^
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Office of Inspector General
}'<:. ;; r' - s www.epa.gov/oigearth
v v' Report No. 2001-P-00013
''-:''"£. .; August2001
Water Enforcement:
- **' '',
State Enforcement of
Glean Water Act Dischargers
Can Be More Effective
U.S. EPA Headquarters Library
Mail codeS29*34<>4T
1200 Pennsylvania Avenue NW
Washington DC 20460
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Inspector General Divisions
Conducting the Audit:
Program Office and Regions
Involved:
Western Audit Division, San Francisco, CA
Southern Audit Division, Atlanta, GA
Central Audit Division, Kansas City, KS
Office of Enforcement and Compliance Assurance
EPA Regions 4, 8, and 9
Cover Photo: Wastewater discharge from a California facility into Suisun Bay
(Photo by Dan Cox, EPA OIG)
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\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f JUL 5 OFFICE OF THE INSPECTOR GENERAL FOR AUDIT
WESTERN DIVISION
75 HAWTHORNE STREET
MAIL CODE IGA-1, 7 FLOOR
SAN FRANCISCO, CA 94105-3901
August 14, 2001
MEMORANDUM
*° SUBJECT: Final Report No. 2001-P-00013
(Y State Enforcement of Clean Water Act Dischargers Can Be More Effective
^ FROM: Charles McCollum
:k Divisional Inspector General for Audit
Western Division
TO: Sylvia Lowrance
Acting Assistant Administrator for
Enforcement and Compliance Assurance
Attached is our final report, "State Enforcement of Clean Water Act Dischargers Can Be More
Effective." The purpose of the audit was to determine whether EPA-authorized state enforcement
programs protect the environment and human health. Our audit included your office, three
regions, and one state within each region. We also took into account the results from a National
State Auditors' Association joint review of state water programs.
This audit report contains findings that describe problems we have identified and corrective
actions we recommend. This report represents the opinion of the OIG; the findings in this report
do not necessarily represent the final EPA position. Final determinations on matters in this report
will be made by EPA managers according to EPA audit resolution procedures.
ACTION REQUIRED
According to EPA Order 2750, you (as the action official) are required to provide this office with
a written response to this report within 90 days of its issuance. For corrective actions planned but
not completed by the response date, please provide the specific milestone dates for completing
these actions.
If you or your staff have any questions, please contact me at (415) 744-2445, or Katherine
Thompson, Team Leader, at (916) 498-6535. Additional copies of this report may be .obtained
from us or our website, www .epa. gov/oigearth/.
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Objective
Results in Brief
Strategies Need
Reconsideration
Executive Summary
The objective of the audit was to determine whether state
enforcement of Clean Water Act discharge programs protect human
health and the environment. This audit resulted from concerns over
the effectiveness of state enforcement programs.
Forty-four states play a major role in implementing the Clean Water
Act's National Pollutant Discharge Elimination System program.
These states have EPA approval to issue and enforce permits that
set limits on pollutants that can be discharged into our nation's
surface waters. We evaluated state enforcement of discharge
programs in three regions; within each region, we evaluated one
EPA-approved state program. We also took into account
information from five state audits.
We believe that state enforcement programs could be much more
effective in deterring noncompliance with discharge permits and,
ultimately, improving the quality of the nation's water. EPA and
the states have been successful in reducing point source pollution
since the Clean Water Act passed in 1972. However, despite
tremendous progress, nearly 40 percent of the nation's assessed
waters are not meeting the standards states have set for them.
The state enforcement strategies we evaluated needed to be
modified to better address environmental risks, including
contaminated runoff. Contaminated runoff, including agricultural
and urban runoff, was widely accepted as causing the majority of
the nation's remaining water quality problems. Although many
sources of contaminated runoff were regulated, some were not.
EPA's Office of Enforcement and Compliance Assurance had set
national enforcement priorities for urban and agricultural runoff,
including storm water dischargers, sewer overflows, and
concentrated animal feeding operations. However, its core program
and monitoring systems have emphasized major industrial facilities
and larger sewage treatment plants. State strategies were also
inhibited by:
Inadequate water quality data.
Incomplete permit data.
EPA-state relationships.
State concerns over regulating small and economically vital
businesses and industries.
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Compliance and
Enforcement Systems
Deficient
One critical missing
component of the
Permit Compliance
-System-was electronic
transmission of self-
monitoring reports.
Without electronic
reporting by
dischargers, it was
virtually impossible for
, states to monitor
compliance with all
permits; ..'n '
Other Matters
The states we evaluated did not have
sufficient information on dischargers to
effectively implement their programs.
A major barrier to state program
management was the lack of information
about hundreds of thousands of
dischargers that contributed to water
quality problems.
EPA's Permit Compliance Systemits
national permitting and enforcement
systemwas incomplete, inaccurate and
obsolete. The growth, variety and
complexity of the regulated community
had greatly outstripped the system
capabilities. Hundreds of thousands of
dischargers were not monitored by the
system. Although many states were
developing their own systems, they did not
fill the information void.
State Enforcement
Program Deficiencies
* Compliance systems lacked
data for hundreds of
thousands of smaller
dischargers
* Serious toxicity violations
and other violations were not
reported
Strategies for identifying
unpermitted storm water
dischargers were incomplete
* Enforcement actions were
issued a year or more after
violation
Penalties failed to recover
"economic benefit of
noncompliance
Proactive strategies to avoid.
serious violations needed
further development
Recommendations
States also had weaknesses in their compliance monitoring and
enforcement systems, including not reporting serious, significant
violations. The states we evaluated did not implement effective
storm water compliance monitoring programs to detect and correct
noncompliance in higher risk areas. Moreover, states needed to
improve their enforcement response to significant violations to
prevent further violations. Most of the enforcement actions we
reviewed did not meet EPA's criteria for timeliness and often did
not recover the economic benefit gained by violators.
Finally, to ensure fair and effective enforcement of the Clean Water
Act, EPA regions need to improve their in-depth program
evaluations and annual performance evaluations of state
performance. These evaluations need to be consistent, continue
toward a goal of measuring the effectiveness of performance, and be
made easily accessible by the public.
In determining the status of EPA's plan to modernize its Permit
Compliance System, we found that the Office of Enforcement and
Compliance Assurance had not successfully collaborated with the
Office of Water and the states in the design of the new system
requirements.
We are recommending that the Office of Enforcement and
Compliance Assurance, in partnership with the Office of Water and
EPA regions, collaborate with states to develop risk-based
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"A modernized
[Permit Compliance]
system should fulfill
many programmatic
needs and ;.
contribute to the
demonstration of -
environmental ', :
(outcomesand I ,
results."'.:':W -""''-.-'-
x -EPA diffice of Water I
Agency Comments
enforcement priorities. EPA also should make modernizing its
Permit Compliance System a high priority. Teaming with EPA's
Office of Water and the states, the Office of Enforcement and
Compliance Assurance should ensure that the new system will meet
both federal and state needs.
We are also recommending that the Office of Enforcement and
Compliance Assurance revise its enforcement guidance to better
define significant violations for toxicity test failures, minor
facilities, and storm water dischargers.
Lastly, the Office of Enforcement and Compliance Assurance
should routinely determine whether states are fulfilling their
obligations to monitor and enforce discharge programs. To do so,
the Office should develop consistent criteria for in-depth program
evaluations of state programs. These evaluations, along with state
performance measures, should be accessible to the public.
The Office of Enforcement and Compliance Assurance agreed with
several of the conclusions in the report, including that states need to
implement risk-based approaches to water enforcement and that it
would be useful to have a process for periodic evaluation of the
Clean Water Act program in each state. It agreed that modernizing
the Permit Compliance System should be a high priority.
However, the Office expressed concern about the way some of the
issues, as well as EPA's role, were characterized in the report, and
claimed that many of the findings were based on "anecdotal
information." The Office stated the draft report did not recognize
that (1) it had an exhaustive process for setting national
enforcement priorities, (2) states should be responsible for setting
watershed-specific enforcement priorities, and (3) permit program
requirements had flexibility that supported state enforcement
strategies. The Office also believed the issues related to the Permit
Compliance System were oversimplified.
The Office of Enforcement and Compliance Assurance believed that
existing national enforcement guidance had the necessary flexibility
to address toxicity, minors, and storm water violations. It agreed to
work with EPA regions to ensure that the states were aware of the
guidance. The Office agreed to consider the OIG's specific
recommendations when guidance is updated in the future. The
Office also agreed that elements of state compliance and
enforcement programs need to be periodically evaluated.
111
U.S. EPA Headquarters Library
Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
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OIG Position
The Office of Enforcement and Compliance Assurance either
specifically agreed with the vast majority of our conclusions or did
not dispute them. However, in many cases it did not agree to a
specific course of action to correct the problem. Instead, the Office
defended existing guidance, processes, and systems. It agreed to
reassess some of its guidance, but did not state when. It proposed
alternative recommendations, but did not agree to take them.
In short, the Office was reluctant to change its current way of
conducting business. However, the current way of conducting
business was marginally effective.
We agree that states have helped develop national priorities and that
they are responsible for developing risk-based strategies. However,
states cannot be fully effective until the Office of Enforcement and
Compliance Assurance allows states more latitude in the redirection
of their resources.
Also, EPA had taken too long to modernize the Permit Compliance
System, leaving huge information gaps for minor and storm water
dischargers that rendered the system inadequate. Further, the
existing guidance and processes for ensuring the prevention or
correction of significant toxicity, minor discharger, and storm water
violations were not working - thousands of toxicity violations
occurred nationally and numerous facilities had recurring violations.
The guidance needs updating.
Although the Office of Enforcement and Compliance Assurance
asserted our conclusions in this report were based on "anecdotal"
evidence, we disagree. Anecdotal information was only used to
provide examples. As discussed with the Office, our audit was
based on extensive data analysis, document reviews, interviews,
surveys, and observations. Details on our scope and methodology
are in Exhibit 1, page 65.
IV
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Table of Contents
m
Executive Summary i
Part I: Introduction , ,.. i
Chapter 1: Objective, Background, and Scope and Methodology 1
I Part II: Strategies Need Reconsideration 5
Chapter 2: State Enforcement Strategies Need to Be Modified 5
Part III: Compliance Monitoring and Enforcement Systems Deficient n
Chapter 3: Permit and Other Information Systems Inadequate 19
I Chapter 4: Storm Water Compliance Systems Have Deficiencies 35
Chapter 5: Enforcement Actions Late and Penalties Insufficient 43
* Chapter 6: Improved Performance Evaluation and Measurement Needed 53
I Exhibits
1 - Details on Scope and Methodology 65
2 - Other Matters: Key Management Decisions Needed for the Permit Compliance System ... 69
3 - Report Contributors 75
4 - Report Distribution '. 77
Appendix: Agency Response 79
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Parti
Introduction
Chapter 1
Objective, Background, and Scope and Methodology
Objective
Background
Discharge System
The objective of the audit was to determine whether state enforcement
of Clean Water Act discharge programs protects human health and the
environment.
The purpose of the Clean Water Act's discharge permit program is to
protect human health and the environment by setting limits on
pollutants that can be discharged into our nation's surface waters. The
goal of the Clean Water Act is for all rivers, lakes, and estuaries to be
swimmable and fishable.
Citizens, industries, states, local governments, and the federal
government have done much to improve the quality of our nation's
waters in the last 30 years:
More than a trillion dollars, much of it authorized under the
Clean Water Act, was spent to build, upgrade, and expand
wastewater treatment facilities.
EPA and the states have written and enforced over 70,000
permits to limit pollutants.
Controlling point sources has removed billions of pounds of pollutants
from our waters and doubled the number of waters safe for drinking
and swimming. Much of this success can be credited to the Clean
Water Act, which was enacted in 1972.
Despite the successes of the Act, EPA reports that a majority of
Americans live within 10 miles of a polluted river, lake, stream or
coastal area. Although there is not an accurate portrayal of water
quality conditions nationwide, the 1998 National Water Quality
Inventory found that nearly 40 percent of the nation's assessed waters
were not meeting the standards states have set for them.
Much of the Clean Water Act's improvements can be attributed to the
National Pollutant Discharge Elimination System, a program to control
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States with EPA Approval to
Issue Discharge Permits
Runoff Permits
I 1 EPA Approval
No EPA Approval
discharges from
"point sources"
of pollution.
Point sources
are discrete
conveyances,
such as pipes or
man-made
ditches.
Forty-four states
play a major
role in
implementing
the Clean Water Act's discharge program. These states have EPA
approval to issue and enforce permits that set limits on pollutants that
can be discharged into our nation's surface waters. EPA regions issue
permits in the remaining states.
Several categories of discharges are covered under the permit program,
including municipal waste water and industrial process waste water.
These facilities are generally classified as major or minor, depending on
size and nature of the discharges. For example, a major municipal
treatment plant typically discharges one million gallons or more per
day.
In 1987, Congress added provisions to the Clean Water Act that called
attention to another source of problems that was believed to be
responsible for continuing water
quality problems: contaminated
runoff from agriculture, airborne
pollution, forestry, and urban
development.
Amendments to the Clean Water
Act and subsequent regulations
require permits for storm water
runoff from industrial activity,
large and medium municipal
storm water systems, and
construction activities. Also,
certain concentrated animal
feeding operations, primarily
those with over 1,000 animals and
those discharging into waters, are
subject to permit requirements.
Idaho animal feeding operation runoff drains into a Snake River tributary
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1
State Enforcement
Systems
1
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1
1
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Self-Monitoring
Reports
Self-monitoring
reports prepared
by facility
§
eports entered into Permit
Compliance System
t
System creates quarterly
noncompliance report
§
Quarterly non-
compliance report sent
to EPA
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Issues Impacting
Enforcement
Effectiveness
Expired Permits
By law, most irrigated agricultural discharges have been excluded from
permit requirements.
In order for states to have effective enforcement systems, they need
sound enforcement strategies and compliance monitoring systems.
They also need to take prompt and appropriate enforcement actions that
deter future noncompliance not only at the facility, but at other
facilities. EPA has developed an enforcement management system
which sets criteria for identifying and reporting significant violations.
In addition to enforcement guidance, the Office of Enforcement and
Compliance Assurance issues the Memorandum of Agreement
Guidance that establishes national priorities for enforcement programs.
States monitor facility compliance through inspections and self-
monitoring reports. EPA recommends that states inspect major
facilities annually. Also, facilities are required to regularly analyze
their discharge arid report the results on self-monitoring reports. States
compare self-monitoring reports to permit limits to determine
compliance. In addition, major dischargers are required to report
significant violations to states within 24 hours.
States report significant violations to EPA in a quarterly noncompliance
report. This report identifies major dischargers with significant
violations, the nature of the violation, and the type of enforcement
actions taken in response to those violations. EPA has defined
violations of a sufficient magnitude or duration as "significant" in order
to target those violations for a high enforcement priority.
EPA has established standards for taking enforcement actions on
significant violations. Generally, if a major facility has two significant
violations in two consecutive quarters, a state is expected to take a
formal enforcement action before the end of the following quarter.
EPA also recommends assessing penalties that recover the economic
benefit of noncompliance gained by the violator.
Nationally, there are two important issues that impact the effectiveness
of permit enforcement in protecting human health and the environment.
The backlog of expired discharge permits.
The implementation of the Total Maximum Daily Load
Program.
A backlog of expired permits is an ongoing, national problem that
impairs enforcement. In fiscal 2000, about 25 percent of discharger
permits for major facilities nationwide were expired. Federal law
requires permits to be updated every five years. Permits are updated
and reissued in order to conform with changing state and federal laws,
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* Total Maximum
Daily Load
Program
Total maximum
daily load = sum of
non-point sources
f sum of point
sources + margin
of safety
Scope and
Methodology
pollution control technology, and water quality conditions. Outdated
permits may not reflect new technology or water quality objectives,
thereby impairing enforcement effectiveness.
