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
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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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