#--97-003
EPA-350-R-97-003
\
I Office of Inspector General
w
5? Report of Audit
Consolidated Review of the
Air Enforcement and
Compliance Assistance Programs
Report No. E1GAE5-05-0169-7100306
September 30,1997
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Inspector General Division
Conducting the Audit:
Consolidated Report:
Northern Audit Division
Chicago, Illinois
Regional Reports:
Northern Audit Division
Chicago, Illinois
Central Audit Division
Dallas, Texas
Western Audit Division
San Francisco, California
Regions Covered:
Regions 5, 6, and 9
Program Offices Involved:
Office of Enforcement and
Compliance Assurance
Region 5 Air and Radiation Division
Region 6 Compliance Assurance and
Enforcement Division
Region 9 Air and Toxics Division
U.S. Environmental Protection Agency
Region 5, Library (PL-12J)
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
THE INSPECTOR GENERAL
SEP SO
MEMORANDUM
SUBJECT: Audit Report No. E1GAE5-05-0169-7100306
Consolidated Review of the Air Enforcement and
Compliance Assistance Programs
FROM: Michael Simmons
Deputy Assistant Inspector General
for Internal Audits
TO: - Steve Herman
Assistant Administrator
for Enforcement and Compliance Assurance
Attached is our final report titled Consolidated Review of the Air Enforcement and
Compliance Assistance Programs. This report consolidates national issues identified during our
reviews of Regions 5, 6, and 9. The report contains findings and recommendations identified
during our review of the air enforcement and compliance assistance program.
This report represents the opinion of the Office of Inspector General. EPA managers will
make a final determination on matters in the report following established EPA audit resolution
procedures. Accordingly, the findings described in the report do not necessarily represent the
final EPA position.
A draft of this report was issued on August 7,1997. Although we have not received a
written response to our draft report, we have made changes based on discussions with OECA
staff and a draft response, received on September 22, 1997. When we receive your written
response, the response along with our evaluation of it will be provided to interested parties upon
request.
Action Required
In accordance with EPA Order 2750, you, as the action official, are required to provide us
with a written response within 90 days of the date of this report. The response should address all
recommendations. For corrective actions planned but not completed by the response date, please
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describe the actions that are ongoing and provide a timetable for completion. This information
will assist us in deciding whether to close this report.
We have no objection to the release of this report to the public. We appreciate the efforts
of your staff, and the staff in each region, in working with us to develop this report. Should you
or your staff have any questions, please contact Kimberly O'Lone, Audit Manager, at 312-886-
3186 or Ernie Ragland, Audit Liaison, at 202-260-8984.
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EXECUTIVE SUMMARY
INTRODUCTION
OBJECTIVES
The Office of Inspector General audited air enforcement and
compliance assistance programs in Regions 5, 6, and 9. Because
we identified national issues during these audits, we have used that
work as a basis for this report.
Many different levels of government have roles in enforcing the
Clean Air Act, as amended in 1990 (Act). U.S. Environmental
Protection Agency (EPA) Headquarters and regional offices can
and do take enforcement actions, but in most instances, the states
are primarily responsible for enforcing the Act. States sometimes
delegate their enforcement authority to local agencies.1 The states,
including their local agencies, are expected to perform compliance
evaluations and take action against significant violators. States can
also pass their own legislation, giving them additional, independent
enforcement authority.
The objectives of this audit were to determine if:
• the level of enforcement activity was consistent throughout
the nation;
• regional and delegated agency programs were designed to
deter companies from violations, through:
publicizing enforcement actions,
assessing the economic benefit component of
penalties, and
conducting compliance assistance activities; and
1 In this report, we will refer to the state, district, and local offices collectively as "delegated agencies,"
unless we refer to a specific level.
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the EPA Headquarters or regions have useful, effective
management information systems for tracking enforcement
actions.
RESULTS IN BRIEF
Enforcement Levels
Varied Across the
Nation
The Office of Enforcement and Compliance Assurance (OECA)
could prevent unnecessary inconsistencies and duplication in
regional and delegated agency enforcement and compliance
assistance activities. Inconsistent activities included (1) the levels
of enforcement activity, (2) the use of publicity, (3) assessing the
economic benefit component as part of penalties, and (4) variation
in how, or even if, agencies used the national database. Regions
and delegated agencies had active compliance assistance programs,
with outreach efforts made to a number of industry groups.
However, some of the compliance assistance activities they
performed were similar, which could result in duplication.
The goal of EPA's enforcement program is for all facilities to
consistently comply with applicable rules and regulations. At a
minimum, the program should ensure that like violations are
treated similarly in enforcement responses, regardless of location
or agency boundaries. Instead, the regions and delegated agencies
implemented the program inconsistently, resulting in varied
penalty sizes and numbers of enforcement actions taken. These
inconsistencies were caused by unfavorable political climates,
resource limitations, limited legal support, and a lack of
administrative enforcement authority.2 Inconsistent enforcement
can result in (1) reduced levels of environmental protection that put
public health and the environment at increased risk and (2)
industry being treated unfairly, where enforcement consequences
are more a function of locale than conduct.
2Regional officials cited other potential factors such as regional attitudes toward enforcement, compliance
assistance and technical activities, and other program initiatives. We did not evaluate the impact these factors may
have had on enforcement programs.
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More Publicity of
Enforcement Actions
Was Needed
Delegated Agencies
Needed to Consider
the Economic Benefit
in Penalties
Air Enforcement Data
Quality Needed to be
Improved
Most EPA regions and delegated agencies reviewed did not usually
publicize enforcement actions. Even when press releases were
issued, the type of information included in them varied. EPA's
policy is to encourage publicizing enforcement actions, but the
policy is outdated and the regions did not always follow it.
Delegated agencies did not publicize cases because they were
concerned about possible political repercussions and often did not
have written publicity policies. Inconsistently publicizing cases
can result in some companies having their violations known,
damaging their image, while their competitors may also be subject
to enforcement actions that are not made public.
Regions and a few delegated agencies used the economic benefit
component of penalties to deter companies from violations, in
accordance with EPA's Penalty Policy.3 Most delegated agencies,
however, did not consistently consider or appropriately assess the
economic benefit. This occurred because the delegated agencies
(1) did not have procedures for computing the economic benefit,
(2) believed legal decisions and case law prevented them from
calculating or assessing it, or (3) reduced the penalty. If
enforcement officials did not assess a penalty that recovered the
full economic benefit component, they allowed violators to have an
advantage over companies that paid to come into compliance. The
deterrent effect of enforcement actions was also limited when
violators saved money by avoiding or delaying costs of
compliance. As a result, companies were more likely to ignore
emission limits and continue polluting the environment.
Several regions and delegated agencies reviewed needed to
improve the quality of their data in the Aerometric Information
Retrieval System (AIRS) Facility Subsystem (APS). These data
quality problems occurred because regions and delegated agencies
(1) applied different data definitions when tracking enforcement
data, (2) had difficulty entering data into AFS, and (3) did not use
or maintain data in AFS. As a result, Agency resources were used
inefficiently, OECA and regions may not have enough information
3Clean Air Act Stationary Source Civil Penalty Policy
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about potential violators, and incorrect information could be
released to the public.
Regions and Delegated Each regional office and delegated agency reviewed had performed
Agencies Needed to Share compliance assistance activities, including outreach to dry cleaners
Compliance Assistance and printers. Some of these activities were similar to efforts other
Activities agencies had developed. While OECA has taken some steps to
help coordinate compliance assistance activities, a clearinghouse of
these activities did not exist for most industries. As a result, there
was a potential for duplication. Regions and delegated agencies
may be developing similar compliance assistance materials and
activities, rather than using methods that have already been
developed and tried elsewhere. If regions and delegated agencies
share information, they may be able to use their resources to
develop new materials for other program areas, resulting in wider
outreach to the regulated community.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Enforcement
and Compliance Assurance:
1. Set up a mechanism to work with regional and delegated
agency staff to recommend ways to address national
inconsistencies in enforcement. This should include
evaluating factors that may affect enforcement programs,
such as political climates, resources, enforcement authority,
attitudes toward enforcement, and other program initiatives.
2. Update and reissue the 1985 EPA policy on publicizing
enforcement actions, in conjunction with the Office of
Communication, Education, and Public Affairs.
3. Ask the regions to work with delegated agencies to assess
the full economic benefit of noncompliance in all
enforcement matters.
4. Determine OECA's minimum data needs for decision-
making and monitoring on a nationwide basis. Then,
decide if OECA could obtain this data directly from the
IV
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regional or delegated agency data systems to reduce the
amount of data input to the national system. If OEC A
continues to use AFS, consider establishing a minimum set
of standard data elements and simplifying data input.
5. Work with regions, delegated agencies, and other
appropriate groups to create and maintain a clearinghouse
of available compliance assistance materials.
Additional and expanded recommendations are included at the end
of each chapter, beginning with Chapter 2.
AND OIG EVALUATION We have not received an official written response to our draft
report, although it was due by September 8, 1997. However, we
received a draft response on September 22, 1997, that requested
some changes to our draft report. We made changes, based on the
draft response and further discussions with OEC A officials.
