Title:
SUBJECT: Audit Report No. E1SFF9-11-0015-0100227
Review of the Fiscal Year 1988
Sviperfund_ReQfi*rt to Congress
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Finding:
Removal Program . . .
The Annual Report's nationwide and Region 4 and 5 totals for
Kemoval Starts and Removal Completions differed slightly from those
tot-ai J T^L S Printouts provided to us. Nationwide Removal Starts
328 in the Annual Report and 326 in CERCLIS. Nationwide
aioletions totaled 282 in the Annual Report, but only 277
oval comp R ion 4 and 5 Removal Starts totaled 96 in the Annual
in CBRcLIj'o5 in CERCLIS, while Region 4 and 5 Removal Completions
a
Re in the Annual Report and 85 in CERCLIS. OSWER officials
totaled B these differences to the fact that the larger numbers
actiribit account sites with more than one removal action, whereas
take i."rTTS totals equate each site with only one such action.
the CERi-^J-3
of the 47 Removal Starts and 11 Removal Completions we
wed, 51 (88 percent) were valid FY88 actions. However, seven
rev^h*» actions were not valid FY88 accomplishments.
of trie
Four of these seven actions were not valid because, based on
fficial Agency definitions, they should have been recorded in a
j-fferent fiscal year. In fact, one of these four was actually an
FY87 Removal Start that was counted in both FY87 and FY88.
For the other three actions, the source documentation did not
show any evidence that the Agency definitions of a start or a com-
pletion were met, regardless of the fiscal year involved. For
example, the Marietta Mercury Spill site in Region 4 was counted
as both an EFA-lead first Removal Start and first Removal Comple-
tion, even though the definition was never entirely met in either
case. Specifically, EPA received notification of "about a six
ounce mercury spill" on the floor of a personal residence in
Marietta, Georgia. The On-Scene Coordinator (OSC) first mobilized
a contractor to assist in removing the mercury. The OSC then went
to the residence and was told EPA's assistance was not required.
The resident of the home said that a relative would help in remov-
ing the mercury. The OSC subsequently stated in a memorandum to
his file that EPA did not use the contractor to do any removal
actions at the residence. EPA paid $1,000 to mobilize the contrac-
tor, even though the contractor's services were not needed.
OSWER Directive 9200.3-1A states that a first Removal Start
occurs when removal activity has begun. Furthermore, the directive
states that a first Removal Completion is counted on the day the
on-site removal action is completed. We believe that the Marietta
Mercury Spill site does not meet the Agency definition of a Removal
Start or a Removal Completion. In addition, our review of CERCLIS
revealed that this site was also counted as a responsible party-
lead subsequent Removal Start and Removal Completion, because the
resident of the house stated she would clean up the mercury.
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Finding:
Remedial Program
Both the Annual Report and the CERCLIS printouts listed 150
RI/FS Starts nationwide in FY88. For the two regions which we
reviewed, CERCLIS reported 42 RI/FS Starts. We sampled 13 RI/FS
Starts and determined that all 13 were valid FY88 actions. .
We found that the number of Records of Decision (RODs) listed
in the Annual Report aa completed nationwide during FY88 was almost
identical to CERCLIS. The Annual Report listed 152 and CERCLIS
listed 154 RODS in F788. CERCLIS identified 37 RODs for Regions
4 and 5, and all 15 RODs we reviewed were valid FY88 actions.
The nationwide totals for Remedial Design (RD) Starts and RA
Starts contained in the Annual Report agreed with those on the
CERCLIS printouts provided to us. Of the 99 RD Starts during FY88,
23 were in Regions 4 and 5. For RA Starts, these regions accounted
for 18 of the 72 nationwide.
Qf the 15 RD Starts and 15 RA Starts we reviewed, 29 (97 per-
were valid FY88 actions. The one invalid action was due to
ce funds not being obligated on an EPA-lead site as of the end of
chaa The definition of an RD Start for this type of site includes
F t bating the funds. Figure 2 provides the detailed results of
ob ID and RA Starts review.
our i*"
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Finding:
pre-Remedial Program
The nationwide totals for PAs and Site Inspections (Sis)
contained in the Annual Report agreed with those on the CERCLIS
printouts provided to us. Of the 2,884 PAs completed during FY88,
784 were in Regions 4 and 5. For Sis, these regions completed 413
of the 1,237 nationwide.
Of the 44 PA completions and 31 SI completions we reviewed,
25 (33 percent) were valid FY88 actions. Five were not valid FY88
actions; instead, according to official Agency definitions, they
should have been recorded in a different fiscal year. Three of
these five were part of a batch of 74 PA reports actually input to
CERCLIS on November 4, 1988 (FY89), but which were erroneously
recorded as November 4, 1987 (FY88).
In addition, we were unable to locate adequate source docu-
mentation for 45 (60 percent) of the 75 sample cases. Specifi-
cally, in Region 4 we located all of the reports, but there was no
evidence on the reports, such as a date and signature, to show that
they had been reviewed and accepted by the Agency. A log was main-
tained of approximately 60 percent of the reports, but it did not
show review and acceptance. Further, some of the reports themsel-
ves were undated, and others were very old, in one case dating back
to FY81. Region 4 officials stated that they did not document the
review and acceptance on the reports because they entered the dates
into a computer database instead. In Region 5, regional personnel
could not locate some of the reports. The regional log was spora-
dically maintained during FY88, and as a result, in some cases
there were no entries for these reports documenting Agency review
*nd acceptance. Figure 4 provides the detailed results of our
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Finding:
Annual Report Chapters 3.0 and 4.0 -
Additional Coaments
According to OSWER officials, CERCUS waa expanded and
improved during PY88. However, as previously discussed, our review
identified concerns with the accuracy of some data in the system.
Further examples of system problems include the following!
-- In December 1988, we requested that Headquarters OSWER
officials provide us CERCLIS printouts from which to
select our samples for Regions 4 and 5. We were "«-ti-
ally advised that printouts could not be provided due
to "data discrepancies." During January 1989, these
officials apparently believed the discrepancies were
sufficiently resolved, and we received our printouts.
— During our field work., Region 5 officials advised the
auditors that they considered the system to contain
inaccuracies.
From our discussions and observations in the two regions,
^e believe that inadequate input controls continue to hamper the
accuracy and reliability of CERCLIS. OSWER officials advised us
that a work group has been formed to review these input controls
and make recommendations for improvements. In addition, they
stated they are conducting monthly data quality audits.
In addition to our concern about the accuracy of the data,
CSRCLIS accomplishments for FY88 differed depending on the date of
the printout. For example, we obtained three different figures for
Removal starts in Region 4. A Headquarters CERCLIS report dated
October 19, 1988, listed 62; the draft Annual Report dated February
23, 1989, listed 67? and a Region 4 CERCLIS printout dated March
14, 1989, listed 65. '
OSWER Directive 9200.3-1A established a cut-off date of
October 17, 1988, for producing final quarter accomplishments
reports. However, the regions did not adhere to the cut-off date
and continued to input information into CERCLIS months after the
end of the fiscal year. OSWER officials stated that for purposes
of completeness, the Agency wants to get all accomplishments into
CERCLIS, .regardless of lateness. Nevertheless, since the CERCLIS
runs used for the Annual Report were generated shortly after the
cut-off date, and since the regions continued to enter accomplish-
ments into the system, the Annual Report may be understating some
Agency accomplishments.
The reader should understand that in some instances, activi-
ties conducted at a site are claimed in multiple categories, i.e.
both as Removals and Remedial Actions. These same activities are
apparently considered to meet more than one Agency definition.
For example, at the Region 4 Newport Dump site, the documentation
in the files stated that "the remedial action was initiated on
July 2, 1987 and completed on October 31, 1987." Yet the CERCLIS
printouts we received indicated that not one, but three actions
occurred on October 30, 1987: a Removal Completion; a first RA
Completion; and a final RA Completion. Some Agency officials have
devised the term "removials" to apply to these cases; OI6 auditors
in Region 4 have initiated an audit of this practice.
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Finding:
Annual Report Chapter 5.0 -
The National Priorities List Of Sites
The Annual Report listed five sites deleted from . the NPL
nationwide in FY88. We obtained documentation from Headquarters
which verified that the Agency deleted these five sites from the
NPL. Two of the sites deleted were in Region 4, while Region 5
did not have any sites deleted. We did not do any further work in
Region 4 validating the completion dates for the two sites deleted.
Finding:
Annual Report Chapter 6.0 -
Enforcement Program Activities
We reviewed four categories of enforcement activities dis-
cussed in the Annual Report: Administrative Orders (AOs); RI/FS
Settlements; RD/RA Settlements; and Referrals. In most cases, the
nationwide CERCLIS totals provided to us agreed with the totals
shown in the Annual Report. The only instance in which the nation-
wide totals did not agree was in the AO category. The CERCLIS
printouts showed 202 Unilateral/Administrative Orders, while the
Annual Report contained 207.
For our samples of cases selected in each activity category,
we were able to locate all appropriate source documents and verify
that the actions occurred during FY88, as claimed. Figure 5 out-
lines the number of sample cases reviewed.
