&EPA
United States
Environmental Protection
Agency
Administration And
Resources Management
(3304)
EPA 205-R-95-005
December 1995
1995 Integrity Act Report To
The President And Congress
Federal Managers'
Financial Integrity Act (RL 97-255)
October 1,1994^-September 30,1995
^ J^
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Cover photo: Nesting Ospreys
Hammonassett Beach State Park
Madison, Connecticut
Photo by the late Richard D. Couch
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UNFTED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHMOTON, D.C. 20460
DEC I 9 J995
THE ADMINISTRATOR
The President
The White House
Washington, DC 20500
Dear Mr. President:
I am pleased to assure you that the Environmental Protection Agency's (EPA)
management and financial control systems, with exceptions noted, provide reasonable
protection of the Agency's programs and resources from fraud, waste, and abuse. In my
judgment, EPA has achieved the intent of the Federal Managers' Financial Integrity Act
(P.L. 97-255), to prevent problems through systematic review and evaluation of the Agency's
management controls.
My assurance to you is based on EPA's annual self-evaluation, conducted for the first
time this year m accordance with the Office of Management and Budget's (OMB) new
national integrity guidance under Circular A-123. EPA strongly supported, and was the first
Federal agency to pilot this major new policy direction, which redefines oversight and
comomes greater management flexibility with accountability for achieving program results.
Over the last year, EPA's Assistant and Regional Administrators earned out this policy by
exercising personal judgment in reviewing their operations, and in identifying, correcting, or
reporting significant issues affecting management of the Agency's environmental programs.
In September 1995. my Senior Leadership Council (SLC) met with key executives
from OMB and the General Accounting Office (GAO) to hear their perspectives of the
Agency's most significant management problems. EPA has been a leader in engaging its
principal oversight agents in dialogue of this kind. The discussion this year was of great
assistance to our Assistant and Regional Administrators in assessing results of their
environmental programs. The Council convened again in November to review the results of
the self-evaluations, including the Assistant and Regional Administrators' formal response to
the views of our colleagues at OMB and GAO. The SLC then developed independent
recommendations for my final decisions, which are conveyed in this Report.
"X— Pnnted on Recyciea Paper
-------
As a result of this systematic Agency-wide evaluation, I am very pleased to report that
EPA has corrected eight of its fourteen material weaknesses this year: 1) Contracts
Management, 2) Accounts Receivable; 3) Pesticides Data Integrity; 4) Superfund Cost
Recovery; 5) EPA's Integrated Data for Enforcement Analysis System; 6) Storm Water
Permitting; 7) Research and Development Facilities; and 8) Research and Development
Equipment. The Agency identified many of these weaknesses a number of years ago, and
their final correction reflects the results of sustained management attention. Because of their
long-term, systemic impacts, we will continue to monitor our progress in addressing past
management problems with the Agency's contracts, and in improving our fiduciary controls
over EPA's receivable accounts.
The Agency is scheduled to correct its six remaining material weaknesses in fiscal
years 1996 and 1997: 1) Accounting System-Related Financial Management Problems;
2) Information Resources Management Planning and Investment; 3) Research and
Development Operating Expenses; 4) Research and Development Extramural Resources;
5) Environmental Data Quality; and 6) Drinking Water Primacy. EPA is also on target to
correct its three remaining material non-conformances with government-wide accounting
standards in fiscal 1996. These areas are further described in the Enclosures to this letter.
Finally, I am pleased to advise you that EPA is not identifying any new material
weaknesses for your attention this year. However, in the spirit of the new integrity policy of
prevention, my senior managers will be addressing several Agency weakness areas that were
raised during EPA's annual self-assessment. For example, we will be strengthening the
Agency's ability to develop user fees for EPA services under OMB Circular A-25. Also, we
will be working to improve safety and health conditions for employees at EPA laboratories
and field stations, and ensure that these facilities would not present an undue risk to the
communities they serve in the event of a natural disaster. With early and high-level
management intervention, we expect to prevent these weaknesses from developing into
material management problems.
This Agency will continue to do its best to protect public health and our environment.
With your support, I intend to work closely with Congress, our state and Tribal partners, and
the American people to protect our health, our natural resources, our economy, and our
communities through common sense cost-effective and flexible strategies.
Sin
Carol M. Brown
Enclosures
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
FISCAL YEAR 1995
INTEGRITY ACT REPORT
TO THE
PRESIDENT AND CONGRESS
^ PRO^°
Federal Managers' Financial Integrity Act
(P.L. 97-255)
October 1, 1994 - September 30, 1995
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1995 INTEGRITY ACT REPORT
TABLE OF CONTENTS
CONTENTS PAGE
Transmittal Letter to the President
Enclosure A Statistical Summary of Performance A 1
Enclosure B Progress Report on High Risk Areas B 1-3
Enclosure C Schedule of Corrective Actions for
Material Weaknesses C 1-29
Material Weakness Summary
6 Carryover Material Weaknesses
8 Corrected Material Weaknesses
Enclosure D Schedule of Corrective Actions for
Material Non-Conformances D 1-7
Material Non-conformance Summary
3 Carryover Non-conformances
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Enclosure A - Statistical Summary of Performance
-------
1995 INTEGRITY ACT REPORT
U.S ENVIRONMENTAL PROTECTION AGENCY
STATISTICAL SUMMARY OF PERFORMANCE
SECTION 2, INTERNAL CONTROL
Prior Years
1993 Report
1994 Report
1995 Report
Total
Number of Material Weaknesses
Number reported
for the first
time in:
42
0
0
0
42
For that year,
number that have
been corrected:
36
0
0
0
36
For that year,
number still
pending:
6
0
0
0
6
Of the total number corrected, how many were corrected in 1995? 8
SECTION 4. FINANCIAL MANAGEMENT SYSTEMS
'
Prior Years
1993 Report
1994 Report
1995 Report
Total
Number of Material Non-conformances
Number reported
for the first
time in:
18
0
0
0
18
For that year,
number that have
been corrected:
15
0
0
0
15
Of the total number corrected, how many were corrected in 1995
For that year,
number still
pending:
3
0
0
0
3
? 0
Enclosure A - Page 1
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Enclosure B - Progress Report on High Risk Areas
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
PROGRESS REPORT ON HIGH RISK AREAS
Title and Status: Financial Systems
EPA's financial system does not provide timely data and does not fully automate
accounting for receivables. (See Enclosure B, page 2, for a detailed description of the Agency's
corrective action strategy, milestones and results indicators.)