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Table of Contents
EXECUTIVE SUMMARY i
ABBREVIATIONS ix
CHAPTERS
1 INTRODUCTION 1
Purpose 1
Background 1
Scope and Methodology 5
2 ENFORCEMENT LEVELS VARIED ACROSS THE NATION 6
EPA Needs to Ensure Even Enforcement 6
Enforcement Programs Were Inconsistently Implemented 7
Barriers Caused Inconsistent Implementation 12
Public Health and Companies' Costs Can Be Affected 16
Conclusion 16
Recommendations 17
3 MORE PUBLICITY OF ENFORCEMENT ACTIONS WAS NEEDED 19
EPA Policy Calls for Publicity 20
Regions' Use of Publicity Varied 21
Delegated Agencies Seldom Publicized Enforcement Actions 22
Internet and Other Vehicles for Publicity 23
Conclusion 24
Recommendations 24
4 DELEGATED AGENCIES NEEDED TO
CONSIDER THE ECONOMIC BENEFIT IN PENALTIES 26
Deterring Violators by Assessing the Economic Benefit 26
Regions Considered Economic Benefit 27
Delegated Agencies Varied on Assessing Economic Benefit 28
Reasons Delegated Agencies Did Not Assess Economic Benefit 29
Violators Gained and Were Not Deterred From Violations 30
Conclusion 30
Recommendation 31
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5 AIR ENFORCEMENT DATA QUALITY NEEDED TO BE IMPROVED 32
Background 32
Data Quality Could Be Improved 33
Causes of Data Quality Problems 34
Data Problems are Inefficient and Misleading 36
Conclusion 37
Recommendations ..: 37
6 REGIONS AND DELEGATED AGENCIES NEEDED TO SHARE
COMPLIANCE ASSISTANCE ACTIVITIES 39
Background 39
Agencies Had Active and Sometimes Similar Programs 40
National Clearinghouse of Ideas Did Not Exist 41
Similar Activities Could Result in Duplication of Effort 41
Conclusion 42
Recommendation 42
EXHIBITS
1 SCOPE AND METHODOLOGY 43
2 PRIOR AUDIT COVERAGE ...45
3 BARRIERS TO EFFECTIVE AIR ENFORCEMENT PROGRAMS 48
APPENDIX
1 DISTRIBUTION 49
Vlll
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Abbreviations
Clean Air Act, as amended in 1990
AIRS Facility Subsystem
Aerometric Information Retrieval System
Bay Area Air Quality Management District, California
California
Chlorofluorocarbon
Air Quality Management District
U.S. Environmental Protection Agency
Clean Air Act Stationary Source Civil Penalty Policy
U.S. General Accounting Office
Illinois Environmental Protection Agency
Indiana Department of Environmental Management
Louisiana Department of Environmental Quality
Michigan Department of Environmental Quality
Monterey Bay Unified Air Pollution Control District, California
Notice of Violation
Office of Enforcement and Compliance Assurance
Office of Inspector General
Act
AFS
AIRS
Bay Area
CA
CFC
District
EPA
EPA Penalty
Policy
GAO
Illinois
Indiana
Louisiana
Michigan
Monterey Bay
Notice
OECA
OIG
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Sacramento
South Coast
Texas
Timely &
Appropriate
Guidance
Wisconsin
Sacramento Metropolitan Air Quality Management District, California
South Coast Air Quality Management District, California
Texas Natural Resource Conservation Commission
Guidance on the Timely and Appropriate
Enforcement Response to Significant Air Pollution Violators
Wisconsin Department of Natural Resources
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CHAPTER 1
Introduction
PURPOSE
The Office of Inspector General (OIG) has performed a series of
regional audits of air enforcement and compliance assistance
programs. Because we identified national issues during these
audits, we have used that work as a basis for this report. The
objectives of this audit were to determine if:
• the level of enforcement activity was consistent throughout
the nation (see Chapter 2);
• regional and delegated agency programs were designed to
deter companies from violations, through:
publicizing enforcement actions (see Chapter 3),
assessing the economic benefit component of
penalties (see Chapter 4), and
conducting compliance assistance activities (see
Chapter 6); and
• the U.S. Environmental Protection Agency (EPA)
Headquarters or regions have useful, effective management
information systems for tracking enforcement actions (see
Chapter 5).
The Clean Air Act, as amended in 1990 (Act), gives EPA authority
to set national standards to protect human health and the
environment from emissions that pollute the air. The Act assigns
primary responsibility to the states and local agencies for ensuring
adequate air quality. EPA is responsible for issuing regulations to
implement the Act.
Emissions regulations apply to two categories of air pollutants,
criteria and hazardous. Criteria pollutants are discharged in
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relatively large quantities by many sources across the country.
EPA has set national standards for all six criteria pollutants: (1)
ozone, (2) carbon monoxide, (3) sulfur dioxide, (4) nitrogen
dioxide, (5) lead, and (6) particulate matter. The standards specify
acceptable air pollution concentrations for a geographic area.
States are required to meet those standards.
Regulations also apply to hazardous air pollutants, or air toxics.
These pollutants come from specific sources, such as auto paint
shops, chemical factories, or incinerators. EPA has established
emissions standards for some air toxics, such as: asbestos,
beryllium, mercury, vinyl chloride, arsenic, radionuclides, and
benzene.
Enforcement Authorities The Act defines EPA's air enforcement authorities, including
administrative, civil, and criminal remedies. Under Section 113:
• Subpart (a) provides administrative orders for corrective
action to comply, but does not provide for assessing
penalties. This section is also used if the violator fails to
respond to an information request.
• Subpart (b) allows for initiating civil judicial action against
certain violators to restore compliance and recover a civil
penalty of up to $27,500 per day per violation.4
• Subpart (c) defines criminal enforcement, including fines
and/or prison sentences.
• Subpart (d) gives EPA the authority to issue administrative
penalty orders. These orders may assess penalties of up to
$27,500 per day of violation. They are generally
authorized in cases where the penalty sought is not more
than $220,000 and the first alleged date of the violation
4This information reflects the increase in penalties, due to inflation, effective January 30,1997. During our
audit period, the maximum penalty was $25,000 per day, with the total penalty for a single administrative
enforcement action at a maximum of $200,000.
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Roles
occurred no more than 12 months prior to the start of the
administrative action.
• Subpart (d) (3) gives EPA the authority to create a field
citation program through implementing regulations. EPA
expects the rule promulgating this program to be effective
in February 1998.
The Act also granted EPA information request authority, through
Section 114. This gives EPA the right to require any person
believed to have information relating to the Act to submit that
information to EPA.
Many different levels of government have roles in enforcing the
Act. EPA Headquarters and regional offices can and do take
enforcement actions, but in most instances, the states are primarily
responsible for enforcing the Act. States sometimes delegate their
enforcement authority to local agencies.5 The states, including
their district offices and local agencies, are expected to perform
compliance evaluations and take appropriate action against
identified violators, including significant violators. The EPA
regions have concurrent authority to conduct compliance
evaluations and take enforcement actions. States can also pass
their own legislation, giving them additional, independent
enforcement authority. However, state laws cannot be enforced at
the Federal level, unless incorporated into a state implementation
plan.
If an EPA region or a delegated agency finds a violation of the Act,
it can bring an enforcement action against the company. The EPA
regions identify violations by using a variety of sources, including
reviewing monitoring data, conducting inspections, reviewing
emission test results, and through information requests to
companies. The delegated agencies typically identify violations
through inspections. If the inspection finds a violation of the air
regulations, the type of action taken depends upon the nature of the
Enforcement Process
5 In this report, we will refer to the state, district, and local offices collectively as "delegated agencies,"
unless we refer to a specific level.
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violation. The delegated agencies are required to report all Federal
violations to the region.
Federal enforcement actions often start with a notice of violation
(notice). Delegated agencies have similar documents that
generally serve the same purpose. The notice outlines: the
statutory authority supporting the notice, the rules the company has
violated, and the violations. The notice also has a cover letter that
informs the company what the next steps in the enforcement
process are. The company is encouraged to meet with regional or
delegated agency officials to discuss resolving the violation and to
begin negotiating a settlement.
An important part of the settlement negotiation process, for
enforcement actions that will include a penalty, is agreement on the
penalty. At the regional level, stationary source violations are
subject to the Clean Air Act Stationary Source Civil Penalty Policy
(EPA Penalty Policy). The EPA Penalty Policy outlines penalty
calculations. While EPA encourages delegated agencies to follow
its penalty policy, it does not require them to do so. If the
company reaches a settlement with the region or delegated agency,
the parties enter into a formal agreement. This is a legal agreement
that outlines the terms of the settlement. EPA and some delegated
agencies can settle cases administratively or judicially.
Effective Programs There are at least three ways EPA regional and delegated agency
That Deter Violators programs can effectively deter violators. First, the enforcement
action should be publicized. Publicity will help the regulated
community learn that regions and delegated agencies have strong
enforcement programs and inform the public about which
companies violate the Act. Second, enforcement actions must
recover the economic benefit the violator gained by not complying
with the Act. This means that the penalty should make it more
expensive for companies to violate the law than to be in
compliance. Finally, the agencies need to proactively seek out
industries, particularly small businesses, to assist them in coming
into compliance. This proactive approach is called compliance
assistance.
