&-/  §'
                 /
         |     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                             WASHINGTON. D.C. 20460
                                MAY 14  •-;.                         OFFICEOF
                                                                TMi INSPECTOR GENERAL
 '    MEMORANDUM
 •5   -
 "°   SUBJECT:  Audit Report No. 05EH6-11-0036-60964
 c^>             Audit of Superfund Management
 ^}             U.S. Army Corps of Engineers
 ^             Washington, O.C.
     FROM:     Kenneth D. Hockman
               Divisional Inspector General
                 for Audit
               Internal Audit Division  (A-109)

     TO:       Jack W. McGraw
               Deputy Assistant Administrator
                 for Solid Waste and Emergency Response  (WH-562A)


          Attached are two copies of the subject audit report we received from
     the Offic* of the Auditor General, Department of the Army.

     SCOPE AND OBJECTIVES

          We  requested the Auditor General, Department of the Army to perform
     a  review of the S'jperfund interagency agreements entered into between the
     Environmental Protection Agency and the U.S. Army Corps of Engineers.
     The purpose of the audit was to evaluate the internal control framework
     established to manage Superfund operations in support of the Environmental
     Protection Agency.  Specific audit objectives were  to determine whether:

          - Policies and procedures were established to  effectively carry out
            and monitor interagency agreements with the  Environmental Protection
            Agency.

          - Costs claimed for Superfund work were reasonable and properly
            supported.
                                 KMQUAOTERS UBRARY
                                 flMHONMENTAl PROTECTION AGUVi. *
                                 WASHINGTON, D.C.204UJ

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     - Contract administration procedures were appropriate and were
       followed to ensure the proper performance of hazardous waste
       cleanup actions by contractors.

     - Reimbursement procedures were appropriate and were followed on a
       consistent basis by Corps finance and accounting offices.

     The audit was performed from July 1985 through January 1986.,  Audit
work was performed at the Headquarters, U.S. Army Corps of Engineers in
Washington, D.C.; three Corps division offices; and three Corps district
offices.  In addition, discussions were held with and information was
received from personnel at Headquarters, U.S. Environmental Protection
Agency in Washington, D.C.; two Environmental Protection Agency regional
offices; and one Environmental Protection Agency field office.  The audit
covered transactions which were representative of operations current at
the time of the audit.

SUMMARY OF FINDINGS

     The audit showed that the internal control framework established
by the Crops to manage Superfund operations in support of the Environmental
Protection Agency was essentially sound.  The Corps made full use of its
existing civil works management structure and contracting experience to
ensure that the Environmental Protection Agency received prompt and
proper support for its ongoing efforts to correct hazardous waste sites
in the United States.  However, improvements were needed to better control
the unique aspects of Superfund requirements and to reduce the cost to
the U.S. Treasury.

     The Department of Army's official position on the audit report has
not, as yet, been established and therefore the conclusions in the report
should be considered tentative.  We will advise you of the Army's final
position on the audit.  Also, we request that you not release the report
or its contents outside the U.S. Environmental Protection Agency.  Any
requests that you may receive for the report, including those under the
Freedom of Information Act, should be referred to the Office of the
Auditor General for processing.

A brief summary of the Auditor General's major findings follows.

     1.  FINANCING SUPERFUND WORK

          The current reimbursement method of financing contracted
     Superfund work caused the U.S. Treasury to incur about $108,000 in
     avoidable interest cost during the first 10 months of FY 85.  The
     interest was unnecessarily incurred because the Corps used appropri-
     ated funds to pay contractors for work performed and the U.S. Treasury
     must borrow money to cover the outlay of cash.  A direct use of
     Superfund monies by the Corps to pay for contracted costs as they
     are incurred could result in the avoidance of about $3.4 million in
     interest during FY 86 and as much as $50.5 million in interest over
     the projected life of the Superfund program.

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2.  PROGRAM AUTHORITY

     About $62 million of the program authority for Superfund projects
had not been adequately reviewed by project managers to identify and
return unneeded amounts to the Environmental Protection Agency.
Estimated costs on construction projects were not reviewed and
adjusted when contracts were awarded, and program authority was
retained unnecessarily.  Also, expired interagency agreements for
technical assistance and design work were not reviewed and either
promptly closed to return unneeded program authority or extended if
warranted.  As a result, on 31 July 1985, the Corps retained about
$6.6 million in Superfund program authority that should have been
returned to the Environmental Protection Agency.

3.  SUPERFUND AUTOMATED MANAGEMENT SYSTEM

     The Superfund Automated Management System was not complete  or
accurate.  Also, the Management System was not used by the Corps to
monitor the status of Superfund projects.  Information on estimated
Superfund project costs, projected monthly expenditures, and current
project status was not kept up to date or was not entered into the
Management System's data base.  Errors on projected expenditures had
an adverse impact on the Environmental Protection Agency's efforts
to manage the Superfund trust fund since the expenditure data was
used by the Agency to forecast cash requirements.  In addition,  the
content of the Management System was not examined periodically to
identify Superfund projects requiring management attention.

4.  SOURCE DOCUMENTATION

     Procedures had not been established to ensure that all costs
billed to the Environmental Protection Agency were supported in
accordance with the terms of the interagency agreements.  Labor
charges were not supported by timesheets, cost transfers and credits
were not fully explained or documented, and documents supporting
work performed by other Corps activities on a reimbursable basis
were not retained.  Overall, about 31 percent of the Corps' in-house
costs for Superfund billings reviewed were not adequately documented.
Thorough and complete Superfund cost documentation is needed to
support future actions to recover costs from parties responsible for
creating the hazardous waste sites now being corrected by the Corps.

5.  MAINTENANCE OF COST DOCUMENTATION

     The existing procedures for the maintenance of Superfund project
cost documentation did not ensure the documentation would be readily
available when needed.  Cost documentation should have been filed on
an interagency agreement basis at a central location; instead,
documentation was filed by type of document at several locations.
Also, documentation may need to be retained longer than the retention
periods prescribed by Agency guidelines.  As a result, documentation
of costs incurred for Superfund work may not be available for future
litigation efforts against parties responsible for creating hazardous
waste sites.

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     6.  ACCOUNTS RECEIVABLE

          About $1.6 million of accounts  receivable  from the Environmental
     Protection Agency were not promptly  collected because  prescribed
     collection procedures were not  followed.   Collection letters were
     not sent at required intervals, local  procedures  did not  exit
     designating responsible personnel  and  appropriate actions,  and
     billings were processed after interagency agreements expired.   As  a
     result, the U.S. Treasury unnecessarily  incurred  about $52,000  in
     interest costs on the delinquent accounts.

RECOMMENDATIONS

     We recommend that a member of your staff coordinate with  EPA's
Office of the Comptroller and the Grants  Administration Division to
resolve the findings contained in this  report.  Specifically,  we would
like your written response to discuss the actions taken or  planned to:

     1.  Arrange for an alternative  method  of financing the Corps of
         Engineers Superfund work.

     2.  Deobligate the $6.6 million in unneeded program authority.

     3.  Ensure that EPA project officers:

              0 monitor the interagency agreements  in  order to extend
                or close expired agreements;

              0 deobligate excess funds when  agreements are terminated;

              0 require a written justification from the Corps of  Engineers'
                project officer when project  cost categories  exceed  the
                guidelines issued by EPA; and

              0 review and approve Crops of Engineers  invoices within  the
                prescribed timeframe.

     4.  Ensure that all interagency agreements contain appropriate
         provisions on the need for and the retention  of  source documentation,

     5.  Arrange for the retention of documentation  after  the Corps  of
         Engineers normal retention period {e.g., transfer to E?A).

     6.  Ensure payment of the Corps of Engineers invoices within  the
         prescribed 30 day timeframe.

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ACTION REQUIRED

     In accordance with EPA Directive 2750,  the action official  is  required
to provide this office with a written response to the audit report  within
90 days of the date of this memorandum.

     Should your staff have any questions, please have them contact
Elissa R. Karpf or me on 382-4930.

Attachments

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                               DISTRIBUTION


                                                       Copies
Divisional Inspectors General for Audit (1)              5
Director, Audit Operations Staff                         3
Agency Followup Official (PM-225)                        1
  Attn:  Resources Management Division
Comptroller (PM-225)                                     1
Director, Financial Management Division (PM-26)          1
Chief, Superfund Accounting Branch (PM-226)              1
Financial Management Officer - Cincinnati                 1
  Accounting Operations Office
Director, Grants Administration Division (PM-216)        1
Chief, Grants Information and
  Analysis Branch (PM-216)                               1
Director, Office of Emergency and
  Remedial Response (WH-548)                             1
Director, Office of Waste Programs
  Enforcement (WH-527)                                   1
Assistant Administrator for Enforcement
  and Compliance Monitoring (LE-133)                     1

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                    U. S. ARMY AODFT AGENCY

AUDIT REPORT; MW 86-605
24 APRIL 1986
                        REPORT OF AUDIT

                    SUPERFUND MANAGEMENT

                  U. & ARMY CORPS OF ENGINEERS
                        WASHINGTON, D. C.

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                      DEPARTMENT OF  THE ARMY
                     OFFICE OF THE AUDITOR GENERAL
                            3101  PARK CENTER DRIVE
                      ALEXANDRIA. VIRGINIA 223O2-1596
DAAA-ZA

SUBJECT: Audit of Super fund Management
           U. S. Army Corps of Engineers
           Washington, D. C.
           Audit Report:  MW 86-605
24 April  1986
Commander
U. S. Army Corps of Engineers
Washington, D. C.  20314-1000
1.   This  is  our report  on the  audit of  Superfund  management within the
U. S. Army Corps of Engineers.   The audit  was made  from  July  1985 through
January 1986  to  evaluate  the internal control framework established to manage
Superfund operations performed in support of the U. S. Environmental Protection
Agency.  Emphasis was placed on reviewing the controls over accounting for costs
incurred, the measures taken to ensure  that costs incurred  were reasonable, and
the appropriateness of procedures used to obtain reimbursement for costs incurred.
The public  law establishing the Superfund requires the  Inspector General, Environ*
mental Protection Agency to audit Superfund as  appropriate and requires Federal
agencies to cooperate with the Inspector  General's efforts.  This audit was made in
response to a request from the Inspector General of the  Environmental Protection
Agency.