Title and Status: Contracts Management
EPA is implementing a comprehensive plan to address Agency-wide contract
management problems. The Agency has completed 38 of the 40 recommendations for
strengthening contracts management and is making substantial progress to complete the
remaining actions. This High Risk Area was also a material weakness that has been
corrected in FY 1995. (See Enclosure C, page 26 for a detailed description of the Agency's
corrective action strategy, milestones and results indicators.)
Enclosure B - Page 1
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[X] OMB High Risk Area
[ ] New
[ ] Material Weakness
[ ] Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Financial Systems
DESCRIPTION:
General Accounting Office (GAO), Office of Inspector General (OIG), and internal Agency reviews found
non-conformances and deficiencies in EPA's Integrated Financial Management System (IFMS). IFMS
is not fully automated to account for Superfund specific receivables and requirements for installments and
compound interest.
RESPONSIBLE MANAGER:
Kathryn S. Schmoll, Comptroller, Office of the Comptroller
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[X] LUST
[X] B&F
[X]IG
[X]CG
[X] R&D
[X] Oil Spill
[X] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1989
1990
1995
1996
Explanation for Change in Date: Programming problems delayed
completion of reports.
Enclosure B - Page 2
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
The Agency's corrective action strategy for FY 1996 includes implementing a PC based accounts
receivable module. EPA will request OIG validation that corrective actions eliminated management
control weaknesses during its annual audit of EPA's financial statement required by the Chief Financial
Officers Act. EPA plans to recommend removal of financial systems from OMB's High Risk List in
FY 1996.
RESULTS INDICATORS:
Key results indicators include accurate and timely accounting of receivables and unproved IFMS capability
to produce OMB and EPA management reports.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Update policies for recording General Ledger
transactions in IFMS.
2. Install enhancements to Accounts Receivable
Module to handle debt servicing.
3. Complete third round of on-site verification
reviews for Accounts Receivable.
4. Reconcile FY 1989 General Ledger
conversion adjustments.
5. Implement Version 5,le of IFMS, user
manuals, and system documentation.
6. Complete enhancements to produce complete
and accurate supplemental accounts receivable
reports.
7. Install interface of Cost Recovery Tracking
System (CTS) with IFMS to automate accounting
for installments and perform Superfund
compounding of interest due EPA.
ORIGINAL
TARGET
DATE
10/92
12/92
6/93
10/92
2/94
6/94
1/96
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
N/A
9/96
ACTUAL
COMPLETION
DATE
11/92
5/93
6/93
10/93
5/94
11/95
Enclosure B - Page 3
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Enclosure C - Schedule of Corrective Actions
Material Weaknesses
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
MATERIAL WEAKNESS SUMMARY
Qiiyy &m M&twfal Wettowsm
1. Environmental Data Quality
2. Research & Development Extramural Resources
3. Drinking Water Primacy
4. Accounting System-Related Financial Management
Problems
5. Information Resources Planning & Investment
6. Research & Development Operating Expenses
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2. Research & Development Facilities
3. Storm Water Permitting
4. Pesticides Data Integrity
5. Integrated Data for Enforcement Analysis System
6. Superfund Cost Recovery
7. Contracts Management
8. Accounts Receivable
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Enclosure C - Page 1
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[ ] Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Environmental Data Quality
DESCRIPTION:
EPA organizations that make or use environmental measurements are required to maintain a Quality
Assurance (QA) program to assure that environmental data of the appropriate type and quality are
collected to support Agency decisions. GAO and OIG have criticized the Agency for failing to
systematically assess the integrity of the Agency's environmental data measurement program.
RESPONSIBLE MANAGER:
Henry L. Longest, II, Deputy Assistant Administrator for Management
Office of Research and Development (ORD)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X] SF
[X] LUST
] B&F
[]CG
[X] R&D
[X] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1992
1994
1997
1996
Explanation for Change in Date: EPA programs without approved
Quality Management Plans by 9/30/96, will report as Agency
weakness for their own organization.
Enclosure C - Page 2
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
ORD focused top management attention on the importance of quality assurance to increase environmental
data quality supporting Agency decisions. ORD provided QA compliance status reports and distributed
policies and regulations to all senior managers. Since FY 1992, ORD has reviewed quality assurance
programs in 25 out of 40 organizations. During FY 1996, ORD will conduct further reviews and develop
generic training on QA practices, principles and definitions for use Agency-wide. In FY 1997 and beyond,
ORD will continue oversight and defer responsibility to individual programs to have current, documented,
operational Quality Management Plans (QMPs).
RESULTS INDICATORS:
ORD is aggressively working with Agency offices to achieve full compliance in developing required QA
management plans. Site review results will provide indicators of accuracy in environmental measurements.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Distribute FY 1994 Management Systems
Review schedule. Report quarterly on progress.
2. Present updated status and action plan to the
Administrator's Senior Leadership Council.
3. Develop generic language to address QA
responsibilities for Agency managers'
performance standards.
4. Include QA performance standard in all
senior manager's performance agreements.
5. Distribute schedule for planned FY 1996
Management Systems Reviews.
6. Develop Agency-wide generic training on
definitions, principles, and practices.
7. Distribute for green border review, new
Quality Manual, including Order on revised QA
requirements.
8. Develop procedures for resolving disputes on
QA-related documentation and implementation
issues.
ORIGINAL
TARGET
DATE
1/94
5/94
4/95
12/95
12/95
3/96
4/94
4/96
CURRENT
TARGET
DATE
N/A
N/A
N/A
12/95
12/95
3/96
4/96
4/96
ACTUAL
COMPLETION
DATE
1/94
5/94
2/95
Enclosure C - Page 3
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
f 1 Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Research & Development Extramural Resources
DESCRIPTION:
Internal ORD assessments and OIG audits and related reviews identified a number of vulnerabilities in
ORD's management of extramural resources, which account for nearly seventy percent of total ORD
funds. The vulnerabilities include a wide range of programmatic, administrative, and financial issues.