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SCOPE AND
METHODOLOGY We performed our audit in accordance with the U.S. General
Accounting Office's Government Auditing Standards, as issued by
the Comptroller General of the United States (1994 Revision). We
also reviewed the Office of Enforcement and Compliance
Assurance and regional Federal Managers' Financial Integrity Act
reports. The reports did not identify any material weaknesses or
vulnerabilities related to air enforcement and compliance
assistance. We did not detect any material internal control
weaknesses during our audit.
See exhibit 1 for scope and methodology details. See exhibit 2 for
prior audit coverage.
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CHAPTER 2
Enforcement Levels Varied Across the Nation
The goal of EPA's enforcement program is for all facilities to
consistently comply with applicable rules and regulations. At a
minimum, the program should ensure that like violations are
treated similarly in enforcement responses, regardless of location
or agency boundaries. Instead, the regions and delegated agencies
implemented the program inconsistently, resulting in varied
penalty sizes and numbers of enforcement actions taken. These
inconsistencies were caused by unfavorable political climates,
resource limitations, limited legal support, and a lack of
administrative enforcement authority. Inconsistent enforcement
can result in (1) reduced levels of environmental protection that put
public health and the environment at increased risk and (2)
industry being treated unfairly, where enforcement consequences
are more a function of locale than conduct.
EPA NEEDS TO ENSURE
EVEN ENFORCEMENT The Office of Enforcement and Compliance Assurance (OECA)
needs to ensure national consistency in implementing and
enforcing Federal requirements to prevent polluters from gaining a
competitive advantage over entities that do not violate the law.6 In
the FY1995 Enforcement and Compliance Assurance
Accomplishments Report, OECA officials stated that:
Enforcement actions prevent violators from gaining
any competitive advantages by skirting pollution
control requirements. No one should gam from
violating the environmental laws, and putting
people's health and the environment at risk.
Furthermore, responsible citizens and companies
who make the necessary expenditures to comply
with our laws should not be placed at a competitive
disadvantage to those who do not. EPA is
6Core EPA Enforcement and Compliance Assurance Functions, February 1996.
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committed to ensuring that actions are taken to level
the economic playing field for law-abiding
companies.
One way of creating a level playing field is through the regional
enforcement programs. While delegated agencies primarily are
responsible for enforcing air laws and regulations, EPA regions
retain oversight responsibility. If regions identify situations where
delegated agencies are not carrying out an enforcement program
consistent with EPA guidance, the region may take action to
correct this inconsistency. Such regional action should help ensure
that competitive companies in different areas are treated fairly.
ENFORCEMENT
PROGRAMS WERE
INCONSISTENTLY
IMPLEMENTED
Ah" enforcement programs in delegated agencies and regions were
inconsistently implemented. For instance, the penalties assessed
and the number of enforcement actions taken varied widely across
agency lines. While we recognize that some variation is to be
expected, the extent of the inconsistencies identified warrant
OECA's attention.
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The States of Michigan, Indiana, and Texas, and the Bay Area
District in California (CA) stood out as having assessed penalties
of more than $ 100,000 in a few individual cases (see table 1).
These agencies were the only ones to assess a single penalty
exceeding $100,000, within the 18 month period of our review.
Michigan led the agencies with four cases where the penalties
exceeded $100,000 and Indiana had three such cases. The Bay
Area District and Texas each had one case with penalties over
$100,000.
Table 1: Delegated Agency Cases
Assessing Over $100,000 in Penalties
Michigan
Indiana
Bay Area, CA
Texas
$2,800,0007
$572,000
$1,050,000
$263,375
532,000
340,000
499,000
125,000
200,000
7This was Michigan's share of a larger penalty assessed through a lawsuit along with Region 5, Wisconsin,
and several environmental groups.
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Perhaps more important than a single penalty is the average
penalty assessed per enforcement action. Delegated agencies'
average penalties varied significantly.8 For example, as shown in
table 2, Michigan and Indiana each assessed an average penalty of
more than $30,000. Texas averaged just over $20,000, while all
four California local districts averaged less than $2,500 in penalties
per case.9
Table 2: Average Penalties Assessed
Delegated Agencies
Delegated
Agency
Michigan
Indiana
Texas
South Coast, CA
Sacramento, CA
Bay Area, CA
Monterey Bay, CA
Average
Penalty
$68,285
$34,431
$21,990
$2,473
$754
$452
$270
8To determine average penalties, we used the universe of cases completed during an 18 month period. We
dropped the highest and lowest single penalty for each agency. We did this to prevent a single case from skewing
the average.
'Louisiana was not included in this analysis because the data we had were not complete for penalties and
number of cases.
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The number of enforcement actions taken at delegated agencies
also varied, as shown hi table 3. The Bay Area District took many
more enforcement actions than any other delegated agency, at 455
actions completed within an 18 month tune period.10 The South
Coast District was the next closest agency, having completed 86
actions. Indiana, Texas, and Michigan each completed more than
25 actions, while the Sacramento and Monterey Bay Districts
completed fewer than 10 actions each.
Table 3: Number of Actions Completed
Delegated Agencies
Delegated Agency
Bay Area, CA
South Coast, CA
Indiana
Texas
Michigan
Sacramento, CA
Monterey Bay, CA
Number of
Actions
455
86
34
31
29
9
4
10One reason why the Bay Area District may have had more actions than other agencies was that they
issued a separate notice of violation for each identified violation, while other agencies may have combined all
identified violations from each inspection into a single notice. We were unable, however, to determine how much
of the variation was caused by this practice.
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The three EPA regions reviewed also varied widely in both the
number of actions completed and penalties assessed, as shown in
figure 1. Region 5 completed 33 enforcement actions and assessed
more than $6 million in penalties in the same period as Region 9
completed 25 actions and assessed about $3.5 million in penalties,
while Region 6 completed 2 cases and assessed penalties of just
over $100,000.
Figure 1:
Air Enforcement Actions & Penalties
EPA Regions 5, 6 & 9
$7
.32 5
T3
B 4
U
ex.
•a s
MillionsS
Region 5
~ JLegion9"
Region 6
10
20
No. of Actions
(18 month period)
30
40
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BARRIERS CAUSED
INCONSISTENT
IMPLEMENTATION
Political Climates
The regions and delegated agencies identified several barriers
that caused inconsistencies in program implementation. These
barriers included (1) unfavorable political climates, (2) resource
limitations, and (3) delegated agencies' limited legal support and
lack of administrative authority.11
Officials at 6 of the 12 agencies reviewed cited a political climate
that did not favor enforcement as one of their top three barriers to
their enforcement programs. Enforcing air regulations often
involves major employers. Delegated agency officials stated that
companies might close or choose to locate elsewhere when faced
with a strong enforcement program. Because of this possibility,
politicians sometimes become involved in individual enforcement
actions and enforcement programs in general.
The political climate particularly affected delegated agencies. For
example, political involvement made it difficult for Michigan
officials to settle some cases. In an enforcement action against a
copper mine in the upper peninsula of Michigan, local politicians
tried to convince the Michigan Attorney General's Office not to
enter a lawsuit. The local politicians also urged individuals to
write the Attorney General and their state legislators protesting the
lawsuit. They were very concerned that the mine would close,
affecting more than 1,000 employees. This political involvement
made it difficult for Michigan staff to pursue the enforcement
action. Eventually, Region 5 and others became involved and
reduced the case's political effect on Michigan.
Other delegated agency officials also said the political climate was
a barrier to their programs. According to officials from two
California air districts, their Boards did not always support
aggressive enforcement actions, because the Boards feared
industries might move to other locations if faced with aggressive
enforcement. In Texas, an official stated that the changes in the
, regions, and delegated agencies also listed other barriers to effective air enforcement programs.
In this section, we focused on those barriers that led to inconsistencies. See exhibit 3 for a listing of all barriers.
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political climate from one election year to the next were a problem,
because the program was expected to be consistent even though the
political climate had changed.
According to a Region 5 official, the national political climate also
affected the regional air enforcement program. He thought the
regulated community recognized that they could exert influence
over regulations and the enforcement process. They called or
wrote their Congressional representatives after the EPA issued an
enforcement action against them. Involving Congressional
representatives can delay the process and take the negotiations to a
higher level. For example, Region 5 had brought an enforcement
action against a state university. Shortly after that, a United States
Senator and congressional staff met with the EPA Administrator.
As a result, negotiations were elevated to a higher level, reducing
Region 5's control and influence over the negotiations. Such
political involvement can negatively impact the enforcement
program.
Limited Resources Eight of the twelve agencies, at both the regional and delegated
agency level, stated that limited resources affected their ability to
carry out effective air enforcement programs. For example,
• South Coast District officials advised that they continued to
scale back their enforcement program. Between 1994 and
1996, they cut their field inspectors by 20 percent. Even
before this reduction, a 1993 California evaluation report
on the local district pointed out that "overall, non-
compliance has increased, while resources have been
reduced.... "
• Texas and Louisiana officials also stated that a lack of
resources prevented them from having effective air
enforcement programs.
• Michigan officials said that they did not have enough
resources to identify and take enforcement actions on all
violations. The officials noted that, although their
resources for compliance and enforcement had increased in
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recent years, the increases were for the permitting program,
not inspections.