Finding:
Annual Report Chapter 11.0-
Technology-Related Research And Development
We reviewed the information presented in the Annual Report on
the SITE Program. Concurrent with our review of the Annual Report,
the OIG was conducting a survey of the SITE Program. To determine
if the information presented on the SITE Program was reasonable and
accurate, we asked the auditors working on the SITE Program survey
to analyze this chapter. Based on their review, we believe that
the information presented on the SITE Program is generally reason-
able and accurate. >
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Performance Audits
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Title:
SUBJECT: Audit Report E1SJF9-05-0274-0100207
Review of. Superf und Cost Recovery Accounts
Receivable Establishment and Collection
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Finding:
1. Accounts Receivable Need To Be Recorded
Neither Headquarters nor the regions timely recorded accounts
receivable on the financial records of the Agency. For FT 1989,
$5.3 million of $5.9 million (90 percent) of the payments we
reviewed were not timely recorded as accounts receivable. Thus,
the Agency's control over monies owed to the Superfund Trust fund
was ineffective. Because receivables were not recorded, the
Agency was not aware of what payments were due the Superfund
Trust Fund. As a result, a payment might be diverted, lost, or
not paid without anyone being aware of it. This also results in
late payments with a resulting loss of the applicable interest as
discussed in Finding Number 2.
The Agency was also not meeting internal control standards which
require that significant events be promptly recorded and properly
classified. The failure to record accounts receivable for
amounts due to the Superfund Trust Fund is a material weakness in
internal controls.
The FY 1989 Agency Operating Guidance stated that the success of
collecting cost recovery payments depends on being sure case
closing information is immediately sent to the regional financial
offices. This ensures that collections can be properly recorded
and receivable amounts can be accurately reported to management.
We found that accounts receivable were not recorded becauses (a)
internal controls were not established for forwarding settlement
documents to the Financial Management Office, (b) judicial orders
were not promptly obtained from the Department of Justice, and
(c) the Financial, Management Office did not timely record
accounts receivable on the financial records when settlement
documents were received prior to payment. In addition, the
regions did not establish routine procedures to regularly
reconcile Superfund and Office of Regional Counsel records with
the financial records.
In response to our draft report recommendations, the Assistant
Administrator for Administration and Resources Management
outlined several measures to strengthen the control over accounts
receivable. He also stated that all regions will be provided a
copy of the final report. Each region will be requested to
continue to strengthen procedures for internal controls over
Superfund accounts receivable. The actions outlined by the
Assistant Administrator, when implemented, will substantially
correct the deficiencies cited in our draft report.
We recommend that the Deputy Administrator ensure that the
Assistant Administrators for (a) Administration and Resources
Management, (b) Solid Waste and Emergency Response, and (c)
Enforcement and Compliance Monitoring, the General Counsel, and-
the Regional Administrators work together to complete the planned
corrective actions.
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Reconunendation(s):
We recommend that the Deputy Administrator ensure that the
Assistant Administrators for (1) Administration and Resources
Management, (2) Solid Waste and Emergency Response, and (3.)
Enforcement and Compliance Monitoring, the General Counsel, and
the Regional Administrators work together to complete the planned
corrective actions.
We also recommend that the Deputy Administrator take appropriate
action to ensure that Regional Administrators and Offices of
Regional Counsel reconcile their, records to ensure that cost
recovery amounts due in the past have been collected. Where cost
recovery amounts have not been collected, the amount due must be
recorded as an account receivable and appropriate action taken
for collection. Further, the Financial Management office should
notify the Regional Administrator when settlement documents are •
not provided timely for appropriate corrective action.
. ' •
In addition, we recommend that the Deputy Administrator ensure
that the Assistant Administrator for Administration and Resources
Management provide guidance on when amounts owed, particularly
when the amount in under appeal or in litigation, should be
recorded as accounts receivable.
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Finding:
' 2. Promot Action Needed To Collect Amounts Owed
Neither Headquarters nor the regions were promptly collecting
cost recovery amounts owed to the Superfund Trust Fund. This
resulted from (a) delays in sending accounting data to
• responsible parties, (b) late payment of amounts due, (c) delays
due to responsible party requests for further documentation
and/or dispute of cost billed, and (d) delays in notifying
responsible parties of the effective date. These conditions
existed primarily because (a) the regions did not have a system
for tracking when accounting data were needed and (b) consistent
action was not taken to ensure prompt collection of payments.
Delays in collecting amounts owed resulted in lost interest to
the Superfund Trust Fund of $103,856.
Of the 55 settlement documents reviewed, we found 22 cases (40
percent) where collection of amounts owed was delayed. The U.S.
Treasury Department currently invests Superfund monies in 52-week
U.S. Treasury MK Bills. When cost recovery amounts are not
promptly collected, the Superfund Trust Fund loses the interest
which would have accrued.
In response to our draft report recommendation, the Assistant
Administrator for Administration and Resources Management stated
that guidance for Monitoring and Collecting Oversight
Reimbursement was distributed to the regions on February 20,
1990. Also, review procedures will be established to ensure that
oversight billings are promptly issued. The actions outlined by
the Assistant Administrator, when implemented, will substantially
correct the deficiencies cited in our draft report.
We recommend that the Deputy Administrator ensure that the
Assistant Administrators for (a) Administration and Resources .
Management, (b) Solid waste and Emergency Response, and (c)
Enforcement and Compliance Monitoring, the General Counsel, and
the Regional Administrators work together to complete the planned
corrective actions.
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Recommendation(s):
We recommended in our draft report: that the Assistant
Administrator for Administration and Resources Management take
appropriate action to:
1. Coordinate.with the Assistant Administrator for Solid Waste
and Emergency Response to require the Office of Waste
Programs Enforcement to complete and implement the guidance
on tracking and collecting reimbursement of oversight costs.
2. Work with the Deputy Administrator and coordinate with the
Assistant Administrator for Solid Waste and Emergency
Response to:
i
a. Require each EPA Region to provide formal assurance
that the guidance on tracking and collecting
reimbursement of oversight costs has been fully
implemented and procedures have been established to
ensure that oversight billings are promptly sent to
responsible parties.
b. Include, .as part' of the annual Headquarters review of
regional programs, a determination of whether the
procedures and controls have been implemented and are
adequate to ensure that oversight billings are promptly
sent to responsible parties.
The reason we asked that the Assistant Administrator for
Administration and Resources Management work with the Deputy
Administrator is because we recognize that senior program
officials do not have line authority over regional offices.
3. Work with the Deputy Administrator, and coordinate with the
General Counsel and the Assistant Administrators for Solid
Waste and Emergency Response and Enforcement and Compliance
Monitoring, tor
a. Require that all administrative and judicial orders and
decrees include a statement that interest will accrue
from the due date when disputed costs in oversight
billings are found to be payable.
b. Require that oversight billings a statement that
interest will accrue from the due date if disputed
costs are found to be payable.
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Title:
SUBJECT: Audit Report No. E1SJF9-05-0274-01Q0172
Review of Superfund Cost Recovery Accounts
Receivable Establishment and Collection
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Finding:
i. Accounts Receivable Meed To Be Consistently Recorded
For 9 of 14 settlement documents we reviewed, neither
Headquarters nor Region 3 were consistently and promptly
recording accounts receivable (about $3.1 million) on the
Agency's financial records. Thu», the Agency's control over
monies owed to the Superfund Trust Fund was ineffective. Because
receivables were not recorded, the Agency was not aware of all
payments which were due the Superfund Trust Fund. As a result, a
payment might be diverted, lost, or not paid without anyone being
aware of it.
The Agency was also not meeting internal control standards which
require that significant events be promptly recorded.and properly
classified. The failure to record a receivable for amounts due
to the Superfund Trust Fund is a material weakness in internal
controls.
The FY 1989 Agency Operating Guidance stated that the success of
collecting cost recovery payments depends on being sure that case
closing information is immediately sent to the regional financial
offices. This ensures that the collections can be recorded
properly and receivable amounts can be accurately reported to
management. Accounts receivable were not consistently recorded
in Region 3 because! (a) the Office of Regional Counsel did not
timely forward settlement documents to the Financial Management
Office in all cases, and (b) there was no assurance that
Financial Management Office received settlement documents timely.
In response to our draft report, the Regional Administrator
stated that he believed the finding was overstated because it
includes those actions that Headquarters was responsible for
prior to FY 1989. If the actions prior to FY 1989 are eliminated
from the review, no material weakness in Region 3's internal
controls would be found. The Region believed that an internal
control review is not justified because existing procedures
adequately insure the recording and recovery of all Trust Fund
receivables.
notwithstanding the comments made by the Region, we are still of
the opinion that the existing procedures were not adequately
implemented to ensure that all amounts due for Superfund cost
recovery are recorded as accounts receivable. We recognize that
the Headquarters Financial Management Division, and not Region 3,
was responsible for recording accounts receivable and ensuring
payments were collected prior to FY 1989. However, for each year
we reviewed, Region 3 was responsible for all other activities,
including forwarding settlement documents to financial
management. As stated in our report, we found that (a)
settlement documents were not consistently forwarded to the
Financial Management Office and (b) only one settlement document
was date stamped by the Financial Management Office as
verification of when it was received.