2.   The audit showed that  the internal control framework established to manage
Superfund operations in support of  the Environmental  Protection  Agency was
essentially  sound.  The Corps made full use of its existing civil works management
structure and contracting experience  to ensure that the  Environmental Protection
Agency  received prompt and proper  support  for its  ongoing efforts to correct
hazardous waste sites in the  United States.   However, improvements were needed
to better control the unique  aspects of Superfund requirements and to reduce the
cost to  the U. S. Treasury.   Controls over accounting for costs incurred did not
ensure that all cost elements were fully documented.  Thorough and complete cost
records were needed to support actions by the Environmental Protection Agency to
recover Superfund expenditures from  the parties responsible.   Costs incurred  on
individual Superfund projects were  reasonable; over 90 percent of the costs were
directly related  to contractor invoices.   The invoices were for contracts consist-
ently  awarded to  the  qualified low bidder  on a  firm fixed-price basis, and the
contractor's performance was closely  monitored and controlled by Corps personnel.
But total project cost estimates  were not periodically reviewed and adjusted  to
release unneeded program  authority, and overstated expenditure estimates caused
cash management problems for the Superfund trust fund.  The reimbursable method

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DAAA-ZA                                                     24 April 1986
SUBJECT: Audit of Super fund Management
           U. S. Army Corps of Engineers
           Washington, D. C.
           Audit Report:  MW 86-605

used  to  fund contractual  costs  for  Superfund projects  was the least desirable
method available because the Corps had to use its funds to pay  contractors.  This
outlay of  appropriated  funds caused  the U. S. Treasury  to incur unnecessary
interest expense that could have been avoided if the Corps had made direct use of
the Superfund trust  fund to pay contractors.  Also,  the procedures used to obtain
reimbursement for  costs incurred needed strengthening.   Delinquent accounts
receivable  from  the Environmental   Protection Agency  were  not  intensively
managed, and specific collection responsibilities were not fully delineated within
the finance and accounting offices.  The delinquent accounts receivable further
increased the interest cost to the U. S. Treasury.

3.    We  recommended  the  preparation of  detailed cost  records for  in-house
expenses, changes in the method used to file and retain cost documentation, closer
reviews and prompt  adjustment of program authority and expenditure projections,
seeking an alternative method of financing contractor costs, and closer adherence
to regulatory requirements on the collection of delinquent accounts receivable.
This  report  includes potential  monetary  benefits  that  should  accrue  from
implementing the audit recommendations and that could be reasonably estimated
at the time of audit considering variable factors and assumptions.   The results of
audit are summarized in Part I of this report and the details are in Part Q.  The
Annex to the report shows the activities covered by the audit.

4.    Your command agreed  with  the  findings, recommendations,  and monetary
benefits.   However, final target dates for implementing  some recommendations
will  have  to be  included in the  official command reply.  Detailed command
comments are presented after each recommendation in Part II of this report.  The
Army's official position on the findings, recommendations, and  monetary benefits
will be established when the  official command-reply process is completed.  The
auditors' conclusions  and command's position  should be considered tentative until
the Army's official position on the report is  established at the conclusion of the
official command-reply process.  This process is being initiated through separate
correspondence.   Army Regulation  36-2 provides that the  official command reply
be submitted to Headquarters, Department of the  Army within 60  calendar days.
This report is not to be released outside the Department of the Army until this
60-day period has elapsed.  However, the results of audit will be furnished to the
Inspector General, Environmental Protection Agency, who requested this audit.
                                       HAROLD L. STUGART
                                       The Auditor General
                                      ii

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DAAA-ZA                                           24 April  1986
SUBJECT: Audit of Superfund Management
         U. S. Army Corps of Engineers
         Washington, D. C.
         Audit Report: MW 86-605

COPIES FURNISHED:
ASSISTANT SECRETARY OF THE ARMY (FINANCIAL MANAGEMENT)
ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS)
CHIEF OF -PUBLIC AFFAIRS
DIRECTOR OF THE ARMY STAFF
THE INSPECTOR GENERAL
COMPTROLLER OF THE ARMY
DEPUTY CHIEF OF STAFF FOR PERSONNEL
DEPUTY CHIEF OF STAFF FOR LOGISTICS
COMMANDERS
  U. S. ARMY CRIMINAL INVESTIGATION COMMAND
  WASHINGTON DISTRICT, U. S. ARMY CRIMINAL INVESTIGATION COMMAND
HEADQUARTERS,  DEPARTMENT  OF  THE  ARMY  MEMORANDUM  36-1
PRESCRIBES THE  PROCEDURES FOR RELEASE  OF THIS  REPORT OUTSIDE
THE DEPARTMENT OF THE ARMY.
                               iii

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                  AUDIT OF SUPERFUND MANAGEMENT
                    U. S. ARMY CORPS OF ENGINEERS
                          WASHINGTON, D. C.
                              CONTENTS
                          i
                                                                  Page

Letter of Transmittal                                                  i

PART I    -    SUMMARY

              Preface 	     1

              Objectives and Scope  	     2

              Observations and Conclusions	     2

              Responsibilities and Resources  	     4

PART Q   -    FINDINGS, RECOMMENDATIONS, AND
              COMMAND COMMENTS

              A * Financing Superfund Work  	     5

              B - Program Authority  	     8

              C * Superfund Automated Management System	    12

              D - Source Documentation  	    IS

              E - Maintenance of Cost Documentation  	    19

              F - Accounts Receivable	    22

ANNEX   -    ACTIVITIES INCLUDED IN THE AUDIT  	    2?

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                         U. S. ARMY AUDIT AGENCY
                    ALEXANDRIA, VIRGINIA 22302-1596

                   AUDIT OF SUPERFUND MANAGEMENT
                     U. & ARMY CORPS OF ENGINEERS
                             WASHINGTON, D. C.
AUDIT REPORT: MW 86-605
24 APRIL 1986
                                   PARTI

                                 SUMMARY
PREFACE

     The  Comprehensive  Environmental Response, Compensation,  and Liability
Act of  1980  (Public Law  96-510) mandated the establishment  of the  Hazardous
Substance Response Trust Fund, which is commonly known as "Superfund."  The
Superfund, managed by the U. S. Environmental Protection Agency, was established
to respond to emergency hazardous conditions and to fund  the cleanup  efforts
required to remove or control hazardous waste substances.  The Superfund trust
fund was initially established at $1.6 billion. About $220 million was appropriated
from general tax revenues and the  balance was collected  from taxes  imposed on
the manufacturers, producers, and importers of petroleum, petroleum products, and
certain chemicals.

     The Environmental Protection Agency identifies hazardous waste sites  and
attempts to  have the responsible parties perform the needed cleanup.   If  the
responsible parties  cannot be identified  or  will  not perform  the cleanup,  the
Environmental Protection  Agency requests the State where the hazardous waste
site is located to assume cleanup responsibilities.  When  neither the responsible
party nor the State will assume cleanup responsibilities, the  Federal government
assumes the  responsibility.    In  February 1982,  the  Environmental  Protection
Agency  and the U. S. Army Corps of Engineers reached an agreement for the Corps
to provide technical assistance, contract for the design and construction work, and
perform contract administration functions when the Federal government assumes
cleanup responsibility for hazardous waste sites. The actual hazardous waste site
cleanup is accomplished by contracting with private firms.  Contract costs are paid
by the Corps and then reimbursed  by the Environmental  Protection Agency.  In
order to assist the  Environmental  Protection  Agency in cost recovery  actions
against parties responsible for creating hazardous waste sites, the Corps is required
to maintain detailed site-specific accounts that fully document all costs incurred.

     The  public  law  establishing the Superfund  requires  the Inspector General,
Environmental Protection  Agency to audit Superfund as appropriate and requires
Federal Agencies  to cooperate with  the Inspector General's efforts.  The Inspector
General requested audit assistance  from The  Auditor General of the Army in
evaluating the Corps'  management of Superfund work.  At  a meeting in June 1985,

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representatives of the Army Audit Agency and the Inspector General determined
that this initial audit of the Corps' involvement with Superfund would be designed
to evaluate the appropriateness of the procedures and policies forming the internal
control framework of the Corps' management of  Superfund efforts.  Accordingly,
detailed analyses and  examinations  were  limited  to those  transactions  and
observations necessary to test the overall procedures.  The economy and efficiency
with which the Corps carries out individual hazardous  waste site cleanup projects
was  audited  only to the  extent necessary to reach  conclusions on the  overall
management process.

OBJECTIVES AND SCOPE

     By agreement with the Environmental Protection Agency, the mission of the
Corps  includes providing technical  assistance  for the cleanup of hazardous waste
sites, contracting for the design and construction work at hazardous waste sites,
and  performing  the  associated contract  administration functions.   The  overall
purpose of the audit  was to evaluate the internal control framework established to
carry out Superfund operations in support of the Environmental Protection Agency.
Specific audit objectives were to determine whether:

    -Policies and procedures were established  to effectively carry out and monitor
     interagency agreements with the Environmental Protection Agency.