Resources and other factors also affected regional enforcement
programs. Officials from Regions 6 and 9 commented that staffing
levels at EPA regional offices could result in some variability in
enforcement actions taken. For example, they said Region 5 took
more enforcement actions than the other regions, because it had
more staff. However, Regions 6 and 9 had similar resources to
each other, but the number of enforcement actions completed were
significantly different. As shown in table 4, Region 5 had about
50% of the resources for the three regions and completed just over
50% of the actions. Regions 6 and 9 each had about 25% of the
resources, but Region 9 completed 42% of the actions, while
Region 6 only completed 3%. This variation suggests that factors
other than resources also affected how many actions were taken.12
Table 4: Regional Enforcement and Compliance Resources13
Region
Region 5
Region 6
Region 9
Total
Budgeted
Resources
67.0
(53.6%)
30.2
(24.2%)
27.7
(22.2%)
124.9
(100%)
Actions
Completed
33
(55%)
2
(3%)
25
(42%)
60
(100%)
12Regions also identified other potential factors, including the region's attitude toward enforcement,
compliance assistance activities, involvement in Project XL and the Common Sense Initiative, and the type of
industry in each region. We did not evaluate the impact these factors may have had on enforcement programs.
13The regional air enforcement and compliance officials provided these numbers for total budgeted FTE
(full time equivalent) for fiscal year 1997. We did not verify the accuracy of these numbers.
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Limited Legal Support
and Lack of
Administrative Authority
In some delegated agencies, limited legal support and a lack of
administrative authority contributed to inconsistencies in
enforcement. Some delegated agency officials said their legal
offices delayed air enforcement activities. If delegated agencies
can pursue violations administratively, they can avoid lengthy
delays, caused by going through outside legal offices. Having
administrative authority is particularly important for delegated
agencies without strong legal support.
According to Illinois enforcement officials, delays in the state
Attorney General's Office had a negative impact on the
enforcement program. While Illinois did not have administrative
penalty authority, the State could assess penalties by referring
cases to the State Attorney General's Office. However, a backlog
of cases existed in the Attorney General's Office, so few cases were
resolved in less than six months.
Wisconsin and California both had long legal delays as well.
Wisconsin enforcement officials had to go through the State
Department of Justice to collect penalties from violators.
According to a compliance official, the Department of Justice took
a long time to resolve cases. Similarly, the Sacramento and Bay
Area districts said they were reluctant to refer cases to their legal
departments, because of lengthy delays.
When agencies have administrative authority, it gives them another
option besides going through the legal staff. Indiana enforcement
officials, for instance, said they had not received adequate support
from their Attorney General's Office in the past. Because of the
limited support, Indiana officials seldom referred cases to the
Attorney General's Office. Indiana was able to work around this
problem, because it had authority to settle cases and assess
penalties administratively.
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PUBLIC HEALTH AND
COMPANIES' COSTS
CAN BE AFFECTED
CONCLUSION
Inconsistent enforcement can lead to inconsistent health and
environmental protection and to companies being treated unfairly.
If some agencies do not enforce the requirements as strongly as
others, the people living in those areas may be exposed to more air
pollution and the environment may be adversely affected.
Enforcement actions can deter companies from avoiding pollution
requirements and putting people's health and the environment at
risk.
Such diversity between agencies can also result in inequities,
where companies are treated unfairly. For example, according to
Michigan staff members, General Motors officials complained that
they were treated unfairly, because Michigan's state enforcement
program was more stringent than the Wayne County, Michigan
program.14 Wayne County personnel allowed Ford Motor
Company's facilities located in the County to operate with
violations that Michigan officials required General Motors'
facilities in other counties to fix, according to General Motors
officials. These officials also noted differences in how their own
facilities in Wayne County and those outside the County were
treated. Such inconsistency is especially unfair for companies that
come into compliance on their own, when other companies are
allowed to profit from violating the law.
Inconsistent enforcement across the country can lead to industry
being treated inequitably, where some pay to come into
compliance up-front or through enforcement actions, while others
are allowed to profit from avoiding requirements. Limited
enforcement may also result in risks to public health and the
environment. Regions and delegated agencies faced several
barriers, including unfavorable political climates, resource
limitations, limited legal support, and a lack of administrative
authority, that led to such inconsistencies.
14As a local agency, Wayne County operated separately from Michigan, although the County was under
contract with the State for air enforcement.
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RECOMMENDATIONS
We recommend that the Assistant Administrator for Enforcement
and Compliance Assurance:
2-1. Negotiate, through the Memoranda of Agreement, to have
the regions:
a. conduct thorough program evaluations of delegated
agencies and place priority on enforcement in those
areas where delegated agencies do not have strong
enforcement programs.
b. focus their limited resources on areas that will have
the most impact on achieving the Agency's goals.
c. assist delegated agencies in obtaining administrative
authority from their legislatures, where appropriate.
d. work as partners with delegated agencies that do not
have administrative authority to impose
administrative penalties for their actions, or to assist
the agency in obtaining support from its legal staff.
e. under the Timely and Appropriate guidance, track
the cases referred to State Attorney General offices
and take action as needed to ensure the cases are
resolved both appropriately and timely.
2-2. Reevaluate the mechanism for distributing enforcement and
compliance resources to the regions to determine if it is
appropriate. Also, assess the regions' distribution of
enforcement and compliance resources through the
Memoranda of Agreement process and periodic regional
reviews.
2-3. Set up a mechanism to work with regional and delegated
agency staff to recommend ways to address national
inconsistencies in enforcement. This should include
evaluating factors that may affect enforcement programs,
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such as political climates, resources, enforcement authority,
attitudes toward enforcement, and other program initiatives.
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CHAPTER 3
More Publicity of Enforcement Actions Was Needed
Most EPA regions and delegated agencies reviewed did not usually
publicize enforcement actions. As shown in figure 2, press
releases were issued in only 15 of the 116 (13 percent) cases
reviewed. Even when press releases were issued, the information
included in them varied. EPA's policy is to encourage publicizing
enforcement actions, but the policy is outdated and the regions did
not always follow it. Delegated agencies did not publicize cases
because they were concerned about possible political repercussions
and often did not have written publicity policies.
A written, implemented publicity policy helps assure that (1)
companies believe violations will be detected and enforcement
actions will be taken; and (2) the public is aware and may pressure
companies to come into, or remain in, compliance. Inconsistently
publicizing cases can result in some companies having their
violations known, damaging their image, while their competitors
may also be subject to enforcement actions that are not made
public.
Figure 2: EPA Regions and Delegated Agencies
Press Releases Issued by EPA Regions
and Delegated Agencies
101 Unpublicized
87%
15 Publicized
13%
Total Cases Reviewed: 116
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EPA and delegated agencies also used methods other than press
releases to publicize their enforcement programs, in accordance
with EPA's policy. These methods, such as industry meetings and
the Internet, were also useful in deterring violators.
EPA POLICY CALLS
FOR PUBLICITY EPA has long supported publicizing enforcement actions to
improve communication with the public and the regulated
community, and to encourage compliance with environmental
laws. The November 21, 1985 EPA Policy on Publicizing
Enforcement Activities stated:
It is the policy of EPA to use the publicity of
enforcement activities as a key element of the
Agency's program to deter noncompliance with
environmental laws and regulations. Publicizing
Agency enforcement activities on an active and
timely basis informs both the public and the
regulated community about EPA's efforts to
promote compliance.
In determining whether to issue a press release, EPA personnel are
to consider the following:
• amount of the penalty,
• significance of the relief sought and its public health or
environmental impact,
• whether the case would create national or program
precedence, and
• whether unique relief is sought.
The policy also states that enforcement actions that do not meet
these criteria may still be appropriate for local publicity in the area
where the violation occurred. On March 6,1992, the Deputy
Administrator issued a separate memorandum which stated that
press release content cannot be negotiated with the violator.
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EPA can use public opinion to help bring violators into compliance
by strategically publicizing significant enforcement actions. In the
November/December 1995 issue of the Environmental Forum, the
Deputy Assistant Administrator for Enforcement and Compliance
Assurance wrote:
... agencies are realizing the potential power of
enlisting the public and appropriate segments of the
regulated community in ensuring compliance and
promoting behavior that goes beyond. The public's
role will be to use its right to know as a tool to
motivate industry and government.
Publicizing enforcement actions deters violators by increasing the
regulated community's awareness of regulations and the
consequences of noncompliance. Businesses hope to avoid the
costs of noncompliance and prevent damage to their public images.
As citizens learn about violators, they may pressure companies to
come into compliance or risk losing customers. The public also
may pressure government to enforce regulations and penalize
violators.
REGIONS' USE OF
PUBLICITY VARIED The three regions publicized 10 of the 21 cases reviewed, as shown
in table 5. However, the publicity given to enforcement actions
varied from region to region. For example, for the cases reviewed,
Region 5 issued three often possible press releases, Region 6 did
not issue any releases for its four cases, and Region 9 released
information on all seven cases, through a single, consolidated press
release. Although there was an EPA publicity policy in effect,
only Region 9 fully implemented the policy.
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Table 5: Press Releases Issued by EPA Regions
Sampled Cases
Press
Release Issued
Yes
No
Total
Region 5
3
7
10
Region 6
0
4
4
Region 9
7
0
7
Total
10
11
21
Content of Press Releases
The content of press releases also varied among the regions.