In the future, permit compliance will take on more importance in
meeting water quality standards because of the Clean Water Act's Total
Maximum Daily Load Program. A total maximum daily load is a
calculation of the maximum amount of a pollutant that a water body can
receive and still meet water quality standards, and an allocation of that
amount to the pollutant's sources.
States are required to:
Identify water bodies not meeting water quality standards;
Set priorities for calculating total maximum daily load;
Develop a total maximum daily load for each pollutant in each
listed waterway; and,
Allocate loadings to both permitted dischargers and to non-point
sources.
States have just begun to implement this program for water bodies
identified as impaired. It is likely that permit limits for some pollutants
will be more stringent after total maximum daily load calculations are
completed. And, if limits are exceeded, it may prevent the water body
from meeting water quality standards.
This audit resulted from concerns over the effectiveness of state
enforcement programs. We focused on the Clean Water Act discharge
program because of a lack of recent audit coverage in this area.
In addition to evaluating national data, we evaluated three EPA regions:
4, 8, and 9. In each region, we evaluated one state with EPA approval
to issue discharge permits: California (Region 9), North Carolina
(Region 4), and Utah (Region 8). We also took into account recent
audit reports from the following states: Arkansas, Colorado, Louisiana,
Maryland, and Oregon. Our scope and methodology are further
discussed in Exhibit 1, page 65.
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Part II
Strategies Need Reconsideration
Chapter 2
State Enforcement Strategies Need to Be Modified
State enforcement strategies and systems needed to be modified to meet
the goals of the Clean Water Act and to better protect human health and
the environment. In the three states we reviewed, there were
opportunities to better align enforcement strategies and resources with
water quality impairments.
"...nearly 40 percent of the
nation's assessed waters
are not meeting the
standards states have set
for them."
-Office of Water, May 2000J
EPA and the states have been successful in reducing point source
pollution since the Clean Water Act passed in 1972. However, despite
tremendous progress, nearly 40 percent of the nation's assessed waters
are not meeting the standards states have set for them. Contaminated
runoff, both regulated and unregulated, is widely accepted as causing
the majority of the nation's remaining water quality problems.
In the past, EPA and the states have focused their efforts on major
dischargers because they were relatively few in number but discharged
large quantities of pollutants. We believe enforcement strategies should
be environmentally risk-based and better address:
The relative risks presented by contaminated runoff, such as
storm water and concentrated animal feeding operations.
A rapidly growing number of smaller dischargers.
Unique problems causing impairments in individual watersheds.
EPA's Office of Enforcement and Compliance Assurance had set
national enforcement priorities and developed strategies for addressing
runoff, including storm water dischargers, sewer overflows, and
concentrated animal feeding operations. However, its core program and
monitoring systems emphasized major industrial facilities and larger
sewage treatment plants. State strategies were also inhibited by:
Inadequate water quality data.
Incomplete permit data.
EPA-state relationships.
State concerns over regulating small and economically vital
businesses and industries.
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EPA's Strategic
Plan
Need for New
Strategies
Changing Sources of
Pollution
Swimmers frolic in Southern California waters often posted as
unsafe due to urban runoff. (Photograph by Chas Mativier,
Orange County Register.)
EPA's Strategic Plan lays out the Agency's 10 long-term goals for
protecting human health and safeguarding the environment. In
addition to long-term goals for achieving clean air, clean water, and
safe food, one of EPA's 10 goals is to ensure full compliance with
laws intended to protect human health and the environment.
EPA cannot achieve its goals without partnerships with states. States
play a major role in implementing the Clean Water Act's discharge
program. Forty-four states have EPA approval to issue and enforce
Clean Water Act discharge permits. EPA regions issue discharge
permits in the remaining states. States write more than 90 percent of
all federal environmental permits and take over 75 percent of
enforcement actions.
In the past, EPA and the states have focused their efforts on major
dischargers because they were relatively few in number but discharged
large quantities of pollutants. We believe enforcement strategies
should be environmentally risk-based and better address:
Changing sources of pollution;
An increasing universe of permit holders; and
Watershed approaches to improving water quality.
Contaminated runoff, such as agricultural and urban runoff, was
widely accepted as causing the majority of the nation's remaining
water quality problems. Agricultural runoff (crops and animal
husbandry) was ranked as the number one cause of impaired rivers,
streams, and lakes. Some of these sources
have been regulated; others, such as irrigation
runoff, have not.
EPA issued regulations in 1976 to permit
discharges from concentrated animal feeding
operations; since that time, the livestock
industry substantially increased both the
number and size of these large animal feeding
operations. Combined releases of more than
30 million gallons of animal waste to surface
water in a number of states have highlighted
the adverse environmental impacts of
concentrated animal feeding operations. By
law, agricultural storm water discharges and
return flows from irrigated agriculture have
been excluded from permit requirements.
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Increasing Permit
Universe
Watershed Strategies
In order to address urban runoff, the Clean Water Act was amended in
1987 to regulate municipal and industrial storm water discharges.
Phase n of these regulations was added in 1999, thereby regulating a
large number of smaller facilities. Storm water is a continuing
concern; it was the largest source of water pollution in urban areas,
such as Los Angeles.
Clean Water Act Permits
{Includes Phase II Storm Water Permits)
Minor
104,000
20.3%
In response to
changing
regulations and
sources of water
impairments, the
Office of
Enforcement and
Compliance
Assurance has
suggested
enforcement
strategies for
storm water
dischargers and
concentrated
animal feeding
operations.
These strategies
are accessible by
states.
The addition of storm water regulations more than tripled the regulated
universe. The ballooning regulated universe, along with other issues,
such as the backlog of out-of-date permits and the lack of data systems,
has made it virtually impossible for states to fully permit, monitor, and
enforce the regulated universe.
rm Water
385,900
75.4%
CAFO is concentrated animal feeding operation
Source: EPA Office of Water
To achieve the nation's clean and safe
water goals, EPA will implement the
watershed approach...."
-EPA's Fiscal 2001 Annual Plan
The watershed approach to
solving water quality
problems calls for individual
strategies tailored to each
watershed rather than a focus
on major dischargers or types
of agricultural or urban
runoff. EPA's annual plan calls for a watershed approach to fulfill the
goal of the Clean Water Act. EPA regions have partnered with states,
local governments, private industry, and environmental organizations
to create some effective watershed strategies.
US. EPA Headquarters Library
7 Mailcode.3201 .
1200 PennsylvaniaAvenue,NW
Washington DC 20460
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States Can Improve
Effectiveness
Contaminated runoff is
widely accepted as
causing the majority of the
nation's water quality
problems.
California
"The polluted runoff
problem is the number
one water pollution
problem in California."
-California Resources
Secretary
North Carolina
Utah
Reasons for
Emphasis on Major
Dischargers
The states we reviewed continued to emphasize inspecting and
monitoring major dischargers, although contaminated runoff, including
storm water runoff, was widely accepted as causing the majority of the
nation's remaining water quality problems. EPA and the states could
improve the effectiveness of state enforcement programs by developing
risk-based enforcement strategies. EPA has a role in evaluating the
effectiveness of state strategies and supplementing them, when
necessary and feasible.
In the three states we reviewed, there were opportunities to better align
enforcement strategies and resources with water quality impairments.
California identified storm water as its most serious water quality
problem. However, it had invested relatively little resources in
inspecting and monitoring storm water. Meanwhile, storm water runoff
continued to cause water impairments and beach closures. At the same
time, the state had a relatively significant investment in monitoring and
enforcing its major dischargers, although the state reported a relatively
high compliance rate. In fiscal 2000, the state increased its storm water
staffing; however, it needed to further evaluate whether its enforcement
resources would yield a better return by monitoring other sources.
North Carolina had not developed a strategy for monitoring compliance
with storm water permits, although storm water was a significant
contributor to its water quality impairments. As discussed in Chapter 6
(page 53), North Carolina was taking actions to better measure the
effectiveness of its enforcement strategies.
We found indicators that Utah could more effectively use its
enforcement resources to address the risks that agricultural and urban
runoff presented to Utah's water quality. Specifically, agricultural
practices, land development, and urban runoff were listed as sources of
impairments of surface waters or ground water. However, we found
that monitoring strategies were not fully developed for either its storm
water or concentrated animal feeding operation dischargers.
We believe the emphasis on major dischargers was typical of many
states because EPA's implementation of the Clean Water Act focused
on major dischargers. Due to limited resources, EPA and the states had
decided many years ago to focus on major dischargers because they
were relatively few in number but discharged large quantities of waste
water. Subsequently, EPA and state management systems were well
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Implementation
Focuses on Major
Dischargers
Contaminated Runoff
Not Easily Regulated
developed for major dischargers but not for other sources, such as storm
water, which had new types of permit limits.
States needed more latitude in the redirection of their resources. The
state programs we reviewed did not have the resources and systems to
permit, monitor, and fully regulate smaller dischargers, such as storm
water. States did not have mechanisms to evaluate tradeoffs in different
enforcement strategies. Also, states were not encouraged to divest in
major dischargers.
Much of the Clean Water Act's implementation over the last quarter of
a century focused on addressing point sources, particularly major
dischargers:
EPA and many of the EPA regions emphasized inspecting,
monitoring, and enforcing major discharger permits in program
guidance, performance measures, and oversight reviews.
The Code of Federal Regulations required states to have the
capability to inspect all major dischargers annually. EPA and its
regions stressed and monitored the annual inspection of all major
dischargers. Utah cited EPA's 100 percent inspection requirement
of major dischargers as one reason it was difficult to shift to other
priorities.
EPA's Permit Compliance System included little data for nonmajor
dischargers. Because of states' concerns over the cost of data entry
requirements, EPA policy did not require data from other
dischargers to be entered into the system.
National standards were set for taking action on significant
violations by major dischargers but standards were unclear for other
dischargers.
The state programs we reviewed did not have the resources and
information systems to permit, monitor, and fully enforce regulated
runoff, such as storm water. As discussed more fully in Chapter 4
(page 35), the states we reviewed had minimal coverage of storm water
dischargers. The addition of storm water regulations greatly increased
the size of the regulated universe without a commensurate increase in
resources or information systems. Thus, states were limited in their
ability to implement, monitor, and enforce storm water regulations.
Further, as one EPA region noted, states were expected to fully
implement the "core" program before moving onto programs to regulate
contaminated runoff.
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Mechanisms for
Evaluating Tradeoffs
Not in Place
Best Practice:
Strategy Evaluation
Process
State Enforcement
Priorities Need
Development
The states we evaluated did not have mechanisms in place to weigh the
relative merits of divesting in major discharger enforcement in order to
more heavily invest enforcement resources in minor dischargers,
agricultural feeding operations, storm water dischargers, industrial
sectors, or watersheds. Although the Office of Enforcement and
Compliance Assurance's program guidance allowed states to change
their enforcement priorities, it did not encourage divesting in major
dischargers. .
Region 10 Best Practice:
Strategy Evaluation Process
Evaluated shifting resources. ',
between monitoring different types
of permits. - '.'--*.
Changed enforcement priorities.
Quantified improvements to water
quality resulting from shifting .;
resources. :
One notable "best practice" we
found was in Region 10's
process for evaluating the
impacts of different state
enforcement strategies.
Region 10 issued the Clean
Water Act discharge permits
for Idaho and Alaska.
The Region had established a
process to evaluate the
effectiveness of investing
resources in monitoring and
enforcement of all categories of permit holders, including minor
facilities and concentrated animal feeding operations.
As a result of its evaluation, the Region changed its enforcement
priorities and ultimately caused improvements in water quality. The
Region moved some of its resources from monitoring major dischargers
to other sources, such as storm water. It also created a cost-effective
system to monitor minor dischargers. As a result, the Region:
Realized substantial reductions of pollutant loadings.
Significantly increased compliance rates.
Provided an impetus for municipality infrastructure investments
that were necessary for long-term improvements in water
quality.
EPA, its regions and the states need to jointly develop priorities that
address each state's risks to water quality and maximize the
effectiveness of
enforcement
resources.
EPA impacts state
enforcement priorities
10
"Section 106 grants continue to support the >;,,, ;:i;;;,
complianceand enforcement'efforts undertaken aH
the State level to protect surface water quality."
EPA Office of Water
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in several ways. First, EPA must approve state enforcement programs
before they can operate. EPA also provides states with Clean Water
Act water pollution control grants and negotiates related grant
agreements. For fiscal 2001, Congress appropriated about $170 million
for states, territories, and Indian tribes for administering water pollution
control programs. Further, the Office of Enforcement and Compliance
Assurance sets national priorities in its program guidance; regions use
this guidance to develop enforcement priorities with states.
In its program guidance, the Office of
Enforcement and Compliance Assurance set
national priorities for enforcing "wet
weather" dischargers, including sewer
overflows, concentrated animal feeding
operations, and storm water. It also
identified two industrial sectors as priorities:
petroleum refineries and metal
electroplating.
: ERA'S Wet Weather !
Enforcement Priorities
^Combinedsewer- i :
:overflow policy ..- .
; Sanitary sewer overflow
enforcement system
Concentrated animal
feeding operations
sector strategy , .
Fiscal 2000/2001 guidance
Storm water regulations
The Office of Enforcement and Compliance
Assurance consulted with states (and EPA
regions and Office of Water) in setting these
priorities. It also considered public health
and environmental risk as reported by states and the Office of Water.
As a result of its process, wet weather issues, such as sewer overflows
and contaminated urban and agricultural runoff, along with storm water,
were identified as national enforcement priorities for fiscal years 2000
and 2001.
However, these enforcement priorities did not necessarily reflect a
state's or region's watershed-specific impairment problems. For
example, some watersheds were impacted by surface mining. Also, wet
weather priorities encompassed a large universe of dischargers that
could not be easily addressed by states without finding new resources or
divesting in other areas. Divesting in major dischargers was somewhat
difficult because EPA grant work plans continued to contain
requirements for inspecting major dischargers, a resource-intensive
requirement.
Finally, agreed-upon state enforcement priorities were not necessarily
followed. For example, for fiscal 1999, Utah agreed that three
industrial sectors would be given priority: refineries, mineral mining,
and steel making. We were unable to substantiate that the state took
any priority actions for these sectors, which included some minor
permit holders. The state's year-end report stated that the mineral
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mining and steel making sectors ended the year with zero and 50
percent compliance rates, respectively.
Barriers tO Strategy EPA anc^ tne states nave been hampered by a number of significant
Development barriers to developing and evaluating the effectiveness of enforcement
strategies. They include:
Water Quality Data
Gaps. The General
Accounting Office's
(GAO) survey of all 50
states found that their
"Only six states reported that they have a
majority of the data they need to assess
whether their waters meet water quality
standards." .
" ;' : -GAO, March;2000j
abilities to identify and ^^^^^i
set priorities among water quality problems were impacted
by (1) a lack of water quality assessments and (2) data
limitations on causes and sources of water impairments.
These data gaps were particularly serious in the case of
diffuse non-point sources, which were widely accepted as
contributing to the majority of the nation's water quality
problems.
Incomplete Compliance Data. Due to limited resources,
EPA's Permit Compliance System and state systems had
incomplete data on smaller dischargers, concentrated animal
feeding operations, and storm water dischargers. There were
serious data gaps on the amounts and types of pollutant
discharges, the number of facilities without required permits,
and compliance rates. These gaps hampered the |
development of risk-based strategies. (This issue is
discussed further in Chapter 3, page 19.)
Compliance Standards Not Established. EPA and the
states we reviewed had not set compliance standards for
types of dischargers, sectors, watersheds, or other specific
categories. Without some standard, there was no objective
basis for making decisions to invest or divest in certain I
sectors, areas, or programs.
Environmental Outcomes Difficult to Measure. GAO I
found environmental outcomes were inherently difficult to
measure for a number of reasons: the absence of baseline _
data, the inherent difficulty and expense involved in
quantifying the outcomes, and the difficulty in establishing
causal links that isolate the effect of a particular strategy. g
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State Partnerships
Need
Strengthening
Recommendations
Reluctance to Address Certain Sectors. EPA enforcement
officials told us some states were reluctant to address small
businesses and economically vital industries.