    -Costs claimed for Superfund work were reasonable and properly supported.

    -Contract administration procedures  were appropriate  and  were followed to
     ensure  the proper  performance  of hazardous  waste cleanup  actions by
     contractors.

    -Reimbursement procedures  were  appropriate   and   were followed  on  a
     consistent basis by Corps finance and accounting offices.

     The  audit,  performed  from  July  1985  through January 1986, was made  in
accordance   with generally   accepted  government   auditing  standards   and,
accordingly, included such tests of  internal controls as we considered necessary in
the circumstances.  Audit work  was performed at the Headquarters, U. S. Army
Corps  of Engineers  in Washington, D.  C.; three Corps division offices;  and three
Corps district offices.  In  addition, discussions were held with and information was
received from personnel at  Headquarters,  U.  S. Environmental Protection Agency
in Washington, D. C.; two Environmental  Protection Agency regional offices; and
one Environmental Protection Agency field office.  The Annex shows the specific
activities  included in  our review.  The  audit covered transactions which were
representative of operations current at the time of the  audit.

OBSERVATIONS AND CONCLUSIONS

     The  overall internal  control framework  used  by  the  Corps  to  manage
Superfund operations  in support  of  the Environmental  Protection  Agency  was
appropriate and  generally effective.  Essentially, the'Corps made full use of the
existing civil works decentralized management  structure aa  the mechanism  to
manage Superfund efforts.    But  some aspects of this existing internal control
structure needed to  be changed or improved to properly manage the unique aspects
of the  Superfund program.

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      Effective policies  and procedures were  established to execute  the work
requirements  of  interagency  agreements  with  the  Environmental  Protection
Agency.  Formal  written guidelines, which detailed the procedures to be followed
in executing interagency agreements, were circulated  throughout the Corps.  But
procedures were not established to effectively monitor the status of interagency
agreements. Superfund Automated  Management System reports were not reviewed
to ensure  that the  reports  were  complete  and  contained current information.
Unneeded project spending authority was not promptly returned to the Environ-
mental Protection Agency,  and interagency  agreements expired before all costs
were billed and were not  closed promptly when completed. Establishing procedures
for a management review  of project  manager's worksheets would  ensure  that
complete  and accurate  information on Superfund  projects  is provided  to the
Environmental Protection Agency and that project managers  effectively manage
each agreement.  Also, the method used to  finance Superfund efforts within the
Corps was  not cost-effective since  the U. S. Treasury had to borrow to cover cash
outlays until a subsequent reimbursement was  obtained from  the Superfund trust
fund.   The U. S. Treasury  incurred $108,000  in interest  charges in  the  first
10 months of FY 85 and could incur about $50.5 million in interest charges over the
projected  life  of the Superfund program if  the present reimbursable method  of
financing continues.   U.  S. Treasury interest  costs would be reduced if the Corps
made direct use of the Superfund trust fund to pay contractors*

     Costs claimed by the Corps for Superfund work were reasonable considering
the scope and the complexity of the Superfund program, but formal supporting cost
documentation was not always prepared and retained in accordance with the terms
of the  interagency  agreements.    Costs charged  for  contractual work were
thoroughly supported. However, about 31 percent of the in-house charges reviewed
were not properly supported. Timesheets were often destroyed after the informa-
tion  was entered into the  automated system.   Documentation supporting work
performed on reimbursable orders within the  Corps was not provided to the Corps
activity responsible  for  the  interagency agreement.  Cost transfers  and billing
credits were made without sufficient documented justification.  According to the
interagency agreements, cost  documentation must  be provided  to the Environ-
mental Protection Agency  within  3 weeks of  a request  for  the  documentation.
Records supporting  the  costs  charged  may not  be readily  available  when the
Environmental Protection Agency requests them because accounting records were
filed by type of document rather than by interagency agreement.  Also, the length
of time for document retention  needed adjustment because  cost documentation
must be available to support future  litigation actions against parties responsible for
creating hazardous waste sites  and current Army document retention requirements
were not adequate.

     Contract administration procedures for  hazardous waste cleanup efforts were
appropriate and were followed.    Firm fixed-price contracts were consistently
awarded to the qualified low bidder.  The contractor's  performance was closely
administered.  For example, project managers were required to complete daily and
weekly progress reports for each contract.  Corps inspectors  were located at the
hazardous waste sites to ensure work was being performed in accordance with the
terms of the  contract.  Control logs were  maintained showing the quantity of
contaminated materials removed from a site and shipped to an appropriate disposal
location.  Manifest shipping documents  were  signed by the sender and receiver to
verify proper disposition of hazardous materials.

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      Reimbursement procedures were not appropriate  or were not followed on a
consistent  basis by Corps finance and accounting offices.  Policies prescribed by
regulation were not being followed to collect delinquent accounts receivable.  Also,
none  of  the finance and accounting offices we reviewed  had local  procedures
designating personnel responsible  for collection actions.   As a  result of not
collecting  delinquent accounts  receivable,  the U. S. Treasury  incurred about
$52,000 in  interest costs during FY 85 on the delinquent accounts.  Following the
procedures outlined  in AR 27-40 and AR 37-108, combined with establishing local
procedures designating personnel responsible for collection actions, would decrease
the amount of delinquent accounts receivable.

RESPONSIBILITIES AND RESOURCES                                                  ^

      The Corps of Engineers is responsible for managing the design and construc-
tion of Federal cleanup sites paid for  by the Environmental Protection Agency with
money from the Superfund trust fund.  Design work  is  managed within the Corps'
Missouri  River Division and construction is managed by the Corps' district  with
jurisdiction over the geographic location of the cleanup  site.  Since 1982, the Corps
has accepted  259 interagency  agreements  from the  Environmental  Protection
Agency valued at about  $62 million.  In  addition,  the  Corps received about
$1.3 million in FY 85 for  management  of  the  Superfund program.   The Corps
estimated that the overall personnel effort  committed to the Superfund program
was equivalent to about  100 full-time  personnel during FY  85.   However, the          —
Superfund program is still in its early stages. According to current estimates, the
Corps could receive as  much as $335 million in  FY 86 for Superfund work and as
much  as $5 billion over the projected  life of the program.

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                                  PARTn

        FINDINGS. RECOMMENDATIONS, AND COMMAND COMMENTS

          FOR THE COMMANDER, U. S. ARM7 CORPS OF ENGINEERS


                     A - FINANCING SUPERFUND WORK

FINDING
                            i

     The  current reimbursement  method of financing contracted Superfund  work
caused the U. S. Treasury to incur about $108,000 in avoidable interest cost during
the first 10 months of FY 85. The interest was unnecessarily incurred because the
Corps used appropriated funds to pay  contractors for  work performed! and the
U. S. Treasury must borrow  money to cover the outlay of cash.   A direct use of
Superfund  monies by the Corps to pay for contracted costs as they are incurred
could result in the avoidance of about $3.4 million  in interest during FY 86 and as
much as $50.5 million in interest over the projected  life of the Superfund program.

                                DISCUSSION

1.   Background.   The Comprehensive Environmental  Response, Compensation,
and Liability Act of  1980 (Public Law 96-510), commonly known  as Superfund,
provides for the cleanup of hazardous wastes from uncontrolled or abandoned waste
sites.   The Superfund is  a trust  fund  which provides  the  operating  capital to
accomplish cleanup actions.  On 30 June 1985, the Superfund had a balance of over
$600 million.   The monies  were derived primarily from taxes levied on oil and
chemical companies and from settlements made by  parties responsible for creating
hazardous  waste sites.  To accomplish  cleanup actions, the  U.  S. Environmental
Protection Agency enters into interagency agreements with the U. S. Army Corps
of Engineers.  The Corps provides technical expertise, issues contracts for design
and construction work, and performs contract administration functions.  Environ-
mental Protection Agency procedures provide three payment methods for financing
cleanup efforts  with the  Superfund.   Superfund work can  be financed  on  a
reimbursement, advance, or transfer  of allocation basis.  To date, all  Environ-
mental  Protection Agency interagency agreements with the Corps have specified
the reimbursement method of financing.  That is, the Corps paid for the cleanup of
hazardous waste sites and was later reimbursed by the  Environmental  Protection
Agency  from  the Superfund.

2.   Reimbursable Financing. Interest  costs were incurred by the  U. S,. Treasury
because the reimbursement method was  used to finance Superfund work within the
Corps.  Under the reimbursable method of financing, the Corps used funds from the
Civil Works Construction, General Appropriation to pay  contractors for Superfund
work.  The Corps wrote checks against this appropriation to pay contractors as
costs  were incurred.   Monthly, the  Corps  billed  the Environmental  Protection
Agency  for reimbursement of the costs incurred during the month. The reimburse-
ment process took a minimum of 45 days to complete. The 45'days consisted of the
15-day average time that the costs were incurred before billing and a minimum of
30 additional  days for the Environmental Protection Agency to certify the billings
and issue  a reimbursement check against the Superfund. Because the Corps paid

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for incurred costs with appropriated funds, the U. S. Treasury had to borrow funds
and incur interest until reimbursement was received from the Superfund.  There-
fore,  interest costs were  incurred for about 45 days on checks written against
appropriated funds.