EPA's policy states that press releases should include the
environmental result the action achieved and the penalty. Some
press releases, such as the one from Region 9 and some from
Region 5, included such important information about the
enforcement actions, while other Region 5 releases were not as
detailed. Regional officials agreed that including information,
such as the violation's impact on public health or the environment,
added to the effectiveness of the press release.
In response to our regional audits, Regions 5 and 6 agreed to take
some action to improve their publicity. Region 5 officials
developed a press release policy. The policy addresses three main
areas: (1) guidelines for deciding which press releases the media
was more likely to pick up, (2) time frames for preparing and
issuing press releases, and (3) content of press releases. Also
included is a checklist explaining the type of information public
affairs officials need to write a news release. Region 6 officials
began, in March 1997, to publish quarterly enforcement activity
reports.
DELEGATED AGENCIES
SELDOM PUBLICIZED Delegated agencies issued press releases in only 5 of 95 cases
ENFORCEMENT reviewed, as shown in figure 3. This occurred because delegated
ACTIONS agency officials feared political repercussions and did not have
formal policies for issuing press releases.
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Figure 3: Delegated Agencies
Press Releases Issued by
Delegated Agencies
90 Unpublicized
95%
5 Publicized
'5%
Total Cases Reviewed: 95
Some delegated agencies indicated that, while they supported
publicizing enforcement actions, they were reluctant to do so,
because they were concerned about possible political
repercussions. For instance, both Indiana and Michigan officials
said they did not want to draw the attention of state legislators to
their programs through publicizing enforcement actions.
Delegated agencies' publicity policies, or a lack thereof, also
limited publicity. For example, California local districts did not
issue press releases, because they had no policy for doing so. In
Louisiana, a state law required companies to file a public notice
when assessed penalties were lowered. However, companies could
avoid publicity by paying the penalty in full.
INTERNET AND OTHER
VEHICLES FOR
PUBLICITY
Press releases were not the only vehicles for publicizing
enforcement actions. EPA offices, regions, and delegated agencies
also reached the regulated community and the public through other
means, including the Internet, presentations at industry meetings,
sending lists of enforcement actions to interested parties, and trade
journals. While EPA's policy advocates using other publicity
methods, it has not been updated to include such alternatives as the
Internet.
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The regional offices had established "Home Pages" on the Internet
that included information on air enforcement. Items on Region 5's
Home Page included lists of companies in each state that were in
violation, graphs of enforcement trends, and press releases for air
enforcement actions. Region 6's Home Page had information
available on closed and concluded enforcement actions. Region 9
provided copies of air enforcement press releases on its Home
Page. Also, the Office of Communication, Education, and Public
Affairs put enforcement press releases on the Internet. Placing air
enforcement information on the Internet is another useful tool for
reaching the public.
CONCLUSION
RECOMMENDATIONS
Most EPA regions and delegated agencies usually did not issue
press releases. One reason this occurred was that the existing EPA
publicity policy was outdated and the regions did not always
follow it. Also, delegated agencies feared political repercussions
and did not have formal policies for issuing press releases.
Because the delegated agencies seldom publicized enforcement
actions, the regulated community was unaware of these actions,
and not deterred from similar violations. The public was also
unaware, and therefore could not help motivate industry to comply.
Because EPA regions' use of publicity varied, companies in some
regions may have their violations made public, damaging their
public image, while their competitors may also be subject to
enforcement actions that are not made public.
We recommend that the Assistant Administrator for Enforcement
and Compliance Assurance, in conjunction with the Office of
Communication, Education, and Public Affairs:
3-1. Update and reissue the 1985 policy on publicizing
enforcement actions for the regions' use. When updating
the policy, consider including:
a. a checklist of information needed to write a press
release, or other instructions to help staff members
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write press releases that clearly describe the
violations and the effects on the environment and
community.
b. the Internet as an additional method of publicizing
enforcement actions.
c. the information from the Deputy Administrator's
March 6, 1992 memorandum on prohibiting the
negotiation of press releases.
3-2. Work with the regions to encourage delegated agencies to
publicize more enforcement actions.
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CHAPTER 4
Delegated Agencies Needed to
Consider the Economic Benefit in Penalties
DETERRING
VIOLATORS BY
ASSESSING THE
ECONOMIC BENEFIT
Regions and a few delegated agencies used the economic benefit
component of penalties to deter companies from violations, in
accordance with EPA's Penalty Policy.15 Most delegated agencies,
however, did not consistently consider or appropriately assess the
economic benefit. This occurred because the delegated agencies
(1) did not have procedures for computing the economic benefit,
(2) believed legal decisions and case law prevented them from
calculating or assessing it, or (3) reduced the penalty. If
enforcement officials did not assess a penalty that recovered the
full economic benefit component, they allowed violators to have an
advantage over companies that paid to come into compliance. The
deterrent effect of enforcement actions was also limited when
violators saved money by avoiding or delaying costs of
compliance. As a result, companies were more likely to ignore
emission limits and continue polluting the environment.
By not complying with the Clean Air Act as amended in 1990
(Act), companies can save money or realize an economic benefit.
In many cases, they save money by delaying or avoiding expenses.
For example, a company may delay installing pollution control
equipment until EPA or a delegated agency takes an enforcement
action. In other cases, companies try to avoid expenses by
disconnecting pollution control equipment or not hiring enough
trained staff to monitor emissions.
According to EPA's Penalty Policy, penalties should include two
components: economic benefit and gravity. The economic benefit
component is important to level the playing field among
companies within an industry, and eliminates any economic
advantage violators gain through delayed or avoided costs. The
15Clean Air Act Stationary Source Civil Penalty Policy
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gravity component reflects the seriousness of the violation, and
represents: (1) the actual or possible harm resulting from a
violation, (2) the importance of the violation to the regulatory
scheme, and (3) the violator's size. We focused on the economic
benefit component because EPA's Penalty Policy provided that
"any penalty should, at a minimum, remove any significant
economic benefit resulting from noncompliance."
Although considering economic benefit is critical, EPA policy
recognizes that there are some limited situations where it does not
have to be assessed. For instance, EPA's Penalty Policy states that
the economic benefit component can be waived where it is less
than $5,000, considering the impact on the violator and the size of
the gravity component. The total penalty, the economic benefit
and gravity components, also may be mitigated due to litigation
risk or the violator's inability to pay. Although the economic
benefit is a key component of a civil penalty, it does not apply in
delegated agency cases involving: (1) regulations that are not
Federally enforceable, or (2) non-significant violators.
REGIONS CONSIDERED
ECONOMIC BENEFIT Regional officials considered the economic benefit of violations
when resolving enforcement actions. When the economic benefit
was applicable, they assessed it. Their decisions on whether
economic benefit applied were appropriate, based on the discretion
allowed in EPA's Penalty Policy.
For example, for the cases reviewed, officials from Regions 6 and
9 determined that the economic benefit was not applicable, in
accordance with EPA's Penalty Policy. For Region 6, the
violations for the four cases reviewed either did not result in an
economic benefit, or resulted in an insignificant benefit, so it was
not assessed. For Region 9, the economic benefit for all the cases
was determined to be nominal.
Region 5 assessed the economic benefit component, when it
applied. The economic benefit applied to 6 of the 10 cases
sampled. Region 5 staff assessed the economic benefit in five of
the six. In the sixth case, the file showed the enforcement officials
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reduced the penalty in accordance with EPA's Penalty Policy,
based on the company's financial condition and ability to pay
calculations.
DELEGATElTJGENCIES
VARIED ON ASSESSING One delegated agency reviewed consistently assessed the economic
ECONOMIC BENEFIT benefit, when it applied, while two other agencies sometimes
assessed the economic benefit. We could not determine if the other
delegated agencies assessed the economic benefit in the cases we
reviewed.
Michigan enforcement officials supported collecting the economic
benefit and they assessed it, when applicable. Of the 10 Michigan
cases reviewed, the economic benefit applied in 4 instances and it
was assessed.
Two other states reviewed did not consistently assess the economic
benefit component in their penalties. Indiana and Illinois
sometimes assessed the economic benefit. For instance, in each
state, the economic benefit applied to six cases, but the state
officials collected it in only three.
At the remaining delegated agencies, we could not tell if the
penalty assessed included the economic benefit or whether they
even considered it. For example, although Sacramento District
officials included the economic benefit as a component of then-
penalty calculations, they only assessed a percentage of each total
penalty. Because of the way Sacramento District officials reduced
each penalty, it was not possible to determine if they assessed the
full economic benefit. For other delegated agencies, officials did
not formally calculate the economic benefit, so we could not
determine what it was. Examples included:
• To compute fines, Louisiana completed a Penalty
Assessment Form with nine factors to consider when
determining a recommended penalty amount. One of these
factors was to consider the economic benefit realized
through noncompliance. However, Louisiana officials did
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REASONS DELEGATED
AGENCIES DID NOT
ASSESS ECONOMIC
BENEFIT
No Procedures
Legal Decisions
not break out among the nine factors how the total penalty
was computed.
Texas officials did not compute economic benefit for any of
the 10 sample cases. Texas officials said they computed
economic benefit only in extreme cases where the violation
had continued for a long period of time.
At three California local air districts, Monterey Bay, South
Coast, and Bay Area, there was no evidence indicating that
they considered the economic benefit of noncompliance
when calculating proposed penalties.