We recognize these impediments impact EPA's and the states' abilities
to set priorities and improve the effectiveness of enforcement
investments. Nonetheless, as evidenced by the actions taken by
Region 10, there is much that can be done to improve the effectiveness
of enforcement with some relatively minor system changes and resource
realignments. Further, the establishment of compliance standards
would greatly aid the decision-making process.
"itis of great importance tithe states-
and to the nation that our partnership:
[with EPA] be strengthened." - - :
'>, . . -Environmental Council of the States I
EPA, its regions, and states needed
to forge strong partnerships in order
to improve the effectiveness of
enforcement and help solve
environmental problems. State
enforcement priorities were
sometimes not made in a partnership fashion.
As pointed out by the National Academy of Public Administration,
there are many impediments to a performance-based EPA-state
relationship. Certainly, the lack of data is a major impediment. The
Academy concluded that other impediments were EPA's state oversight
role and a concern that states will weaken environmental protection.
However, actions by Region 10 and some states show that enforcement
effectiveness can be greatly improved. We believe EPA-state
collaboration is essential to maximize the effectiveness of limited
enforcement resources, to reach EPA's goal of compliance with
environmental laws, and to improve our nation's waters.
We recommend that the Assistant Administrator for Enforcement and
Compliance Assurance:
3- 1. In partnership with the Office of Water and EPA regions,
collaborate with states to develop risk-based enforcement
priorities. Encourage states to develop mechanisms to evaluate
tradeoffs in enforcement investments.
3- 2. Provide states more latitude in the redirection of their resources.
In this respect, eliminate the goal to inspect all major
dischargers annually.
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Agency Response 2-1. Risk-Based Priorities. The Office of Enforcement and
3fld OIG Position Compliance Assurance explained that it already has a consultation
process in place in which EPA regions, states, EPA's Office of Water,
and other stakeholders are extensively consulted in determining the
national water enforcement priorities for each 2-year cycle. A major
factor in identifying the candidates for priorities is the element of risk.
This consultation process was being used to shape the 2002/2003
Memorandum of Agreement guidance. The Office believed the OIG
should recognize state involvement in identifying national priorities
and recommend that the Office of Enforcement and Compliance
Assurance develop a process to ensure states are implementing its risk-
based strategies.
The Office of Enforcement and Compliance Assurance asserted that its
actions are not keeping the states from implementing a risk-based
approach or from addressing watershed priorities. Its guidance and
strategies provide states with the flexible framework they need to
implement a risk-based program. While EPA regions can and do
recommend that states participate in national water priorities, suggest
where states might focus their resources, and meet with states to
conduct joint work planning, the Office stated that, ultimately, it is a
state's decision as to the priorities it will set. The Office stated that a
"constructive" recommendation would be that EPA should place more
emphasis on program reviews and improve its efforts to share best
practices with the states.
The Office disagreed with the finding that the "core" permit program
inhibits the development of state strategies. The Office's guidance
allows regions and states flexibility in shifting a portion of their total
inspection resources from major to minor facilities, particularly in
priority watersheds, where those minor facilities represent a significant
risk. The Office also defended the Agency goal to inspect 100 percent
of all major point sources annually because:
Major point sources generate the majority of effluent flow and
toxic pollutant loadings which can significantly affect water
quality in receiving waters.
Significant environmental benefits associated with higher levels
of compliance among majors would be lost if "we were to allow
a total shift to minors."
OIG Position: The Office's response partially addresses our
recommendations. We recognize that states have been involved in
setting national priorities. We agree that EPA should evaluate state
enforcement strategies and share best practices. However, the Office of
Enforcement and Compliance Assurance needs to further collaborate
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with EPA's Office of Water, regions, and states so that each state has an
effective, risk-based enforcement strategy that addresses its unique risks
to water quality. Further, the Office should foster the development of
tools that states can use to evaluate tradeoffs in enforcement
investments.
States have not been allowed total flexibility in deciding how to best
invest their enforcement resources. EPA does, to some extent, control
state enforcement programs. It authorizes states to operate these
programs and sets rules, regulations, and goals for permitting,
inspecting, monitoring, and enforcing discharge permits, especially
those for major facilities. EPA state grants were typically contingent
upon work plans which required states to perform a certain number of
inspections of major and minor dischargers and perform other actions.
2-2. Inspections. The Office of Enforcement and Compliance
Assurance believed that state programs needed to have the ability to
inspect all major dischargers annually. It cited several reasons,
including:
States should have minimum, quantifiable standards for
procedures and resources.
Major dischargers were high risk because they generate the
majority of the effluent flow and toxic pollutant loadings.
Numerous noncompliance problems existed with major
dischargers.
The Office of Enforcement and Compliance Assurance also pointed out
that it has issued guidance that allows minor facility inspections to be
traded for major facilities at a 2:1 ratio, using risk-based rationale.
The Office believed an appropriate alternative recommendation would
be to ensure that any state that does not commit to inspect 100 percent
of its major facilities develops and implements an inspection plan that
targets an appropriate mixture of high risk dischargers (i.e., majors
and minors) in priority areas such as impaired watersheds.
OIG Position: The Office of Enforcement and Compliance
Assurance's response illustrates its reluctance to commit to a risk-based
approach. We believe it is the impact state resources have on
compliance and, ultimately, water quality, that should be used to
determine the adequacy of a state's resource investment in major
inspections and other activities.
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Systems Deficien
:SS'y>*!SSf fls^l^h-jdife'.rA&^S
higher risk areas.
The states we evaluated did not have sufficient information on dischargers
to effectively implement their enforcement programs. One reason was that
EPA's Permit Compliance System was incomplete, inaccurate and
obsolete. The growth, variety and complexity of the regulated community
had greatly outstripped the system capabilities. Compliance data for
hundreds of thousands of dischargers were not monitored by the system
because it was too costly to enter the data. Although many states were
developing their own systems, they did not fill the information void.
States had other weaknesses in their compliance monitoring and
enforcement systems, including not reporting serious, significant
violations. The states we evaluated had not implemented effective storm
water compliance monitoring programs to detect and correct
noncompliance in Percentage of Major Dischargers
In Compliance
.MHWIHBI . ^ Fiscal 2000
Moreover, states
needed to improve
their enforcement
response to significant
violations to prevent
further violations.
Although EPA's goal
was full compliance,
only 10 states reported
a compliance rate of
90 percent or better
during fiscal 2000.
Twenty states reported
that less than 75
percent of their major dischargers were in compliance during the year. A
discharger was defined as out of compliance with its permit when it had
two significant, repeated violations of its permit within two consecutive
quarters.
We recognize the compliance rate was not completely accurate because of
deficiencies in EPA's Permit Compliance System. However, it provided
17
Source: Permit Compliance System
I190-100% compliance
SH 75-89% compliance
mm o-74% compliance
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an indicator of the states' compliance status. National compliance rates
were not available for other sources such as minor facilities and storm |
water dischargers. As detailed later in this section, EPA and the states
estimated a very large number of storm water dischargers were not in
compliance because they had not obtained permits. I
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Chapter 3
Permit and Other Information Systems Inadequate
The states we evaluated did not have sufficient information on regulated
dischargers to determine the effectiveness of their enforcement programs.
A major barrier in state program management was the lack of information
about hundreds of thousands of smaller dischargers that contributed to
water quality problems. EPA's Permit Compliance Systemits national
permitting and enforcement systemwas incomplete, inaccurate and
obsolete. The system lacked data from these smaller dischargers.
Although many states were developing their own systems, they did not fill
the information void. As a result, states could not effectively implement
the discharge program.
Without electronic
reporting by
dischargers, it will
be virtually-
; impossible for
states to monitor
compliance with
.permits, i '-,-.
Permit Compliance
System Had
Serious Problems
One critical missing component of the Permit Compliance System was
electronic transmission of self-monitoring reports. Without electronic
reporting by dischargers, it will be virtually impossible for states to
monitor compliance with all permits.
Further, serious toxicity violations were not classified as "significant,"
thereby overstating the national compliance rate. The states we evaluated
had other weaknesses in their procedures for identifying significant
violations.
Without sound compliance monitoring systems, significant permit
violations that adversely impact water quality went uncorrected. At two of
the three states, toxic discharges were released into impaired water bodies.
EPA's Permit Compliance
System Data
Pollutant discharges
' Permit limits
Permit violations
'. Enforcement actions
EPA's permitting and enforcement
information system the Permit
Compliance Systemwas incomplete,
inaccurate and difficult to use. Compliance
data from hundreds of thousands of smaller
dischargers was not captured by the system
and information in the system had serious
limitations. Some states had created their
own systems and, to some extent, duplicated the Agency's system. EPA
was aware of these problems and, in 1999, identified the system as an
Agency weakness. Until the system is upgraded, expanded, and
reasonably accurate, its usefulness as a management and program
evaluation tool will be seriously limited. As such, the system should
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continue to be reported as an Agency weakness until these problems are corrected.
System Capabilities
Exclude Many
Dischargers
Permits Have
Different
Requirements
EPA and state permitting and enforcement
programs rely on EPA's compliance system;
of the 44 states approved to issue permits, 39
states enter data into the system. EPA uses
the system for program management and
oversight purposes, including assisting in
targeting enforcement activity to the areas
experiencing compliance and environmental
problems. The data are analyzed to help
determine the quality of the nation's water
bodies and will serve as the source of data for
reporting purposes on EPA's progress in
reducing pollutant loadings.
The growth, variety, and complexity of the
regulated community had greatly outstripped
the system's capabilities. Dischargers not
monitored by the system included:
Storm water, ;
Concentrated animal feeding
operations, and
Sewer overflows. i
State Enforcement
Program Deficiencies
Compliance system
excluded data for smaller
dischargers
Serious toxicity violations
and other violations not
reported
Strategies for identifying
unpermitted storm: water
dischargers needed
development
""' Many enforcement
actions issued a year or
more after violations
; Penalties failedhteNrecover;
; economic benefit of ?
; noncompiiance.'.'" ;
"Proactive strategies '
;:. .needed to avoid serious
: - ^violations' -!: ?1 ./
The system was not designed for these type of permits, which had different
permit requirements than the more traditional major and minor discharger
permits. Generally, states were not entering discharge information on
minor and storm water dischargers, concentrated animal feeding
operations, and sewer overflows because EPA did not require it.
Number of Permits in EPA's
Permit Compliance System
The lack of a sound
monitoring system was
particularly evident for
storm water dischargers.
The system was not
designed to track storm
water compliance data,
and states did not
maintain their own
complete and consistent
data systems for tracking
and monitoring storm water compliance activities.
Type of Permit
Storm water
Concentrated animal
feeding operations
Estimated
Number of ;
Permits
400,000
15,000
Number in
System
16,417
5,608
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Thousands of
Permits Need Data
Entry
Best Practice:
Electronic Reporting
System Inaccurate for
Major Dischargers
Another reason data was excluded for smaller permits was because data
entry was time-consuming. The Office of Water estimated there were
about 400,000 storm water and 100,000 minor discharger permits.
Compared to 7,000 major discharger permits, these permits represented a
substantial workload. As such, EPA and the states had agreed that data
only for major dischargers was required to be in the system.
In order for states to effectively monitor the myriad of smaller dischargers
and others, electronic self-monitoring reports are critical. As noted later in
this report, storm water and minor permit violations went undetected and
uncorrected largely due to.a lack of monitoring. Also, EPA had not yet
been successful in its efforts to introduce electronic self-reporting. To
effectively monitor all sources, EPA should set a high priority for
implementing electronic reporting for all dischargers nationwide.
California was testing electronic
submission of self-monitoring reports
and reported successful results. In
addition to providing necessary
environmental decision-making
information, electronic self-reporting
eliminates costs associated with
preparing paper reports and repeat data
entry by states and EPA. It also helps
eliminate the failure of facilities and
states to accurately report and
categorize violations.
In addition to excluding a large number
of dischargers, the Permit Compliance
System was inaccurate for a number of
other reasons. For example:
Best Practice:
Electronic Self-Reporting
Eliminates costs associated;
.with preparing and reviewing
paper reports " .
Minimizes repeat data entry
by EPA and the states
Helps eliminate inaccurate
reporting by facilities and
states
Facilitates the prompt review
of discharge reports
Allows large volumes of
discharge data to be included
in state and national data
bases efficiently
California Data Not Entered.
Beginning in fiscal 2000, the Office of Enforcement and Compliance
Assurance had agreed to allow only about 30 percent of California's
major facility compliance data to be entered into the system. These
facilities represented the greatest amount of municipal flow and the
industries of greatest concern.
Utah's Noncompliance Rate Overstated. A compliance system
report showed that 65 percent of Utah's major facilities were in
significant noncompliance for fiscal 1999. This rate was substantially
overstated because the state had not entered self-monitoring reports
into the system on time. The system did not have the capability to
correct this error.
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System Obsolete
States Create Their
Own Systems
» Report Unusable in Maryland. A recent Maryland state audit report
found the system generated many violations that did not represent
actual violations.
Toxicity Violations Excluded. As detailed later in this chapter, whole
effluent toxicity violations were not classified as significant violations
and, in many cases, overstated the compliance rate.
As shown, it was questionable whether the compliance system fairly
represented the compliance status of major facilities nationwide. It did not
reflect the national compliance rate of other facilities. Without complete
and accurate information, it was difficult to evaluate the effectiveness of
permitting, compliance, and enforcement strategies.
EPA readily acknowledged its compliance system was obsolete, resource
intensive, and difficult to use. In spite of these factors, the system had not
had any major redesigns in nearly 20 years.
The Permit Compliance System was first developed in 1974 and its last
modernization effort was in 1982, nearly 20 years ago. Further, the system
was:
Hard to use. Due to the age and inflexibility of the system, it was not
user friendly. The system was dependent on user coding and some
users only saw the large quantity of data that was entered.
Resource Intensive. The system required the manual entry of all data
including facility self-monitoring reports. As a result, data entry was
very labor intensive. For example, the state of Colorado estimated the
cost to enter data was about $70,000 per year. Further, the system was
costly for EPA
tomaintain State Data Systems
The lack of an
effective compliance
system resulted in
the development of
unique state
systems. Unique
systems have created
.
Uses its own system
Enters data into Permit
Compliance System
California
North
Carolina
! Utah?
= Condition occurs
problems for EPA and the states. Some state systems did not interface
with the Permit Compliance System. As a result, either states or regions
had to reenter state data into the Permit Compliance System. To remedy
this problem of duplicate data entry, EPA has proposed an Interim Data
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Compliance System
Modernization Project
Other Aspects of
Compliance
Systems Need
Improvement
Exchange Format to overcome the data transfer difficulties. However, this
system has not been fielded.
Further, the Office of Enforcement and Compliance Assurance had not
addressed the risk that new state systems would not include the data
elements required by the modernized Permit Compliance System. To
illustrate, California was designing a new enforcement system to meet its
own needs; however, Region 9 was not involved with the development to
ensure all data elements needed for the new Permit Compliance System
were included. In order to do this, the Office of Enforcement and
Compliance Assurance and Office of Water need to complete the policy
statement for mandatory data elements.
The Office of Enforcement and Compliance Assurance had three major
initiatives underway for its Permit Compliance System which were
intended to address system problems and improve its usefulness as a
management tool:
1. System modernization,
2. State interim data exchange format, and
3. Electronic reporting.
In determining the status of EPA's plan to modernize its Permit
Compliance System, we found that the Office of Enforcement and
Compliance Assurance had not successfully collaborated with EPA's
Office of Water and the states in the design of the new system
requirements. This issue is discussed in more detail in Exhibit 2, Other
Matters, found on page 69.
We found other fundamental weaknesses in EPA and
state compliance monitoring systems for major and
minor facilities. Our review of three states, along with
results from recent state audits, found:
Many serious toxicity violations were not classified
as "significant" and thus were not subject to
corrective or enforcement actions.