These deficiencies in ORD laboratories significantly impair the ORD mission.
RESPONSIBLE MANAGER:
Deborah Y. Dietrich, Director, Office of Resources Management and Administration
Office of Research and Development (ORD)
APPROPRIATIONS/ACCOUNTS:
[ ]PRO
[X] AC&C
[X]SF
[ ] LUST
[]B&F
[]CG
[X] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1990
1992
1996
1996
Explanation for Change in Date: Not Applicable
Enclosure C - Page 4
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
ORD's comprehensive strategy to strengthen extramural resource management and ensure compliance
with all ORD, EPA, and Federal policies and requirements is to: 1) assign executive-level oversight;
2) conduct comprehensive staff training; 3) develop and implement new policies and procedures and
evaluate their effectiveness; 4) conduct in depth management reviews and analyses; and 5) establish
Extramural Management Specialist positions in all ORD offices and laboratories. These types of
initiatives and efforts will continue and will be further enhanced with improved quality control procedures.
RESULTS INDICATORS:
ORD is striving to achieve effective, efficient extramural resource management in full compliance with
EPA and Federal policies and requirements.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Complete training sessions for POs, DOPOs,
and WAMs with contract management
responsibilities.
2. Develop policy guidance on generic issues
and problems.
3. Implement management oversight throughout
ORD and provide proactive approaches in
identifying and correcting problems.
4. Complete training sessions for Project
Officers with assistance administration and
management responsibilities.
ORIGINAL
TARGET
DATE
9/91
12/91
12/91
9/96
CURRENT
TARGET
DATE
N/A
N/A
N/A
9/96
ACTUAL
COMPLETION
DATE
9/95
10/94
9/94
Enclosure C - Page 5
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[ ] Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Drinking Water Primacy
DESCRIPTION:
Under the Safe Drinking Water Act (SDWA) the Agency requires states to adopt and implement all EPA
drinking water regulations to retain primacy. Expansion in the number and complexity of drinking water
regulations has increased workload demands and threatened states' ability to retain primacy. EPA lacks
capacity and expertise to implement programs withdrawn or returned from the states, as required under
current law. Unless strong steps are taken, the Federal/state partnership in the drinking water program
is in serious jeopardy.
RESPONSIBLE MANAGER:
Cynthia C. Dougherty, Director
Office of Ground Water and Drinking Water, Office of Water (OW)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[JSF
[ j LUST
]B&F
[JCG
R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1992
1997
1997
1997
Explanation for Change in Date: Not Applicable
Enclosure C - Page 6
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA is working to: 1) increase Public Water Systems Supervision grants to states; 2) allocate resources
to the greatest public health threats first; 3) allow more time for states to build capacity for primacy;
4) provide training and technical assistance to states on the use of alternative financial mechanisms; and
5) promote innovation and flexibility in program implementation, if necessary. EPA has developed a
contingency plan, including use of third parties, to directly implement state programs. EPA also prepared
a report on key issues and recommendations for the Congress to consider in reauthorizing the Safe
Drinking Water Act.
RESULTS INDICATORS:
Currently, thirty states have full primacy and seventeen are awaiting EPA approval. Based on site reviews,
most states are carrying out the highest priority elements of EPA state priority guidance.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Revise state resource needs assessment to
estimate shortfall by year and by regulation.
2. Implement the priorities guidance with each
state through the annual work planning process.
3. Assess state abilities to meet priority one
activities.
4. Identify and work to resolve state capacity
needs.
5. Develop contingency plan for directly
implementing state primacy programs.
6. Identify EPA resource needs to directly
implement state programs.
7. Elevate state capacity efforts in FY 94
contract plan.
8. Validate that states have implemented new
rules included in the priority strategy.
ORIGINAL
TARGET
DATE
3/93
annually
9/93
ongoing
3/93
6/93
8/93
9/97
CURRENT
TARGET
DATE
12/95
annually
N/A
ongoing
N/A
10/96
N/A
9/97
ACTUAL
COMPLETION
DATE
annually
9/93
ongoing
1/93
11/93
Enclosure C - Page 7
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[ ] Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Accounting System-Related Financial Management Problems
DESCRIPTION:
While EPA's Integrated Financial Management System (IFMS) meets the Joint Financial Management
Improvement Program core accounting system requirements, specific systems-related problems impair
EPA's ability to provide complete, and timely data for Agency decision-making and control of assets.
These problems include: 1) incomplete user manuals and system documentation; 2) inadequate automated
project cost accounting capability; 3) incomplete interfaces with programmatic and administrative systems;
and 4) inadequate financial management reports. EPA's Financial Systems is also reported on the Office
of Management and Budget's High Risk List and in Enclosure D, Financial Systems Non-conformances,
of EPA's 1995 Integrity Act Report.
RESPONSIBLE MANAGER:
Kathryn S. Schmoll, Comptroller, Office of the Comptroller
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X] SF
[X] LUST
[X] B&F
[X]IG
[X]CG
[X] R&D
[X] Oil Spill
[X] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1992
1995
1995
1996
Explanation for Change in Date: Additional milestone added to
address OMB concerns with property accounting.
Enclosure C - Page 8
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA will implement the Property Accounting System and issue new policies and guidance to address the
new function in IFMS. During FY 1996, the OIG will validate the effectiveness of corrective actions as
part of its annual audit of EPA's financial statement required by the Chief Financial Officers Act.
RESULTS INDICATORS:
EPA's key success measure is complete, reliable, and timely financial data to support effective Agency
decision-making.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Complete final on-site verification reviews.
2. Conduct Strategic and Master Plan Study.
3. Complete Property System Requirement Study.
4. Implement Version 5.1e of IFMS.
- User Manuals and System Documentation
5. Develop Funds Management Requirements.
6. Complete enhancements to produce accurate
reports.
7. Develop Project Cost Accounting
Requirements.