Delegated agency officials did not always assess or calculate the
economic benefit component of penalties because they (1) did not
have procedures for computing it, (2) believed legal decisions and
case law prevented them from calculating or assessing it, or (3)
reduced the penalty.
Several delegated agencies did not have procedures in place for
assessing the economic benefit. Texas' Penalty Guidelines, for
instance, did not include economic benefit as a component in the
calculation of the penalty.16 The California district offices also did
not have procedures that required them to compute the economic
benefit.
Officials from Louisiana and Illinois believed that legal decisions
and case law prevented them from calculating or assessing the
economic benefit. Louisiana officials said they did not formally
compute the economic benefit because of a Louisiana
Administrative Law Judge ruling. In October 1991, the Judge
ruled that the method of computing economic benefit as contained
in Louisiana's Penalty Policy was not valid, because the State
Legislature had not promulgated it. Louisiana officials interpreted
the Judge's ruling as prohibiting them from including a
16Texas is currently developing a penalty policy that will include consideration of economic benefit.
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mathematical calculation of economic benefit in the penalty.
Illinois officials also believed that Illinois case law affected their
collection of the economic benefit. In responding to our Region 5
report, they stated, "The principles of deterrence, restitution and
retribution have not been widely embraced by Illinois courts or the
Pollution Control Board."
Reduced Penalties
VIOLATORS GAINED
AND WERE NOT
DETERRED FROM
VIOLATIONS
CONCLUSION
Two delegated agencies indicated that they did not always assess
the economic benefit, because they reduced the penalties. Indiana
officials, for instance, said they often reduced penalties during
settlement negotiations. Sacramento District officials also reduced
their penalties, by automatically assessing only a percentage of
what the actual penalty, including the economic benefit portion,
could have been.
Penalties that do not include an economic benefit component do
not eliminate the economic advantage companies gain by violating
the Act. By not assessing penalties with an economic benefit
component, enforcement officials may allow violators to gain an
unfair economic advantage over other companies.
Not recovering the economic benefit of violations also limited the
deterrent effect of enforcement actions. If the economic benefit is
not assessed, it continues to be less expensive for a company to
violate the law than to comply with it. As a result, some
companies were more likely to ignore emission limits and continue
polluting the environment, while waiting to see if EPA or the
delegated agencies identified their violations. This can lead to
unnecessary risks to human health and the environment.
While the regions and some delegated agencies assessed the
economic benefit component of a penalty, other delegated agencies
did not. Sometimes, agencies did not have procedures that called
for considering the economic benefit. In other instances, delegated
agency officials believed that legal decisions prevented them from
calculating or assessing it, while some delegated agencies reduced
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the penalty, including the economic benefit portion. By not
assessing the economic benefit, delegated agencies reduced the
deterrent effect of their enforcement actions and allowed the
violators to gain an unfair economic advantage over companies
who complied with rules and regulations. As long as companies
gain economically, they may continue to pollute the environment,
putting people's health at risk.
RECOMMENDATION
We recommend that the Assistant Administrator for Enforcement
and Compliance Assurance:
4-1. Ask the regions to work with delegated agencies to assess
the full economic benefit of noncompliance hi all
enforcement matters.17 Discussions with the delegated
agencies should include the regions:
a. assisting delegated agencies in securing the needed
legal authority to calculate, assess, and recover the
economic benefit component of penalties, if
necessary.
b. implementing procedures consistent with EPA's
policy to calculate and assess the economic benefit
component.
c. providing assistance in calculating, assessing, and
recovering economic benefit when delegated
agencies may be precluded from doing so, such as
in Louisiana and Illinois, or in similar
circumstances.
d. identifying what actions regions will take if
delegated agencies do not assess and recover the
economic benefit of a penalty.
''Discussions with the regions and delegated agencies may be conducted through OECA's Memoranda of
Agreement with the regions or EPA's Environmental Performance Partnership Agreements with the delegated
agencies, or through other agreements, as appropriate.
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CHAPTER 5
Air Enforcement Data Quality Needed to be Improved
BACKGROUND
Data Requirements
Several regions and delegated agencies reviewed needed to
improve the quality of their data in the Aerometric Information
Retrieval System (AIRS) Facility Subsystem (AFS).18 These data
quality problems occurred because regions and delegated agencies
(1) applied different data definitions when tracking enforcement
data, (2) had difficulty entering data into AFS, and (3) did not use
or maintain data in AFS. As a result, Agency resources were used
inefficiently, the Office of Enforcement and Compliance
Assurance (OECA) and regions may not have enough information
about potential violators, and inaccurate information could be
released to the public.
Headquarters designed the AIRS database in stages during the
1980s to be a national repository for air pollution data. AFS was
an AIRS enhancement, completed in 1990. The system developers
designed AFS to maintain data for emissions, compliance,
enforcement, and permits. AFS separated this information
between two parts, emission and compliance. The compliance part
included enforcement data, the subject of this chapter. We did not
review emissions data.
EPA has established national minimum data requirements for AFS
and issued final requirements in December 1993. These data
requirements apply to all regions and delegated agencies. OECA
also currently requires AFS data through the Memorandum of
Agreement with each region. Regional personnel are responsible
for ensuring that AFS data requirements are met for both delegated
agency and regional enforcement cases.
18We reviewed AFS compliance data by comparing regional AFS reports of completed significant violator
cases to delegated agency reports and identified any differences. We also compared information on both the AFS
and delegated agency reports to the information in the enforcement case files.
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On February 7, 1992, EPA issued the Guidance on the Timely and
Appropriate Enforcement Response to Significant Air Pollution
Violators (Timely and Appropriate Guidance). This guidance
defined:
(1) what a significant violator was,
(2) the process and timing of enforcement actions,
(3)
(4)
how states and regions would identify who had the lead for
taking an enforcement action,
the conditions when an EPA regional office could assume
responsibility for completing a state case, and
(5) requirements for updating AFS.
This guidance was important to defining what the national
approach to enforcement would be and how the data would be
evaluated.
Several EPA Headquarters' offices use AFS enforcement data. For
example, OECA uses AFS data for accountability, targeting, sector
analyses, and external reporting purposes. The Headquarters'
Office of Information Resources Management has made AFS data
available to the public on the Internet.19
DATA QUALITY
COULD BE IMPROVED Several of the regions and delegated agencies reviewed needed to
improve the quality of their AFS data. The data quality problems
primarily consisted of missing data. We also found some incorrect
data.
Data were not in AFS for many delegated agencies, including the
Bay Area, Monterey Bay, and South Coast Districts in California,
19Although AFS is available on the Internet, the information is not readily accessible and it is difficult to
query state information on the system.
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and the States of Texas and Louisiana. For example, about half of
the completed notices of violation for the Bay Area District and
three of four notices of violation for the Monterey Bay District
were not recorded in AFS. None of the 86 notices of violation for
the South Coast District were recorded in AFS. Finally, not all
cases for Region 6, Texas, and Louisiana were in AFS.
Some information in AFS was incorrect. For example, Region 6,
Texas, and Louisiana did not accurately report information related
to significant violators to AFS. Also, some enforcement cases on
AFS showed Region 5 as having the case lead, when the work on
the case instead remained at the state level. Therefore, AFS data
did not reflect who was really handling the cases.
CAUSES OF DATA
QUALITY PROBLEMS
Different Data Definitions
A few factors combined to create data problems in AFS. Regions
and delegated agencies (1) applied different data definitions when
tracking enforcement data, (2) had difficulty entering data into
AFS, and (3) did not use or maintain data in AFS.
Regions and delegated agencies used data definitions that differed
from those in the Timely and Appropriate Guidance. These
differences included defining what was a significant violator and
Federal and state lead on cases.
Texas and Louisiana used their own definitions of significant
violators for reporting to AFS. According to Region 6 personnel,
if a case was not a significant violator within the states' definition,
the states did not report the facility. For these cases, Region 6
personnel had to obtain and input the information to AFS.
AFS data for Wisconsin were not correct because Region 5 had
identified cases as Federal-lead in AFS, although the state often
finished the cases. This occurred because the Region 5 section
responsible for Wisconsin identified as Federal-lead the cases it
could take over, per the Timely and Appropriate guidance, even if
they did not actually take over the case. Region 5's use of a
different definition, for Wisconsin than for other states, distorted
the Wisconsin data.
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Difficulty Entering
Data Into AFS
AFS Not Used or
Maintained
Some delegated agencies had difficulty uploading and converting
data from state data systems to AFS. For example:
• The Bay Area District had problems uploading information
electronically to AFS. Bay Area District officials were
working with Region 9 to solve this problem.
• While Texas and Louisiana electronically submitted data to
AFS, system problems existed related to converting the
data from the state systems to AFS.
Some regions and delegated agencies did not use or maintain AFS.
AFS was part of a mainframe system that was difficult for state
personnel to use. Most states found it easier and more meaningful
to create and use their own systems.
OECA recognized that many regions and delegated agencies did
not use AFS as their own tracking systems and that this created
problems for AFS data. For example, OECA officials noted in a
Region 4 evaluation report:
Reliance on Regionally developed tracking systems,
in lieu of the major national databases, appears to be
taking away the incentive for the Region to address
data quality problems with national systems.