Numerous other major and minor facility violations
went unreported.
State inspection procedures for major facilities
needed some improvements.
Without sound compliance monitoring systems,
significant permit violations that adversely impact
water quality go undetected. For example, we found serious toxicity
23
A wastewaler
treatment plant in
North Carolina
failed 27 out of 36
toxicity,tests since
1996. None of
these violations
were designated as
significant and,
therefore, the state
did not include
them on quarterly
non-compliance
reports to EPA.
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Serious Toxicity
Violations Not
Identified as
Significant
?ln, addition,the
[toxicity] test itself is
intended to measure \ -
the direct potential for
impairment of fish-and,
aquatic life > "Y'''
communitiesrelatedto
substances present in
effluents at toxic
(wcentrations.ffhus,
\ahy'failureot'the , .Y
.effluentlimitation::':; ",
should be considered ;
ciassl[serjous]< and1
appropriate action
taken."
Wisconsin Department
of Natural Resources
violations in two states that went uncorrected; they were not reported to
EPA as significant violations. In at least one case, the toxic discharge was
released into an impaired water body. Further, when violations are not
identified, enforcement actions that penalize noncompliance cannot be
taken.
Serious toxicity violations, found through whole effluent toxicity tests,
were not categorized as significant violations. The states we evaluated
told us they were not aware toxicity test failures met EPA's criteria for a
"significant" violation. Also, Office of Enforcement and Compliance
Assurance guidance (a 1995 memorandum) did not clearly identify toxicity
text violations as significant violations. As a result, facilities continued to
discharge toxic waste water into water bodies.
Whole effluent toxicity tests are one of the most important measures of
assessing the impact of wastewater discharges. Toxicity tests expose
aquatic organisms and fish to discharges for a specific time period, in
order to predict at what levels the discharges may cause harm to the
organisms. When a toxicity violation occurs, it shows the discharge is
toxic enough to harm or kill fish and organisms.
Our sample of nine facilities in California and our review of North
Carolina's data base identified three facilities in California and four
facilities in North Carolina that had toxicity violations. The seven
California and North Carolina facilities did not categorize their toxicity
violations as significant. If EPA had been aware of the toxicity violations,
it could have worked with state
officials, obtained
enforcement orders, and
resolved the toxic problems.
Utah did not report any
toxicity violations in the sample
of facilities we reviewed.
Region 8 told us that Utah had a
policy in place to take actions on
whole effluent toxicity test
violations.
Best Practice:
Utah's Toxicity Violation Policy
Violations imust be. reported within
24 hours ;,: ; Y; ;
Accelerated testinglsirequired ;
Investigation of the cause of toxicity
is required for patterns of toxicity
There was a large number of toxic violations nationwide that went
unreported as significant violations. EPA's Permit Compliance System
reported 6,552 toxicity violations nationwide between October 1,1998 and
December 31,1999. We estimate that less than 10 percent of these
violations were designated as significant and, thus, were not subject to the
requirements for taking enforcement actions.
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Violations by Major
Dischargers Not
Identified
Although EPA guidance categorized effluent violations that may cause
environmental harm as significant, it did not specifically designate
whole effluent toxicity violations as significant. EPA officials told us
this stemmed from industry opposition years earlier based on concerns
over the reliability of toxicity tests. However, EPA officials confirmed
that toxicity tests were very reliable. Also, they noted that toxicity
tests allowed dischargers to eliminate other tests of specific chemicals.
As such, EPA needs to require dischargers to categorize toxicity test
failures as significant violations.
Significant
violations by
major
dischargers
were not
always
identified and
reported. In
California, the
state's manual
reviews of
monitoring
reports missed
significant
Refinery in Northern California, a major discharger
violations at three of the nine facilities we reviewed. As a result, none
of these violations were identified and reported. Many of these
problems could be eliminated by having dischargers submit monitoring
reports electronically.
A 1999 California study also found that violations were not identified
and reported. The study found many self-monitoring reports were not
received, and many that were received were not reviewed in sufficient
detail to identify violations. ^ x
In North Carolina, permits
contained daily or weekly
limits which were sometimes
violated but not identified or
reported. In at least one case
we reviewed, the violations of
mercury limits were directly
attributable to impairing a
Because it did not identify daily and weekly
violations, North Carolina delayed 15
months in issuing an enforcement action for
mercury violations. The violator, a town's
waste water treatment plant, was the cause
of pollution of an environmentally-impaired
stream with designated poor water quality,
non-supporting of its intended uses.
stream. As a result of our audit, North Carolina developed a separate
software system to detect violations of daily maximum limits in
permits.
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Significant Violations
Not Identified for
Minor Facilities
State audit reports identified problems with the accurate identification of
violations. For example, Arkansas's Legislative Auditor found
discrepancies between the violations reported on the self-monitoring
reports and those reported on in-house summary reports.
Significant violations were not identified for minor facilities. There were
two main reasons for this condition:
States were not tracking compliance at minor facilities and entering
information into EPA's system.
EPA had not explicitly defined a "significant" violation for minor
dischargers.
Minor dischargers have been
implicated as causes of water
impairments in some water
bodies. A recent Region 10 initiative
to monitor compliance at minor
facilities found high noncompliance
rates. After the region developed an
oversight system and began
enforcing permit limits, pollutant
discharges dropped dramatically.
Region 10 Best Practice
Minor Permit Compliance System
Created oversight system for
minor facility dischargers
Identified violations with minimal
effort
Identified when an enforcement
action should be taken
EPA's Permit Compliance System identifies violations based on data
entered from permits and discharger self-monitoring reports. As discussed
previously, generally states only enter data for major facilities. Even this
limited data entry process is time-consuming and expensive; however, the
system calculates discharge violations.
Generally, states were not reporting information on minor facility
compliance to EPA. Although North Carolina was reviewing minor
facility violations, we found:
Data Not Entered into EPA System. None of the three states we
evaluated were consistently entering minor facility data into the
Agency's compliance system. Thus, minor discharger violations
weren't reported to EPA.
Annual Reports Missing. Many states did not submit annual reports
describing compliance and enforcement activities at minor facilities, as
required by federal regulation. None of the states we reviewed
submitted this report and only two of the ten states in Regions 8 and 9
submitted this report.
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Inspections of Major
Facilities Need
Improvements
California performed
cursoiyjnspections of a
sugar refinery, missing
violations of chlorine
limits. When the state
analyzed reporting
documentation in August
1999, it found several
years of unreported
violations of chlorine
limits. The chlorine was
discharged into an
impaired waterway.
States Were Not Evaluating Compliance. Two of the three states we
evaluated did not have a state system for evaluating minor facility
compliance.
Conditions Noted in Other Reports. These conditions were noted in
state audit reports. For example, Louisiana auditors found 21 percent
of the required self-monitoring reports for minor facilities in their
sample had not been submitted. Also, the state was not reviewing the
monitoring reports that were submitted.
Without these annual reports on the compliance status of minor
dischargers, EPA was unaware of compliance problems and was unable to
take unilateral action or assist the states in helping permit-violating
facilities come back into compliance.
Further, EPA had not established criteria for significant violations at minor
facilities or significant minor facilities. EPA guidance stated that the
inventory data for "significant minors" should be entered directly into the
Permit Compliance System, but significant minors was not defined. At a
minimum, minors that adversely impact impaired watersheds should be
identified as significant. Also, nonsubmission of discharge monitoring
reports should be identified as a significant violation. If this criteria were
established, states, regions and EPA would have better data to evaluate
compliance by minor facilities.
States needed to improve the quality of their
inspections to ensure facilities were accurately
reporting monitoring data. Self-monitoring
reports are the backbone of the Clean Water
Act's compliance monitoring system; major
facilities must submit them monthly. States
rely on facilities to promptly and accurately
report their violations to regulators. Facilities
are required to report significant violations to
states within 24 hours.
Changes Needed to State
Inspection Procedures
Inspections need to be
,: -unannounced
; Inspections need to
.evaluate the accuracy and
;.,: ^reliability of self-monitoring
< reports
Two of the three states we reviewed needed to improve their inspection
procedures. For the sites we reviewed, neither California nor Utah
performed unannounced inspections and California did not uniformly
verify the accuracy and reliability of self-monitoring reports during site
visits. As a result, California missed unreported significant violations by
at least one facility. .This facility discharged chlorine into an impaired
waterway.
Other reports found inspection quality issues in state
programs. For example, the Environmental Working Group
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Conclusion
reported in July 2000 that 42 percent of all
Clean Water Act inspections were a brief visual
inspection of a facility. Visual inspections
typically do not evaluate the accuracy of self-
monitoring reports. Although most state audit
reports did not evaluate the quality of
inspections, a recent Oregon audit report found
that the Department of Environmental Quality
was not ensuring self-monitoring reports were
accurate.
Oregon Department of
Environmental Quality
"...was unaware of
numerous instances of
falsified reporting
occurring over a 5-year
period at one permitted
facility..:" ,.._
-Oregon Audits:Division
In California, inspections were not thorough because inspections were
deemed lower priority than issuing permits and taking enforcement
actions. The goal of inspecting all major facilities annually took
precedence over a thorough inspection. States did not perform
unannounced inspections because staff were concerned no one would be
available at the facility and time would be wasted.
EPA's Permit Compliance System was obsolete and insufficient to
evaluate the effectiveness of state enforcement programs. The system
lacked data from thousands of smaller dischargers. Although many states
were developing their own systems, these systems did not fill the
information void.
One critical missing component of the Permit Compliance System was
electronic transmission of self-monitoring reports. Without electronic
reporting by dischargers, it will be virtually impossible for states to
monitor compliance with all permits.
We also found many states were not classifying thousands of serious
toxicity violations as "significant." Without this designation, states were
not subject to EPA requirements for taking enforcement and corrective
actions. Moreover, in some states, toxic effluent continued to be
discharged into impaired waterways.
Other aspects of discharge compliance were not being addressed by states.
Two of the three states we reviewed were not evaluating compliance by
minor dischargers. We also found procedures for conducting inspections
and reviewing self-monitoring data was insufficient at two states. Since
self-monitoring reports are the cornerstone of the discharge system, these
procedural weaknesses are serious.
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Recommendations
Agency Response
and OIG Position
We recommend that the Assistant Administrator for Enforcement and
Compliance Assurance:
3- 1. Make modernizing the Permit Compliance System a high priority.
Further, ensure that future systems:
Require electronic submission and evaluation of self-
monitoring reports for all dischargers, including minor facilities
and storm water.
Track storm water permits, inspections, compliance rates, and
enforcement actions.
3- 2. Accelerate the development of the Interim Data Exchange Format
for the Permit Compliance System. Also, before proceeding further
into design and development, work with the Office of Water to
ensure there is an up-to-date policy statement for water system
criteria.
3- 3. Have regions work with states to help ensure data elements needed
for the new Permit Compliance System are included in state systems
being developed.
3- 4. Continue to report the Permit Compliance System as an
Agency-level weakness until the modernization project is
implemented and the system data is reasonably accurate and
complete.
3- 5. Revise guidance to specify that whole effluent toxicity violations
are significant violations. Revise regulations to require whole
effluent toxicity violations to be reported on quarterly
noncompliance reports.
3- 6. Establish a definition of significant violations for minor facilities,
including storm water dischargers. At a minimum, include
nonsubmission of self-monitoring reports in this definition. Also,
define "significant" minor facilities. Include facilities impacting
impaired waterways in this definition.
Additional suggestions for modernizing the Permit Compliance System
can be found at Exhibit 2, page 69.
3-1. System Modernization. The Office of Enforcement and Compliance
Assurance stated that modernizing the Permit Compliance System was,
and will continue to be, a high priority. The modernized system will allow
for entry of data element fields needed to track all dischargers, including
U.S. EPA Headquarters Library
29 Mail code 3201
^Pennsylvania Avenue NW
Washington DC 20460
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minor facilities and storm water facilities. Information tracked for those '
dischargers will include permit limits, inspections, compliance and
enforcement action data. System modernization is scheduled for
implementation by the end of 2003.
OIG Position: While the Office asserted that the Permit Compliance
System was a high priority, the system has been obsolete for over 10 years
and the new system schedule has continually slipped. Further, the Office «
has not yet identified the data elements the system will include. These {£
facts indicate that the system has not been a high priority.
3-2. State Data Transfer System. The Office of Enforcement and ^
Compliance Assurance said it and the EPA Office of Environmental
Information had worked closely with their state partners in implementing
the Interim Data Exchange Format over the last year.
The EPA Office of Environmental Information is the lead for implementing '
the Exchange Format project, has developed the schedule for project
implementation, and must address acceleration. Currently, the Exchange
Format is scheduled for full implementation by March 2002. I
While Office of Enforcement and Compliance Assurance agreed that there
was a need to update the Policy Statement to address new data
requirements, it did not agree that this must occur before design and
software development. Broad capacity will be built into the system as ^
indicated in the response to 3-1. Only a subset of that capacity is likely to
be federally required. Therefore, the Policy Statement can be updated
during system design and development.
OIG Position: The Agency's response does not fully address our
conclusions and recommendations. According to the Office of
Enforcement and Compliance Assurance's Fiscal 2000 Integrity Act |
Annual Assurance Letter, the Exchange Format was scheduled to be
implemented in the third quarter of fiscal 2001. Thus, the Exchange
Format system has been delayed nearly a year since the letter was prepared
in October 2000. Further, the Office needs to work with the Office of
Environmental Information to accelerate the Exchange Format system,
since the Office of Enforcement and Compliance Assurance is responsible
for the system.
The Policy Statement is obsolete and needs to be updated immediately.
This critical Agency document excludes federal information requirements
for storm water permits, which now compromise the largest number of
permits. Further, changes to the Policy Statement should be completed
before software design, so that the changes can be incorporated into the _
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modernized system. Data entry requirements are essential for determining
system requirements.
3-3. State Systems. The Office of Enforcement and Compliance
Assurance explained that it was finalizing the overall data requirements
for the modernized Permit Compliance System. It stated it will continue to
work closely with the states in developing detailed data requirements.
Until those requirements are finalized, those states modernizing their
systems should include in their modernized system the data entry
requirements specified in the current Policy Statement.
For the most part, states do not coordinate or consult with the Office of
Enforcement and Compliance Assurance when modernizing their systems,
as these systems are built primarily to accommodate state needs.
However, the Office agreed to request of regions that they make a special
effort to discuss state modernization plans during their program status
meetings. Additionally, it hoped that extensive involvement of state
representatives in the modernization process will have a spill over effect
in getting states to include the necessary data elements in their systems.
OIG Position: We do not agree an updated policy statement is
unnecessary at this time. EPA regions need an updated policy statement to
engage in constructive discussions with states about which state data is
needed at the national level. Existing data requirements are insufficient.
3-4. Agency Control Weakness. The Office of Enforcement and
Compliance Assurance agreed to continue to report the Permit
Compliance System as an Agency-level weakness until all milestones were
met. One of the milestones was the completion of modernization which is
scheduled to occur by the end of 2003.
OIG Position: The response only partially addresses our recommendation.
The system should continue to be reported as an Agency weakness until
the data is reasonably accurate and complete.
3-5. Toxicity Violations. The Office of Enforcement and Compliance
Assurance pointed out that, in many ways, whole effluent toxicity is
treated like any other parameter in the permit program; i.e., the permittee
reports self-monitoring data on its discharge report, results are entered
into the permit compliance system and tracked, and violations should be
reviewed and are subject to a range of enforcement responses. The major
exception is that toxicity violations are not automatically flagged as
significant noncompliance. Because of the variability in permit
requirements and in the frequency of compliance monitoring required,
toxicity violations do not neatly fit under existing "significant
noncompliance " criteria.
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However, EPA's existing regulations and guidance provide EPA regions
and states with the flexibility to identify toxicity violations as significant:
40CFR Part 123.45(a) provides states with the flexibility to report
any violation of substantial concern on quarterly noncompliance
reports.