3.    Interest  Cost. Superfund  costs valued at  about $10.7 million were billed in
the first 10 months of  FY 85.  Using the annual interest rate of 9 percent in effect
at the  time  of  audit, about  $119,000  in  interest accrued  during the 45-day
reimbursement period.  The $10.7 million included  both contracted and in-house
costs of Corps personnel involved in Superfund work. We excluded interest accrued
for in-house costs because  most  of the costs were for salaries and it is not feasible
to pay the salaries of Corps personnel with anything other than a Corps appropria-
tion.   A  sample  of billings  showed that about  91 percent  of the costs were
contracted and 9  percent were in-house.  Therefore, about $108,000 in interest was
incurred because contracted costs were  paid with appropriated funds and later
reimbursed  by the  Superfund.    Similarly,  the  interest  costs  associated  with
contracted work  would be about $3.4 million  for the  FY 86  Superfund program
currently projected to  be about $335 million. To demonstrate the magnitude of the
potential problem, $50.5 million in interest costs could be incurred for contractual
costs  on the $5 billion that is projected for the Corps' participation in Superfund.
Interest costs could be avoided  if a method of financing was arranged that  would
authorize the  Corps to use  the funds  available in the  Superfund to pay  for
contracted work.

4.    Alternative Methods  of Financing.  There are several alternative methods of
financing  available that would not require the U.  S. Treasury to borrow funds and
incur  interest  for contracted Superfund work. Both the cash advance and transfer
of allocation methods  of financing are already provided for by  the Environmental
Protection Agency procedures.  Both methods would involve the direct use of funds
in the Superfund.  Under the cash advance method, the  Environmental Protection
Agency could  transfer  all of the funds needed to complete the requirements of an
interagency agreement to  the Corps or only transfer sufficient funding to finance
work  for  the  next  month  or quarter.  An agreement as to how much and when
funding should be transferred would  have to be arranged with  the Environmental
Protection Agency.  With the advance method, the Corps could continue to use the
Civil  Works  Construction, General  Appropriation  for  contracts and checks to
contractors, but the U. S.  Treasury would not have to borrow because the  monies
would have already been transferred  from the  Superfund trust fund. Under the
transfer of allocation method, a portion of the Superfund would be transferred to
the Corps.  The Superfund would then be  treated like any other appropriation
available to the Corps. The Corps could cite the Superfund on contracts and issue
checks directly against the Superfund. This method would allow funds to remain in
the Superfund until the checks were cashed by the  contractor. There are also other
methods of financing that would  not require the U. S. Treasury  to  borrow  funds.
One such  method is direct  citation.  This  method is very similar to the transfer of
allocation  method.  Under the  direct citation  method,  the Corps would receive
authority  to cite  the Superfund on contracts and checks* but primary responsibility
for all Superfund transactions  would remain with  the  Environmental Protection
Agency.   The use  of  any alternative  method  of financing  would have  to be
coordinated with  the Environmental Protection Agency.

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RECOMMENDATION AND COMMAND COMMENTS

A  - Arrange for cm alternative method of financing Superfund work that will not
require the U. S. Treasury to borrow funds and incur interest costs.

Command agreed and  stated that  a formal request for a change in the  method of
financing  Superfund work  will be  forwarded to  the  Environmental Protection
Agency.   Any  additional actions  as  a result of  the  Environmental Protection
Agency  response  will  be completed as expeditiously  as possible.  Command also
stated  that  the Corps has  informally suggested  use of  alternative methods of
financing Superfund work to the Environmental Protection Agency on at least three
occasions  since  the  program began.   On  each occasion,  the  Environmental
Protection Agency rejected the Corps' suggestion as unacceptable  from an overall
program management perspective.  Hence, the Corps has had to continue to use the
reimbursement  method to finance  Superfund  work.  Command indicated that the
potential monetary benefits were reasonable.

U. S. Army Audit Agency Evaluation.  Final target  date for implementation of
Recommendation  A will have to be included in the official command reply.

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          FOR THE COMMANDER, U. S. ARMY CORPS OF ENGINEERS


                         B - PROGRAM AUTHORITY

FINDING

     About $62 million of the program authority  for Superfund projects had not
been adequately reviewed  by  project managers  to identify and return unneeded
amounts to the Environmental  Protection Agency.  Estimated costs on construction
projects were  not  reviewed  and  adjusted  when  contracts  were  awarded, and
program authority was retained unnecessarily.   Also, expired interagency agree-
ments  for technical assistance  and design  work  were not reviewed  and  either
promptly  closed to  return unneeded program authority or extended if  warranted.
As a result, on  31 July 1985,  the  Corps retained  about $6.6 million in Superfund
program authority that should  have been returned to the Environmental Protection
Agency.

                                 DISCUSSION

1.   Background

     a.    Interagency Agreements. The  Environmental Protection Agency issues
program authority  to  the Corps  to carry  out Superfund  work.   The work  is
authorized within the Corps by an  interagency agreement  for each phasic within a
Superfund project; normally technical  assistance,  design,  and construction.  The
interagency agreements  specify the amount of program authority available to
perform the  work.   In  effect,  the  receipt  of program  authority  from the
Environmental Protection Agency  creates an unobligated balance available to the
Corps.   The agreements  also establish  timeframes for the Corps to start and
complete Superfund projects.  Once the agreements are accepted by the Corps, the
Environmental Protection Agency  reserves monies in the  Superfund trust fund to
reimburse the Corps for costs incurred.   The funds  are reserved until the entire
amount is used or until any unneeded program authority is returned by the Corps.
As of  31 July 1985,  the Corps had accepted  259 interagency agreements that
provided program authority totaling about $62 million.  Twenty of the agreements,
valued  at  about $41 million, were for construction work; 239 agreements, valued at
about $21 million, were for technical assistance and design  work.

     b.    Project Manager Worksheets.  Project  managers at the Corps provide
data on a monthly  basis  to  an  automated system  that produces management
information to include project manager worksheets for each interagency agree-
ment.   The worksheets show  available program authority,  agreement expiration
date, estimated project cost,  percentage of project completed, and project cost
incurred by month.  Continuing reviews of unobligated amounts are required by
AR 37-108 to promptly adjust and return amounts that will not be converted to
valid obligations. The worksheets  help reviews of program authority (unobligated
balances)  by showing how much program authority is required  for the major cost
categories within a  project phase.  Cost categories include contract cost, contract
contingencies,  supervision  and   administration,  engineering   and  design, and
unawarded contingencies.  The Environmental Protection Agency issued guidelines
in February 1985 for estimating the major cost categories of a Superfund project.

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If  -
The  guidelines  were stated  as a percent of the contract cost.  For example, on
contracts over  $2 million,  contract  contingencies  normally  should  not exceed
g percent of the contract cost, supervision and administration  normally should not
exceed 6 percent of contract cost, and engineering and design  normally should not
exceed 1 percent of contract cost.

2.   Status of Interagency Agreements.  Project managers were not reviewing and
adjusting the program authority provided by interagency agreements.   Returning
unneeded program authority was not emphasized; and, as a result, project managers
either  overestimated the  amounts  needed for the various  cost  categories  on
construction  projects or retained  excess amounts  without  explanation.   Also,
completed technical assistance and design projects were not promptly closed, and
thus unneeded  program  authority  was retained.  As of 31 July  1985, the  Corps
retained about $6.6 million of program authority that should have been returned to
the Environmental Protection Agency for use on unfinanced high priority Super-fund
projects.

     a.   Construction  Projects.    The  Corps  unnecessarily  retained  about
$6.5 million  of  program  authority that will not  be  converted to obligations for
construction projects.  Estimated cost categories were  sometimes overstated and
the estimated total required amount for a project was often not compared to the
available program authority.

          (1)   Estimated Cost Categories.  At the  time of our review, 20 agree-
ments for construction projects were  in process.  Estimated costs were overstated
by $5.3 million  on 13 projects for which contracts had been awarded and for which
the cost  data had been entered on project manager worksheets.  Contracts were
awarded for two of the remaining seven construction  projects,  but the data had not
been entered on the worksheets. (A recommendation covering the need for timely
update of project  manager worksheets is addressed  in Finding C -  Superfund
Automated Management System.) Contracts  had not  yet been awarded for the
remaining five construction projects.  Under the guidelines  issued by the Environ-
mental Protection Agency,  the project manager worksheets,  dated  31 July 1985,
showed that excessive amounts had been estimated on the 13 projects for the cost
categories of (i) contract contingencies, (ii) supervision  and  administration, and
(iii) engineering and design.  The estimates were overstated as follows:
                       Cost Category
               Contract  Contingencies
               Supervision and Administration
               Engineering and Design

                Total
                                   Project
                                   Manager
                                   Estimate

                                 $5,800,000
                                   1,300,000
                                    500.000

                                 $7.600.000
Environmental
  Protection
   Agency
  Guideline
   Amount

  $1,500,000
     800,000
     200.000

  $2.500.000
Difference

$4,300,000
   500,000
   300.000

$5.100.000
               In addition, about $200,000 was shown as reserved for unawarded contingencies on
               4  of the  13  project  manager worksheets.   The  cost category  of  unawarded
               contingencies  was not covered  by the Environmental Protection Agency guidelines.

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 To determine if the guidelines issued by the Environmental Protection Agency were
 realistic,  we reviewed three  essentially completed construction  projects.  We
 concluded that the guidelines  for estimating costs we%e realistic and provided a
 valid means to evaluate the reasonableness of estimated costs.  The Environmental
 Protection Agency cost guidelines were within 10 percent of the actual cost of the
 completed construction  projects.   To illustrate,  for  one construction  project,
 application  of the guidelines  showed  that  about $1.06 million of the  program
 authority  was not required.  The project  manager  agreed that  this amount was
 unneeded.  After contract  award, the reasonableness of estimates for Superfund
 project cost  categories should be evaluated  using the Environmental Protection
 Agency guidelines.  A justification or explanation  should be prepared when a
 project cost category exceeds ,the guidelines.