We agree that Region 3's procedures, when consistently followed,
are adequate to ensure the recording and recovery of all
Superfund Trust Fund receivables. In our opinion, the Region's
inconsistent implementation of its procedures is a material
weakness in internal controls because it significantly weakens
safeguards against waste, loss, unauthorized use or
misappropriation of funds.
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we i.c'c.>ww»'*t5C? i'^s Regional Administrator, Region 3, takes
appropriate action to direct the Office of Regional Counsel, tne
Hazardous Waste Management Division, and the Financial Management
Office to ensure that (a) settlement documents are timely
forwarded to the Financial Management Office and (b) Office of
Regional Counsel's tracking system is regularly reconciled with
the financial management system. Also, an alternative internal
control review should be conducted during FT 1990 to ensure
receivables are promptly recorded on the financial records.
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Recommendation(s): .
We recommend that the Regional Administrator, Region 3, take
appropriate action tot
1. Direct the Office of Regional Counsel, the Hazardous Waste
N Management Division, and the Financial Management Office to
ensure that (a) settlement documents are timely forwarded to
the Financial Management Office and (b) Office of Regional
Counsel's tracking system is regularly reconciled with the
financial records.
2. Direct the Financial Management Office to ensure that
settlement documents are date stamped as verification of
receipt.
!
3. Perform an alternative internal control review during FY
1990 to determine whether the procedures are being followed
to ensure that receivables are promptly recorded on the
financial records.
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Finding:
2. Prompt Action Needed To Collect Amounts Owed
Region 3 was not promptly collecting cost recovery amounts owed
to the Superfund Trust Fund because of (a) delays in sending
accounting data to responsible parties, (b) late payment of
amounts due, and (c) delays in notifying responsible parties.
These conditions existed primarily because the enforcement
personnel in the Superfund Remedial and Removal Branches had not
reported all oversight cases for billing to the CERCLA Cost
Recovery Section. Delays in collecting amounts owed resulted in
lost interest to the Superfund Trust Fund of $11,553.
Of the 14 settlement documents reviewed, we found 6 cases (43
percent) where collection of amounts owed was delayed. The U.S.
Treasury Department currently invests Superfund monies in 52-week
U.S. Treasury MK Bills. When cost recovery amounts are not
promptly collected, the Superfund Trust Fund loses the interest
which would have accrued.
In response to our draft report, the Regional Administrator
stated that the Office of Regional Counsel, the Hazardous Waste
Management Division and the Office of the Comptroller developed
written procedures for billing oversight costs. The procedures
will be reviewed and finalized during FT 1990. Also, the
Comprehensive Environmental Response and Liability Information
System (CERCLIS) will track oversight billings and ensure that
the bills are issued timely.
The actions planned by the Region, when properly implemented,
will substantially correct the deficiencies cited in this
finding. We recommend that the Regional Administrator ensure
regional officials complete their planned actions.
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Reconunendation(s) :
we recommended that the Regional Administrator, Region 3, require
the:
1. Hazardous Waste Management Division, the Office of Regional
Counsel, and the Financial Management Section to complete
and implement procedures for billing oversight costs.
2. Hazardous Haste Management Division to establish a tracking
system to (1) identify all orders and decrees which require
oversight billings and (2) promptly issue oversight
billings.
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Title:
SUBJECT: Audit Report Mo. E1SJF9-05-0274-0100152
Review of Superfund Cost Recovery Accounts
Receivable Establishment and Collection
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ending:
1. Accounts Receivable Used To Be* Recorded
For all 21 settlement documents we reviewed, neither Headquarters
nor Region. 4 promptly or accurately recorded accounts receivables
amounting to about $2.6 million on the financial records of the
Agency. Thus, the Agency's control over monies owed to the
Superfund Trust Fund was ineffective. Because receivables were
not recorded, the Agency was not aware of what payments were due
the Superfund Trust Fund. As a result, a payment might be
diverted, lost, ox not paid without anyone being aware of it.
This also results in late payments with resulting loss of
applicable interest as discussed in Finding Number 2.
The Agency was also not meeting internal control standards which
require that significant events be promptly recorded and properly
classified. The failure to record a receivable for amounts due
to the Superfund Trust Fund is a material weaJcness in internal
controls.
Recommendation(s) :
We recommended that the Region 4 Regional Administrator take
appropriate action toi
1. Direct the applicable offices to develop a Memorandum of
Understanding to ensure that thei
a. Waste Management Division promptly forwards settlement
documents to the Financial Management Unit.
b. Financial Management unit promptly and accurately
records accounts receivable for all cost recovery
amounts owed.
c. Office of Regional Counsel works with Department of
Justice to timely obtain orders and decrees.
d. Financial Management Unit, Office of Regional Counsel,
and waste Management Division establish and implement
procedures to regularly reconcile Waste Management
Division and Office of Regional Counsel records with
fittacial management system and to exchange information
oa~ftny changes in amounts due and on the status of
debts, including cases concluded by Department of
Justice.
e. Financial Management Unit, Office of Regional Counsel
and Waste Management Division reconcile their records
to ensure that cost recovery amounts due have been
collected. Where cost recovery amounts have not been
collected, the amount due should be recorded as an
account receivable and appropriate action taken for
collection.
2. Perform an internal control review of the procedures in the
Memorandum of Understanding during the latter part of FT
1990 to determine whether the procedures .are being followed
and whether they are adequate to ensure that receivables are
promptly recorded on the financial records.
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Finding:
2. Prompt Action Needed To Collect Amounts Owed,
Region 4 was not promptly collecting coat recovery amounts owed
to the Superfund Trust Fund because of (a) delays in sending
written notification of the effective date to responsible
parties, (b) late payment of amounts due, and (c) delays in
sending accounting data to the responsible party. These
conditions existed primarily because (a) the Waste Management
Division did not have a system to track when written notification
of effective dates are to be sent and (b) consistent action was
not taken to ensure collection of late payments. Delays in
collecting amounts owed resulted in lost interest to the
Superfund Trust Fund of at least $13,071.
Of the 21 settlement documents we reviewed, we found 6 cases (29
percent) where collection of amounts owed was delayed. The U.S.
Treasury Department currently invests Superfund monies in 52-week
U.S. Treasury MK Bills. When cost recovery amounts are not
promptly collected, the Superfund Trust Fund loses the interest
which would have accrued.
Recommendation(s):
We recommended that the Region 4 Regional Administrator direct
the Waste Management Division toi
1. Implement a system to promptly issue written notices of the
effective date for cost recovery agreements.
2. Take prompt action to follow-up on late payments, including
Middleaboro Rehabilitation Center and Linecrest Way.
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Recommendation(s)
3. FMS Heads To Accurately Reflect Transaction Dates
The Integrated Financial Management System (IPMS) did not
accurately reflect the (a) date of the accounts receivable, (b)
due date, (c) collection date, and (d) interest rate for past due
amounts. Also, handling charge and penalty waivers were not
indicated. IFMS data were not accurate because (a) information
was not forwarded promptly to the Financial Management Unit, (b)
the Financial Management Unit was not inputting data from source
documents correctly, and (c) the interest rate was not changed to
reflect the interest charged on Superfund debts. As a result,
IFMS did not provide accurate financial reports, and demand
payment letters were not generated accurately.
Finding:
We recommended that the Region 4 Regional Administrator direct
S?Q^f?oiai Mana*~nt Ul*t to correctly and timely input
ihouTFSi ?J?rHf28t: recowv receivables'into IFMS/ This area
Inrc1990 M P*" °f the *•»*«» internal control review
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Title:
Audit Report No. E1SJF9-05-0274-0100126
Review of Superfund Cost Recovery Accounts
Receivable Establishment and Collection
Finding: 1. Accounts Receivable Meed to be Recorded
For all 20 settlement documents we reviewed, neither Headquarters
nor Region 5 recorded accounts receivable amounting to about $5
million on the financial records of the Agency. Thus, the
Agency's control over monies owed to the Superfund Trust Fund was
ineffective. Because receivables were not recorded, the Agency
was not aware of what payments were due the Superfund Trust Fund.
As a result, a payment might be diverted, lost, or not paid
without anyone being aware of it. This also results in late
payments with resulting loss of applicable interest as discussed
in Finding Number 2.
The Agency was also not meeting internal control standards which
require that significant events be promptly recorded and properly
classified. The failure to record a receivable for amounts due
to the Superfund Trust Fund is a material weaJcness in internal
controls.
The FT 1989 Agency Operating Guidance stated that the success of
collecting cost recovery payments depends on being sure case
closing information is immediately sent to the regional financial
offices so the collections can be recorded properly and
receivable amounts can be accurately reported to management. We
found that accounts receivable were not recorded because: (a)
Office of Regional Counsel (ORC) and' Waste Management Division
(WMD) did not forward the settlement documents to the Superfund
Accounting Section (SFAS) in all cases, and (b) SFAS did not
establish accounts receivable in the Financial Management System
(FMS) when settlement documents were received prior to payment.
In addition, routine procedures have not been established to
regularly reconcile WMD and ORC records with FMS.
Region 5 is currently formalizing procedures between the offices
involved in cost recovery. ORC,. WMD and SFAS are preparing a
Memorandum of Understand (MOU) concerning Superfund cost recovery
procedures. According to a November 13, 1989 draft of the MOU,
WMD will be responsible for providing the SFAS with all
administrative orders. ORC will be responsible for providing all
Judicial consent decrees and orders.