EPA's "Whole Effluent Toxicity Permitting Principles and
Enforcement Strategy" prescribes review of toxicity limit violations.
EPA's enforcement response guide recommends responses to toxicity
violations.
The Office of Enforcement and Compliance Assurance agreed to
reconsider the applicability of significant noncompliance to whole effluent
toxicity violations when it revises the definition of significant
noncompliance.
OIG Position: There is no reason to delay categorizing whole effluent
toxicity violations as significant violations. The current process is not
working. While states have had the flexibility to identify whole effluent
toxicity violations as "significant" violations, they generally have not.
According to the Permit Compliance System, only 5.6 percent of the fiscal
2000 toxicity violations were identified as significant violations. Facilities
nationwide had large numbers of recurring toxicity violations that were not
designated as significant. For example:
One facility in Massachusetts had 16 toxicity violations; none were
categorized as significant.
One facility in New Jersey had nine toxicity violations; none were
categorized as significant.
One facility in Florida had 19 toxicity violations; none were labeled
as significant.
By not labeling toxic violations as "significant," states obfuscate EPA
oversight of the appropriateness and effectiveness of state enforcement
actions.
3-6. Other Significant Violations. The Office of Enforcement and
Compliance Assurance noted that a state has the discretion to designate
any facility with violations of concern as a "major" discharger thereby
subjecting the facility to "significant" noncompliance criteria. 40 CFR
Part 123.45(a) provides a state with the discretion to report any violation
of "substantial concern" on a quarterly noncompliance report.
The Office of Enforcement and Compliance Assurance committed to
consider developing guidance on when a minor discharger should be
designated as a major discharger and to include factors such as non-
submission of discharge monitoring reports and impact of the discharge
on impaired waterways.
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OIG Position: The Office's response does not address our
recommendation to establish a definition of significant violations for
minor facilities, including storm water dischargers, and to define
"significant" minor facilities. We are recommending that EPA establish a
uniform definition for significant violations at all minor dischargers,
including storm water. Designating minor dischargers as major
dischargers does not address our recommendation or the problems that
exist.
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Chapter 4
Storm Water Compliance Systems Have Deficiencies
"Urban runoff from seven
south Orange County
[California] cities is so
noxious that it exceeds
safe-swimming water
standards:at all:but three
of 35 sites-and by 100-
fold at four..." '
-Orange County Register
Numerous Storm
Water Non-filers
Storm water pollution posed significant water quality problems and health
risksin 1999, more than 6,000 beaches were closed or had health
advisories issued due to polluted waters caused mainly by storm water
runoff.
The states we evaluated were not effectively monitoring compliance by
storm water dischargers, resulting in violations going undetected and
unaddressed. We found:
California estimated there could be
as many as 19,000 facilities
operating without proper storm
water permits.
State strategies were needed for
identifying storm water non-filers.
States estimated thousands of
facilities had not obtained storm
water permits.
* Risk-based inspection programs
were lacking. The thousands of
relatively small dischargers in this program dictated a risk-based
approach that had not been well developed.
Processes were needed to monitor discharge reports. States did not
maintain adequate processes or systems for reviewing self-monitoring
reports, identifying major violations, and taking appropriate action.
Tracking systems for citizen complaints were insufficient. Although
citizen complaints were a primary means of identifying violations,
complaint tracking systems were not implemented.
The main impediments to effective storm water monitoring systems were a
lack of resources and information. Although the storm water program
involved nearly 400,000 dischargers nationwide, state resources were not
significantly increased to implement this program. Further, EPA's Permit
Compliance System and state systems did not track storm water permit
compliance data, resulting in significant data gaps. As a result, the states
we reviewed did not have effective storm water compliance monitoring
programs to detect and correct noncompliance in higher risk areas.
The states we evaluated did not have adequate strategies for identifying
storm water dischargers that had failed to file for a proper permit.
Although some "non-filers" were identified through citizen complaints,
states did not have systematic processes to search for and identify non-filers
because of inadequate resources and data.
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Inadequate
Inspection
Programs
Inspection Statistics
Unreliable
States Need Strategies
The number of unpermitted dischargers was substantial. For example, Utah
estimated it had about 500 unpermitted facilities subject to storm water
regulations. California estimated that at least 19,000 facilities might be
subject to storm water regulations, but had yet to apply for a permit.
Because the identification of non-filers continued to be a challenge in the
state, the state was investigating the feasibility of accessing other state
agency databases to assist in identifying non-filers.
The states we evaluated were not employing sound, risk-based inspection
programs of storm water dischargers:
Storm Water Inspection Programs
Number of permitted facilities
Estimated annual rate of
facilities inspected
Risk-based inspection
schedule developed
Inspections documented
Inspection results tracked and
violations followed up
California
(Los Angeles)
16,641
(3,304)
12%
No
Yes
No
Utah
690
2%*
No
Sometimes
No
North Carolina :
6,227
Construction-100%;
others unknown
No
Yes
No, except
construction sites
* Number of inspections performed could not be substantiated.
State-reported inspection statistics were generally overstated or
unsubstantiated at the states we reviewed. For example, California's Los
Angeles region included searches for non-filers in its tally. Fortunately, the
Los Angeles region had recently increased its inspection field presence
from previous years. Utah's reported inspections could not be fully
substantiated; the state did not consistently document or track inspection
results.
Although most state audit reports did not evaluate storm water inspections,
the Louisiana Legislative Auditor reported in January 2001 that most of the
uninspected facilities were storm water dischargers.
We recognize that it is not realistic to inspect hundreds or thousands of
storm water dischargers every year with limited resources. Therefore,
states should develop risk-based strategies to target inspections that provide
maximum benefit to improving total water quality.
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Best Practice: Risk-
Based Inspection
Strategy
States Need to Follow
Up on Inspection
Results
Self-Monitoring
System Not
Identifying Major
Violations
California Best Practice:
Risk-Based Inspection Plan
Focuses limited resources on
highest risk dischargers
Uses criteria to identify highest risk
dischargers
California was developing a
risk-based inspection plan: the
Los Angeles region's work plan
for fiscal year 2000/2001 showed
that it intended to start targeting
industrial and construction
inspections at the highest risk
dischargers using specific criteria,
such as administrative or
technical non-compliance, high-risk industries, large construction sites, and
complaints. Other criteria states could use to focus inspection resources are
impaired waters or high priority watersheds, and repeat violators.
The states we evaluated were not consistently tracking or following up on
inspection results. Four of eleven inspection
reports reviewed in California and Utah
detected violations that were not tracked or
acted upon. Therefore, facilities with major
violations, such as failure to prepare a storm
water pollution prevention plan or implement
storm water best management practices, did "^^^^^«^^^
not come into compliance promptly, if at all. And there was no evidence to
determine if or when compliance was achieved.
The states we evaluated were not reviewing
reports for compliance with permits
and regulations. In California, one of
four monitoring reports we reviewed
did not meet regulatory requirements.
The Los Angeles region
acknowledged that in the past they
have had to focus limited resources on
requiring dischargers to submit
reports, as opposed to addressing
noncompliance items in reports.
"The heart of a general
permit is the pollution
prevention plan..."
- EPA Region 9
Utah did not track which facilities
were required to submit self-
monitoring reports; thus, the state
could not ensure all required reports
were received.
self-monitoring
Significant Storm Water
Violations Found: California
Missing sampling analysis during
the required test period
Missing descriptions of best
management practices
implemented at the facility
Reporting results which were not
based on storm events
Not submitting monitoring reports
EPA and state systems did not facilitate a review of self-monitoring reports.
The Permit Compliance System was not designed to track storm water
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Complaint Tracking
Systems Lacking
Barriers
Inadequate Data
Systems
Control of sediment into storm drain
compliance data. State data
systems did not fill this gap,
either. However, storm
water data was critical, not
only for determining
compliance, but for
evaluating the effectiveness
of the storm water program.
Due to the large volume of
storm water self-monitoring
reports, states need an
electronic scoring process
that cost-effectively identifies significant violations and other
important information. Several low-cost viable options need to be
seriously considered including scan sheets (commonly used for
electronic scoring of tests) and web-based reporting. This would make
efficient use of limited resources, as well as provide assurance that
required reports are submitted and noncompliance is detected.
The states we reviewed did not maintain adequate or consistent
tracking systems for citizen complaints. Complaints were an important
source of violation information.
Without consistently tracking when
and how citizen complaints were
resolved, there was no evidence that
the states addressed the complaints or
provided a formal or informal response
addressing citizen concerns.
Deficiencies in the state storm water
programs occurred primarily because
of incomplete and inconsistent data
systems for tracking storm water
activities and inadequate resources.
Also, states were reluctant to place
additional burdens on small and
economically vital business.
As previously discussed in Chapter 3,
one major impediment to storm water
self-monitoring systems was data
38
Fed by urban runoff. Munger Creek in Orange
County; California, had an increased fecal-
coliform count. (Photo by Orange County
Register.)
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Inadequate Resources
"...the Los Angeles
"Regional Board '
inexplicably devotes the
least amount of
_ resources to its worst
water quality problem:
.polluted runoff."
- Natural Resources
.Defense Council
systems. Storm water data was critical, not only for determining
compliance, but for evaluating the effectiveness of the storm water
program. We found EPA's Permit Compliance System:
Included only about 16,500 of an estimated 400,000 storm water
permits.
Did not require states to enter storm water permit data. This was due to
concerns over the increased state and federal data entry workload.
Was not designed to track storm water compliance data.
State data systems did not fill this gap, either. The states we evaluated did
not maintain their own complete and consistent data systems for tracking
and monitoring storm water compliance activities. All three state data
systems were not tracking one or more pieces of critical storm water data.
For example, Utah did not track critical compliance data and could not
support an internal report citing 100 percent compliance. Utah also did not
maintain an information system on its current construction site permits.
Our sample included an instance where a construction facility was
operating with an expired permit until a complaint was lodged.
The promulgation of the Phase I storm water regulations in November 1990
substantially increased the universe of permit holders under the Clean
Water Act. Implementation of the Phase n regulations beginning in 2000
further increases the universe. However, minimum resources have been
dedicated to carry out storm water activities. In addition, permit fees were
generally inadequate to help fund storm water programs.
Staff Years Dedicated to Storm Water
Fiscal 1999
State
California
(Los Angeles Region)
North Carolina
Utah
Storm Water
Permits,
3,304
6,227
690
Staff
-Years
2.5
7
1 +
For example, at the time
of our audit, California's
Los Angeles region only
had 2.5 staff years to
monitor more than 3,300
storm water permit
holders and conduct
searches for as many as
10,000 unpermitted
facilities that were
subject to regulation.
The program was grossly underfunded and as a result, was identified as not
meeting federal standards for controlling pollution caused by storm water
runoff. This was a serious concern because storm water runoff was the
largest single source of water pollution in this region. To help address this
concern, the Los Angeles region requested and received a substantial
increase in its 2000/2001 storm water budget, which enabled it to hire
additional storm water staff.
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Risk-Based Strategies
States Taking
Enforcement Actions
Recommendations
Agency Response
and OIG Position
Because of limited resources and the large number of storm water
dischargers, states should engage in risk-based strategies to focus their
resources on the most significant water quality issues. Urban runoff,
including storm sewers, is one of the top three sources of pollutants in
rivers, lakes, and estuaries. Storm water dischargers now make up about 75
percent of the number of discharge permits. However, as further discussed
in Chapter 2, state water programs have generally given higher priority to
major "point source" dischargers, such as municipal waste water treatment
plants and industrial facilities.
The three states in our review
took some substantial storm
water enforcement actions.
The three states assessed
penalties of over $500,000.
North Carolina took one
enforcement action for
$50,975.
Storm Water Enforcement Actions
Fiscal Year 1999
California (Los
Angeles Region)
North Carolina
Utah
Number of
Enforcement
' Actions i
28
12
2
'Penalties
$256,100
$248,741
$ 86,609
We recommend that the Assistant Administrator for Enforcement and
Compliance Assurance:
4-1. Work with EPA regions in assisting states to:
Develop mechanisms to better balance their limited resources
between all categories of dischargers, as indicated by the states'
analysis of risks to water quality.
Create effective strategies for identifying storm water non-filers.
Develop sound storm water inspection programs which include risk-
based inspection schedules and tracking and follow-up of inspection
results.
Establish tracking systems for citizen complaints.
4-2. Facilitate the development of a system which allows self-monitoring
reports to be electronically scored for compliance. Consider low-cost
options such as scan sheets (commonly used for electronic scoring of
tests) and web-based reporting.
4-1. State Strategies and Systems. The Office of Enforcement and
Compliance Assurance agreed to continue to work with the EPA regions
and states to implement risk-based approaches to water enforcement. It
noted that the Office's Memorandum guidance and national strategies
provide flexibility to address majors as well as minors. The 2000 Storm
Water Enforcement Strategy outlines a recommended "sweep" approach of
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targeting a priority watershed or geographic area, then focusing storm
water inspections and enforcement actions on a category of non-filers (e.g.,
a priority industrial sector or large construction sites) in that area.
The Office noted that while EPA can assist the states by providing
direction, guidance, training, and work-sharing, states must take
responsibility to develop appropriate planning mechanisms to develop and
implement risk-based strategies (which should include a sound inspection
program and a system to track citizen complaints), and balance their
limited resources.
OIG Position: The Office's Memorandum Guidance does not address our
recommendation. While the guidance allowed "trading" major inspections
for minor inspections at a 2:1 ratio, the guidance did not address trading
major inspections for storm water inspections. Nor did it address the other
aspects of our recommendation. Moreover the storm water enforcement
strategy was developed for EPA regions, not states.
We agree that states are responsible for their enforcement strategies.
However, we do not agree there is sufficient flexibility in the existing
system. EPA-driven requirements for major facility inspections, oversight,
and enforcement actions focus state programs on major dischargers.
Instead of setting rules for divesting in major facility oversight, it would be
more useful if EPA used its national perspective and expertise to help states
develop and fine-tune risk-based enforcement strategies, including those for
monitoring storm water permits.
4-2. Electronic Submission of Storm Water Reports. The current Permit
Compliance System already determines compliance based on electronic
review of the discharge monitoring reports, though some improvements are
needed in the system. The modernized system will certainly have this
capability. Additionally, the modernized system will provide the capability
for facilities and states to electronically report information using the
Agency's Central Data Exchange portal and the National Environmental
Information Exchange Network for the transfer of permit data.
OIG Position: The Permit Compliance System does not determine
compliance for storm water permits because it does not have the capability
to accept storm water compliance data. Further, for various reasons, the
system does not accept compliance data electronically. As a result, states
must enter compliance data manually. Manual data entry is a huge
obstacle, especially for the hundreds of thousands of storm water and minor
permits.
One obvious solution to the data entry problem is to have permit holders
submit their reports electronically. Low-cost, common platform options are
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electronic score sheets (used for testing) and web-based reporting. We
have no evidence the new system will address these issues; however, in
meetings with the Office, it indicated it would explore these options.
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Chapter 5
Enforcement Actions Late and Penalties Insufficient
Although the states we evaluated generally took enforcement actions on
significant violations, we found these actions were often taken a year or
more after the violation occurred. Further, penalties were sometimes
insufficient to prevent further violations and were not always collected.
This may have contributed to a large number of recurring violations. Over
one-third of the states reported that over half of their major facilities with
significant violations in 1999 also had recurring significant violations in
fiscal 2000. (Data was not available for non-major facilities.)
"Regulations are not self-
implementing; they have
impact only when regulated
parties decide to comply or
agencies force them to do
so."
-National Academy of Public
Administration
Delayed
Enforcement
Actions
Major Facilities with Recurring Violations
Facilities With Significant Violations Recurring in 2000
Some states were
taking actions to
improve the
effectiveness of
their enforcement
programs by:
Requiring
penalties to
include recovery '
of the economic
benefit of
noncompliance.
Using minimum
penalties.
Publicizing
violations and responses.
