforcing water
quality standards for drinking water served by commercial
carriers (planes, trains, and buses) The Agency agreed to
take action to ensure appropriate monitoring and reporting.
Audit Resolution

During fiscal 1988, the Office of Inspector General issued
1,989 new audit reports and closed 2,031. The 443 audit
reports  remaining in the Agency followup system are
scheduled for  resolution within the next 6 months.
  Of the audits closed, $100.6 million of questioned costs
were sustained, including $53 million to be recovered, and
$47.6 million in cost efficiencies. In addition, cost
recoveries from current and prior periods included $7.7
million in cash collections, and at least $35.2 million in
offsets  against billing.
  EPA formed a Task Force to develop quality training
materials and an approach called,  "Strengthening the Audit
Management Ability of EPA Managers,"  to help  managers
improve their audit management skills and the
performance of their programs.
  The Task Force has produced several outstanding
products to strengthen EPA managers' understanding of
the importance of audits, enhance their ability to respond
to audits, work with auditors, and resolve audits promptly
and properly, including:

•  An Audit Handbook for EPA Managers involved in audits
and the audit process;

• A Model Audit Management System highlighting the
process for audit resolution and tracking corrective action;
and
• A Videotaped Training Session for managers about their
roles and responsibilities regarding audits.

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Investigative Activities
During this fiscal year, our investigative efforts resulted in
67 indictments and convictions and over $1.6 million of
fines and recoveries from persons or firms who defrauded
the Agency. Most of these recoveries involved bid rigging
and other fraud on competitively awarded  contracts. Since
1983, a total of 42 indictments and 38  convictions have
been obtained for bid rigging.

Three  Plead Guilty in New York Asbestos Bribery Case
Twenty-five asbestos removal contractors  in the New York
metropolitan area were arrested January 5, I988, and
charged with bribing an EPA inspector. Subsequently, 18
contractors were indicted, charged with paying a bribe to
induce the  EPA inspector to overlook violations of Federal
rules and regulations with regard to asbestos removal
conducted  by the defendants, and to stay  away from job
sites being worked by their companies. To date three
contractors pled guilty to  the charges and  one contractor
was found  guilty after a jury trial.
  EPA regulations require that specific  work practices be
used during demolition and renovation  of structures
involving asbestos. Asbestos is a toxic  substance
regulated through the Clean Air Act.

Two Michigan Pipe Companies Guilty of Bid Rigging
fined $400,000
National Concrete Products Company, of Plymouth,
Michigan, pled guilty August 31, I988, to a charge of
conspiracy  and unreasonable restraint of trade in violation
of the  Sherman Antitrust  Act. The company, which
manufactures and sells concrete pipe and  related materials
in Michigan, was fined $250,000. National  Concrete
company was charged with conspiracy to suppress and
eliminate competition on  contracts to provide concrete
pipe and related products for several EPA  projects in
Michigan.
  Northern Concrete Pipe, Inc., of Bay  City, Michigan, pled
guilty September 1, I988,  to a  charge of conspiracy to
suppress and eliminate competition on  a contract to
provide concrete pipe and related projects  for the Grand
River Drive drain extension project of the Kent County,
Michigan, Drain Commission. The company was fined
$150,000.

EPA Receives $600,000 from Chattanooga's Bid
Rigging Suit
The City of Chattanooga paid EPA $532,000 from the
proceeds of its settlement of an antitrust suit against
several contractors who rigged bids on  EPA funded sewer
projects in that city. The city will pay EPA about $100,000

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more as it receives future payments from those
contractors. Chattanooga agreed to share its settlement
with EPA based on the conviction  of several contractors
who conspired to rig bids on the $6 million  Hixson
interceptor sewer contract.  During the course of the
litigation, Chattanooga uncovered evidence  of bid rigging
on a number of contracts as well.