8. Implement interface between IFMS and GICS.
9. Eliminate ADCR.
10. Replace FMS function in CPARS.
11. Install Project Cost Accounting System.
12. Implement Property Accounting System.
ORIGINAL
TARGET
DATE
6/93
3/93
1/94
2/94
9/93
6/94
9/93
9/93
6/94
2/95
9/95
7/96
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2/95
N/A
7/96
ACTUAL
COMPLETION
DATE
6/93
7/93
6/94
5/94
9/94
9/94
9/94
7/95
9/94
4/95
9/95
Enclosure C - Page 9
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[ ] Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Information Resources Planning and Investment
DESCRIPTION:
OIG and GAO believe that material management control weaknesses have resulted in duplication,
inefficiency, cost overruns, and delays in developing and implementing EPA systems, ineffective Agency
management of ADP contracts, data quality deficiencies, exposure of sensitive data to unnecessary risk,
and inability to support EPA's cross-media mission. The lack of a cohesive planning and investment
review process, top management commitment and sufficient resources to support Information Resources
Management (IRM) impede comprehensive EPA assessment of environmental risks and solutions.
RESPONSIBLE MANAGER:
Paul Wohlleben Acting Director, Office of Information Resources Management
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[X] LUST
[X] B&F
[X]IG
[X] CG
[X] R&D
[X] Oil Spill
[X] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1992
1995
1996
1997
Explanation for Change in Date: Milestones added to address OIG
concerns for lack of investment review process.
Enclosure C - Page 10
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
The strategy for improving IRM security is complete. In FY 1995, EPA updated and formally issued
security policies through the Agency's directives system and continued mandatory security awareness
training for program and regional offices. The FY 1996 strategy for improving IRM planning and
investment review processes is to: 1) develop guidance to aid those involved in IRM multi-year planning;
2) issue an Agency-wide IRM implementation plan; and 3) establish and implement a pilot investment
review process.
RESULTS INDICATORS:
Key EPA success measures for IRM planning and investment include more effective mission support as
proposed investments are evaluated based on a cohesive, Agency-wide IRM Strategic and Implementation
Plan, increased data quality for better decision-making, and reduced costs from integrated planning and
budgeting and coordinated systems development.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Implement a security monitoring program.
2. Secure sensitive system's risk analysis and
plans.
3. Update information security policies/standards.
4. Initiate pilot integrated planning cycle.
5. Publish formal Integrated IRM Plan
6. Finalize planning procedures and guidance.
7. Initiate Agency-wide IRM 5- Year Plan process.
8. Issue Agency-wide IRM 5-Year Plan.
9. Conduct pilot Investment Review Board
process.
10. Implement Investment Review Board process.
ORIGINAL
TARGET
DATE
6/93
12/93
12/93
5/94
12/94
2/95
5/95
3/96
7/96
4/97
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3/96
7/96
4/97
ACTUAL
COMPLETION
DATE
6/93
6/93
6/95
5/94
4/95
11/95
11/95
Enclosure C - Page 11
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[ ] Corrected
[ ] Non-conformance
[X] Carryover
TITLE: Research & Development Operating Expenses
DESCRIPTION:
Internal EPA reviews identified that the lack of sufficient resources for research and development
laboratory operating expenses prevents the Agency from maintaining adequate and up-to-date research
materials and services for vital scientific studies and analytical activities. This significantly impairs
fulfillment of the Agency's research mission.
RESPONSIBLE MANAGER;
Deborah Dietrich, Director, Office of Resources Management and Administration
Office of Research and Development (ORD)
APPROPRIATIONS/ACCOUNTS:
[ ]PRO
[]AC&C
[X]SF
[ ] LUST
[ ] B&F
[]CG
[X] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1990
1992
1996
1996
Explanation for Change in Date: Not Applicable
Enclosure C - Page 12
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
The Agency's strategy is to: 1) obtain Congressional approval for increased flexibility in use of the
Research and Development appropriation; 2) consolidate ORD's budget structure to allow more efficient
allocation of resources; 3) include ORD laboratory funding requirements in Agency budget and planning
processes; and 4) issue new policy initiatives, specialized financial management reviews and evaluations,
and improve monitoring and reporting techniques. These initiatives will continue and will be further
enhanced by improved quality control procedures.
RESULTS INDICATORS:
Corrective actions, to date, resulted in increases in ORD laboratory operating expense funds from $22
million in FY 1990 to over $55 million in FY 1995. A key measure of success is obtaining an overall
reduction of risk to the Agency's scientific and research mission through improved funding of EPA's R&D
laboratories.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Reassess overall weakness to determine the
propriety of Integrity Act reporting.
2. Submit a proposal to the Agency based on
"1." above.
3. Develop policy directives for financial
management operations.
4. Conduct financial management reviews.
5. Validate effectiveness of corrective action in
reducing the risk to the Agency.
ORIGINAL
TARGET
DATE
3/94
4/94
6/94
7/94
8/94
CURRENT
TARGET
DATE
N/A
4/96
6/96
7/96
8/96
ACTUAL
COMPLETION
DATE
11/94
Enclosure C - Page 13
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[X] Corrected
[ ] Non-conformance
[ ] Carryover
TITLE: Research & Development Equipment
DESCRIPTION:
As a result of internal reviews, ORD discovered that its scientific equipment, the basis for vital
assessments and analyses supporting EPA's mission and regulatory program, is aged and obsolete by
industry standards. There is no Agency strategy for equipment planning or budgeting to strengthen
laboratory scientific capability.
RESPONSIBLE MANAGER:
Deborah Y. Dietrich, Director, Office of Resources Management and Administration
Office of Research and Development (ORD)
APPROPRIATIONS/ACCOUNTS:
[ JPRO
[]AC&C
[X] SF
[ ] LUST
B&F
IG
[]CG
[X] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1988
1990
1999
Corrected
Explanation for Change in Date: Inventory review showed
significant reduction of aged equipment.
Enclosure C - Page 14
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY;
During FY 1995, ORD: 1) updated and analyzed its scientific equipment inventory for completeness and
accuracy; 2) assessed the impact of previous year's funding of equipment inventory; and 3) sustained
replacement/upgrade of antiquated equipment in each laboratory that provides the necessary capability
to support critical research programs. ORD will continue to review, evaluate, and prioritize scientific
equipment needs identified by laboratories, manage the central escrow account to ensure proper
expenditures, and evaluate and analyze its equipment inventory to ensure needs are identified in then-
strategic planning process.