In response to our draft report, the Regional Administrator
stated that the Memorandum of Understanding La expected to be
fully executed by the end of January 1990. Alao, an internal
control review of accounts receivable, which will include a
review of the procedures in the Memorandum of Understanding, is
scheduled in February 1990.
The actions planned by the Regional Administrator, when
implemented, will substantially correct the deficiencies cited in
i-our report. We recommend that the Regional Administrator ensure
^ regional officials complete their planned actions.
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K.ecommenaacion(s> : , • •
t
Draft Report Recommendations
We recommended that the Region 5 Regional Administrator take
appropriate action to:
1. Instruct Waste Management Division/ Office of Regional
Counsel/ and Superfund Accounting Section to complete the
Memorandum of Understanding and implement the procedures.
2. Perform an internal control review of the procedures in the
Memorandum of Understanding during FT 1990 to determine
whether the procedures are being followed and whether they
are adequate to ensure that receivables are promptly
recorded on the financial records.
3. Instruct the Financial Management Branch to implement its
Superfund Accounts Receivable - Interim Operating
Procedures/ as outlined in its August 30/ '1989 memorandum/
to identify settlement documents not forwarded to Superfund
Accounting Section. Where cost recovery amounts have not
been collected, the amount owed should be recorded as an
account receivable and action taken for collection.
4. Instruct Office of Regional Counsel and Waste Management
Division to establish a consolidated tracking system for
, cost recovery. Until a consolidated tracking system is
'• established/ require the Office of Regional Counsel and the
Waste Management Division to continue to reconcile their
tracking system reports. Also, require that tracking
reports be provided to Superfund Accounting Section.
5. Instruct Superfund Accounting Section to regularly reconcile
tracking reports provided by Office of Regional Counsel and
Waste Management Division to the financial management
system.
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Finding: "
2. Prompt Action Needed to Collect Amounts Owed
Region 5 was not promptly collecting cost recovery amounts owed
to the Superfun4 Trust Fund because of (a) delays in sending
accounting data to responsible parties, (b) responsible party
requests for further documentation and/or dispute of cost billed,
and (c) late payment of amounts due. These conditions exist
primarily because 'the responsibility for sending accounting data
was not clearly assigned within the Waste Management Division
(WMD). Delays in collecting amounts owed resulted in lost
interest to the Superfund Trust Fund of at least $79,232.
Of the 20 settlement documents we reviewed, 12 required that
accounting data be sent to the responsible parties as a billing
of cost incurred by EPA. In 10 of 12 cases where accounting data
was required, there were delays in the collection of amounts due.
In another case, the responsible party is contesting the court
order and has not paid the cost due.
The Treasury Department currently invests Superfund monies in 52-
week U.S. Treasury MK Bills. When cost recovery amounts are not
promptly collected, the Superfund Trust Fund loses the interest
which would have accrued.
Our draft report recommended that Region 5 (a) establish formal
procedures between the Waste Management Division, the Office of
Regional Counsel, the and Superfund Accounting Section to
identify all settlement documents which include provisions for
billing of oversight costs and forwarding settlement documents to
Superfund Accounting Section, and (b) instruct Superfund
Accounting Section to develop an automated tracking system for
billings. In response to our draft report, the Regional
Administrator stated that the Memorandum of Understanding will
ensure that settlement documents are promptly forwarded to the
Superfund Accounting Section. Also, an automated tracking system
for billing oversight costs will be included as part of the newly
developed Cost Documentation Monitoring Systc
The actions planned by the Regional Administrator, when
implemented, will substantially correct the deficiencies cited in
our report. We recommend that the Regional Administrator ensure
regional officials complete^ their planned actions.
^ecommendation(s):
We recommended that the Region 5 Regional Administrator take
appropriate action to:
1. Establish formal procedures between the Waste Management
Division, the Office of Regional Counsel, and the Superfund
Accounting Section to identify all settlement documents
which include provisions for billing of oversight costs.
The procedures should include forwarding settlement
documents to Superfund Accounting Section.
2. Instruct Superfund Accounting Section to develop an
automated tracking system for billings.
3. Instruct Waste Management-Division to promptly notify
Superfund Accounting Section of all oversight billings
required, until all settlement documents are forwarded to
Superfund Accounting Section and/or an-automated tracking
ftvaten is developed,
4* £«|»*rnefth« SuP«*und Accounting section to promptly
Prepare accounting data and send billings to responsible
-------
Title:, Review of Region 2's Oversight of Superfund
Post-Settlement Activities
Audit Report No. EISJCS.-0 2-0055-0100230
Finding: 1. LENGTH OF REGIONAL REVIEWS DELAY SUPERFUND CLEANUPS
Initiation of Superfund cleanup work was unnecessarily delayed
after the Region had reached a settlement with PRPs. The
approval of workplans, project operation plans and other
documents required prior to initiating field work on RI/FSs, or
other work phases took between 6 and 36 months. This occurred
because of a lengthy review process which lacked definitive EPA
review and approval timeframe guidelines. In addition, the
Region did not maintain an automated post-settlement tracking
system to monitor the timeliness of PRP submissions or the
overall status of settlement cases. Another contributing factor
was an understaffed and overworked project manager corps which
could not always devote essential review time to individual
projects. As a result, Superfund cleanup actions were
significantly prolonged (up to several years) increasing the
potential for adverse public health effects and further
environmental degradation.
'.ecommendation(s) :
1.
2.
we recommend that guidelines be developed and implemented which
set specific timeframe deadlines for Regional review and approval
of PRP submissions. We also recommend the development and
implementation of an automated tracking system to monitor
specific post-settlement milestone dates, in addition, we
recommend streamlining the review process for PRP draft
submissions. We further recommend the review of project
managers' workload to determine whether any reassignments are
necessary to better equalize workload. Finally, we recommend
that a systematic approach for the preservation of documentation
in project files be developed and implemented.
Direct the Director, ERRD, to develop and implement
guidelines which set specific timeframe deadlines for
Regional review and approval of PRP submissions.
Direct the Director, ERRD, to develop and implement an
automated tracking system to monitor specific post-
settlement milestone dates. The use of personal computers
should be considered for this system due to their
-availability to ERRD enforcement personnel.
Consider streamlining the review process for PRP draft
submissions. While initial reviews should continue to be
sent to all appropriate parties, technical review of any
revised submission should be primarily limited to the
project manager.
Review the current project managers' workload and determine
whether there are extreme cases where reassignments are
necessary to better equalize workload. Once this is
accomplished a plan of action should be developed for case
assignments taking into consideration such items as optimal
project manager/site ratio, site status, project manager
experience, and contingencies for staff turnover.
Develop and implement a systematic approach for preserving
documentation in project files. Files should be maintained
in an organized and orderly fashion so that information can
be readily obtained.
3.
4.
5.
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Finding: 2.
REGION N
PENALTIES
. Stipulated penalties were not beino assA««^ *
with settlement milestone dates The »*~* f°f noncoi«pUance
taking aggressive enforcement action M^?Lr?5rained froin
verbal negotiations or warning letters ^Z»*itS.*Ctions to
penalties in extreme instance!. The !J?JW 2^°nly sou^nt
as much as 51,157,500 in penalties ?«£? did not assess PRPS
reviewed. As a result, there was no f J ° °f the 13 cases we
comply with compliance order reo^ir™"?"06"6?* for PR*s to
enforcement encourages PRPS to Strement? • This lack of
provisions of the settlement Soc^t^?6?"^ imP°«a^
unnecessary lengthening of the oSSii nff lead8 to an
detrimentally affect the public hlalti I»* ?KP Process- This can
recommend the Emergency and Remedial p^ d the envi*onnient• We
concert with the Office of R«oi«dff ^ esponse DivisiorfTin
the option of stipulated penalties whfnn«i' aWe«ively pursue
with settlement document reauiri™L? * PRPs are in noncompliance
provided and approved Sy ap^opr?f?e R*a£*^ficatio« should 22
instances where stipulated penalties frf n f1 »«•«•" L» those
Recommendation(s): penalties are not pursued.
we recommend that you require the Director ER»n ,-«
the Office of Regional Counsel, to i«®"°f;..f??D^.in concert
of stipulated penalties when PRPs
settlement document requirements, j
provided and approved by appropriate
instances where stipulated penalties
f?"tt* the °Ption
nonc°n>pUance with
Sh°Uld be
-------
Find 3> OVERSIGHT OF TECHNICAL ENFORCEMENT SUPPORT f TES K CONTRACTORS
NEEDS IMPROVEMENT
The Region needs to improve its oversight responsibilities of TES
contractors. Specifically, the Region did not effectively
monitor the timely submission and processing of required
contractor reports and plans; conduct and document field
oversight reviews, quality assurance audits, and contractor
office reviews; and give emphasis to project manager training.