States could further improve the effectiveness of enforcement actions by
taking actions promptly and improving proactive strategies that help avoid
violations.
The three states we evaluated were oftentimes taking a year or more to
respond to significant violations at major facilities:
^^ 0-24% recurrence *'
25-49% recurrence
i SO-tOO%recurrence
Source Permit Compliance System
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Enforcement Actions Delayed Over 1 Year
State
California
(San Francisco Region)
North Carolina
Utah
Percentage of Late
Actions
50%
100%
100%
Months Late
(Violation to Action)
15
26 to 41
12 to 41
[We evaluated 15% and 67% of the formal enforcement actions taken on major
dischargers in North Carolina and Utah, respectively. In California, we
evaluated 67% of the actions on major dischargers taken by the San Francisco
Region.]
There was evidence this problem extended to other states. For
example, the Louisiana Legislative Auditor found the state took over a
year to issue nearly 40 percent of its actions.
Not taking
prompt
enforcement
action increases
water pollution as
violations go
unchecked.
States must take
swift action not
only to bring
violators into
compliance
quickly, but also
to establish
credible
Discharge from a Northern California facility
enforcement programs. For example, a California municipality failed
to meet its deadline to replace its obsolete treatment plant by 1997.
Although the state issued a cease and desist order in 1993, at the time
of our audit, no penalties were assessed. Delays continued and the
plant continued to pollute the Pacific coast until the new plant
demonstrated full compliance in January 2001.
There were a number of reasons states enforcement actions were
delayed:
Enforcement Process. Enforcement actions generally had to
be approved by higher management levels and, in California,
Governor-appointed boards. These approval processes delayed
actions. Also, states negotiated enforcement orders or penalty
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amounts with dischargers, which was a time-consuming process.
Further, in order to compute penalties, states needed to obtain cost
data from the discharger, further delaying actions.
Reluctance. States were reluctant to take immediate action on
violations, especially when violators were making efforts to
comply. Staff tended to work closely with the discharger,
developing a working relationship they believed would be
threatened by a formal enforcement action. Also, North Carolina
and Utah negotiated formal orders or penalty amounts due to
concerns over litigation; negotiations caused further time delays.
Consequences. There were limited adverse consequences
associated with delayed enforcement actions. The Office of
Enforcement and Compliance Assurance told us that states not
taking actions on repeat violators received phone calls from EPA;
generally, EPA took no other actions. The most obvious adverse
consequence of delay enforcement was the continued discharge of
pollutants in excess of permit limits. However, this consequence
usually had no immediate impact on a state.
Another factor may have been the lack of time standards for taking
enforcement actions. The states we evaluated had not set standards for
taking enforcement actions. EPA's standard was variable and not
embraced by the states we evaluated.
EPA's Enforcement Response
Guide set a variable time standard
for taking enforcement actions. It
required a formal enforcement
action when there was a repeated,
significant violation in the same or
The Enforcement Response Guide...
addresses timely responses to...:*.
violations...Even though some of the
language can be seen as
ambiguous..." "
- EPA Office of Enforcement and
Compliance Assurance
a consecutive quarter. A state was
expected to complete a formal
action before the end of the quarter
following the second violation. Thus, the timing of the second violation
determined how long a state had to take a "timely response." For example,
if the repeat violation occurred April 1, the state had 6 months to complete
the action; if it occurred on June 30, the state had only 3 months to
complete the action. Three months may not be enough time to issue an
enforcement action. We recommend that EPA set a clear and consistent
time standard for taking enforcement actions.
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Penalties Did Not
Recover Economic
Benefit
Timeline for Taking Enforcement Actions
Similar
Significant
Violations
Two or More In
the First
Quarter?
Two or More In
First and Second
Quarters?
Formal
Enforcement Action
Required by the
End of Second
Quarter
Formal
Enforcement Action
Required by the
End of the Third
Quarter
Two of the three states were not calculating or
recovering the economic benefit of
noncompliance, although both states had
recently instituted changes to do so. The
failure of states (and EPA) to recover the
economic benefit of noncompliance has been a
long-standing problem. EPA oversight should
continue to evaluate the effectiveness of
penalties, including the recovery of economic
benefit.
Frequently, violators have economic gains
from postponing compliance actions. These
savings can come from:
Delaying or avoiding purchase of equipment.
Delaying the construction of new facilities.
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.Adverse impacts of
Insufficient Penalties
Financial gain
realized when
economic benefit of
violation not
recovered
, Violator implicitly
rewarded for each
violation
Violator gains an
economic advantage
over compilers
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"EPA expects.states to make a
reasonable effort to calculate
economic benefit and
encourages states to recover
this amount in negotiations
and litigation," ; .
;; ; -EPA's 1986 Oversight I
; Frameworkj
Avoiding annually recurring costs of operating and maintaining
equipment over the period of noncompliance.
To ensure everyone is thus treated fairly and consistently, economic
benefit should be recovered for all significant violations.
At the time of our review, neither California nor North Carolina required
or prescribed the recovery of economic benefit. Also, they had not
developed procedures for calculating economic benefit:
Recovery of Economic Benefit
State law requires recover/ of
economic benefit?
Policy requires recovery of
economic benefit?
Policy prescribes methods to
compute economic benefit?
Economic benefit recovered?
California !
No*
Yes
No
No
iNorth Carolina V^
No
Yes
No
No
Utah
No
Yes
Yes
Yes
'California passed a law effective January 1,2000 requiring the recovery of economic
benefit. It did not impact the actions we reviewed.
Although recent state audit reports did not address recovery of economic
benefit, EPA Region 9's evaluation of Nevada's program and a 1997
Virginia audit found that these states were not recovering economic
benefit.
When states did not recover economic benefit, violators could realize
substantial financial gains and be implicitly rewarded for noncompliance.
To illustrate, a California municipality's waste water treatment plant was
not completed by the deadline required by the state's cease-and-desist
order. However, a penalty was not assessed. The municipality saved at
least $1.5 million by delaying construction of the $50 million plant.
Besides the lack of a
requirement and methodology,
there were other reasons states
did not recover economic
benefit. One of the main
reasons economic benefit was
not calculated was because
obtaining necessary cost data
was cumbersome and time
consuming. Minimum
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Reasons States Did Not Recover
Economic Benefit in Penalties
' Lack of methodology - -
, Difficult and time-consuming to obtain
cost data'
Time-consuming to compute penalties
Penalties generally higher; states
reluctant to assess higher penalties
Not required to by state law or policy '
'Minimum penalties used instead
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Economic Benefit
Recognized As
Deterrent
Lack of Consistent
Penalties
Uncollected
Penalties
penalties also sometimes prevented the recovery of economic benefit. For
example, a North Carolina treatment plant was fined repeatedly for failing
to meet its permit limits. The state's environmental specialist concluded
paying minimum penalties was less costly than complying with permit
requirements.
Recently, both California and North Carolina had recognized the
importance of recovering economic benefit in improving compliance.
California passed a law requiring the recovery of economic benefit. North
Carolina issued its Principles of Enforcement which call for the cost of
noncompliance to be greater than the cost of compliance. North Carolina
stated that it was committed to incorporate economic benefit into penalties
for serious violations and chronic repeat violations.
Penalties were not consistent nationwide or within states. In order to
maintain a level playing field, penalties should recoup the economic
benefit the violator gained through noncompliance. As GAO concluded, a
key difference among state enforcement authorities is the recovery of
economic benefit. Economic benefit tends to be a large portion of
computed penalties. When it is not computed, it can lead to smaller
penalties and an unfair economic advantage to the violator. To make
enforcement consistent nationally, economic benefit should be recovered
in state penalties.
Internal studies by California and Arkansas had found problems with the
consistency of penalties. In 1999, California reported that there were
inconsistencies in enforcement actions amongst its regional boards. In
2000, Arkansas reported that "the current formal enforcement structure
allows for inconsistencies in the initiation of formal enforcement actions
and the levying of fines."
To ensure the regulated community is treated fairly, states should have
uniform penalty structures that have specific guidelines and equitable
formulas.
Penalties must be collected to establish credibility. We found some
penalties for storm water permit violations were not collected in
California. There was evidence penalty collection was problematic in other
states. Louisiana's Legislative Audit report showed the state had not
collected $441,188 in penalties for the years 1998 and 1999. A Maryland
audit found the state did not assess or collect penalties of $100 per day for
not meeting consent order milestones. In this last case, the discharger
continued to violate its permit 13 times between October 1997 and March
2000 without paying assessed penalties.
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Proactive Actions
Could Prevent
Significant
Violations
The states we evaluated needed to x^ , .>
improve strategies to prevent violations "^y°u 'Snore the (sewage) systems
from occurring at overused facilities. for 20 or 30 Xea/s'iting to come
Many significant violations occurred back and haunt you." ;
, ^ ... c -1- -Orange County CoastKeeper;
because waste water treatment facilities , environmental advocate
were obsolete, worn out, or exceeding
capacity. Further, an expanding
population taxed existing systems
beyond capacity.
We found states had vehicles available to address future discharges that
would violate permits. For example, California could issue a time
schedule order for threatened discharges of waste in violation of
requirements. '
We found numerous violations due to plant obsolescence and capacity
limits. For example:
In North Carolina, one small city's waste water treatment plant
capacity had not kept pace with population growth, leading to pollution
violations. The treatment plant discharged pollutants into a stream
which ran through a residential area.
In Northern California, one small city's population growth outstripped
the capacity of its sewage collection system. Sewage spills occurred
because the collection system lacked necessary capacity. Some of
these spills ended up in drinking water sources.
Many of these violations could not be prevented without major capital
investments, including new plants, that required months or years to finance
and construct.
EPA should continue to work with states to establish proactive strategies,
such as time schedule orders, to hold dischargers accountable for
compliance. As one North Carolina official observed, when discharge
rates reach 80 percent of the limit, consideration should be given to
expanding the plant. When discharges approach 90 percent, plant
expansion should have begun.
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Best Practices:
Deterring
Noncompliance
vBest Practices:
Deterrence
Minimum penalties
Publicity of enforce-
ment actions
Compliance report
card
Recommendations
States had several best management practices that were effective in
improving compliance. These practices included:
Minimum Penalties. Both California and North Carolina had
instituted minimum penalties for certain violations. They followed
the lead of New Jersey, which reported improvements in water quality
by using minimum penalties for large sewage spills and other water
quality violations. However, as found by
North Carolina, minimum penalties may
not be effective for more severe
violations if they are too low.
Publicity of Enforcement Actions.
EPA's sector facility indexing project
and North Carolina's website provided
some measure of public accountability
over violators and regulator responses.
By accessing these Internet sites, the
public can identify violators, locations,
and penalties assessed. States can gain
an additional deterrent effect by
publicizing their enforcement responses
widely, using vehicles such as state
websites and press releases.
Minimum Penalties:
Pros and Cons
+ Penalties assessed for
normally unaddressed
minor violations
^Relatively quick
consequence to violations
^Ensures consistent,
dependable response from
regulators
Serious violations may
receive the same penalties
as minor violations
-Minimum penalty may be
substantially less than
recovering economic
benefit
Compliance Report Card. California
planned to publicize the results of its
enforcement program to keep managers,
policy makers, and the public informed
about violations and actions taken. Its
planned compliance report card would be produced annually, showing
compliance rates, enforcement actions taken, the use of penalty funds
and supplemental environmental projects. Ongoing compliance rates
of dischargers and the report card would be placed on the Internet.
We recommend that the Assistant Administrator for Enforcement and
Compliance Assurance:
5- 1. Establish a clear and consistent standard for measuring the
promptness of enforcement actions.
5- 2. Continue to work with the regions to assist states in establishing
proactive enforcement strategies to help facilities avoid long-term
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serious violations due to plant or system obsolescence or capacity
limits.
Chapter 6 also contains a recommendation for setting standards for
enforcement actions. See page 60.
Agency R6SpOnse 5-1. Time Standard. The Office of Enforcement and Compliance
and OIG Position Assurance explained that the permit program already had a "timely and
appropriate " standard described in the Enforcement Management System.
It believed that a more appropriate recommendation would be for the
Office to review the consistency of its standard and ensure that the regions
and states are aware of it.
OIG Position: We agree with the Office's alternative recommendation
and ask it to address the recommendation's implementation.
5-2. Proactive Strategies. The Office of Enforcement and Compliance
Assurance stated that it, in conjunction with the EPA Office of Water, had
developed guidance documents and training workshops to assist the
regulated community in avoiding noncompliance due to plant or system
obsolescence or capacity problems. Some specific examples were
guidance for implementation of nine minimum controls and a long-term
control plan for combined sewer overflows, as well as guidance
documents and training workshops for municipal officials, system
operators, and consultants on procedures to eliminate and prevent
combined and sanitary sewer overflows.
The Office of Enforcement and Compliance Assurance said it was involved
in the development of the Guide for Evaluating Capacity Management,
Operation and Maintenance Programs at Sanitary Sewer Collection
Systems which describes management practices and operation and
maintenance techniques that have served municipalities best in the
reduction and elimination of sanitary sewer overflows from their systems.
The audience for this guidance is state and EPA personnel who are
assisting municipalities to comply with sanitary sewer overflow
requirements. The guidance will also help municipalities make decisions
on the rehabilitation and repair of their collection systems and ways to .
better operate those systems. The guidance was scheduled for release as
an interim-final document early in fiscal 2002, and was planned to be
finalized following the final publication of the Sanitary Sewer Overflow
Rule.
The Guide for Evaluating Capacity Management, Operation and
Maintenance Programs at Waste-water Treatment Plants will assist
inspectors in determining whether a capacity management, operation and
maintenance program was adequate for a particular wastewater treatment
U.S. EPA Headquarters Library
51 ..Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
-------
plant. The guidance will also be useful to municipalities for determining
whether their plants were following accepted practices and for addressing
any discrepancies as needed in order to improve or maintain compliance.
The guidance was scheduled for release as an interim-final document
early in fiscal 2002.
OIG Position: The Office's reply partially addresses the issue and
recommendation. The guides are excellent references and will provide
some measure of compliance assistance to EPA regions and states.
However, the guides in and of themselves are not proactive enforcement
strategies.
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Chapter 6
Improved Performance Evaluation and
Measurement Needed
Oversight Tools
To ensure fair and effective
enforcement of the Clean Water
Act, EPA regions need to
continue performing both
periodic, in-depth program
evaluations and annual
performance evaluations of
states' performance. These
evaluations need to be
consistent, continue toward a
goal of measuring the
effectiveness of performance,
and be made easily accessible to
"EPA must balance the new expectations *
raised by the Government Performance and
Results Act, the [National Environmental; I I
Performance] partnership approach ;>v :
suggesting moretflexibilify in state oversight,
and the wore traditional measures usedto
assess performance of state enforcement:
programs." .; .f -;:,.r '_ -:"; ';. ': :'..,'Jf"
-EPA Office of Regulatory Enforcement
the public.
EPA had developed several tools to evaluate state enforcement
performance:
Quarterly Non-Compliance Reports. States are required to report on
major facilities that have significant violations of their permits on a
quarterly basis, along with the enforcement actions the state has taken.
Further, the Office of Enforcement
and Compliance Assurance has
developed an automated system
called "SNC [Significant
Noncompliance] Tracker" which
allows both states and regions to
evaluate compliance records of
major facilities at any time.
Policy Framework. In 1986, EPA
established a framework for
evaluating enforcement programs.
In addition, Clean Water Act-
specific guidance provides
additional criteria.
EPA's Oversight Criteria and
. Measures
Clear identification of and priorities
. for the regulated community
. Clear and enforceable requirements
Accurate and reliable compliance
.monitoring
High or improving rates of continuing
compliance
Timely and appropriate enforcement
response
Appropriate use of civil, judicial, and
administrative penalty authorities
-EPA 1986 Policy Framework
Core Performance Measures. Under the National Environmental
Performance Partnership System, EPA and the Environmental Council
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of the States have agreed upon seven "core" performance measures for
evaluating state enforcement and compliance performance.
fee] ions Performed ^e f°und that at least eight regions were performing in-depth evaluations
/aluable °^ state P1"0^31115- (We were unable to obtain information from two
: valuations regions.) The three regions we audited were performing in-depth
evaluations that had important findings that were used, or should have
been used, to improve state programs. To illustrate:
"While states and
local government :i;
have primary
responsibility for
compliance and
enforcement actions...