RESULTS INDICATORS;
EPA increased resources for scientific equipment from $2 million in FY 1988 to $13 million in FY 1995
to improve the quality of ORD's scientific equipment and develop an equipment inventory tracking
system. Results of an internal review indicated a 39% reduction in aged equipment items (over 7 years
& older) from 75% in 1988 to 35.3% in 1995. The long range goal is state-of-the-art scientific equipment
at all ORD laboratories.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Update inventory and perform analysis for
replacement vs. upgrade needs.
2. Submit annual budget initiatives.
3. Develop a replacement/upgrade scientific
equipment plan for 1995-1999 based on current
funding level.
4. Verify that management control weakness has
been corrected.
ORIGINAL
TARGET
DATE
3/94
4/94
6/94
9/94
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
ACTUAL
COMPLETION
DATE
3/95
4/95
8/94
9/95
Enclosure C - Page 15
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[X] Corrected
[ ] Non-conformance
[ ] Carryover
TITLE: Research & Development Facilities
DESCRIPTION:
The majority of ORD's twelve research laboratories and five field stations, which provide scientific
expertise for the Agency's regulatory program, are over thirty years old and in various stages of disrepair.
No valid Agency Masterplan exists to promote systematic upkeep and maintenance of these EPA-owned
assets. The disrepair results in health, safety, and environmental violations and vulnerabilities in EPA's
science program.
RESPONSIBLE MANAGER:
Deborah Y. Dietrich, Director Office of Resources Management and Administration
Office of Research and Development (ORD)
APPROPRIATIONS/ACCOUNTS:
[ ]PRO
[]AC&C
[]SF
[ ] LUST
[X] B&F
[]CG
[X] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1989
1990
1997
Corrected
Explanation for Change in Date: Completed activities ahead of
scheduled correction date & transferred Masterplan implementation
to OARM.
Enclosure C - Page 16
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
ORD created a Buildings and Facilities (B&F) Committee comprised of ORD Laboratory Directors to
focus senior management attention on B&F projects, priorities, and budget strategies to ensure systematic
upkeep and repair of ORD laboratories. ORD implemented a fully automated internal data collection
process to identify annual B&F requirements, developed an automated methodology to rank B&F projects
by category and improve decision and allocation processes, submitted a formal request to prepare a
Masterplan for each ORD facility to ensure systematic upgrades of physical plant needs, and developed
and implemented an ORD budget for B&F projects costing $75,000 or less.
RESULTS INDICATORS:
ORD's goal is efficient and fully operational laboratories consistent with a Masterplan strategy for
systematic maintenance and upkeep. ORD is an ardent supporter of Masterplan initiatives and continues
to work with the Agency in this area.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Obtain input for the Masterplan effort from
ORD senior managers to ensure strategic
planning is included.
2. Establish policies for the appropriate
management of B&F procurement costing
$75,000 or less.
3. Develop FY 1995 budget initiatives to
support increased funding for facility repairs,
maintenance and construction.
4. Transfer responsibility of Masterplan
implementation to OARM.
ORIGINAL
TARGET
DATE
9/92
6/92
6/92
9/95
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
ACTUAL
COMPLETION
DATE
7/95
10/94
4/94
9/95
Enclosure C - Page 17
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[X] Corrected
[ ] Non-conformance
[ ] Carryover
TITLE: Storm Water Permitting
DESCRIPTION:
The Clean Water Act (CWA) Amendments of 1987 require EPA to implement a permit program for
storm water drainage. Internal Agency reviews found delays in implementing this National Pollutant
Discharge Elimination System (NPDES) permit program, potentially depriving the public of improved
water quality required by the Act.
RESPONSIBLE MANAGER:
James F. Pendergast, Acting Director, Permits Division, Office of Wastewater Management
Office of Water (OW)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[]SF
[ ] LUST
B&F
IG
[]CG
[ ] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1991
1993
1995
Corrected
Explanation for Change in Date: Not Applicable
Enclosure C - Page 18
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA's strategy for meeting CWA Amendments of 1987 storm water permitting requirements was to:
1) increase Agency resources devoted to storm water program activities; 2) revise and promulgate
NPDES storm water regulations; 3) initiate issuance of permits; and 4) study current and future storm
water permit programs and prepare a report to Congress. During FY 1995, EPA tracked milestones on
the Agency's Semiannual Regulatory Agenda and the quarterly OWM Agenda. These tracking systems
validated the effectiveness of OW's planned actions, reported the status of accomplishments, and verified
results.
RESULTS INDICATORS:
Promulgated and revised NPDES regulations in April 1992 in 40 CFR Part 122.26. A combined report
on storm water discharges and control methods was submitted to Congress on March 31, 1995.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Reorganize to create a storm water unit.
2. Allocate increased FY 1992 extramural funds.
3. Provide EPA Regions with increased contract
support for storm water permit programs.
4. Complete initial comprehensive outreach
activities.
5. Establish Notice of Intent Processing Center
in operation.
6. Issue twelve EPA storm water general
permits.
7. Complete Report to Congress.
ORIGINAL
TARGET
DATE
1/91
12/91
1/92
10/92
10/92
6/92
3/93
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
N/A
N/A
ACTUAL
COMPLETION
DATE
1/91
12/91
1/92
9/92
9/92
9/92
3/95
Enclosure C - Page 19
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ]New
[X] Material Weakness
[X] Corrected
[ ] Non-conformance
[ ] Carryover
TITLE: Pesticides Data Integrity
DESCRIPTION:
An Agency internal review and the OIG's special Good Laboratory Practices (GLP) program review
identified the following problems with laboratory integrity in the pesticides and toxic substances
enforcement program: 1) inspectors lacked training in laboratory fraud detection; 2) too much advance
notice prepared laboratories for upcoming inspections; 3) the GLP program lacked the means of
identifying laboratories based on the type of scientific studies they were contracted to perform; and
4) poor internal office coordination.