These conditions occurred because of inadequate monitoring,
untimely or lengthy Regional reviews and approvals, lack of
written procedures and low priorities or insufficient resources
assigned to certain tasks. As a result, there were work
stoppages and unnecessary delays which have contributed to a
lengthier cleanup process , there was no assurance that TES teats
or .records were reliable or accurate and there was nS assurance
that project managers were sufficiently knowledgeable to
adequately administer TES contractors. We recoSmend the Reaion-
(i) improve the quality and timely EPA monitoring of TES Regi°n*
contractors' required reports and workplan submittals and
compliance with- miles tone dates; (ii) expedite the Regional
review and approval system for TES deliverables ; and (UiV
develop timetables and minimum requirements for periodic field
oversight reviews, quality assurance audits, and contractors
office reviews are scheduled , performed and adequately
documented. We also recommend that project managers be reouired
^™tte!!d Prescribed training. Suciftraining sS2u!5 generally t
received prior to performing TES oversight responsibilitiS.
Recommendation(s) :
we recommend that you:
improve the quality and timely monitoring of TES
workplan
2' deliverable.. R99i°Ml rSVieW and aPP«™l systen for TES
3' ??IT0Lii??tSl" and minimuo requirements for periodic
re»pon»ibiUtie».
if it
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Follow-Up Review
-------
Title:
SUBJECT: Review of EPA Region 8's Corrective
Actions Taken in Response to
Audit Report No. E5eH7-08-0005-71992
Review of EPA Region 8's Administration of
Superfund Cooperative Agreements
Special Report No. E1SGG9-08-5000-0400013
Finding:
Region 8 initiated actions to correct the audit findings
discussed in the audit and to implement the 10 recommendations.
The Region's implementation of its action plan, however, was not
timely in all instances nor fully effective in correcting the.
previously reported conditions. Our followup review disclosed
that corrective action to implement two of the audit report's
recommendations remained incomplete. Also, the corrective
actions on two other audit recommendations were not fully
effective in correcting the deficiencies discussed in the audir.
Our followup review also disclosed that the Region does not
have an effective system for tracking the implementation of
corrective actions. Consequently, Regional management has no
assurance or knowledge that its commitments to correct audit
identified deficiencies have been met.
-------
RecoouEendation(s):
We recommend that the Region 8 Regional Administrator:
1. Prepare and implement an updated action plan which
addresses each of the incomplete corrective actions in audit
report no. E5eH7-08-0005-711992. Specifically, the following
corrective actions should be included.
a. Assure that Regional Superfund staff are aware of and
fully instructed in Regional policies and procedures implemented
to enhance oversite of state performance in the Superfund
cooperative agreement program. Specifically, the importance of
the policy entitled "Region VIZI Policy on Documentation in
Project File of Region's Acceptance/Rejection of Completed
PA's/SI's", dated April 7, 1 988, should be re-emphasized.
b. Assure that all remaining Si's covered by SARA's original
completion goal of January 1, 1989 are adequately tracked and
completed to the extent possible, pending implementation of the
revised HRS.
c. Give special attention to expediting action at the
following three NFL sites identified in both the audit and our
followup review as experiencing inordinate delays:
/•
- Sharon Steel Site
- Silver Bow Creek Site
- Arsenic Trioxide Site
d. Continue to take an active role in monitoring the
timeliness and adequacy of state Superfund cooperative agreement
performance; including having in place for each state: (i) a
signed final SMOA; or (ii) alternative oversight methods tailored
to state.
2. Enter the corrective action plan from our followup review into
MATS and monitor progress until all corrective action items are
complete.
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Cooperative Agreements
-------
Title: Audit Report No, P5BFN9-04-0189 - 0300035
Report on Interim Audit of Alabama
Department of Environmental Management
Cooperative Agreement No. V004S50-87
Finding: in the auditor's opinion, subject to the effect of EPA's ultimate resolution of
the questionable expenditures summarized below and presented in the report, the
costs claimed fairly present the financial information in accordance with
financial provisions of the grant and generally accepted accounting principles.
Recommendation(s):
We recommend that EPA not participate in the $6,021 of ineligible costs. If any
portion of the ineligible cost is determined to be valid project cost, the
balance due EPA should be appropriately adjusted. Region 4 should recover all
funds due EPA in accordance with established procedures.
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Title:
SUBJECT: Audit Report No. P5cG*8-04-0091 - 0300010
Report en Interim Audit of Kentucky
Natural Resources and Environmental Protection Cabinet
Cooperative Agreement No. V004484-85
Finding:
Direct involvement hours by site included in the quarterly reports
submitted to EPA were significantly below total hours charged to the
Agreement through March 31, 1989. KNREP did not maintain or retain
schedules supporting the direct involvement hours reported. KNREP's
formal timekeeping system, though providing for tracking total hours by
program, did not acconnpdate the tracking of hours by site. The
site-specific hours cannot, therefore, be reconciled with the formal tine
summaries.
Attachment A to EPA's "State Participation in the Superfund Remedial
Program" indicates states are not required to track costs by. site under
pre-remedial PA/SI cooperative agreements. The quarterly report required
by EPA does, however, require the reporting of direct involvement hours by
site.
We believe that KNREP's system did not provide for proper monitoring of
program efficiency or the supplying of accurate productivity data to EPA.
Reconunendacion(s);
We recommend that KNREP implement a timekeeping system which will
facilitate the tracking of hours, by site as well as by activity and
project. We further recommend that KNREP reconcile hours reported to EPA
with the formal timekeeping system and ensure that the data being reported
is accurate.
Finding:
In suonarizing costs for the month of March 1985, KNREP did not take
into account the fact that the first payroll in March 1985 covered the
latter half of February 1985. The beginning project and budget period
date of March 1, 1985 is delineated in the grant award. Cumulative
cost claimed includes direct labor and indirect costs incurred prior
to the effective date of the Agreement in the amounts of $2,455 and
$643, respectively. W* believe that costs incurred prior to the start
of the project period are ineligible. Accordingly, the $2,455 and
$643 have been questioned.
Recommendation(s):
Wfe recoomend that KNREP implement cost reporting procedures to ensure
that costs claimed represent cost incurred within the project and
budget period.
-------
Finding:
Seventy-five hours of time expended by an Environmental Program
Coordinator during the pay period ended October 15, 1988, on another
project (and indicated as such on the employee's tine report) were
charged to the cooperative agreement as the result of an input error.
This resulted in the overstatement of cost claimed under the
Cooperative Agreement. The $1,086 and $520 of personnel and indirect
costs, respectively, claimed as a result of the error are ineligible
and have, thus, been questioned.'
Recommendation(s):
5* tBM-) ^~™<^£%«S^t££&i-ot
errors.
Finding:
EPA approved the use of CERCLA funds to purchase two vehicles costing
$32,534. An amendment to the cooperative agreement included a list of
proposed equipment, its unit cost and written justification. Not included
was a cost-effectiveness comparison of purchasing with federal funds
versus other options. Appendix T to EPA's "State Participation in the
Superfund Remedial Program" requires the submittal of a cost-effectiveness
comparison when equipment is to be purchased with CERCLA funds.
Ws believe that the purchase authorization was not obtained in accordance
with the requirements of Attachment T. However, the $32,534 has riot been
questioned inasmuch as EPA approval was obtained.
Recommendation(s) :
We recommend that KNREP and EPA act in accordance with the requirements of
EPA policies and regulations.
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Title: Audit Report No. P5bFN9-06-01fl8 -0300033
Report on Interim Audit of Texas Water Commission
Cooperative Agreement No. V006454-01
Finding: in the 'auditor's opinion, subject to the effect of EPA's ultimate resolution of
the questionable expenditures summarized below and presented in the report, the
costs claimed fairly present the financial information in accordance with
financial provisions of the grant and generally accepted accounting principles.
Recortunendation(s):
We recommend that EPA not participate in the $9,373 of ineligible costs. If any
portion of the ineligible cost is determined to be valid project cost, the
balance due EPA should be appropriately adjusted. Region 6 should recover all
funds due EPA in accordance with established procedures.
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Title:
SUBJECT: Audit Report No. E5BGL9-06-0134-0100079
Interim Audit Sikes Disposal Site No. 22
Superfund Cooperative Agreement V006450-01
Texas Water Commission - Austin, Texas
March l, 1986 through June 30, 1989
Finding:
In our opinion, the costs summarized below and presented in
Exhibit A present fairly the financial information in accordance
with the financial provisions of the cooperative agreement and
generally accepted accounting principles.
Recommendation(s):
we again recommend that EPA require TWC to prepare a summary
record of negotiations setting forth the principal elements of
negotiations. This record should contain sufficient detail to
reflect the significant considerations controlling the
establishment of price and other terms of the contract.
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Title: New York State Department of
Environmental Conservation
Interim Audit Multi-Site Cooperative Agreement
Number V-002437-84-1C250394-02
Audit Report Number P5BGL9-02-0366-0100245
Finding: The ineligible costs of $71,897 claimed by the grantee consisted
of:
* $66,649 of Contractual Services due to costs associated
with invalidated analytical data and costs incurred
after the lapse of the project period.
* $4,551 of Personnel Costs due to costs associated with
invalidated analytical data and costs incurred after
the lapse of the project period; and
* $697 of Travel Expense due to costs associated with
invalidated analytical data and costs incurred after
the lapse of the project period.
Unsupported costs of $221,135 claimed by the grantee
consisted of:
* $77,749 of Personnel Costs in excess of the grant
budget and inadequate documentation;
* $4,379 of Travel Expenses in excess of the grant budget
inadequate documentation; and
* $135,901 of Contractual Services due to inadequate
documentation; and
* $3,106 of Equipment and Supplies in excess of the grant
budget.