Both Regions 6 and 5 developed their own tracking systems. For
example, although Region 6 officials reported directly to AFS, they
also maintained a separate database for their own information
needs. Region 5 also maintained a database that provided
information Headquarters' officials did not require for AFS and
that Region 5 staff did not want in a public database, such as
potential violations. The Region 5 database included all
enforcement actions that Region 5 staff members were responsible
for, including those which were not tracked in AFS.
Delegated agencies also maintained their own databases. Michigan
and Indiana officials developed and used their own systems, for
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reasons similar to those at Region 5. Louisiana and Texas did not
use AFS as their primary tracking system. California local air
districts did not use APS as their primary information system
because the AFS system was too limited to provide all the
compliance information local officials needed. Consequently, they
developed their own information systems to serve local needs.
With their own systems, local air districts did not use or rely on
AFS and, therefore, placed less emphasis on ensuring the accuracy
of data contained in AFS.
DATA PROBLEMS ARE
INEFFICIENT AND
MISLEADING
Data problems in AFS can lead to (1) inefficient use of Agency
resources, (2) OECA and regions not having enough information
about potential violators, and (3) inaccurate data being released to
the public.
Incomplete and incorrect data in AFS result in inefficient use of
Agency resources, through maintaining different systems and
collecting and reporting additional data. The average amount spent
to maintain AFS for the last six years (FY 1991 through FY 1996)
was over $858,000 per year. Regions and delegated agencies also
used additional resources to maintain separate databases since AFS
did not meet their needs. In some cases, regions also had to
expend resources to input delegated agency data into the AFS
system, if the delegated agency officials did not maintain the data
themselves. According to an OECA official, he used AFS data as
only one of several different sources of information to evaluate the
enforcement programs, because he recognized that AFS data were
not always correct. Regions sometimes needed to submit manual
reports from separate databases to supplement the data in AFS.
Having to use information from various systems to reach decisions
was not efficient.
For oversight purposes, if delegated agency data are missing or
incorrect, OECA and the regions may not always have enough
information about potential violators. For instance, they may not
know the compliance status and violation history of many major
sources. This could limit the regions' ability to take actions to
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correct violations if delegated agencies are not appropriately
addressing them.
Incomplete and incorrect data in AFS are of particular concern,
since EPA has made the data publicly available on the Internet.
Citizens who access the data could receive inaccurate information.
CONCLUSION
RECOMMENDATIONS
AFS data, alone, for the regions reviewed, were not reliable to
make some management decisions. For instance, due to missing
data, OECA could not evaluate the performance of certain
delegated agencies. The problems with the data occurred partly
because regions and delegated agencies interpreted the Timely and
Appropriate Guidance differently. Also, regions and delegated
agencies had trouble entering data into AFS electronically and did
not maintain AFS data since they used their own data systems to
meet their information needs. Data problems in AFS lead to an
inefficient use of Agency resources, OECA and the regions not
having enough information about violators, and inaccurate data
being made available to the public.
We recommend that the Assistant Administrator for Enforcement
and Compliance Assurance:
5-1. Negotiate, through the Memoranda of Agreement, to have
the regions review the Timely and Appropriate Guidance
with their delegated agencies. This should include working
with regions and delegated agencies to ensure consistent
interpretation of data requirements.
5-2. Determine OECA's minimum data needs for decision-
making and monitoring on a nationwide basis. Then,
decide if OECA could obtain this data directly from the
regional or delegated agency data systems to reduce the
amount of data input into the national system. If OECA
continues to use AFS, consider:
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a. working with Headquarter's Office of Information
Resources Management to establish a minimum set
of standard data elements to ensure consistent data
definitions between regions and delegated agencies.
b. simplifying data input.
c. issuing guidance on required AFS data quality.
d. implementing a regular review process to evaluate
whether reported data meet the data quality
guidelines.
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CHAPTER 6
Regions and Delegated Agencies Need to Share
Compliance Assistance Activities
Each regional office and delegated agency reviewed had performed
compliance assistance activities, including outreach to dry cleaners
and printers. Some of these activities were similar to efforts other
agencies had developed. While the Office of Enforcement and
Compliance Assurance (OECA) has taken some steps to help
coordinate compliance assistance activities, a clearinghouse of
these activities did not exist for most industries. As a result, there
was a potential for duplication. Regions and delegated agencies
may be developing similar compliance assistance materials and
activities, rather than using methods that have already been
developed and tried elsewhere. If regions and delegated agencies
share information, they may be able to use their resources to
develop new materials for other program areas, resulting in wider
outreach to the regulated community.
BACKGROUND
Compliance assistance is a key component of an effective
enforcement and compliance assurance program. It complements,
but does not replace, appropriate enforcement action. Compliance
assistance includes outreach, response to requests for assistance,
and on-site assistance. By providing clear and consistent
descriptions of regulatory requirements, compliance assistance
helps the regulated community understand its obligations. It can
also help regulated industries find cost-effective ways to comply
through the use of pollution prevention and other innovative
technologies.
The compliance assistance program at EPA is relatively new. In
March 1995, President Clinton issued the regulatory reform
initiative. This initiative instructed EPA to reduce the burden on
companies to comply with environmental regulations. The
initiative also established: (1) a grace period for small businesses
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to correct identified violations, and (2) incentives for self-
disclosure and correction of violations. It encouraged EPA to work
with small businesses and companies that identified their own
violations.
AGENCIES HAD
ACTIVE AND
SOMETIMES SIMILAR
PROGRAMS
The regions and delegated agencies reviewed were actively
involved in compliance assistance activities. Several of the
activities were conducted in similar areas, such as with dry
cleaners, printers, or chlorofluorocarbon (CFC) regulations.
A number of regional and delegated agency programs involved
outreach to dry cleaners. For instance, Indiana developed a Five
Star Recognition Program for dry cleaners. The state developed
and distributed to dry cleaner operators a manual including all
applicable regulations. Texas and Louisiana also provided
assistance to dry cleaners, including holding workshops and
distributing brochures that described what rules applied to the
cleaners. At the regional level, a Region 6 official visited
approximately 50 dry cleaners in Texas to make them aware of the
dry cleaner regulations. Region 6 officials coordinated this effort
with Texas. OECA has also developed a collection of educational
materials for the dry cleaning industry.
Several agencies also conducted compliance assistance for the
printing industry. Louisiana distributed brochures to print shops,
while Illinois offered compliance assistance to printers through its
Clean Break Amnesty Program. OECA also established a
Compliance Assistance Center for printers.
The regions have performed compliance assistance in several
similar program areas as well. Examples of these programs
include Regions 6 and 9 offering assistance to affected industries
for the new CFC regulations and Regions 5 and 9 offering outreach
for new air toxics standards.
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NATIONAL
CLEARINGHOUSE
OF IDEAS DID
NOT EXIST
SIMILAR ACTIVITIES
COULD RESULT IN
DUPLICATION OF
EFFORT
Although regions and delegated agencies performed compliance
assistance activities, often in the same industry or regulatory areas,
there was not a national clearinghouse of the activities. OECA had
taken some steps in this direction. For instance, OECA established
a compliance assistance work group to exchange information on
regional and state compliance assistance activities. Also, OECA
set up Compliance Assistance Centers in four key industry sectors,
with plans to set up four more. An OECA official stated that these
centers could be used to help regions and delegated agencies learn
what activities others had done for specific industry sectors. For
example, in April of this year, the Printers National Environmental
Assistance Center put out a message to all states to provide copies
of manuals and guidance so that a comprehensive list of
compliance assistance tools could be cataloged and linked.
Finally, according to OECA officials, such lists are either under
development or already available for some other industries.
Region 5 states recently expressed a need to better coordinate on
compliance assistance activities so they can learn from each other
and borrow ideas and products that have worked. Region 5 agreed
to serve as a clearinghouse by collecting compliance assistance
information from the states and making it available within the
region. The information included in the clearinghouse, however,
would be limited to the Region 5 area.
Without a clearinghouse coordinating information, regions and
delegated agencies may duplicate efforts in developing similar
compliance assistance activities. Because regions and delegated
agencies are trying to reach many of the same industry groups or
discuss the same regulations, they could share the materials,
perhaps slightly altering them to fit the specific rules of their own
areas. Regions and delegated agencies could also use a
clearinghouse as a way to share information about what methods
have worked well or have not been successful, so that others can
learn from their experiences. This coordination may allow regions
and delegated agencies to save resources. They could then use
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these resources to develop new materials for other program areas
or industries. The resulting increased compliance assistance could
result in wider outreach to the regulated community and fewer
violations that endanger public health and the environment.
CONCLUSION
RECOMMENDATION
Regions and delegated agencies have conducted compliance
assistance activities. In doing so, they may have developed similar
materials and programs, duplicating efforts. Because a national
clearinghouse of compliance assistance activities has not been
developed for most industries, the regions and delegated agencies
cannot easily share information about what materials and programs
they have developed and what has worked well. If the regions and
delegated agencies could share such information, they could save
resources by avoiding duplicating efforts and could instead focus
on creating new materials for other industries or program areas.
This could result in a wider reaching compliance assistance
program, further protecting the environment.
We recommend that the Assistant Administrator for Enforcement
and Compliance Assurance:
6-1. Work with regions, delegated agencies, and other
appropriate groups to create and maintain a clearinghouse
of available compliance assistance materials and make the
database available to all regions and delegated agencies.