RESPONSIBLE MANAGER:
Elaine G. Stanley, Director, Office of Compliance (OC)
Office of Enforcement and Compliance Assurance (OECA)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[]SF
[ j LUST
[]B&F
[]CG
[ ] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1991
1992
1995
Corrected
Explanation for Change in Date: Not Applicable
Enclosure C - Page 20
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA's strategy to strengthen the integrity of the laboratory inspection portion of the pesticides and toxic
substances enforcement program included: 1) training Headquarters, Regional, and National Enforcement
Investigations Center GLP inspectors in fraud detection in a laboratory setting; 2) implementing a
laboratory inspection targeting system; and 3) implementing OIG recommendations on the Federal
Insecticide, Fungicide and Rodenticide Act (FIFRA) GLP program.
RESULTS INDICATORS:
Implementation of the lab targeting system has defined the universe of labs and enables targeting of
smaller labs and those that have never been inspected before, as recommended by OIG; approximately
50 percent of all labs are in this category. More studies are being selected for audit by OCM that have
not been reviewed by the Office of Pesticides Programs (OPP) or received registration approval, providing
OPP with greater assistance in registration decision-making. The time frame for notifying labs of
upcoming inspections has been reduced from twenty-one to seven days, limiting the time that labs have
prior to inspection to improve compliance with GLP regulations; advance notice to test facilities was
reduced from two to less than one week; spot inspections are held as appropriate.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Initiate, on pilot basis, revision of EPA's
inspection notification procedures.
2. Implement a revised neutral administrative
scheme for laboratory selection procedures.
3. Initiate an inspector training program.
4. Conduct a feasibility analysis of laboratory
accreditation.
5. Identify pivotal studies for audit process.
6. Improve coordination between OPP/OC[M]
for GLP program effectiveness through increased
use of OPP auditors.
7. Validate effectiveness of corrective actions
by assessing selected laboratory inspections,
training program evaluations, and inspector
performance.
ORIGINAL
TARGET
DATE
12/91
2/92
9/92
4/93
4/93
1993
9/92
CURRENT
TARGET
DATE
N/A
N/A
N/A
9/95
N/A
9/95
9/95
ACTUAL
COMPLETION
DATE
12/91
9/93
8/92
9/94
9/93
9/95
9/95
Enclosure C - Page 21
-------
\mj
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
New
[X] Material Weakness
[X] Corrected
[ ] Non-conformance
[ ] Carryover
TITLE: Integrated Data for Enforcement Analysis (IDEA) System
DESCRIPTION:
GAO identified continuing weaknesses in the Agency's information system to provide integrated
enforcement data, both in documentation and testing of system software, and training IDEA system end
users.
RESPONSIBLE MANAGER:
Elaine G. Stanley, Director, Office of Compliance (OC)
Office of Enforcement and Compliance Assurance (OECA)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[ ] LUST
[ ] B&F
[]CG
[ ] R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1991
1992
1995
Corrected
Explanation for Change in Date: Not Applicable
Enclosure C - Page 22
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
The Agency's corrective action strategy was to develop: 1) systems and program documentation; 2) a
system testing approach and methodology; and 3) an intensive on-site training program for end users.
In FY 1995, EPA validated the effectiveness of its corrective actions by establishing a documentation
library and instituting procedures for updating system documentation, software, maintenance, testing and
training.
RESULTS INDICATORS:
A key success measure is an increase in the number of EPA Headquarters and Regional users of the
IDEA system, resulting in more effective multi-media enforcement.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Develop a project plan for documentation and
review corrective action milestones.
2. Project review and evaluation of status.
3. Submit testing-documentation procedures.
4. Update documentation and implement testing
procedures.
5. Develop IDEA training plan.
6. Develop and test user friendly interface and
user manual.
7. Training provided for OECA and HQ media
program office staff and EPA regional office staff.
8. Provide ongoing support and reports to
Agency targeting and screening efforts.
9. Complete EPA's Quality Assurance Testing
Protocol document, prescribing how testing is to
be performed for each module or software
component.
ORIGINAL
TARGET
DATE
6/93
6/93
6/93
9/93
12/92
3/93
6/93
9/93
9/95
CURRENT
TARGET
DATE
N/A
N/A
12/94
3/95
N/A
N/A
N/A
N/A
N/A
ACTUAL
COMPLETION
DATE
6/93
6/93
9/94
9/95
12/92
9/93
9/93
9/93
9/95
Enclosure C - Page 23
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ]New
[X] Material Weakness-
[X] Corrected
[ ] Financial Non-conformance
[ ] Carryover
TITLE: Superfund Cost Recovery
DESCRIPTION:
EPA is authorized under the Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) to recover all response action costs incurred by the Government from responsible parties.
OIG and GAO FY 1990-92 audits and reviews of the Agency's Superfund cost recovery program identified
problems in: 1) cost documentation; 2) data accuracy; and 3) accounting for all past costs of cleanups.
RESPONSIBLE MANAGER:
Jerry Clifford, Director, Office of Site Remediation Enforcement
Office Enforcement and Compliance Assurance (OECA)
APPROPRIATIONS/ACCOUNTS:
]PRO
]AC&C
[X]SF
[ ]LUST
[ ] B&F
[]CG
R&D
[ ] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's
Report:
Current Correction Date:
Explanation for Change in Date
1992
1995
1995
Corrected
: Not Applicable
Enclosure C - Page 24
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA's original strategy to improve the performance of the cost recovery program was based on:
1) promulgating a Cost Recovery Rule, which would establish a methodology for calculating full recovery
of EPA indirect costs, require documentation supporting response actions, clarify CERCLA statute of
limitations for cost recovery actions, and set cost recovery legal standards; 2) developing a Cost Recovery
Procedures Manual to provide users with information on preparing cost and work-performed documents
to support cost recovery actions; 3) enhancing Cost Recovery Data Tracking by automating Superfund
time sheets and Contract Lab Program documents; and 4) developing guidance and procedures to
standardize presentation of settlement data.