Recommendations):
The Regional Administrator, Region. II, not participate in the
ineligible costs of $71,897 {$71,897 Federal share) and determine
whether EPA should participate in the unsupported costs of
$221,135 ($221,135 Federal share).
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Interagency Agreements
-------
Title:
SUBJECT: Audit of Superfund Interagency Agreements
with the U.S. Army Corps of Engineers -
Fiscal 1988
Audit Report No. M5BFLO-11-0017-0100029
Finding:
As required by section lll(k) of the Superfund Amendments
and Reauthorization Act of 1986, the U.S. Army Audit Agency
prepared the subject report. One issue is outstanding. At the
end of the audit, the Corps' New England Division could not
locate supporting documentation for a $187,292 obligation. The
Division indicated that it would deobligate the funds if
documentation is not found. To ensure that this issue is
adequately resolved, we are making the following recommendation.
Recomraendation(s):
We recommend that the Director, Grants Administration Division
obtain a written response from the Corps of Engineers regarding
resolution of the $187,292 obligation.
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Title:
SUBJECT; Audit of Superfund Interagency Agreements with the
Department of Energy - Fiscal 1988
Audit Report No. 115BFLO-11-0016-0100027
Finding:
The Office of Inspector General, Department of Energy
prepared the subject report which is required by section lll(k)
of the Superfund Amendments and Reauthorization Act of 1986.
We are not making any recommendations to you and are closing this
report upon issuance. However, the Grants Administration
Division may want to emphasize to the Department of Energy that
indirect costs can be applied to Superfund interagency agreements
only if a rational, defensible allocation plan is being imple-
mented. General or Agency-wide indirect costs are not allowable
unless specifically authorized by legislation.
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Title:
SUBJECT: Audit of Superfund Interagency Agreements With
The Department-of Interior - Fiscal 1987
Audit Report Number M5BFL9-11-0046-0100058 -
Finding:
In accordance with section lll(k) of the Superfund Amend-
ments and Reauthorization Act of 1986, the Inspector General,
Department of the Interior (DOI) performed the subject audit.
Attached are the reports for the two agencies reviewed - the U.S.
Fish and Wildlife Service and the U.S. Geological Survey. The
attached reports discuss (1) 001 agencies conducting valid Super-
fund work activities prior to an accepted interagency agreement
and (2) costs incorrectly charged to Superfund interagency agree-
ments. DOI has resolved both audit reports per the Department's
internal procedures. We will request the Inspector General, DOI
to follow up on the status of the corrective actions planned but
not implemented during the fiscal 19S9 audit, particularly con-
cerning questionable charges. Based on the reports, we are
making the following recommendation.
Recommendacion(s):
We recommend that the Director, Grants Administration Division
emphasize to Headquarters and regional offices the need to issue
interagency agreements prior to starting work or, if this is not
possible, timely documenting EPA's request for services via a
memorandum to the other agency. When work is started before an
interagency agreement is executed, the interagency agreement
should reflect the time period work actually began.
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Title:
SUBJECT: Audit Report No. M5CPLO-11-0019-0100080
Audit of Superfund Activities in the
Department of Justice's Land and Natural
Resources Division for Fiscal Tear 1988
-------
Finding:
II INTERNAL CONTROLS
Our examination of the accounting records, supporting
documentation, and tests of Superfund cosrs for
allowability and allocability disclosed no material,
discrepancies in the FY 1988 Superfund costs reported
by the LNRD to the EPA. However, internal control
weaknesses were found relating to the time reports and
the travel documents- that unnecessarily increase the :
risk that errors could occur and not be detected in a
timely manner. The conditions found could have been
minimized, or possibly eliminated, had: (1) those
employees working on Superfund cases exercised greater
care in the preparation and timely submission of the
required weekly time reports; and (2) those officials
involved in the request, authorization, and approval
of travel, including the traveler, exercised greater
care in the preparation and review of travel documents
relating to Superfund cases.
Recommendation(s):
Ensure that the control procedures over the employee time
reporting system, as indicated in the LNRD's response to
the prior audit of.the FY 1987 Superfund activities, are
completed and implemented no later than October 1, 1989.
2. Require the issuance of written policy and procedures thax
will hold the employees' immediate supervisors responsible
and accountable for obtaining and reviewing the employees •
weekly time reports on a timely basis.
3. Require the establishment of the necessary controls for
verifying the completeness and accuracy of the case
numbers related to the purpose of the travel recorded on
the Official Travel Request and Authorization and the
related travel vouchers, including the allocation of
travel costs now required to be recorded on the vouchers.
-------
Finding:
2. T3AVEI. CSSTS
Because of limitations within the Department's
Financial Management Information System (FMIS), the
LNRD is not readily able to accurately account for
case-specific travel costs relating, to trips involving
more than one case. As a result, the travel charges
made to a specific case could be over or understated
on the reports to EPA. However, in our opinion, this
does not materially affect the financial reports to
EPA or the cost data prepared for litigative cost
recovery actions.
Recommendation(s):
we recommend that the Assistant Attorney General for the LNRD
instruct the Executive office to:
4. Modify the system of accounting to identify those travel
vouchers having multiple cases for which travel .costs mus
be allocated.
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Other
-------
.Title:
GAO Report: "Contractors Should Be Accountable for Environmental Performance"
GAO/RCED-90-23 (SRIS# GA00092)"
Finding:
DOD and DOE contractors have been charged with nearly identical RCRA
violations. DOD holds it contractors accountable for these charged violations
and does not pay any resulting contractor penalties, settlement payments, or
legal costs unless the contractors can demonstrate that these costs resulted
from circumstances beyond the contractors' control. In contrast, DOE does not
hold its contractors accountable for similar charged violations unless its
contractors' top management engaged in criminal activity. Although the unique
nature of DOE's work may warrant a special relationship with its contractors
and DOE's policy and practice of paying its contractors' penalties, settlement
payments, and legal costs, we believe DOE will reduce contractors' incentives
to comply with RCRA and may negate the benefits of EPA's initiative of seeking
enforcement actions against contractors that operate federal facilities.
Recommendation:
To ensure that its contractors are held accountable for charged RCRA
violations and resulting costs, GAO recommends that the Secretary of Energy,
in consultation with appropriate congressional oversight committees, initiate
a rulemaking to revise DOE's current policy and practice of paying for
penalties, settlement agreements, and legal costs incurred by its contractors.
Recognizing that there may be limited circumstances warranting such payment,
the revised .policy should include criteria that detail when such payments
should or should not be allowed.
Finding:
Although neither DOD nor DOE regulations and guidelines require consideration
of contractors' environmental performance in determining award fees, both
agencies consider such performance to varying degrees. DOD and DOE usually
judged their contractors' environmental accomplishments to outweigh the
contractors' environmental weaknesses, including charges of RCRA violations.
Because we could not judge whether the cited accomplishments should or should
not have outweighed these weaknesses, we were.unable to assess whether DOD and
DOE gave appropriate consideration to contractors' environmental performance
in the award-fee process. However, because award fees are intended to
motivate contractors to strive for excellent performance and these contractors
have been repeatedly cited for environmental weaknesses, DOD and DOE should
ensure that contractors' environmental performances are adequately considered
in ail award-fee determinations.
-------
Recommendation:
To help maximize award-fee contractors' incentives to comply with
environmental laws and regulations, the Secretaries of Defense and Energy
should initiate a rulemaking to-revise DOD-'s and DOE's regulations to require
all award-fee contracts.to include environmental performance as a distinct
evaluation area.
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Potential FNFIA lltafcnrssaa Page; 52
FT 1990 Data: 09/13/90
Division: Alt
( 1): Finding 1 Summary
Before we began our evaluation, EPA had developed an information system that included five data collection
mechanisms that provided some information on hazardous waste generation or management. EPA experienced specific
problems with the individual data collection mechanisms or with the information system as a whole in four ereas:
(t) system development, <2) information requirements, (3) measurement, and (4) data collection. Through 1986, these
problems had prevented EPA from determining with reasonable precision or certainty how much of what type of
hazardous waste was generated, how it waa managed, whether sufficient management capacity existed, or whether
progress waa being made in reducing hazardous waste generation.
EPA initiated 13 efforts to improve the hazardous waate information system that directly affected the quality
of Its information on hazardous waste generation and management. In this chapter, we presented our evaluation of
EPA efforts to improve the information system development process; efforts aimed at improving specific-information
system components are discussed in subsequent chapters. Four information system development problema*haverbeen
identified: (1) lack of a comprehensive plan to coordinate data collection efforts; (2) no comprehensive
evaluation of existing regulatory development data; (3) isolated data collection efforts that were narrowly focused
and resulted in duplication of effort; and (4) data planning and collection responsibilities that were-divided
among program offices, with Inadequate integration of data collection efforts (including cross-media data
collection efforts).