EPA retains the .
responsibility for
ensuring fair and
effective enforcement '
of federal
requirements, and a
credible national
deterrence to '
noncompliance."
-EPA's 1986 Policy
Framework for EPA-
^tetp Fnfnrrpmpnf
^WIUIC wlltwl wdllClli
Agreements
In February 2000, Region 9 presented its findings on California's
Clean Water Act discharge program to a California joint legislative
committee hearing on water quality issues. Its findings included the
lack of storm water inspections and inadequate recovery of economic
benefit in penalties. Both of these issues were being addressed by
revisions in California's enforcement strategy and policy.
In June 1999, Region 4's issued its findings from a review of North
Carolina's Clean Water Act discharge program. These findings
included the lack of an effective storm water program and weaknesses
in the state's enforcement policy concerning identifying toxicity test
failures as permit violations.
Although regional evaluations found significant weaknesses with state
programs, they were inconsistent. The regions that responded to our
survey had developed their own evaluation programs; these programs
evaluated many of the same program elements but did not evaluate others.
^^^^^^^^^^ The frequency of in-depth evaluations also varied substantially. Region 4
performed in-depth evaluations every 8 years or so because of the large
number of states in the region. Region 6 told us it performed a detailed
program review on a semiannual basis.
EPA should develop and use consistent criteria and measures for in-depth
program evaluations. At a minimum, all of the oversight criteria and
measures in EPA's 1986 Policy Framework should be included along with
additional elements included in the Clean Water Act discharge guidance,
such as the adequacy of pretreatment programs.
Further, to ensure consistent oversight, there should be a uniform,
objective scoring mechanism. In this regard, Region 8 used an objective
scoring system in 1999 for measuring state performance.
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Performance
Measures Need
Focus on
Effectiveness
r- v -y Best Practice:
foj I.' Region 8's Scoring
'' System
Performance measured
objectively and consistently
Clear expectations set for
performance
States challenged to
improve scores
Areas needing improvement
specifically identified
Region could focus
resources on areas where
state needed assistance
We also believe regional evaluations
should be made easily accessible to the
public. Publicity apparently caused
North Carolina to improve its storm
water program. Although EPA
Region 4's evaluation of North Carolina's
enforcement program in 1999 found
serious deficiencies in management of the
storm water program, the state did not
agree to make investments in the program
until we reported these same problems a
year later.
EPA regions needed to use core
performance measures to consistently n>*«^»im»»MisiMMBwsftiffl»tf
measure the effectiveness of state
enforcement programs. Under the National Environmental Performance
Partnership System, EPA and the Environmental Council of the States had
agreed upon seven "core" performance measures for evaluating
enforcement programs.
While there was state resistence to collecting and reporting state data, EPA
should continue to press its state partners, including the Environmental
Council of the States, to use
core performance measures that
address the effectiveness of
enforcement programs. Further,
these measures should be
reported annually and be easily
Core Performance Measures
Number of major inspections and
percentage in priority areas.
Number o$ enforcement actions
Number of facilities reached through
compliance assistance*
Rates of significant noncompiiance*
Percentage of significant noncompiiers
returned to compliance .
Environmental or health benefits
achieved by enforcement activities*
Results of using alternative compliance
approaches* ,. -
*0ptionai,
accessible to the public.
Core performance measures
were not consistently used by
regions or states to evaluate
performance. Core
performance measures are a
limited set of measures
designed to help gauge progress
toward protection of the
environment and public health.
Only part of one core measure, the number of major facility inspections,
was used to evaluate state performance by all seven regions that responded
to our survey.
We believe the core performance measures needed further evolution in
order to achieve their national objective of "managing for environmental
results" for a number of reasons:
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What is tie relationship
between enforcement and
compliance, and how can
we use this information to
improve compliance and
meet other [North Carolina]
objectives?"
-North Carolina's Enforcement
Assessment 2000
Core Performance Measures
Used by 7 Regions
HN o. of Regions -
SNC=Significant noncompliers
Bean Counts. Three of the measures counted activities, such as the
number of major facilities inspected. These "bean counts" would be
more meaningful if they were converted into rates, such as the
percentage of the targeted universe inspected.
Measuring Success. Rates, such as compliance rates, were not
evaluated against benchmarks, standards, industry averages or
geographic norms. It was unclear what a successful, average, or
unsuccessful rate was.
Environmental Outcomes. The states we reviewed were not
measuring environmental outcomes from enforcement activities or
assistance activities.
Correlation Analysis. Except for North Carolina, the states we
evaluated had not attempted to analyze correlations between
monitoring activities, enforcement actions and compliance rates.
Analyzing such correlations would be useful in evaluating the
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effectiveness of inspections, monitoring, notices of violations, and
penalties.
Many [states] were not enthusiastic about the]
prospect of an EPA report with comparable;
performance measures for all 50 states,.!.";
National Academy of Public Administration,
i '.:: '-'". >. : November 2000J
As found by the National
Academy of Public
Administration, there were
several reasons that the core
performance measures did not
fully shift the focus from "bean
counting" to environmental results. Four of the most important core
performance measures were optional, such as environmental benefits
achieved through concluded enforcement activities. Further, states refused
to collect and report on many measures. They claimed the measures did
not always address their problems and added to their reporting burden.
EPA had its problems with core performance measures as well, the
Academy reported. EPA was unwilling to abandon its traditional practice
of negotiating agreements on activities states will conduct. Further, the
core measures were developed separately from the Agency's own goals
and measures under the Government Performance and Results Act. States
believed there was a significant disconnect between the Agency's own
goals and core performance measures.
In spite of these weaknesses, core
performance measures can
provide an important measure of
success and public
accountability: By reporting on
compliance rates and
environmental benefits, the core
performance measures provide
indicators of state program accomplishments and success. The National
Academy of Public Administration has recommended that all states
compile core performance measures and EPA consolidate them and make
them publicly available. We agree. As California observed, state officials
"must be regularly informed as to how their actions, policies, and staff are
affecting the rate of compliance." States (and EPA) should be held
accountable for their results.
Developing core outcome performance measures will be more difficult.
GAO recently concluded that enforcement outcome measures have been
difficult to create because of:
The frequent absence of baseline data needed to determine whether
compliance rates or environmental quality have improved under new
strategies.
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"All states should compile core performance
measures; EPA should gather them and
make them publicly available."
-National Academy of Public Administration,
November 2000;]
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States' Efforts to
Develop
Performance
Measures
"...The attractiveness of
performance measures
is exceeded only by the
difficulty of their design
and implementation."
-National Academy of Public
Administration
Lack of Goats and
Standards
The inherent greater difficulty and expense in quantifying outcomes as
compared to counting and reporting enforcement activities.
Difficulty in establishing causal links between enforcement strategies
and compliance rates or environmental quality.
Best Practice:
Using Outcome Measures
"Florida Was one ofthe tew states to
Jiaye attempted to quantify outcomes,:
noting that calculating accurate \ ;
: industrywide compliance rates was
ah'importantpartof:the state'seffon
to focus programs on results." ri;
: ; : -GAOTestimony, June 1998.
While core performance measures
may not have addressed each
state's problems, the states we
evaluated had not made much
progress in developing more
appropriate measures.
Utah and North Carolina were tracking
their compliance rates, although there
were some serious limitations.
California was not routinely evaluating
its compliance rates state wide.
However, states were making efforts to
develop better measures.
North Carolina had formed a work group to develop performance
measures to assess the effectiveness of its enforcement programs,
including water quality. The three performance measures developed for
enforcement were the (1) number of repeat violators, (2) compliance rate
per number of regulated facilities, and (3) compliance rate per inspections.
Utah and Region 8 had also partnered in an attempt to develop better
enforcement performance measures, including environmental
improvement measures. After much effort, the project came to a halt. The
Region and state decided not to proceed because the effort would not
reduce reporting; instead, it would increase data gathering.
California was in the midst of a major initiative to improve its compliance
rates for water dischargers. It recognized the serious limits of its
monitoring and data systems and was in the process of implementing new
systems.
Only one of the seven regions that responded to our survey was aware of a
state that used outcome-based performance measures. As previously
noted, developing outcome-based measures was inherently difficult. The
Office of Enforcement and Compliance Assurance had issued grants to
states to develop better performance measures. The results of these studies
should be used to further refine the core performance measures.
Although it was EPA's goal to increase compliance, this goal had not been
articulated into specific measures of success by EPA or the states we
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reviewed. Both Utah and California had set some compliance goals;
however, there were not specific goals or standards for most aspects of the
program. For example, compliance goals were not established for
watersheds, priority programs, high-risk sources, or priority industrial
sectors. None of the states we reviewed had specific goals or objectives
for increasing compliance, reducing recidivism, or improving water quality
by specific amounts or percentages.
The lack of standards and goals made it difficult for decision-makers to
make decisions on whether to invest or divest in certain strategies, target
areas, sectors, watersheds, or sources. Also, without goals or standards, it
was difficult to evaluate the relative success of programs.
Recommendations We recommend that the Assistant Administrator for Enforcement and
Compliance Assurance routinely determine whether states are fulfilling
their obligations to monitor and enforce discharge programs. Specifically:
6- 1. Develop consistent criteria and measures for in-depth program
evaluations of state programs:
a. At a minimum, all of the oversight criteria and measures in the
1986 Policy Framework should be included along with
additional elements included in the Clean Water Act discharge
guidance. Include the accuracy and completeness of data
systems, the quality of inspections, and the reliability of self-
monitoring reports.
b. Evaluate all significant discharge programs including storm
water, minor dischargers, and concentrated animal feeding
operations.
c. Use a uniform, objective scoring mechanism.
6- 2. Have regions perform in-depth evaluations of state enforcement
programs every two to three years. Make these evaluations available
to the public through publicity releases or the EPA website.
6- 3. Continue to remind state partners, including the Environmental
Council of the States, of their obligation to use core performance
measures that address the effectiveness of enforcement programs.
6- 4. Have regions collect and use all core performance measures to
consistently measure the effectiveness of state enforcement
programs on an annual basis. Consolidate these measures
nationwide and make them public.
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6-5. Work with regions to assist states in setting specific goals and
standards for compliance, recidivism, the timeliness of enforcement
actions and other important measures. I
Agency Response 6-1. Consistent Criteria and Measures. The Office of Enforcement and
and Old Position Compliance Assurance agreed that a process for periodic evaluation of I
the Clean Water Act discharge program in each state would be useful. It
stated that most regions conducted assessments of state water enforcement _
programs, either annually or bi-annually, though the nature of the I
assessment varied. Some variability in the assessment process was
necessary since priorities varied by state, as did work sharing with EPA
regions. The Office asserted that the review content of state performance I
for any program, not just the Clean Water Act discharge program, must be
governed principally by the authorization agreements, grant work plans
and agreements and the performance partnership agreement between a |
region and a state. Those policies and agreements should define
priorities, describe work sharing arrangements between a region and a
state, and define the evaluation process to be used, among other things. m
The Office of Enforcement and Compliance Assurance stated it had a I
national evaluation process which focused on "program element reviews"
among programs. These reviews examine policy and implementation of a
particular program element in all EPA regions and a sample of states.
The Office noted it was responsible for working with EPA regions and '
states to evaluate a wide scope of statutory programs, and while resources
did not permit a commitment to ensure a top to bottom evaluation of the I
enforcement of the discharge program in every state, the Office agreed to
consider how best to concentrate on key concerns of the program. _
The Office of Enforcement and Compliance Assurance noted that since the
program element reviews will each address a different program or
problem, there will not be a standing uniform scoring mechanism. |
However, within each review, the questions used and the weight assigned
to the answers will be the same. The Office agreed to continue to develop
a consistent set of criteria and measures as part of its design for each |
program element review. All applicable policy is considered in designing
each review. For discharge permits, this will include criteria from the
1986 Policy Framework. However, the Office was not yet in a position to I
identify what reviews will be undertaken in the future.
OIG Position: We laud the Office of Enforcement and Compliance
Assurance's efforts to develop a consistent set of criteria and measures for
"key concerns" of state enforcement programs. However, the plan to I
evaluate a single element of a state enforcement program is less than .
optimal and merits serious reconsideration. EPA should be aware of
significant weaknesses in the state programs it has authorized. A single
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program element review will not evaluate all of the state's significant
discharge programs. Morever, single program element reviews fail to
consider how resource constraints drive program management.
As the Office noted, it has uniform criteria to evaluate state enforcement
programs: (1) EPA 1986 Policy Framework, and (2) core performance
measures developed by EPA and the Environmental Council of the States.
These criteria provide a sound foundation for consistently evaluating state
performance nationally.
Further, as detailed in this report, all of the regions that responded to our
survey indicated they were performing comprehensive state evaluations.
Thus, lack of resources does not seem to be a major issue.
6-2. In-Depth Evaluations. The Office of Enforcement and Compliance
Assurance pointed out that many regions performed in-depth evaluations
of state enforcement programs on a rotating basis, using the Performance
Partnership Agreement, grant agreement, and existing policy as a basis.
The Office agreed that it would be ideal to have these evaluations of
enforcement programs in all states every 2 or 3 years; however, resources
simply would not allow that in some EPA regions. The Office also agreed
that publicity can be an effective factor to ensure competent program
operations; however, active publication of all evaluations on a website
may exacerbate federal-state tensions and inhibit a frank, open review
process. The Office reserved to use the website as conditions dictate.
OIG Position: It appears EPA regions have adequate resources for
evaluating state programs; all of the regions that responded to our survey
indicated they were performing comprehensive evaluations of state
programs. Further, the Office of Enforcement and Compliance Assurance
could team with the Office of Water to better leverage federal resources
directed at evaluating state performance.
One weakness in the existing state evaluation process was the lack of
consistent criteria and measures. For evaluations to be equitable,
comparable, and valuable, they need to be consistent, objective, continue
toward a goal of measuring the effectiveness of performance, and easily
accessible to the public.
The public should be aware of serious deficiencies in a state's ability to
protect human health and the environment. While public information
about state performance may exacerbate federal-state tensions, it would
provide an important means for holding states accountable for their
environmental performance.
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6-3. State Use of Core Performance Measures. The Office of
Enforcement and Compliance Assurance agreed to continue to remind
states of their obligation to use core performance measures, and I
suggested that OIG encourage the states directly where possible to do so
as well. In fiscal 1999, $1.8 million was awarded to 11 states to develop _
outcome measures, and, in fiscal 2000, another $1.2 million was awarded I
to 10 states to develop outcome measures specifically for compliance
assistance. The Office was also discussing with states possibilities for _
funding performance measurement work within the National
Environmental Performance Partnership System framework. "V
6-4. EPA Use of Core Performance Measures, The Office of '|
Enforcement and Compliance Assurance advised that states report on the
required core measures through national data systems. It is the optional
measures which the states have opted not to use. The Office agreed to
continue to promote the use of the optional measures through all means
available, including grants. The Office consolidates information on
required core measures of outputs nationally, and this information is used
by EPA regions in their performance discussions with their states and is
available to the public on request.
6-5. Compliance Measures. The Office of Enforcement and Compliance
Assurance noted that while measures for compliance, recidivism, and the
timeliness of enforcement actions were not "core measures" for states, it
had established performance standards for the timeliness of enforcement _
actions which, for the most part, were derived directly from the 1986 I
Policy Framework. Regions have worked with states to have them adopt
these standards. In fact, the Office included state performance on this «
standard in some of its program management reports. |
Since the measure for recidivism is new, the Office of Enforcement and m
Compliance Assurance wanted to get some experience with the measure |
before establishing performance goals. Likewise, it has not set
performance goals for compliance rates, recognizing that compliance <
rates are the product of many factors, not just EPA activities. The Office I
planned to work with the states through a grant to the Environmental
Council of the States to assist in developing a consistent approach to I
determining compliance rates.