RESULTS INDICATORS:
Success measures include increased accuracy of Superfund cost recovery accounting and documentation
and increases in the levels of funds recovered from responsible parties. The method for calculating
indirect costs has been revised to increase the percentage of past costs that can be recovered.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Promulgate Cost Recovery Rule
2. Develop Procedures Manual
3. Enhance Data Tracking
4. Develop Settlement Documentation
ORIGINAL
TARGET
DATE
11/93
6/93
9/95
9/95
CURRENT
TARGET
DATE
9/95
9/95
9/95
9/95
ACTUAL
COMPLETION
DATE
N/A*
10/94
10/94
10/94
* All corrective actions have been completed with the exception of promulgating the cost recovery rule.
The Agency has determined that re-proposal of the rule is a discretionary management and policy
decision, not resulting from a failure of management control systems.
Enclosure C - Page 25
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[X] OMB High Risk Area
[ ]New
[X] Material Weakness [ ] Non-conformance
[X] Corrected [ ] Carryover
TITLE: Contracts Management
DESCRIPTION:
In 1992, EPA's Office of Inspector General (OIG) reported widespread and systemic problems with EPA
contracts management, including: 1) personal services relationships between contractors and EPA staff;
2) contractor performance of inherently governmental functions; 3) loss of EPA staff expertise which could
jeopardize Agency control over major programs; 4) unqualified contractor staff; 5) inadequate assurance of
cost-effective Agency operations; and 6) weaknesses in EPA property administration. The Agency established
the Standing Committee on Contracts Management (SCCM) to identify and begin to correct widespread
problems identified by OIG and recommend corrective actions to address the problem's root causes. In FY
1993, the SCCM was renamed the Resources Management Committee (RMC), comprised of Agency Senior
Resource Officials, to focus on all extramural resource management responsibilities.
RESPONSIBLE MANAGER:
Betty L. Bailey, Director, Office of Acquisition Management
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[X] LUST
[X] B&F
[XjIG
[X]CG
[X] R&D
[X] Oil Spill
[X] Miscellaneous
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1992
1996
1996
Corrected
Explanation for Change in Date: Significant progress in correcting
materiality of weakness as first identified in FY 1992.
Enclosure C - Page 26
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA has made significant progress in correcting contracts management vulnerabilities, fully implementing
38 of the 40 Resource Management Committee recommendations. In FY 1995, EPA conducted a
Management Assistance Review (MAR) on Resource Management to assess progress made, assist in
setting priorities, and assure continued progress. The MAR revealed heightened awareness of the
seriousness of contract management responsibilities. In addition, the Office of Acquisition Management
realigned its structure to address contracts management vulnerabilities.
RESULTS INDICATORS:
The materiality of this weakness, as first identified, has diminished to a degree that the Agency has
reclassified it, with concurrence from its OIG, as an internal Agency weakness. EPA will continue to
monitor and validate the effectiveness of its corrective actions. EPA's goal is effective contracts
management practices in compliance with Agency and Federal policies and regulations.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Develop Milestone Plan.
2. Restructure EPA's central contracts function.
3. Integrate accountability for program results
and contract management at strategic, operational,
and project levels.
4. Allocate resources to ensure efficiency and
integrity of acquisition function.
5. Develop a comprehensive training program.
6. Revamp EPA procurement guidance
documents and policies.
7. Revise human resource policies to emphasize
acquisition management.
8. Adopt aggressive policies and programs to
ensure effective contractor performance and
rigorous control of contractor costs.
9. Develop and implement the Integrated
Contract Management System (ICMS).
ORIGINAL
TARGET
DATE
10/92
11/94
3/96
6/93
6/94
6/93
6/93
9/94
9/95
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
N/A
N/A
7/96
12/95
ACTUAL
COMPLETION
DATE
10/92
2/94
7/94
6/93
5/95
6/94
6/94
Enclosure C - Page 27
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[X] Material Weakness
[X] Corrected
[ ] Non-conformance
[ ] Carryover
TITLE: Accounts Receivable
DESCRIPTION:
EPA internal reviews and Office of Inspector General (OIG) audits identified technical shortfalls in EPA's
accounts receivable module. These shortfalls consist of inaccurate and incomplete automated reports and
lack of flexibility for automatically accounting for installment payments and calculating Superfund
compound interest. These shortfalls continue to prevent the Agency from achieving maximum efficiency
in managing its receivables.
RESPONSIBLE MANAGER:
Kathryn S. Schmoll, Comptroller, Office of the Comptroller
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[X] LUST
[X] B&F
[X]IG
[X]CG
[X] R&D
[X] Oil Spill
[X] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1992
1994
1995
Corrected
Explanation for Change in Date: Not Applicable
Enclosure C - Page 28
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA made significant progress in correcting vulnerabilities in accounts receivable. Policies and procedures
have been updated, appropriate staff trained on accounting and managing receivables, and reporting
capabilities have greatly improved. In FY 1996, EPA will install new software to efficiently record
installment receivables and reports, complete enhancements to produce complete and accurate reports,
and implement accounts receivable installments. EPA's (OIG) will validate the effectiveness of completed
corrective actions as part of its annual audit of EPA's financial statement required by the Chief Financial
Officers Act.
RESULTS INDICATORS:
The materiality of this weakness, as first identified, has diminished to a degree that the Agency has
reclassified it, with concurrence from the OIG, as an internal Agency weakness. EPA will continue to
monitor and validate the effectiveness of remaining corrective action. Key results indicators include
accurate and timely accounting of accounts receivables and improved IFMS capability to produce EPA
management reports.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Update policies for recording transactions in
IFMS.
2. Complete final on-site accounts receivable
(A/R) verification reviews.
3. Install debt service enhancements to A/R
Module.
4. Implement Version 5.1e of IFMS:
- User Manuals;
- System Documentation; and
- A/R Installment Enhancement.
5. Complete enhancements to produce complete
and accurate reports.
6. Train staff on accounting and managing
receivables.