EPA s evaluation of data collection activities has fully corrected the second of these problems.-However, the
improvement.efforts we evaluated are not likely to prevent the problem of the isolated development of data
collection efforts needed to ensure integrated data collection that fully supports the program mission. No overall
data collection plan has been developed. The central coordinating office does not have full authority-to develop
data collection efforta and did not use a central prime contractor for developing systems. The coordinating office
had to rely on contributions from the budgets of program offices, other offices continued to have responsibility
for improvement projects, and the tracking system does not provide a mechanism for ensuring consistency. .These
factors also contribute to the possibility both of failure to collect needed information in some areaa and of
redundant data collection in others.
The principal planning mechanism (the new life cycle management system) is a major improvement, but it needs
refinement to ensure that it accomplishes its intent. In th* one applicable case where it waa used, the analysis
and documentation were inadequate given the importance of the system. Important potential data collection
alternatives were not considered, the analysis of costs and benefits waa inadequate, previous problems with the
data collection mechanism were not systematically examined, and specific information needs were not systematically
identified. Finally, the legal authority for collecting new information was not clarified.
Our findings show that EPA haa established an improved information system development process that is largely
consistent with federal guidelines and EPA policy. Our findings also show that further improvements ere needed. EPA
should develop a comprehensive plan for data collection. The life cycle management system should require complete
and detailed documentation for major information system components. Placing the final authority for developing
Information system components in the central coordinating office, which would have control over the information
system development budget and use a prime contractor when appropriate, is an additional step EPA should consider
in order to achieve an overall Information system that effectively supports the program mission.
EPA officials indicated that in general they agreed with our findings and are already taking steps that at
least partially address some of them. They stated that a survey of the states to determine what state officials
believe their data needs are has now been completed, that the central coordinating office now has its own budget
that is supposed to be adequate for system development (although the office may still obtain additional funding
from substantive divisions), and that they now have a prime contractor for the RCRA reporting system. We did not,
however, evaluate EPA's recant activities. ' .
M: Offices Div: Branch:
We recommend that the Administrator of EPA direct that tha Assistant Administrator for Solid Waste and Emergency
Response take appropriate steps to enhance its information system development process and fully ensure that data
collection efforts complement each other and support the program mission. Specifically, a comprehensive data
collection plan should be developed. Steps should be taken to improve the assignment of responsibilities for
planting and directing the development of information system components by increasing the authority of the central
coordinating office to develop data collection efforts and ensure consistency. Finally, the life cycle managmiiint
system should be refined to ensure the complete and detailed analysis and documentation of each stage of the cycle
for major system components.
M: Office): * Olvs
Beport/Audit: Hazardous Waste: EPA's generation and Management Data Need Further Improvement
Title
Beport/Audit Author: GENERAL ACCOUNTING OFFICE
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Potential FNFIA wXetiiMiin Page: S3
FT 1990 Date: 09/13/90
Oiviaion: All
Publication Date: 02/01/90
< 2): Finding 2 Sunnery
Our analysis shows that EPA has extensive needs for hazardous waste generation and management information. The
information requirements can be divided into three groups baaed upon the amount of detail required.
All the data gaps identified in the original information system are filled by one or more of the new or revised
data collection instruments. The vast majority of the additional data needs we identified have also been addressed
by one or more of the instruments developed by EPA. This represents e significant accomplishment by EPA. However,
we also found that three information requirements have not been satisfied. Without this information, EPA regulatory
development research and national capacity analyses, including SARA capacity assurances, will be significantly
flawed.
AA: Office: Div: Branch:
We recommend that the Administrator of EPA direct the Assistant Administrator for Solid Waste and Emergency
Response to take appropriate and feasible steps to fill remaining information gaps, including (1) the volumes of
waate located at CERCLA and corrective action sites that will ultimately require management capacity, (2) the
volumes of waata that will require management capacity under proposed regulations (including the large volumes of
waste expected from the cleaning up of leaking underground storage tanks), and (3} the potential disposal capacity
of salt domes and other geological formations that are capable of preventing the migration of wastes.
AA: Office: Div: Branch:
Report/Audit: Hazardous Waata: EPA's Generation and Management Data Need Further Improvement
Title
Report/Audit Author: GENERAL ACCOUNTING OFFICE
Publication Date: 02/01/90
( 3): Finding 3 Sumnary
The measures included in EPA's revised data collection instruments are much improved. The problems of undercounting
and over-counting the total volume of wastes generated have been corrected. The previous problems with the measures
of waate management technologies, with the exception of those involving treatment technologies, have also been
fully corrected. In addition, significant improvements have been made in the measures of waste end treatment type,
although these improvements have not completely eliminated the original problems.
There still remain some measurement problems that may produce significant errors In determining the volume of each
type of waste generated, the type of treatment technologies used, the total capacity of management technologies
(such as some types of incineration), and the degree of waste minization. The RCRA waate codes, which are used on
all data collection instruments, will continue to produce inaccurate counts of the volume* of regulated waste
streams due to misclaaaification. The qualitative measure of waate type EPA developed to supplement the RCItA waste
codea, although an improvement over peat methods, has not fully solved the problem. The mixture of independent
attributes creates a complex and redundant measure that can significantly reduce reliability because respondents
are likely to interpret it differently. Qualitative measures are also much less accurate than available
quantitative measures, on some instruments, EPA has included the preferable quantitative measures; these represent
an important improvement over the quantitative measures. EPA should continue to expand the use of quantitative or
continuous variables for measuring waate characteristics.
Although EPA has developed new, much improved measures of the types of monegtmiiiit technologies, misclassification
remains likely due to the-mixing of attributes. The development of e true general classification system with
mutually exclusive, exhaustive, and hierarchical categories would fully correct the remaining problem.
In general, waate management capacity is now measured well. However, the measure of the capacity of cement kilns
and aimilar forms of incineration was not sufficiently specific to assure that respondents will interpret the
question in the same way. If respondents assume either unlimited demand for their product or waste with a low
heating value, the capacity of this form of incineration could be significantly overestimated. Some overeatimat ion
of capacity is also likely in some versions of this reporting instrument because acme respondents may not have
considered permit restrictions in reporting maximum capacity.
Finally, the measures of the extent of waate minimization developed by EPA will not produce valid data on changes
in waate generation per unit of production. The measures do not account for the production of different products
from one year to the next that may generate unequal amounts of hazardous waate. The results will be misleading
because incidental changes in production will be mixed with, and thus will obscure, actual waste minimization.
Moreover, the qualitative measure of toxicity can only show the percentage of caaea in which waate minimization
toxicity over-time.-In concentration, not the amount of change in order to correct these problems,. EPA should
measure the voluae of waate produced by each type of product and the concentration of each toxic constituent. These
detailed data could be collected from a sample, which method would be preferable to the larger task of collecting
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Weakness (Continued):
the information via a census.
AA:
Office:
Potential FNFIA
FT 1990
Division: All
Div:
Page: 54
Date: 09/13/90
Brand):
( 3): We recommend that the Adninistrator of EPA direct the Assistant Administrator for Solid Waste and Emergency
Response to assure the use of the mat appropriate measure of the revelant attributes of hazardous waste generation
and management. Specifically, quantitative measures should be used to measure waste characteristics (such as those
needed for assessing management capacity or waste minimization), and in addition, a true general classification
system should be developed for treatment technologies.
AA:
Office:
Divs
Branch:
Report/Audit: Hazardous Waste: EPA's Generation and Management Data Need Further Improvement
Title
Report/Audit Author: GENERAL ACCOUNTING OFFICE
Publication Date: 02/01/90
weakness ( 4): Finding 4
AA:
EPA data collection methods and procedures have improved in important way*. The oust recent national surveys used
accepted stratified sampling techniques, and the sane data collection instrument was used for each respondent
sampled. These are basic and sound methods of data collection. However, because of the continued use of different
data collection instruments among the states, the 1987 RCRA reporting cycle cannot produce complete and valid data.
Some of the sane problems that characterized previous reporting cycles continue to affect data from states using
old instruments. In addition, the new information requested on the revised instrument is not fully supported by
federal regulations.
Data collection problems will not seriously jeopardize the two types of capacity analyses performed directly by
EPA. The integrated capacity assessment and the assessments performed to support the land disposal restrictions
rely entirely on the national surveys, which had minimal data collection problems. However, SARA capacity assurance
will be seriously impaired because of its reliance on the RCRA reporting system and the fact that data from
different years and different data collection efforts will be used. Necessary data will be entirely missing in
states that did not use the revised RCRA reporting system instrument, and previous measurement problems will
persist. EPA has attempted to compensate for the missing data by providing states with assumptions based on
engineering judgments. However, EPA acknowledges that these do not reflect actual state conditions. The resultant
uneven quality of the data will seriously weaken confidence in the SARA capacity assurances. Although state and EPA
experts we interviewed believed the capacity assessments will be as good as possible given the available data and
the time frame, state experts indicated that the level of detail will not be sufficient for waste management
companies to determine whether or where to locate additional capacity.
Our overall conclusion is that data collection problems will threaten the quality of the data produced by the
permanent information system. EPA has not supplied the seme 75 percent of the funding for the RCRA reporting system
that it provides .for other required program activities, nor has it provided effective incentives to the states,
even though EPA intends the system to be the single routine mechanism for providing regulatory development data.