Using existing OECA Compliance Assistance Centers as
clearinghouses for certain industries may be appropriate,
along with a central clearinghouse for other industries or
program areas.
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Exhibit 1
Page 1 of 2
SCOPE AND METHODOLOGY
Scope This report consolidates the audit work completed in Regions 5, 6,
and 9. We conducted fieldwork for the consolidated report
between October 7, 1996 and July 30,1997. We provided position
papers consisting of the complete text of the chapters to officials
from the Office of Enforcement and Compliance Assurance
(OECA) and Regions 5, 6, and 9 on June 5,1997. We
incorporated their comments, received throughout June and July,
into a draft report.
On August 7, 1997, we issued our draft report. On September 22,
1997, OECA officials provided us with a draft response. Although
the draft report was substantially the same as the position papers
they had already commented on, OECA officials made many
additional comments and requested new wording changes. On
September 23,1997, we held an exit conference with OECA
officials to discuss their draft response. The final response was due
September 8, 1997. As of September 30, 1997, the Assistant
Administrator for OECA had not responded. After reviewing the
draft response and conducting the exit conference, we made
appropriate changes and finalized the report.
Methodology Our first objective was to determine if the level of enforcement
activity was consistent throughout the nation. We used the
information obtained from our three regional reviews as a starting
point for accomplishing this objective. We then interviewed
OECA, Office of Air and Radiation, and Regional Air Program
personnel. We also received assistance from the OIG's
Engineering and Science Staff in comparing the enforcement
programs at the various regional and delegated agencies.
To make our data from each regional report comparable with the
others, we selected an 18 month tune period for our analysis of this
objective, which is in Chapter 2 of this report. To do this, we
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Exhibit 1
Page 2 of2
obtained the numbers of both judicial and administrative actions
for Region 9 completed between October 1993 and March 1995 to
compare them with Regions 5 and 6. Since this objective uses a
time frame that is different from the regional reviews, the numbers
in Chapter 2 may differ from those in the regional reports and the
other chapters hi this report.
Our analysis for this objective considered the number of cases
completed and the penalties assessed within the given time period.
It did not include many other factors, such as the relative
complexity of the cases or the impact of ongoing work. Because
the data showed wide variations among the regions and delegated
agencies, we determined that the indicators we used, though
imperfect, were valid.
Our second objective was to determine if enforcement programs
were designed to deter companies from violations. We interviewed
air enforcement personnel and performed case file reviews to
accomplish this objective. In consolidating this issue, we reviewed
the prior OIG regional reports and obtained updated information
from Regions 5 and 6. We also interviewed OECA and Office of
Communication, Education, and Public Affairs personnel.
Our third objective was to determine if EPA Headquarters or
regions had useful, effective management information systems for
tracking enforcement actions. We interviewed enforcement
personnel about the Aerometric Information Retrieval System
(AIRS) Facility Subsystem (AFS). We did not review AFS to
verify its accuracy. We did, however, check the data against
information found in the case files. We also compared AFS
reports to delegated agency reports for the same time period, and
followed up on any differences. In consolidating this issue, we
reviewed the prior OIG regional reports, and interviewed OECA
personnel. We also contacted the Office of Air Quality Planning
and Standards to obtain information regarding resources used for
AFS.
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Exhibit 2
Page 1 of3
PRIOR AUDIT COVERAGE
Scope of
Regional Reviews From 1995 to 1997, we reviewed the air enforcement and
compliance assistance programs in three regions. For Regions 5
and 6, we focused on enforcement actions (excluding asbestos)
completed between October 1,1993 and June 30, 1995. Since the
work at Region 9 was performed later, that review focused on
actions completed between October 1, 1994 and March 31,1996.
Details of the scope of the regional reviews follow:
Region 5: The audit covered the Air and Radiation Division
and the States of Indiana and Michigan. The fieldwork was
performed from September 7, 1995, to July 15, 1996. Prior
to our audit, we conducted a survey. Our survey included
work at the States of Wisconsin and Illinois. The final
report (Report No. 6100284) was issued on September 13,
1996.
Region 6: The audit covered the Compliance Assurance
and Enforcement Division and the States of Texas and
Louisiana. The fieldwork was performed from September
11,1995, to July 26,1996. The final report (Report No.
6100309) was issued on September 26,1996.
Region 9: The audit covered the Air and Toxics Division's
enforcement and compliance activities within California,
the California Air Resources Control Board, and 4 of the 34
local air districts: (1) Bay Area Air Quality Management
District (District), (2) South Coast District, (3) Sacramento
Metropolitan District, and (4) Monterey Bay Unified Air
Pollution Control District. The fieldwork was performed
from October 2,1995, to December 31,1996.20 The final
report (Report No. 7100246) was issued on July 24,1997.
20Fieldwork was suspended from October 1995 until April 1996 to perform other work.
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Other OIG and
GAO Reviews
Both the OIG and the U.S. General Accounting Office (GAO) have
issued reports in this area.21 Several of the reports found that
regions and delegated agencies were not collecting the economic
benefit component of penalties, or correctly calculating and
documenting penalties. Some reports identified concerns with
delegated agency air enforcement programs, such as not:
• meeting compliance/enforcement grant commitments,
• implementing EPA enforcement guidance,
• reporting all significant violators to EPA, and
• taking aggressive enforcement action to bring all violating
facilities into compliance.
GAO also issued a related report that addressed EPA data
gathering efforts imposed on states. GAO concluded that a draft
regulation would have imposed data gathering requirements on the
states that exceeded EPA's minimum air pollution program needs.
EPA suspended development of the draft regulation.
2'See next page for a list of the OIG and GAO reports.
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Page 3 of3
OIG AND GAO REPORTS
Review of Region 5's Stationary Source of Air Pollution Compliance and Enforcement Program
(EPA-IGE1K67-05-0449-80743, March 11,1988).
Capping Report on the Computation. Negotiation. Mitigation, and Assessment of Penalties
Under EPA Programs (EPA-IG E1G8E9-05-0087-9100485. September 27, 1989).
Air Pollution: Improvements Needed in Detecting and Preventing Violations (GAO/RCED-90-
155, September 27, 1990).
Environmental Enforcement: Penalties May Not Recover Economic Benefits Gained by
Violators (GAO/RCED-91-166, June 17,1991).
Follow-up Review on EPA's Mitigation of Penalties (EPA-IG E1GMG4-05-6009-4400107,
September 15, 1994).
Air Pollution: EPA Data Gathering Efforts Would Have Imposed a Burden on States
(GAO/AIMD-95-160, August 7, 1995).
Regional Management of Clean Air Act Section 105 Air Grant Program (EPA-IG E1KAE5-24-
0015-5100510, September 29,1995).
Region 5's Air Enforcement and Compliance Assistance Program (EPA-IG E1GAF5-05-0045-
6100284, September 13,1996).
Region 6's Enforcement and Compliance Assurance Program (EPA-IG E1GAF5-06-0056-
6100309, September 26,1996).
Validation of Air Enforcement Data Reported to EPA by Pennsylvania (EPA-IG E1KAF6-03-
0082-7100115, February 14,1997).
Region 9's Administration of the California Air Compliance and Enforcement Program. (EPA-IG
E1GAF6-09-0023-7100246, July 24,1997).
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Exhibit 3
Page 1 of 1
BARRIERS TO EFFECTIVE AIR ENFORCEMENT PROGRAMS
Agency
OECA
Region 5
Indiana
Michigan
Region 6
Texas
Louisiana
Region 9
State of
California
Sacramento,
CA
Bay Area, CA
Monterey
Bay, CA
South Coast,
CA
Barrier 1
Resources
Detecting Violations
Unsupported Enforcement
Action
Limited Resources
Resources
Not Enough People
Legal Process
Limited Coordination
Between OECA and OAR
Limited Resources
Permit Conditions Being
Revised
Insufficient Penalties
Ability to Communicate with
Regulated Community
Political Climate
Barrier 2
Lack of Emission
Data
Slow Enforcement
Process
Weak State Rules
Untimely Permits
Complexity of the
Law
Not Enough Money
Lack of Resources
Limited Resources
Untimely Significant
Violator Reporting
Accuracy of
Monitoring Reports
Determining
Noncompliance
Limited Resources
Industry Influences
Barrier 3
None identified
Political Climate
Local Agencies
Political Climate
States' Perceptions That
They Know Situations
Better than Federal
Government
Political Climate
Cases Delayed in State
Attorney General's Office
AFS Data Quality
Political Climate
Political Climate
Unclear Reporting Criteria
None identified
Limited Resources
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Appendix 1
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DISTRIBUTION
Headquarters
Agency Folfowup Official (3101)
Attn: Assistant Administrator OARM
Agency Followup Coordinator (3304)
Attn: Director RMD
Audit Followup Coordinator, Office of Enforcement Compliance and Assurance (2201 A)
Assistant Administrator for Air and Radiation (6101)
Associate Administrator for Regional Operations and State/Local Relations (1501)
Associate Administrator for Congressional and Legislative Affairs (1301)
Associate Administrator for Communications, Education, and Public Affairs (1701)
Headquarters Library (3404)
Office of Inspector General
Inspector General (2410)
Regional Offices
Regional Administrators
Regional Air Enforcement Directors
Regional Audit Followup Coordinators
Regional Directors of Public Affairs
Regional Libraries
All State Environmental Directors
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