ORIGINAL
TARGET
DATE
10/92
6/93
12/92
2/94
2/94
2/94
6/94
8/94
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
9/96
N/A
N/A
ACTUAL
COMPLETION
DATE
11/92
6/93
5/93
5/94
5/94
11/95
5/94
Enclosure C - Page 29
-------
Enclosure D - Schedule of Corrective Actions
Material Non-Conformances
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
MATERIAL NON-CONFORMANCES SUMMARY
ffctttf
Fear jftrar
1. Regional/General Ledger Accounts Receivables
1989
1995
1996
D-2
2. Property Accounting Process
1983
1996
1996
D-4
3. Accounting System Interfaces
1985
1996
1996
D-6
Enclosure D - Page 1
-------
1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[ ] Material Weakness
[ ] Corrected
[X] Non-conformance
[X] Carryover
TITLE: Regional/General Ledger Accounts Receivables
NON-CONFORMANCE TYPE AND DESCRIPTION: Core Financial System
Internal reviews found several potential unrecorded accounts receivable in the Regions resulting from
program officials not promptly notifying the servicing finance office of the creation and disposition of
receivables. The IFMS accounts receivable module lacks the capabilities to automatically process the
unique Superfund requirements of compound interest and flexible installment receivables.
RESPONSIBLE MANAGER:
Kathryn S. Schmoll, Comptroller, Office of the Comptroller
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[X] LUST
[X] B&F
[X]IG
[X]CG
[X] R&D
[X] Oil Spill
[X] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1989
1990
1995
1996
Explanation for Change in Date: Programming problems delayed
completion of reports.
Enclosure D - Page 2
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
The Agency now requires each Servicing Finance Office to reconcile the recorded accounts receivable with
the program office and the Office of Regional Counsel to assure that all receivables are recorded in
IFMS. Discussions were held with the Department of Justice to identify alternative measures for
obtaining account receivable documents more expeditiously; the Agency is developing an automated
function to handle installment receivables and compounding interest calculations for Superfund
receivables.
RESULTS INDICATORS:
Key results indicators include updated and accurate IFMS user documentation, enhanced accounts
receivable installment functions within IFMS, and financial information in reporting formats that meet
user requirements.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Install enhancements to Accounts
Receivable module to handle debt servicing.
2. Third round of on-site verification reviews.
3. Implement Version 5.1e of IFMS:
- User Manuals;
- System Documentation; and
- Accounts Receivable Installment
Enhancements.
4. Complete enhancements to produce
needed reports:
- Standard Form 220.9; and
- Supplemental Accounts Receivable
Reports.
5. Provide training on accounting and
managing receivables.
ORIGINAL
TARGET
DATE
12/92
6/93
2/94
2/94
2/94
6/94
6/94
8/94
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
9/96
N/A
N/A
N/A
ACTUAL
COMPLETION
DATE
5/93
6/93
5/94
5/94
11/95
11/95
5/94
Enclosure D - Page 3
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] OMB High Risk Area
[ ] New
[ ] Material Weakness
[ ] Corrected
[X] Non-conformance
[X] Carryover
TITLE: Property Accounting Process
NON-CQNFORMANCE TYPE AND DESCRIPTION: Core Financial Subsidiary System
Property values are recorded in the Agency's General Ledger accounts. Internal reviews identified
continuing problems in reconciling financial data recorded in the General Ledger to individual items in
the Personal Property Accountability System (PPAS). The Agency formed a Quality Action Team (QAT)
which recommended procuring a property module that would integrate financial accounting (IFMS
General Ledger) with property accountability.
RESPONSIBLE MANAGER:
Kathryn S. Schmoll, Comptroller, Office of the Comptroller
Office of Administration and Resources Management (OARM)
APPROPRIATIONS/ACCOUNTS:
[X] PRO
[X] AC&C
[X]SF
[X] LUST
[X] B&F
[X]IG
[X]CG
[X] R&D
[X] Oil Spill
[ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
Original Targeted Correction Date:
Correction Date In Last Year's Report:
Current Correction Date:
1983
1989
1996
1996
Explanation for Change in Date: Not Applicable
Enclosure D - Page 4
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
The QAT recommended a module compatible with IFMS and an implementation strategy which was
accepted by EPA management. The strategy contains steps to: 1) examine policies, procedures and EPA
requirements; 2) reconcile data; and 3) develop user manuals and provide training prior to installing the
system.
RESULTS INDICATORS:
EPA's key success measures are full accounting for capitalized property and increased accuracy of
property accounting records.
MAJOR CORRECTIVE ACTION
MILESTONES
1. Revise policy and procedures for identifying
and capitalizing property and recommending
opportunities for automated interface between
IFMS and PPAS.
2. Present QAT recommendations to process
owners.
3. Develop implementation strategy for
recommendations accepted by process owners.
4. Install Property Accounting System Module.
ORIGINAL
TARGET
DATE
9/93
7/93
1/94
7/96
CURRENT
TARGET
DATE
N/A
N/A
N/A
7/96
ACTUAL
COMPLETION
DATE
3/93
7/93
6/94
Enclosure D - Page 5
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1995 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTIVE ACTION STRATEGY:
EPA's corrective action strategy for FY 1996 is to implement the Property Accounting System. OIG will
validate the effectiveness of this corrective action as part of its annual audit of EPA's financial statements
as required by the Chief Financial Officers Act.
RESULTS INDICATORS:
Results indicators include automated interface between IFMS and GICS, installation of Property
Accounting System, and elimination of dependency on the Financial Management System (FMS), the
Automated Document Control Register (ADCR), and the Resource Management Information System
(RMIS).
MAJOR CORRECTIVE ACTION
MILESTONES
1. Analyze disposition of historical FMS data.
2. Eliminate ADCR.
3. Finalize project cost accounting
requirements.
4. Install project cost accounting requirements.
5. Implement interface between IFMS and
regional GICS.
6. Implement Property Accounting System.
7. Implement replacement for FMS historical
data.
8. Replace FMS function in CPARS.
9. Implement MARS view of historical data.
10. Implement accounting number changes.
ORIGINAL
TARGET
DATE
9/93
6/94
9/93
9/95
9/93
10/92
3/95
2/95
7/95
10/95
CURRENT
TARGET
DATE
N/A
N/A
N/A
N/A
N/A
7/96
N/A
2/95
N/A
N/A
ACTUAL
COMPLETION
DATE
10/93
9/94
9/94
9/95
7/95
9/95
4/95
9/95
10/95
Enclosure D - Page 7
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