Rather than conduct further national surveys, the agency plans to have states collect regulatory development data
needed by EPA in the Rca reporting system- this despite the fact that the RCRA reporting system (1) has never
produced valid and complete national data, <2> sample surveys in conjunction with the RCRA reporting system would
be more efficient and effective, and (3) the revised instrument Is more detailed than necessary for implementation
purposes (although less detailed than needed for regulatory development), we believe it is unwise to abandon
EPA-sponsored national surveys without a proven alterative. In addition, the toxic chemical release inventory
reporting system has not been designed to complement other data collection mechanisms that provide information on
hazardous waste generation and management. Moreover, existing federal regulations are inconsistent with EPA
expectations for state data collection and do not support the collection of new information. Finally, EPA'a ability
to require states to collect standard data is limited by the authorization procedures established in RCRA. The
result of the current arrangements is that the federal information system must be pieced together from separate
state systems rattier than, as RCRA suggests, having the states add data to a minimum, consistent federal system.
EPA officfels generally agreed with our findings and stated that the agency has already taken steps that at least
partially address sons of our findings. These steps include increasing the role of limited scope sample surveys,
planning to begin revision of the federal regulations in the fall of 1989, and creating a more streamlined RCRA
reporting instrument. Since these actions were taken after we finished our field work, we could not evaluate them
for this report.
Offices
Div:
Branch:
Reconnend ( 4): we reconnend that the Administrator of EPA direct the Assistant Administrator for Solid Waste and Emergency
Response tot
ensure that state data collection and quality control efforts receive fully adequate support and include specific
indicators related to data collection and verification in the agency's mechanism for monitoring atate performance;
use probability sampling rather than a census of waste handlers whenever feasible for routine national data
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Potential FNFIA Mrnlmrnts Pages 55
FT 1WO Dates 09/13/90
Divlmion: Alt
Buuamnlntion (Continued):
collection and quality control to ensure that EPA obtains the information necessary to develop regulations
efficiently and without unnecessary data collection burden;
ensure that the toxic chemical release inventory reporting system complements other hazardous waste data collection
efforts so that the data it provides on toxic chemical concentrations can be used to their maxima potential; and
finally,
amend federal recordkeeping and reporting regulations so that states are required to collect and provide standard
data eleawits in a disaggregated for* and hazardous waste handlers are required to provide sufficiently detailed
data.
M: \ Office: Dlv: Brandt:
Report/Audit: Hazardous Waste: ERA'S Generation and Management Data Need Further Improvement
Title
.Report/Audit Author: GENERAL ACCOUNTING OFFICE
Publication Date: 02/01/90
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UNI I fcU J> IM 11^ tM V IKUWMtN I AL. fKO I tc 1 ION AW,feNV.t
WASHINGTON, D.C. 20460
AIJG 30 IS90
OFFICE OF
POLICY. PLANNING AND EVALUATION
Honorable John Glenn &rr(s
Chairman
Committee on Governmental Affairs
United States Senate
Washington, D.C. 20510
Dear Mr. Chairmant
On March 19, 1990, the General Accounting Office (GAO) issued
a final report on the Environmental Protection Agency's (EPA's)
system for collecting and producing information on hazardous waste
generation and management. The report is entitled "Hazardous
Waste t EPA's Generation and Management Data Need Further
Improvement* (GAO/PEMD-90-3). The Agency has reviewed the report
and, pursuant to Public Law 91-510, I am providing the Agency's
official. response to the report's recommendations.
GAP Recommendation
GAO recommends that the Administrator, EPA, direct that the
Assistant Administrator for Solid Waste and Emergency Response take
appropriate steps to enhance its information system development
process and fully ensure that data collection efforts complement
each other and support the program mission. Specifically, a
comprehensive data collection plan should be developed. Steps
should be taken to improve the assignment of responsibilities for
planning and directing the development of information system
components by increasing the authority of the central coordinating
office to develop data collection efforts and ensure consistency.
Finally, the life cycle management system should be refined to
ensure the complete and detailed analysis and documentation of each
stage of the cycle for major system components.
EPA Response
The Office of Solid Waste and Emergency Response (OSWER) will
undertake the development of a comprehensive data collection plan,
or strategy, beginning in Fiscal Year 1991. With respect to the
two later recommendations, various internal management measures,
such as stronger quality assurance/quality control, have been
incorporated into OSWER operating procedures as well as ensuring
that life cycle management practices are incorporated into all
systems development efforts. OSWER is a strong proponent of total
quality management, and this office will continue to evaluate
practices and improve in these areas.
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OSWER is in the process of revising the Resource Conservation
and Recovery Act (RCRA) biennial report requirements (40 CFR
262.41, 264.75, and 265.75) to ensure that all states collect data
required by EPA on hazardous waste generation and waste management
practices. This revised requirement will require states to report
data in a standardized format, requiring fewer EPA resources to
convert .state data to usable format for national reporting.
Standardized reporting will allow the Agency to understand more
clearly the demographics of hazardous waste and management. With
this data, the Agency will be able to report to its constituencies
more effectively and efficiently on the status and progress of the
RCRA program.
OSWER is developing data entry and reporting software for use
by all states in collecting and sending EPA biennial reporting
data. When states choose to use their own software, the Agency has
developed "translator" specifications that will enable these states
to cross-walk their data elements into the standardized format.
In developing the software, the Agency has followed all important
life cycle management procedures.
GAP Recommendation
6AO recommends that the Administrator, EPA, direct the
Assistant Administrator for Solid Waste and Emergency Response to
take appropriate and feasible steps to fill remaining information
gaps, including
(1) the volumes of waste located at Comprehensive
Environmental Resource, Compensation, and Liability Act
(CERCLA) and corrective action sites that will ultimately
require management capacity,
(2) the volumes of waste that will require management capacity
under proposed regulation (including the large volumes of
waste expected from the cleaning up of leaking underground
storage tanks), and
(3) the potential disposal capacity of salt domes and other
' geological formations that are capable of preventing the
migration of wastes.
EPA Response
OSWER has added data elements in the 1989 Biennial Report
forms that will enable those states using EPA forms to respond more
systematically and effectively to SARA capacity reporting
requirements. In the long-term, the Agency plans to integrate the
Biennial Reporting and SARA Capacity processes, as appropriate,
since information from the Biennial Report directly supports State.
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SARA Capacity estimates.
M
The Agency will update the regulatory analyses on corrective
action and CERCLA activities, and EPA will gather more information
on waste located at CERCLA and corrective action sites. By
amending the Biennial Report regulation, the Agency is closing
existing gaps in capacity information.
At this time, the Agency is unable to respond to the reference.
to salt domes due to a lack of information.
GAP Recommendation
GAO recommends that the Administrator, EPA, direct ther
Assistant Administrator for Solid Waste and Emergency Response to
assure the use of the most appropriate measures of the relevant
attributes of hazardous waste generation and management.
Specifically, quantitative measures should be used to measure waste
characteristics (such as those needed for assessing management
capacity or waste minimization), and in addition, a true general
classification system should be developed for treatment
technologies.
EPA Response
The Agency recognizes the need to assure the use of the most
appropriate measures or data elements of hazardous waste generation
and management, including both capacity and waste minimization.
The Agency will address these issues in the revisions to the
Biennial Report regulations.
GAO Recommendation
i
GAO recommends that the Administrator, EPA, direct the
Assistant Administrator for Solid Haste and Emergency Response to
— ensure that state data collection and quality control
efforts receive fully adequate support and include specific
indicators related to data collection and verification in the
agency's mechanism for monitoring state performance;
— use probability sampling rather than a census of waste
handlers whenever feasible for >. routine national data
collection and quality control to ensure'that EPA obtains the
information necessary to develop regulation efficiently and
without unnecessary data collection burden;
— ensure that the toxic chemical release inventory reporting
system complements other hazardous waste data collection
efforts so that the data it provides on toxic chemical
concentrations can be used to their maximum potential; and
finally,
-------
Finding: 4. OVERSIGHT COSTS WERE NOT BILLED AND COLLECTED In A TIMELY
MANNER
The Region had not sought to recover from PRPs costs for cleanup
oversight as stipulated in settlement documents. Regional
management had given only limited attention to enforcing this
settlement requirement. In addition, project managers had made
this a low priority in their overall handling of individual
sites, and cost recovery packages were not adequately or timely
prepared to document costs claimed. As a result, the Region had
not recovered at least $627,761 for the Superfund Trust Fund that
could have been invested and earning interest, thus lessening the
amount available for appropriation. We recommend that the Region
establish and implement an effective system for the timely
recovery of oversight costs involving Superfund cleanup sites.
We also recommend that the Region initiate action to collect the
$627,761 in oversight costs identified in our report.
A written response to the draft report was submitted by the
Region on March 27, 1990 (See Appendix 1, without attachment).
An exit conference was not held with Regional Officials since
they stated that the written response adequately presented their
viewpoint. We evaluated the Region's comments and revised the
report where appropriate. Where differences still exist, we have
summarized the Region's comments and our response in the ensuing
paragraphs. These comments were considered when finalizing our
report. The entire response is available for review upon
request.
Recommendation(s) :
We recommend that you:
1. Establish and implement an effective system for the timely
recovery of oversight costs involving Superfund cleanup
sites. Specifically, require that mandated settlement
document itemized cost accountings are sent to PRPs within
90 days of the end of each fiscal year.
2. Initiate action to collect the $627,761 in oversight costs
identified in our report.
37
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