           (2)   Total Required Amount.   In  addition  to the  apparent  over-
 estimated cost categories, about $1.2 million of program authority was not planned
 for obligation within any of the  cost categories shown on the  project  manager
 worksheets and should have  been returned to the Environmental Protection Agency.
 This  program  authority  had been  available since  the project  contracts were
 awarded.  The following schedule shows the amounts retained without explanation
 and the number of months retained unnecessarily.
Superfund
 Project

     A
     B
     C
     D

   Total
 Program
 Authority

$3,700,000
   500,000
 3,200,000
   400.000

$7.800.000
 Estimated
   Total
  Project
   Cost

$3,300,000
   300,000
 2,800,000
   200.000

$6.600.000
Difference

$  400,000
   200,000
   400,000
   200.000

$1.200.000
 Months
  Since
Contract
 Award

   24
   15
   27
    7
Total construction project cost estimates should be compared to available program
authority when contracts are awarded or when estimated costs are reduced so that
amounts that are not planned for obligation can be returned to the Environmental
Protection Agency.

      b.    Technical Assistance and Design Projects.  As of 31 July 1985, 42 of the
239 interagency agreements accepted by the Corps  for technical assistance  and
design work on Superfund  projects were expired.  The Environmental Protection
Agency will not reimburse  the Corps for any costs incurred after the expiration of
the agreement unless an extension to the  performance period  is obtained.   Costs
had not  been  incurred for at least 4 months on 24 expired agreements valued at
about  $600,000.  About $100,000 of unused program authority remained on the
24 agreements.   A detailed review  of 5  of these 24  agreements  showed  no
additional expenditures were planned.  The remaining 18 of 42 expired interagency
agreements had unobligated program authority of about $80,000. However, costs
had been recently  incurred  or costs were estimated in future  months.   Project
managers need  to  review  the expired  interagency agreements and  either obtain
extensions to  the project  performance period  or close the agreements,  and thus
return" the unused program  authority to the Environmental Protection Agency.
                                      10

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RECOMMENDATIONS AND COMMAND COMMENTS

B-l   Require project managers to review the estimated cost categories on project
manager worksheets using the  guidelines issued by the Environmental Protection
Agency whenever contracts are awarded.   Require the preparation of a justifica-
tion or explanation when a project cost category exceeds the guidelines.

B-2   Ensure that project managers compare the program authority available to the
total  estimated cost of a Superfund project, and that they return any  excess
amount to the Environmental Protection Agency whenever a contract is awarded or
a cost category is reduced.   '

B-3   Ensure that project  managers review expired interagency agreements  and
either obtain extensions to the project performance period or close the agreements
to return unneeded program authority to the Environmental Protection Agency.

Command agreed with  the recommendations  and  stated that the Missouri  River
Division was requested  on 11 October 1985 to take prompt  remedial actions, as
necessary.  Special procedures will be started  to correct the conditions found.  An
exception report will be  generated  by the  Superfund  Automated Management
System  listing every project  exceeding  the  major  cost  category percentages
established by  the  Environmental  Protection Agency.  Error  messages will be
generated if project  manager worksheets are not submitted.  Also, reports will be
generated indicating that  an  agreement is  about to expire.  These reports will be
generated 30,  60, and 90 days before an agreement expires.  Each of the reports
will  go to  the responsible  project  manager and to  the division  coordinator.
Implementation of approved actions is expected during second quarter FY 86.
                                      11

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         FOR THE COMMANDER, U. S. ARMY CORPS OF ENGINEERS


            C - SUPERFUND AUTOMATED MANAGEMENT SYSTEM

FINDING

     The  Superfund  Automated  Management  System  was  not complete or
accurate.  Also, the Management System was not used by the Corps to monitor the
status of Superfund projects.  Information on estimated Superfund project costs,
projected monthly expenditures, and current project status was not kept up to date
or was not entered into the Management System's data base.  Errors on projected
expenditures  had  an adverse impact  on the  Environmental  Protection  Agency's
efforts to manage the Superfund trust  fund since the expenditure data was used by
the Agency to forecast cash  requirements.   In  addition,  the content of the
Management System was not examined periodically to identify Superfund projects
requiring management attention.

                                DISCUSSION

1.   Background.  A separate interagency agreement is established for each phase
(technical assistance, design, and construction) of a Superfund project. The  Corps
designates a project manager to ensure the accomplishment of the work required
by each interagency agreement.  The Superfund Automated  Management System
was established at the  Corps' Omaha District to provide management information
on the status of each  interagency agreement. Monthly, the  Management System
generates a project manager  worksheet  for  each interagency agreement.  The
project manager worksheet  shows program authority available, interagency agree-
ment  expiration date,  estimated project cost, estimated expenditures by month,
project status, and actual costs incurred by month.  Except for actual cost data,
which is  extracted  from an automated financial system, project managers  must
provide the data to be  entered  in the  Management System.  The project managers
are required  to annotate any changes on their worksheets and return the  work-
sheets for entry into the data base.  The interagency agreements establish monthly
reporting requirements for the  Corps.  The Management System data base is used
to provide the information required by the Environmental Protection Agency.

2.   Management System.  Procedures did not exist to ensure that information in
the Management System was complete and  accurate.   While controls existed to
make certain that a worksheet was returned on each interagency agreement, there
were  no procedures  to review  the information before or after entry in the data
base.  Our review showed that  information in the data base concerning estimated
costs, estimated expenditures, and project status was not complete or accurate.

     a.   Estimated Costs and Expenditures.  Information  in  the  Management
System showed that on 6 of the IS construction projects reviewed, estimated total
costs  of the projects shown  in  one section  of  the  worksheets  were  about
$4.2 million  less than  the  monthly estimated expenditures shown in a different
section  of the  worksheets.    The estimated  total  costs  and estimated  total
expenditures should always  agree.  For example, the cost estimate for one project
was about $2.3 million, but the estimated expenditures were about $3.2  million, a
difference of $900,000.  The difference in the amounts resulted from the lack of


                                     12

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emphasis  on updating information.   Often,  updating  the  information  was the
responsibility of clerical assistants and little or no review was made by the project
manager.   Also, as discussed  in  Finding  B - Program  Authority,  the estimated
expenditures often equaled the value of  the  interagency agreement and were not
revised downward when contracts  were awarded for lower amounts.  The project
managers  and  clerical assistants who updated the  information did not understand
the importance  of accurate expenditure estimates.  The information in  the data
base on planned expenditures was  provided monthly to the  Environmental Protec-
tion Agency which used  the  estimates  to forecast  cash  withdrawal:} from the
Superfund trust  fund.  If  the  estimated  expenditures were  overstated, too much
money would be held as cash for the  estimated expenditures.  This could cause the
Environmental Protection Agency to lose  the opportunity to invest the funds.

     b.    Status. The Management  System did not contain accurate status codes
reflecting the current condition of  each interagency agreement.  At  least  90 of the
191 project  manager  worksheets  for technical  assistance and design projects
contained either no status codes  or  an  inaccurate status  code.  Worksheets  for
45 technical assistance and design  projects did not have any status codes because
the project managers  had not entered the codes into the system.  Status codes for
the remaining 45 of 90 technical assistance and design projects indicated that the
projects were  physically  and fiscally complete. However, the projects  were not
complete  because all  cost adjustments were  not made and excess funds  were not
returned to the Environmental Protection  Agency.  Similarly, status codes were
nonexistent or inaccurate for 7 of  15 construction projects.  Accurate  status codes
were needed so management could  intensify actions to ensure that projects nearing
completion were closed in a timely manner.

3.   Management Reviews.    Procedures  did not  exist to  periodically  review
information in the Management System  for indications of  management problems.
We found  at  least two  problems that  could have been  readily  identified and
remedied  with a periodic review of information in the data base.  Information in
the Superfund Automated Management System was not used by Corps' management
to identify unneeded  Superfund program authority.   As discussed in Finding B -
Program Authority, about $6.6 million in unneeded program authority was retained
by project managers.  A periodic review  of the information  in the data base could
have identified this problem.  Also as discussed in Finding B, the expiration dates
of interagency agreements were not  effectively monitored by project  managers to
ensure that needed  time extensions were obtained.  A periodic review of informa-
tion in the data base  would assist in the timely identification of these and other
Superfund project problems.

RECOMMENDATIONS AND COMMAND COMMENTS

C-l  Emphasize to the project  managers the need for updating project manager
worksheets  monthly,  with complete  and accurate information on all Superfund
interagency agreements.  Stress the importance of accurate expenditure estimates
and project status codes.

Command agreed and  stated that all  Superfund division coordinators were provided
with* copy of the tentative finding and recommendations on 21 January 1986. The
coordinators were directed to  take immediate steps to make records complete and
accurate and to notify the Corps headquarters not later than  12 February 1986 of
                                      13

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actions taken and steps that will  be  followed to avoid a recurrence of reporting
deficiencies.

C-2   Establish procedures  for a periodic  review of  information in the Superfund
Automated  Management System for completeness and accuracy.  As a minimum,
the review should ensure that:

    •All required data is entered and updated in a timely manner.

    -Planned expenditure data agrees with construction work estimates.

    -Project status codes are accurate.