EPA Wins $156,000 from Antitrust Defendants
EPA has won settlements totalling $156,325 from two
defendants in a case alleging bid rigging on a wastewater
treatment project in Chattanooga,  Tenn. Both defendants
worked for Commonwealth Electric, which  was convicted
of rigging the bid  for the electrical  subcontract  on the
Moccasin Bend project. One defendant, who was the
controlling shareholder and  chief executive  officer of
Commonwealth, will pay EPA $125,000, plus interest, over
six years. The other defendant, Commonwealth's chief
estimator, who was convicted of perjury in  connection
with grand  jury testimony about the bid rigging testimony,
has paid EPA $31,325.
  There are three remaining defendants in the $2.7 million
lawsuit, which seeks triple damages plus forfeitures under
the False Claims Act: Fischbach & Moore, which was also
convicted of  bid rigging on the project, and  two former
employees of Fischbach, one was recently  convicted of
perjury. Under the False Claims Act, all participants in a
scheme to  defraud the government are jointly and
individually liable.

Manager of  EPA Contractor Convicted and Sentenced
A field manager for Y &  M Steel Contractors Inc., of
Detroit, Michigan, was given a three-year suspended
sentence and three year probation, ordered to undergo
counseling, and ordered  to file an amended tax return with
the Internal Revenue Service within 60 days of the January
8, 1988, sentencing.  The defendant pleaded guilty on
November 20, 1987,  to fraudulent  use of Social Security
numbers to add fictitious employees to the payrolls
claimed on  an EPA funded construction project in
Westwood, Massachusetts.
  The defendant submitted  certified payrolls to a prime
contractor containing 15  fictitious names and Social
Security numbers claiming exempt status so no taxes
would be taken out. Several of the workers were paid
under the pseudonyms while receiving unemployment
benefits under their  real  names. The investigation was
conducted jointly between EPA's DIG, the FBI and the
Department of Labor's Office of Racketeering.

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 "Gray Market" Importers and Labs Probed
 We continued working jointly with Federal and State
 agencies investigating "gray  market" auto dealers and
 emissions modification and testing facilities who sell,
 modify, or test imported cars that have been falsely
 certified to meet Federal emission standards. In one case,
 Import Certification Laboratory of Orange, California and
 the company's president were each fined $50,000. The
 president was also sentenced to one year in prison. In
 another case, Sunbelt Auto Imports of Houston was fined
 $10,000. Its vice president was placed on probation for 2
 years and fined $500 for submitting photos  of properly
 modified vehicles and falsely claiming they were  the
 vehicles in question. Another importer, of Vennep, Holland,
 falsified import documents to show other individuals were
 the owners of vehicles he actually owned. EPA regulations
 allow a one-time exemption from Clean Air Act regulations
 for individuals to import one car, 5 years and older. The
 importer faces up to 5 years  in prison and $10,000 in
 fines.

 Former EPA Purchasing Agent Imprisoned for  Violating
 Probation
 A former purchasing agent with EPA, Gulf Breeze, Florida,
 was convicted for creating his own scientific supply
 company under his stepdaughter's name, from which he
 used his official position to purchase almost $40,000 in
 materials for EPA. The defendant was fined $3,000
 sentenced to suspended prison term and placed on five
years probation. However, on November 5,  1987, a
judgment commitment order, citing violations of his
 probation, sentenced him to 15 months in prison.

Timecard Fraud Uncovered
 During an OIG  investigation,  an EPA headquarters
employee admitted altering her timecards by adding 222
 hours of unworked  overtime and deleting 81  hours of
 leave, at a cost to the government of $5,002. In lieu of
prosecution, the employee was entered into a pretrial
diversion program, requiring her to perform 80 hours of
community service. The matter has been  referred to EPA
officials for  restitution and other possible administrative
action.
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Fraud Prevention Activities
Suspension and Debarment Activities
EPA's policy is to do business only with contractors,
grantees, and  persons who are responsible, honest, and
who comply with applicable rules and regulations. EPA
enforces this policy by suspending or debarring any
organization or person for acting improperly, having a
history of substandard work, or willfully failing to perform
on EPA or other Federally funded activities. Suspensions
and debarments deny participation in Agency programs
and activities to  those who represent a risk of abuse to
the Government.
  A new system, required by Executive Order  12549, for
implementation on October 1, 1988, provides that a
nonprocurement debarment or suspension by one Agency
is effective in  all and requires GSA to publish a  "List of
Parties Excluded from Federal Procurement or
Nonprocurement Programs."
  In fiscal 1988, 150 debarment or suspension actions
were taken. Examples include:

• The president of Polymer Chemicals, Inc., Atlanta,
Georgia, was sentenced on November 5, 1987, to a five
year suspended  term, six months in  a  halfway  house,
fined  $10,000 and along with several co-conspirators
entered a lifetime settlement of exclusion from doing
grout related business on any federally funded  projects.
The defendant and his company pled guilty to conspiring
to defraud the United States by selling underweight bags
of chemical grout to  sewer contractors and falsifying the
origin of the grout. Underweight bags of grout  used on
EPA and other federally funded sewer projects
compromises the sealant's effectiveness and the structural
integrity of the projects.

• The largest  contractor of the Chicago Metropolitan
Sanitary District's billion dollar Tunnel and  Reservoir
Project entered an innovative and precedent-setting
debarment/suspension settlement following the
contractors indictment on charges of violating Occupational
Safety and Health Administration standards The contractor
failed to monitor underground air quality level leading to
the suffocation death of a worker.  The contractor was
required to implement detailed worker safety procedures
for the existing and future  EPA funded contract work.

• Julius Mastriana of New York, New  York, was debarred
for 3 years on  May 20, 1988. Thomas DiMicelli and
Eugene Riccardelli, both of Brooklyn, New York, were
debarred for 3 years  on May 25, 1988. These debarments
followed their conviction for extortion and  mail  fraud in
their official duties as EPA  electrical inspectors relating to
work performed  for EPA by electrical contractors in New
York City.
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• On December 2, 1987, Robert Cummins and James
Payne of Enid, Oklahoma, were debarred for 6-months and
10-months, respectively. Their debarments followed the
conviction of Cummins Construction Co., Inc., for bid
rigging on road construction projects in the State of
Oklahoma. The debarred individuals were officials of
Cummins Construction Co., Inc.

Personnel Security Program Increases Productivity and
Timeliness of Integrity Reviews
The Personnel Security Program is one of  the Agency's
first line defenses  against fraud, using background
investigations to review the integrity of EPA employees
and contractors. During fiscal  1988, 605 investigations
were reviewed,  resulting in:

• Fourteen EPA employees were required to submit
corrected SF-171s after falsely claiming college degrees
not earned, failing  to disclose terminations from previous
jobs, or not listing  previous convictions.

• Two employees resigned, pending administrative
removal, one after admitting to the theft of $5,000 in EPA
lab equipment, the other for failing to disclose previous
convictions.

• Two employees were suspended, one for 7 days for
substance abuse and the other for 14 days for
embezzlement from the EPA imprest fund.

Employee and Public Awareness
A major goal of the Office of Inspector General is to make
EPA employees, grantees, firms participating in EPA
operations, and the public aware of their responsibility to
prevent, detect, and report  instances of fraud, waste, and
mismanagement. To provide this information and
encourage participation in fulfilling the objectives of the
DIG we have  used a variety of mediums. Several
examples are  discussed below:

• EPA Celebrates Second Annual "OIG Week"
The OIG held its second OIG Week in EPA to stimulate
interest in the mission of the  OIG to the employees and
managers of EPA through the theme "working together to
promote efficiency, effectiveness, and integrity in EPA."
OIG Week featured a reception for Agency managers and
the presentation of OIG Recognition Awards to three
Agency managers  whose work exemplifies the theme, an
exhibit in Waterside Mall, and a luncheon for OIG staff.
OIG Week was also celebrated in our field offices by the
showing of "A Force for Sound Government," to  EPA
regional employees and management.
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 • Presentation of Fraud Detection and Awareness
 Course to Agency Auditors and Managers.
 This fiscal year, we gave 12 presentations of a course
 entitled "Detecting and  Preventing  Fraud in EPA." The
 course was developed for presentation to independent
 public accountants who  perform audits for the OIG on a
 contract basis, to increase their awareness of and ability to
 detect and refer indicators of fraud  to our Office of
 Investigations. The course was also presented to OIG
 auditors and to about 150 Agency managers through  the
 EPA Institute and by special request to individual office
 components.


 • Publications
 During this period we also issued an updated version of a
 popular publication, "What to do  Before and After the
 Auditors Arrive." We also distributed a new publication,
 "What an Investigation Means to You" to all EPA and
 contract employees.

 Committee on Integrity and Management
 Improvement (CIMI)
 The Committee on Integrity and Management
 Improvement, established in 1984 by EPA Order 1130.1,
 coordinates the Agency's efforts  to minimize the
 opportunities for fraud, waste, and  mismanagement and
 advises the Administrator on policies to improve the
 efficiency and effectiveness of EPA's programs and
 operations. Chaired by the Inspector General, CIMI
 completed several projects including an Awareness
 Bulletin on new antifraud legislation, a pamphlet called
 How to Avoid Wasteful Spending, special events during
 Public Service Recognition Week, and a booklet titled
 Ethics in a Nutshell.


 Human Resources Council (HRC)

The OIG  HRC, composed of 16 employees representing all
grades and OIG locations, advises and assists the
Inspector General in developing policies, strategies,  and
programs for employee development and  workforce
management. As a result of an  HRC project the OIG began
an experimental 5/4-9 compressed workweek, which after
initial evaluation has proven to be successful. This project
has served a model for other Agency components. Other
HRC projects include  a secretarial workshop, and programs
on employee orientation, retention,  recruitment, and
wellness.
         i-i US GOVERNMENT PRINTING OFFICE  1989 - 619-515 - 1302/00800
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Hotline Activities

The DIG Hotline Center received 56 new complaints and
closed 55 cases during fiscal 1988. Of these, 17 resulted
in environmental, administrative, or prosecutive action. We
also received 709 calls in which callers were referred to
the appropriate program office, State agency, or other
Federal agency for assistance.
   The following are examples of corrective action taken as
a result of information provided to the  hotline center.
•  A complaint alleged that a theft from an imprest fund
had occurred. A review of this  complaint disclosed that a
fiscal  assistant  in charge of the fund was guilty of the theft
of Government money. As a result, the employee received
a suspension and was assigned to perform work which
does  not involve any responsibility associated with the
imprest fund.

•  A complaint alleged that an EPA subcontractor was
simultaneously  representing the Agency and a private
company on a related issue. A  review of the complaint
disclosed that a subcontractor employee made remarks at
a public meeting which gave the appearance of a conflict
of interest. The employee also  used a draft EPA manual
not available to the public, which was in direct violation of
contractual terms with the prime contractor. As a result,
the prime contractor issued written instructions to its
subcontractors  clarifying contractual  agreements,
reprimanded the employee, and took steps to prevent any
such  recurrence.
•  A complaint alleged that an EPA project officer
improperly influenced the Agency to award a contract
because of a financial relationship with an employee of the
contractor. A review disclosed  that the EPA project officer
failed  to file a complete financial disclosure statement, and
also created the appearance of a conflict of interest. As a
result, several administrative actions were taken, including
issuance of a formal  letter of reprimand and prohibiting the
employee from  serving as a project officer or task
manager for one year.
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
second  panel of this brochure.
•  Information is confidential.

•  Caller may be anonymous.
•  Call can be made from  anywhere toll free.800-424-4000
and 202 (or 8 if FTS) 382-4977

Remember, Act Like It's Your Money—It Is!

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