Command agreed and stated that the  Corps' Missouri River Division was tasked on
21 January  1986  to develop  the  recommended  procedures  not  later  than
26 February 1986.

C-3   Establish procedures for a periodic review of the information in the data base
for indications  of  the  existence of  potential  Superfund  project  problems.
(Examples of Superfund  project  problems  are  shown  in  Finding B - Program
Authority.)  Begin corrective actions as required.

Command agreed and stated that the  Corps' Missouri River Division was tasked on
21 January  1986  to develop  the  recommended  procedures  not  later  than
26 February 1986.
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         FOR THE COMMANDER, U. S. ARMY CORPS OF ENGINEERS


                       D - SOURCE DOCUMENTATION

FINDING

     Procedures had  not  been established to ensure that  all costs  billed to the
Environmental Protection  Agency were supported in accordance with the terms of
the interagency agreements. Labor charges were not supported by timesheets, cost
transfers and  credits were not fully  explained  or  documented,  and documents
supporting work performed by other Corps activities on a reimbursable basis were
not retained.  Overall, about 31 percent of the Corps' in-house costs for Superfund
billings reviewed  were not adequately  documented.  Thorough and complete
Superfund cost documentation is needed to support future actions to recover costs
from  parties  responsible for  creating  the hazardous  waste  sites  now  being
corrected by the Corps.

                                 DISCUSSION

1.   Background.  Corps responsibilities for Superfund projects are established by
interagency  agreements with  the  Environmental Protection  Agency.  The Inter-
agency agreements require the Corps to keep detailed records of all costs incurred.
The detailed records are required to assist the Environmental  Protection Agency in
cost recovery actions against  the party responsible for  creating the hazardous
waste  site.    To  help  ensure a  successful recovery of Superfund costs,  the
interagency  agreements require that the  Corps  maintain timesheets to document
labor  hours, paid vouchers to document  travel  and per  diem expenses,  and
documentation to support any  other  costs.   Monthly,  the Corps'  Management
Information  System generates  billings to the Environmental Protection  Agency.
The bulk of  the billed costs  is based on contractor invoices, but some of the billed
costs are calculated by an automated system based on information entered into the
system.  For  example,  the  cost of direct labor,  indirect  labor, and overhead is
based on direct labor hours charged to an interagency agreement.

2.   Supporting Documentation.  Controls over  the recording of labor hours, cost
transfers, credit billings,  and reimbursable  workorders did not  ensure that  costs
billed were  properly documented in accordance with the terms of the  interagency
agreements.   We reviewed 55 billings,  valued at  about  $3.3  million,  for  work
performed on 17 interagency  agreements.  About S3 million was for contracted
work properly supported by  contractor invoices.  However, about $96,100, or over
31 percent of the  remaining $300,000  for Corps in-house costs, was not  properly
supported by required cost documentation.  Timesheets supporting almost $54,000
of the  charges  for  direct  labor,   indirect  labor, and overhead had  either been
destroyed or  not  prepared; documentation supporting over $12,000 of  the  cost
transfers and  about $2,100  of the  billing credits had not been prepared  or,  when
prepared, did not provide  adequate explanation;  and  timesheets and other support-
ing documentation for  almost  $28,000 of the work performed  for  reimbursable
workorders within the Corps had been destroyed or was not available.  As a result,
the required documentation did not exist to support these billings.   An  shown in
Finding A -  Financing Superfund Work, about 9 percent of the $10.7 million billed
to the Environmental Protection Agency during the first  10  months of FY 85 was
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for Corps in-house costs.  Accordingly, as  much as $298,000  of the total amount
billed may not be adequately supported  with complete cost documentation..

     a.    Labor Charges.  The labor timesheets used to record direct labor hours
were not always retained as required for cost recovery actions. We reviewed about
$240,000 of the charges for direct labor,  indirect labor, and overhead.   About
$54,000, or over 22 percent, was not properly supported because labor timesheets
had been destroyed or had not been prepared.  At  the time of  our review, the
Corps'  manual time control  system was being replaced by an automated system.
Additional controls are needed for  both the manual and automated systems to
ensure  that labor charges are supportable for litigation to recover Superfund
cleanup costs from the parties "responsible for hazardous waste sites.

          (1)   Manual Time Control. Charges for direct  labor, indirect labor,
and overhead  were unsupported because procedures did  not exist at all Corps
activities to retain labor timesheets. At one activity timesheets  were not  always
prepared; when timesheets were prepared,  they  were discarded after a couple of
months.   At  this activity, time charged to interagency agreements was usually
written on a sheet of paper and  then entered  into the automated system.  At
another activity, Corps personnel told the timeclerks what charges to make on the
various interagency agreements or wrote time charges on informal memorandums.
The  timeclerks  then filled out  a timesheet.   Neither  the employee  nor the
supervisor signed the timesheets.   Labor timesheets,  properly signed, should be
retained under the terms of the interagency  agreements.

          (2)   Automated Time ControL  The Corps of Engineers' Time, Attend-
ance, and Labor System is  currently being implemented throughout the Corps.  The
Labor System  was designed to combine time and attendance reporting with labor
cost reporting.  The Labor System eliminates the need for  a manually prepared
timesheet.  The Labor System automatically  generates a  timesheet for each
employee.  At activities where the Labor System  was implemented,  procedures
required the timesheet to be signed by  the employee's supervisor.  We believe that
the employee should also sign this form to verify the accuracy of the time charges.
During our review we noted that there  were numerous cost transfers because labor
hours were erroneously charged to the wrong interagency agreement.  While we did
not determine how often erroneous charges occurred, the double  signature should
improve the  accuracy  of labor  charges  and  lend additional credence  to  the
accuracy of the costs.  The  Labor System timesheet, properly signed, should be
retained in accordance with the requirements of the interagency agreements.

     b.   Transfers and Credits.   Cost transfers and billing credits were made
without adequate documentation.   Cost transfers occur when direct labor hours or
other charges have been made to the  wrong interagency agreement.  To transfer
the costs, information from a manually prepared  accounting transfer/reference
document is entered into the automated system.  Billing credits are made when the
computer-generated bills are overstated. To correct the  billed amount,, informa-
tion from a  manually prepared credit document is entered into the automated
system to reduce the following month's  bill.  On 3 of the 55 billings reviewed, about
$12,000 had been transferred from  one interagency agreement to another.   For
example, about $8,800 for labor, overhead,  and travel on one construction  project
was transferred to two  agreements for technical assistance on the same  project
when the Environmental Protection Agency rejected the costs.  The  costs  were
rejected because they occurred before the construction  phase of  the Superfund

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project began.  While a memorandum  was prepared stating why the costs were
transferred, no timesheets or other supporting documentation was kept to explain
how the amounts transferred were determined.  Also, 2 of the  55 billings had
manually  generated credits totaling about  $2,100.  The credits were for motor
vehicle and overhead costs that Corps personnel indicated were overcharged on
prior bills. Documentation was not available to support the need for the credits or
for the amount of the credits.   While  credits would not result in additional costs
being recouped from the responsible parties, the existence of unexplained billing
credits could have the effect of casting doubt on the remaining charges. Documen-
tation  of the reason for and the amount of both transfers and credits is needed and
should  be retained to support *ny billing adjustments.

     c.    Reimbursable Orders.   Documentation  was  not  available  to  support
work performed on a reimbursable basis by other Corps activities. When Superfund
work was performed by a Corps activity other than the one responsible for the
interagency agreement, an Intra-Army  Order for Reimbursable Services was issued
to authorize performance of the work.   Charges for  reimbursable  workorders,
totaling about $28,000, were on 4 of the  55 billings reviewed.   We asked for
documentation supporting the charges, and found that the performing activity was
responsible  for maintaining  the  appropriate  documentation.   However,  the one
activity visited  did  not  retain  supporting  timesheets  or documentation.   For
example, a reimbursable workorder for $15,000 was issued to the activity in June
1984.  On the first  bill, the activity charged $11,299 for labor and overhead.
A second bill, for $3,701, was generated in June 1985 to bring the total to exactly
$15,000,  the  amount  of  the  reimbursable  workorder.   Timesheets  and  other
documents needed to support the cost of the work performed were not available.
Procedures need to  be established requiring performing activities to provide copies
of documentation supporting billed costs on reimbursable orders. The documenta-
tion  would then be readily available for litigation efforts, if requested.

RECOMMENDATIONS AND COMMAND COMMENTS

D-l  Establish controls  to ensure that timesheets are manually prepared! and signed
by all employees  performing work on Superfund  projects until the automated time
control system is implemented.  Also, ensure that supervisors verify the validity of
charges.

Command agreed and stated that action will be taken to ensure  that all Corps
activities  at which  the  Corps of Engineers' Time, Attendance,  and Labor System
has not been implemented comply with the existing requirement to  document labor
costs on  Engineering Form  4494,  Labor Cost  Distribution Sheet.   Appropriate
action  will also be taken to ensure that Engineering Forms 4494 are signed by all
employees performing work on  site-specific Superfund projects and to ensure that
supervisors review the forms to verify the validity of the labor cost distributions
recorded thereon.

D-2  Establish controls to  ensure  that automated timesheets  are signed by the
employee  and reviewed by  the  supervisor for validity once the Labor System is
implemented.
     ir
Command agreed and stated that appropriate action will be taken to ensure that
labor  cost  distribution sheets  generated  by  the  Corps  of  Engineers' Time,
                                      17

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Attendance,  and Labor System are signed  by  all employees  performing work on
site-specific  Superfund projects. Appropriate  action will also be taken to ensure
that supervisors review the labor cost distribution sheets to verify the validity of
the labor cost distributions shown thereon.

0-3   Establish procedures  to  ensure that  cost transfers  and credits are fully
explained and documented.

Command  agreed and  stated  that appropriate  action  will  be taken  to  ensure
compliance with existing Corps' requirements  to fully explain and document cost
transfers  and credits.  Compliance with  established procedures will be added to
quality  assurance checklists  and  will be  included  in  future  quality  assurance
inspections.  In  addition, the importance of adequate explanation and documenta-
tion of cost transfers and credits will be reemphasized.

0-4   Require that activities performing work on reimbursable workordera provide
copies of  all supporting documentation, with the bills, to the  Corps  activity
responsible for the interagency agreement.

Command  agreed and stated  that  special procedures governing billings for work
performed on reimbursable workorders in support  of  site-specific  interagency
agreements related to the Superfund program  are being developed for immediate
Corps-wide implementation.   The special procedures  will  require  that billing
activities attach certified copies of all supporting documents  to bills submitted to
the activity responsible for the interagency agreement.

D-5   Establish procedures to ensure that source documentation (timesheets, justi-
fications  for  cost  transfers and  credits,  and  any  other appropriate supporting
documentation)  is  retained in accordance with the terms  of the  interagency
agreements.

Command agreed and stated that appropriate  action is being  taken to ensure that
cost documentation  is retained in  accordance  with  the  terms of the interagency
agreements.   In addition,  an attempt will  be made  to  negotiate a  mutually
agreeable  method of transferring  source documents which meet the destruction
criteria established  in AR 340-18 to the  Environmental Protection Agency for
further  retention.  If an agreement is reached, appropriate changes  to  existing
interagency agreements will be negotiated with  the Environmental Protection
Agency.

Command also stated that existing policies and procedures require that all Corps
activities at which the automated Corps of Engineers' Time, Attendance, and Labor
System  has not  been implemented  document labor costs on Engineer Form 4494,
Labor Cost Distribution  Sheet.   Existing  policies and procedures also  require
preparation and  retention of adequate documentation to support all costs charged
to Corps  projects  and/or reimbursable orders.  These policies and  procedures
extend to  cost  transfers and/or cost  adjustments.   In  addition,  existing policy
dictates  that  all cost source  documents, including labor cost distribution docu-
ments, be retained for the periods specified in  AR 340-18.

U. S/Army Audit Agency Evaluation.  Final target dates for  implementation of
Recommendations D-l  through D-5  will  have to  be  included in  the   official
command reply.

                                      18

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          FOR THE COMMANDER, U. S. ARMY CORPS OF ENGINEER!}


               E - MAINTENANCE OF COST DOCUMENTATION

FINDING

     The  existing  procedures  for  the maintenance of Superfund  project cost
documentation did not ensure the documentation would be  readily available when
needed. Cost documentation should have been filed  on an interagency agreement
basis at a central location; instead, documentation was filed by type of document
at several locations. Also, documentation may need to be retained longer than the
retention  periods prescribed by AR 340*18.  As a result, documentation of costs
incurred for  Superfund work may not  be  available for future  litigation efforts
against parties responsible for creating hazardous waste sites.

                                DISCUSSION

1.   Background.   Separate  interagency agreements  are  issued for each phase
within  a Superfund  project:  normally  technical assistance, design, and construc-
tion.   For each agreement,  the  Corps is  required  to maintain accounts and
documentation of (i) contract cost;  (ii) employee  hours and salary (ttmesheets);
(Hi) employee  travel and  per  diem expenses (travel vouchers);  (iv) receipts  for
materials, equipment,  and supplies;  and (v) any other costs not included  in the
above categories. Detailed records are required so that the costs can b« recovered
by  the  Environmental  Protection Agency  from  the  party  responsible for the
hazardous waste site.  The Corps is required to provide the detailed cost records
within 3 weeks of being requested by the Environmental Protection Agency.

2.   Document Files.  Procedures were not  established to ensure that Superfund
cost documentation would be readily available when needed.  Cost documents were
filed by  type of document at  several  locations  rather  than  by  interagency
agreement at a central location. As a  result, documentation supporting costs on a
particular interagency agreement could not be readily retrieved when requested.
Travel  vouchers, miscellaneous obligation documents, and receipts were filed in the
finance and accounting office  by  type of  document rather  than by interagency
agreement. Generally, after 3 yean these accounting records were sent to records
holding, which made document retrieval even more difficult. Timesheets, which
are not accounting records, were  kept by the timekeeper in each Corps  office.
Additionally,  documents supporting some contract costs were at locations other
than Corps activities and could not be readily retrieved.   For example,  on one
Superfund construction project the contract was ended due  to unforeseen develop-
ments; documents supporting some contract costs were at the hazardous waste site
in Pennsylvania,  while  other  documents were at  the Environmental Protection
Agency Region Office in Philadelphia.  When  we requested these documents,  it
took the Corps about 6 weeks to retrieve them. Establishing files by interagency
agreements at a central  location would ensure that  all cost documents  can  be
provided  to the  Environmental Protection Agency within the required 3-week
period.
    *
3.   Document  Retention.   Retention procedures  for Superfund  documentation
needed  to be changed.   The  Corps  generally  complied with  the provisions of
                                      19

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AR 340-18, which required accounting documents to be kept for 6 years 3 months.
The  existing document  retention procedures may result  in cost documents being
destroyed before litigation is begun by the Environmental Protection Agency.  To
date, the length of time that Superfund  cost records need to be retained has  not
been determined.  However, it is apparent that some files may need to be retained
for  more than  6 years 3 months.   For  example,  in December 1982 the  Corps
received an interagency agreement to provide technical assistance for a Superfund
project in Massachusetts.  Technical  assistance and design work were completed,
and  construction work at the hazardous waste site followed in October 1983. Due
to unforeseen circumstances, the construction  contract  was ended in June 1985.
New design and construction work will take several  more years,  and litigation  will
probably not  take place  until  after all  the  construction  work  is  completed.
Therefore* documents for the initial technical assistance and design interagency
agreements could  be  needed after the 6 years 3 months  existing retention period
has ended. Environmental Protection Agency management told us that their policy
was  to retain cost records for 20 years.  To alleviate some of the problems  and
costs associated with storing a large volume of records,  the Corps  should develop
procedures to transfer supporting cost documentation for each interagency agree-
ment to the Environmental Protection Agency for long-term storage as soon as the
Army's need for the documentation has ended.

RECOMMENDATIONS AND COMMAND COMMENTS

E-l   Establish procedures to forward documentation supporting Superfund costs to
the appropriate office.  File the documentation by  interagency agreement. As a
minimum  include  contract  invoices;  timesheets; travel vouchers; miscellaneous
obligation documents; receipts  for materials, equipment, and supplies; and docu-
mentation supporting any other costs.

Command agreed and stated that existing procedures will be  modified to require
the establishment and maintenance of a file of certified  copies of  cost documents
(contract  invoices; timesheets;  travel vouchers; miscellaneous obligation docu-
ments; receipts for materials, equipment, and supplies; etc.) at a central location
for each Superfund site-specific interagency agreement which includes special cost
documentation maintenance and retention requirements.

E-2   Establish files for  each interagency agreement already accepted.  Perform a
one-time effort to gather and file supporting documentation.

Command  agreed and stated that  files will be established for  each accepted
Superfund site-specific  interagency  agreement which includes special cost docu-
mentation  maintenance and retention requirements.  Once the files  have been
established, certified copies of all existing cost documents will be placed in the
files.

E-3   Retain the files supporting costs for each interagency agreement until such
time that the documents are requested by  or transferred to the Environmental
Protection Agency.

Command agreed and stated that special  procedures will be developed to retain the
files until  requested  by or transferred  to the  Environmental Protection Agency.
Since retention of these records beyond the normal destruction dates established in
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AR 340-18 will require a waiver, an attempt will be made to negotiate mutually
acceptable procedures  for the transfer of these records to the  Environmental
Protection Agency prior to  expiration of  the  normal retention period.   If  an
agreement is reached, appropriate changes to existing interagency agreements will
be negotiated with the Environmental Protection Agency.  If an agreement cannot
be reached, a request for waiver  of the retention requirements of AR 340-18 will
be initiated and forwarded to the appropriate Department of the Army approval
authority.

Command also stated that the manner in which original accounting documents are
filed is an essential part of the Corps' accounting system.  Since original Superfund
cost documents are also the source documents  for  entries  made into the Corps'
standard accounting system,  it is essential  that these documents be filed in the
same manner as all other accounting documents  so that they can  be easily located
to support  an accounting transaction/entry and/or a  disbursement should the need
arise. In addition, certain types of single copy documents, for example, labor cost
distribution sheets, contain data related to  more than one project and can not be
filed  in a  single project file under  any  circumstance.  Through some type of
administrative error, the office of  primary responsibility for cost  documentation
and retention was never advised  of the special  cost documentation and retention
requirements peculiar to site-specific interagency agreements with the Environ-
mental Protection Agency in support of the Superfund program and was  therefore
unaware of the need to establish special procedures to ensure that cost documenta-
tion would  be readily available when needed.

U. 8. Army Audit Agency Evaluation.  Final target dates for implementation of
Recommendations E-l  through E-3  will have  to  be included  in  the official
command reply.
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          FOR THE COMMANDER, U. S. ARMY CORPS OF ENGINEERS


                         F - ACCOUNTS RECEIVABLE

FINDING

      About $1.6 million of accounts receivable from the Environmental Protection
Agency were not promptly collected because prescribed collection procedures were
not  followed.   Collection  letters  were not  sent at required  intervals,  local
procedures did not exist designating responsible personnel and appropriate actions,
and billings were processed after interagency agreements expired.  As a result, the
U. S. Treasury  unnecessarily incurred  about  $52,000 in  interest costs  on the
delinquent accounts.

                                 DISCUSSION

1.    Background.  Interagency agreements between the Environmental Protection
Agency  and the Corps  are established  to provide  the  necessary  funding for
Superfund projects managed by the Corps.  For each phase of a Superfund project,
an agreement  is  established providing the  Corps  with program  authority for a
specified timeframe.  As costs are incurred, the Corps  establishes an account
receivable and bills the Environmental Protection  Agency for the amount spent.
The Environmental Protection Agency reimburses the Corps with a check from the
Superfund trust fund for deposit to the U. S. Treasury.  According to AR 37*107, an
account  receivable  is considered delinquent when payment is not  received within
30 days  of  the billing date.   Procedures  for collecting  delinquent accounts
receivable are  prescribed  in ARs 27-40 and 37-108.  Collection letters should be
sent  to the debtor if payments  are not received within 5 workdays  of the due date.
If payment  is still  not received, two additional letters should be sent at 30-day
intervals. The regulations also encourage aggressive actions, including telephonic
communications at regular intervals, in an effort to collect delinquent  accounts.

2.   Accounts Receivable.    We   reviewed  the  accounts receivable from the
Environmental Protection  Agency  pertaining to Superfund work at the  four Corps
finance and accounting offices that processed the  bulk of the Superfund billings.
As of 9 September  1985,  30 of 94 accounts receivable at  the four finance offices
were  delinquent.   The delinquent  accounts  receivable  were valued at about
$1.6 million* The following chart lists four  examples of accounts receivable for
which payments had not been received within the prescribed 30-day period.

       Billing Date             Amount Billed          Days Delinquent

         18 Jan 84               $  5,159                   565
         30  Nov84                212,266                   243
         22  Feb 85                 454,817                   163
         15  Apr 85                  17,183                   124


Corps personnel were  not following the prescribed delinquent account collection
procedures and were not  seeking  extensions to the interagency  agreements that
authorized  the performance of the  Superfund work.   As a result, until the
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delinquent payments were received from the Environmental Protection Agency, the
U. S. Treasury  was incurring unnecessary  interest costs on  the accounts  for
Superfund work.

     a.   Collection Actions.  Corps personnel did not make aggressive attempts
to collect the delinquent  accounts receivable.  Of the 30 delinquent accounts
reviewed, no collection letters were issued for 22 accounts, a single letter  was
issued for 7 accounts,  and 2 letters were sent for the remaining account. However,
none of the collection  letters were  sent within  the  timeframes  provided  by
regulation. Telephone calls were not made to collect on any of the accounts. Even
though some  collection letters  were sent, Corps personnel stated that it  was not
local policy to aggressively follow up on delinquent accounts receivable from other
government agencies.  Confusion existed as to who should process collection letters
and make telephone calls because local written procedures, designating responsible
personnel or  the appropriate  required actions, did not exist at  any of the finance
and accounting offices.

     b.   Account Status.  In order to determine why payments had not  been
made, we contacted the Environmental Protection Agency's finance and accounting
office to ask about three large  delinquent accounts.  In one case, a bill, valued at
about $454,817, had apparently  not been received by the Environmental Protection
Agency.  Corps personnel were not aware of this situation because the collection
procedures prescribed by AR  37-108 were not followed.  As a result of our inquiry,
a second bill was sent to the Environmental Protection  Agency and payment was
subsequently  received.   We  also  contacted a regional project  manager at the
Environmental Protection  Agency on 28 August  1985 about two additional bills
valued  at $212,266 and $812,917.  As a result of this contact, the project manager
located and  certified for payment the bills  that  were originally  sent  to the
Environmental Protection Agency on 30 November 1984 and 25 June 1985.  Pay-
ments  for both bills  were received by the Corps in September 1985.   If the
appropriate action had been taken by the Corps, payments for these and other
delinquent accounts could have been collected in a more timely manner.

     c.   Interagency Agreements.   An  expired Interagency agreement was a
contributing  cause  for 4 of the 30 delinquent accounts receivable.  Four  bills,
valued  at about $41,000, were sent to the Environmental  Protection  Agency  in
March  and April 1985. The Environmental  Protection Agency did not pay  the bills
because  the  interagency agreement authorizing the  work expired on 31 January
1985. Since the agreement had expired, the Corps no longer had authority  to spend
funds and the Environmental Protection Agency did not have a basis for making the
payments.  A time extension was obtained by the Corps in June 1985 authorizing
work and payments through 30 September 1985. The Corps resubmitted the bills in
July and August 1985.  However, as of 9 September 1985, no  payments had been
received nor  had any followup collection action been started.  (A recommendation
concerning the need to request extensions for the performance  periods of inter-
agency  agreements  with  the  Environmental Protection Agency is included  in
Finding B - Program Authority.)

3.   Interest Costs.   Aggressive actions were not taken by the Corps to collect
delinquent accounts receivable.  The Corps paid contractors for work performed
and incurred costs for the salaries and  travel of Corps personnel.   The Corps
accumulated these costs  and  billed the  Environmental Protection Agency  for
                                      23

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 reimbursement  from the  Superfund  trust  fund.   Interest  costs  were incurred
 because the U. S. Treasury had to borrow funds to pay the checks  written by the
 Corps for contractor costs and for the salaries and travel of  Corps  personnel until
 reimbursement was made  from the Superfund trust fund by  the  Environmental
 Protection Agency.  About $52,000 in interest costs was unnecessarily incurred on
 the 30 delinquent accounts because payments from the Environmental Protection
 Agency were not made within 30 days of the billings.  Improved local procedures
 and increased aggressive collection actions by the Corps will reduce  unnecessary
 interest costs to  the U. S. Treasury.

 RECOMMENDATIONS AND COMMAND COMMENTS

 F-l   Follow  the procedures  prescribed by  ARs 27*40 and 37-108 to aggressively
 collect delinquent accounts receivable. As a minimum, ensure that:

    -Collection letters are sent to the Environmental  Protection  Agency when
      receivables remain unpaid 30 days after billing.

    -Two subsequent letters  are  sent at  30-day  intervals  if  the debt remains
      outstanding.

    -Telephone  calls are  made to the  Environmental Protection  Agency when
      written communications are not answered.

 Command  agreed  and  stated  that  the   collection  procedures  prescribed  by
 ARs 27-40 and 37-108 will be strictly enforced and the current collection policies
 of Engineer Regulation 37-2-10 will be reemphasized.  Additional guidance on the
 collection of accounts receivable from the  Environmental Protection  Agency will
 be issued to all finance and accounting offices.

 F-2   Develop local procedures at  each  Corps  finance  and  accounting  office
designating responsible personnel and appropriate actions  for collecting delinquent
 accounts receivable.

 Command agreed and stated that finance and accounting offices will be directed to
develop and follow  local procedures for collecting delinquent accounts receivable
based on the guidelines presented in AR 27-40, AR 37-108, and Engineer Regula-
tion 37-2-10.   As  a minimum, procedures developed  will designate responsible
personnel and prescribe specific procedures  and actions to be taken  to  aggressively
collect1  delinquent accounts receivable.  Additional guidance will be issued to all
 finance  and  accounting offices reemphasizing the  applicability   of prescribed
collection  procedures  to  government agencies  as well as private  parties and
directing  use of the  automated  accounts receivable aging  program  currently
 available within the Corps'  Management Information System.

 Command also stated that billings sent by  Corps activities  to  the  Environmental
 Protection Agency's Finance  Center  in Cincinnati are logged  in by  the Finance
 Center  and then mailed  to  the  appropriate  Environmental  Protection  Agency
 Regional Office for certification.  Once certified, the billings are  mailed back to
the Finance Center for processing and payment.  As  a result of these  somewhat
unwieldy procedures, it  may be unreasonable to expect payment from the Environ-
 mental  Protection  Agency within  the 30-day timeframe allowed by  governing
directives. Strict compliance  with prescribed collection procedures would probably

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necessitate an initial collection letter for every billing for reimbursable services in
support of the Superfund program.  While this command endorses and supports the
current Army policy on collection of delinquent accounts receivable,  we believe
that it would be in the best interests of all concerned  to obtain a waiver of the
requirement  to  send collection letters  to the Environmental Protection Agency
when receivables remain unpaid 30 days after billing and will actively  pursue this
course of action.

U. S. Army Audit Agency Evaluation.   Final target dates  for implementation of
Recommendations F~l  and F-2 will have to be included in the official command
reply.
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                                                                                   ANNEX
f -
                    ACTTVrnES INCLUDED IN THE AUDIT





U. S. Army Corps of Engineers



Headquarters, U. S. Army Corps of Engineers, Washington, D. C.



Missouri River Division, Omaha, Nebraska



North Atlantic Division, New York, New York



New England Division, Waltham, Massachusetts



Omaha District, Omaha, Nebraska



Kansas City District, Kansas City, Missouri



Baltimore District, Baltimore, Maryland





U. S. Environmental Protection Agency



Headquarters, U. 3. Environmental Protection Agency, Washington, D. C.



Regional Office, Kansas City, Kansas



Regional Office, Philadelphia, Pennsylvania



Field Office, Cincinnati, Ohio
                                                                                                   fe
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