The Office of Enforcement and Compliance Assurance stated it monitored I
and reported on recidivism and timeliness on a national basis. It was
considering setting a national target for recidivism for all programs, as
well as a national target for improving compliance. I
OIG Position: The Office's response partially addressed _
recommendation 6-5. The Office's efforts to set goals and standards for
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compliance, recidivism, and timeliness are critical to evaluating the
effectiveness of state (and EPA) performance and should be continued.
We are recommending, however, that regions work with states to establish
specific performance goals in these areas. We look forward to the
Agency's response to this recommendation in its reply to this report.
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Exhibit 1
Details on Scope and Methodology
Scope This audit resulted from concerns over the effectiveness of state
enforcement programs. We focused on the Clean Water Act discharge
program because of a lack of recent audit coverage in this area.
Forty-four states have EPA approval to issue, monitor, and enforce permits
under the Clean Water Act's National Pollutant Discharge Elimination
System program. EPA regions issue permits in the remaining states. The
purpose of the discharge program is to protect human health and the
environment by preventing the discharge of pollutants.
In addition to evaluating national data, we evaluated three EPA regions:
4, 8, and 9. In each region, we evaluated one state authorized to issue
discharge permits. We selected states with a range of population,
economy and sources of water pollution: California, North Carolina, and
Utah. These states represent about 16 percent of the U.S. population.
We issued a separate report on North Carolina entitled "North Carolina's
NPDES Enforcement and EPA Region 4 Oversight" in September 2000.
This report addressed matters not included in this report, such as water
testing methodology. Issues pertaining to this audit are included in this
report. Additional details on the scope and methodology of our North
Carolina evaluation are discussed in the North Carolina report.
We considered the results from a National State Auditors' Association-
coordinated audit that included enforcement of the Clean Water Act. As
of April 1, 2001, five state audit reports had been issued that addressed
Clean Water Act enforcement to some degree: Arkansas, Colorado,
Louisiana, Oregon, and Maryland. We considered the results of these
audits in this report.
We performed our audit according to Government Auditing Standards
issued by the Comptroller General. Our field work was conducted from
February 2000 to October 2000. The audit included management
procedures in effect as of fiscal 1999. We evaluated strategies,
compliance monitoring systems, and enforcement actions taken from
October 1,1998 to December 31,1999.
Methodology As part of our evaluation of management controls, we performed a risk
assessment. This risk assessment identified the potential threats to state
water enforcement and the management controls to address these threats.
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Management Controls
Analysis Techniques
Based on this risk assessment and interviews with EPA officials, we
identified critical management
controls. _
/
/
In assessing management controls,
we also considered the Agency's
own assessment. EPA's Permit
Compliance System was identified
in 1999 as an Agency weakness
during EPA's annual self-
assessment process. In EPA's
fiscal 2000 Integrity Act Report to
the Office of Management and
Budget, EPA reported it had three
major initiatives underway, in
conjunction with the states, which
were intended to address the issues
involved with the Permit
Compliance System and improve
the usefulness of the system as a
management tool: (1) system
modernization; (2) interim data
exchange format; and (3) electronic
reporting. The status of these
initiatives is discussed in Exhibit 2,
page 69.
The management control
weaknesses we found are described
in this report, along with
recommendations for corrective
action. These weaknesses were a
significant contributing cause to
enforcement effectiveness
problems.
In evaluating state strategies, we considered compliance monitoring
activities performed in high-risk areas.
To evaluate compliance monitoring and enforcement systems, we
evaluated a judgmental sample of facilities to see if violations were
properly identified and enforcement actions were appropriately taken. In
California, we selected a judgmental sample of nine major facilities in the
San Francisco Bay Regional Water Quality Control Board. We also
evaluated the storm water compliance monitoring systems of the Los
Angeles Regional Water Quality Control Board. Both boards are part of
California's State Water Resources Control Board. Moreover, we
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Management Controls Over State
Water Enforcement Programs
Clean Water Act and amendments
EPA approval processor :state
programs
40 CFR 122 and 123 ;,:-
State laws, policies and guidance
EPA's Permit Compliance .System
and state data systems ; .
1986 Policy Framework for
State/EPA enforcement
agreements
ERA Memorandum Of
Agreement Guidance
, EPA's Enforcement
Management System,
Enforcement Response Guide,
and enforcement policies
Regional pefformance
; partnership grant agreements,
work plans, and evaluations
Regional audits and evaluations
of state-programs
Regional ^memorandum of
agreements ., :
EPA Inspection Manual
Inspections
jSelf-monitoring reports
;:Quarterjy nortcompliance reports
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Evidence Considered
Data Limitations
considered Region 9's audits of Clean Water programs that had been
performed in California's three other regional water boards. In evaluating
compliance monitoring and enforcement systems in Utah, we selected a
judgmental sample of six major facilities.
We also evaluated a sample of 34 major facility inspections in California
and Utah; California's were selected from the San Francisco region. We
evaluated four storm water inspections in the Los Angeles region and
seven from Utah. These were judgmental samples; however, we believe
they were representative.
To evaluate regional oversight of state programs and performance
measures, we conducted a survey of 10 regions; seven regions responded.
We also obtained information on oversight procedures for another region.
In evaluating oversight, we compared annual and in-depth state evaluation
criteria to EPA's 1986 Policy Framework and the National Environmental
Performance Partnership System's core performance measures.
In analyzing state strategies, we considered the National Water Quality
Inventory; EPA's Strategic Plan and annual plans; state plans, strategies,
and grant agreements; EPA's 2000/2001 Memorandum of Agreement
Guidance; Office of Water's report, "Liquid Assets 2000"; regional
memoranda of agreement, strategies, and plans; and GAO reports. We
interviewed responsible EPA headquarters, regional, and state personnel.
We considered the following evidence in evaluating compliance
monitoring and enforcement:
State compliance monitoring activities, including receipt and review
of discharge monitoring reports, discharger inspections, and handling
of complaints.
State enforcement actions, including timeliness and appropriateness
of the response, appropriateness of the penalty, and penalty collection.
We reviewed inspection procedures and examined state inspection reports.
We also considered state and regional board policies and practices,
management reports and interviews with responsible officials.
For the three regions we reviewed, we obtained regional evaluations of
state performance.
There were serious limitations in the scope of the management information
available to evaluate state enforcement programs. EPA's permit
compliance system was inaccurate and incomplete. (This problem is
described in Chapter 3, page 19.) Thousands of smaller discharge permits
were not required to be included in the system. Further, state systems
were limited, especially for storm water program compliance status and
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Prior Audit
Coverage
activities. These issues are also further discussed in Chapter 3, page 19
and Chapter 4, page 35.
Neither EPA Office of Inspector General nor GAO have conducted any
recent national audits of state enforcement of Clean Water Act dischargers.
The National Academy of Public Administration issued a report in
November 2000 which included evaluations of EPA's water and
enforcement programs.
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Permit Compliance
System
Modernization
Projects
Exhibit 2: Other Matters
Key Management Decisions Needed for the
Permit Compliance System
During the audit we attempted to determine if the plans for the modernized
Permit Compliance System would remedy data gaps in EPA and state
water enforcement information. These data gaps are discussed in
Chapter 3 of this report (page 19). We were unable to ascertain whether
the modernized system and its components would remedy these data gaps.
We also identified management decisions the Office of Enforcement and
Compliance Assurance should address promptly to ensure the system will
meet both EPA and state needs.
EPA is redesigning the Permit Compliance System to better address
current requirements of discharge permitting and enforcement programs
and to meet new Office of Water initiatives, such as tracking reduced
pollutant loadings, capturing information on storm water sources, and
assessing the health of individual watersheds. EPA estimates that the cost
for modernizing the system is between $12 and $14 million.
The Office of Enforcement and Compliance Assurance has three major
initiatives currently underway for its Permit Compliance System, in
conjunction with the states, which are intended to address system
problems and improve its usefulness as a management tool:
System modernization,
State interim data exchange format, and
Electronic reporting.
Permit Compliance System Initiatives
Initiative , .:
ISystem Modernization
y
Interim Data Exchange
Format
Electronic Self
Reporting
Target,
Date
(Fiscal)
2003
2001
2002
New Functions
Tracks reduced pollutant
loadings, captures information on
storm water sources, assesses
health of watersheds
Eases entry of state data into
system; simplifies transition to
modernized system
Discharger self-monitoring reports
submitted electronically
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Efforts to modernize the system have been frustrated over the years by a
lack of funding and other Agency priorities. In addition, there have been
regulatory hurdles to overcome. For example, to enable electronic
reporting, the Agency had to modify federal discharge regulations to allow
the regulated community to use electronic reporting to submit discharge
information to EPA.
Concerns In evaluating whether the modernized system would remedy problems
with data gaps, we identified several concerns that we believe should be
promptly addressed:
Data Entry Requirements Were Not Updated. The Agency
policy that identifies data that EPA and states are required to enter
into the national information system had not been updated for over
a decade and excluded storm water data. Meanwhile, the
functional requirements documents for the new system had been
completed and the project had started the detailed design phase.
Data entry requirements are critical for determining system
requirements, identifying system costs and benefits, and
developing electronic reporting regulations.
Requirements Documents Were Incomplete. The requirements
documents for the new system were incomplete. We were told that
new data elements had been established for storm water and
concentrated animal feeding operation permits and, potentially,
new data elements will be needed for certain minor facility
operation permits. However, this will not be fully known until the
data entry policy is updated. Also, the Office of Enforcement and
Compliance Assurance had not determined how the compliance
status would be determined for storm water, concentrated animal
feeding operations, and other new permits.
Formal Consensus Was Not Reached. The Office had not
successfully collaborated with the Office of Water in the design of
the system requirements. Further, the states had not formally
bought into system requirements. Although the Office of Water
and states had been included in workshops to determine system
requirements, they had not reached a formal consensus on the
modernized system requirements to ensure the new system will
meet the users' needs.
Cost-Benefit Analysis Was Incomplete. System modernization
for the Permit Compliance System had begun the detailed design
phase without completing the required life cycle cost-benefit
analysis. Office of Management and Budget Circular No. A-l 1,
Part 3 - Planning, Budgeting, and Acquisition of Capital Assets
(July 2000), and OMB Circular No. A-130, Management of
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Federal Information Resources (November 2000), require agencies
to prepare and update cost benefit analyses for information
systems. An accurate cost-benefit analysis is necessary to identify
the most cost-effective solution for the new system. Also, the
expected benefits of the new system need to be quantified for
evaluating the return on investment.
Key Decision Documents Were Needed. Although the
modernized system was estimated to cost more than $10 million in
life cycle costs, the required system charter and system
management plan decision papers had not been prepared or
approved by appropriate levels of management. According to
EPA's Information Resources Management Policy, the system
charter should have been developed during project initiation,
included an estimate of life cycle costs, and identified appropriate
management levels for approval of decision papers. Further, the
decision paper for the system management plan should have been
produced at the conclusion of the analysis stage and updated as the
project progressed.
Suggestions We suggest that the Office of Enforcement and Compliance Assurance
collaborate with the Office of Water to create an updated data entry policy.
Upon completion of this policy, we suggest that the Assistant
Administrator for Enforcement and Compliance Assurance:
Complete the system requirements document.
Execute memoranda of agreements with the Office of Water and
state participants to help ensure (1) that the baseline requirements
for the new system design are formally agreed to and (2) that both
federal and state needs are addressed in the design of the new
system.
Perform a cost-benefit analysis of the new system that addresses
the electronic reporting and data entry requirements, the system
development costs, and the projected operational and maintenance
costs over the life of the system.
Establish and approve a system charter and system management
plan.
Agency Response The Office of Enforcement and Compliance Assurance agreed with the
and OIG Position suggestions, except for the suggestion to execute memoranda of
agreements with the Office of Water and the states on the system
requirements and design. It explained that the schedule below addresses
the tasks it will perform, with the involvement of EPA regions and states:
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Update system management plan
Complete system design specification document
Update federally required data element list
Update system policy statement
5/01-12/01
7/01-3/02
4/02-9/02
Ongoing-9/02
System Requirements Document. The Office of Enforcement and
Compliance Assurance informed us that data requirements were
collected from EPA (the Office of Water and the Office of Enforcement
and Compliance Assurance) and states to determine the scope of the
modernized Permit Compliance System. The next phase of system
modernization is the design phase. One of the major products from
that phase will be a design specification document. This document
will be developed with very intense participation by EPA and states
(both direct users and interface states). The design specification
includes data elements to be collected in the system, data entry
screens, report formats, and specific functionality to be supported,
including electronic reporting efforts being managed elsewhere in the
Agency. This effort will begin in July 2001 with the national Permit
Compliance System meeting and will be completed by March of 2002.
OIG Position: The finalization of the data requirements has the potential
to affect the design phase and the cost benefits of system modernization.
Accordingly, we suggest that extensive work on the design phase not be
initiated until after the finalization of the data and functional requirements.
Memoranda of agreements with the Office of Water and state
participants. The Office of Enforcement and Compliance Assurance
agreed that full consultation and coordination with the Office of Water
and the states was necessary; however it did not agree that the
development of agreements with these parties was necessary or
desirable. The Office believed that such a process would be extremely
time consuming and resource intensive, and the goals of such a
process can be achieved in other ways. Coordination had already
occurred (and will continue) with Association of State and Interstate
Water Pollution Control Administrators and the Environmental
Council of the States.
Decisions on policy and system issues will be handled at a senior level
between the Office of Water and the Office of Enforcement and
Compliance Assurance with recommendations coming from the Permit
Compliance System Steering Committee (representing EPA
headquarters, regions, and states). One of the tasks before the
Steering Committee and senior water managers is the updating of the
system Policy Statement and the identification of federally-required
data elements.
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The Office of Enforcement and Compliance Assurance stated it had
worked extensively with the Office of Water to identify data
requirements. It intended to continue to work with the Office of Water
and the states to finalize data requirements, both for existing programs
and for new regulatory activities which were not well handled in the
Permit Compliance System. In the next several months, system
modernization managers will be working with the Office of Water to
verify that requirements are still accurate and complete. Additionally,
a data requirements team with representatives from the Office of
Enforcement and Compliance Assurance, Office of Water, and state
will be established at the Permit Compliance System national users
meeting in July to review, validate, and finalize the identified
requirements.
Once the data requirements are established, a workgroup, including
EPA headquarters and regional representatives, as well as states, will
be formed to identify the subset of data requirements which will be
federally mandated for entry into the Permit Compliance System. The
Policy Statement will then be modified to incorporate the data
elements which states and regions are required to enter into the system
as well as the universe to which those requirements will apply.
OIG Position: We believe it is critically important that the data and
functional requirements for the modernized system be formally agreed to
by the Office of Water and states to help ensure the system contains the
agreed upon data, data definitions, data formats, and pertinent technical
information needed to foster data quality and data integration. Without
such agreements, there is an increased risk that the modernized system will
not (1) meet the users' needs and (2) lower the costs to exchange data.
Formal agreements are also called for by the Exchange Network, an EPA
project to improve environmental decision-making, improve data-quality
and accuracy, and reduce data redundancy. The Exchange Network's
Blueprint calls for EPA and the states to have "trading partner agreements"
that contain the agreed upon data, formats, and related technical
information. The Blueprint specifically cites Permit Compliance System
data as an exchange of data to be governed by trading partner agreements.
Cost-Benefit Analysis. The Office of Enforcement and Compliance
Assurance agreed to complete a cost-benefit analysis by September
2001.
OIG Position: Because the finalization of the data requirements has the
potential to affect the design phase and the costs and benefits of the Permit
Compliance System modernization, we suggest that the cost-benefit
analysis be completed after the finalization of the data and functional
requirements.
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System charter and system management plan. The Office of
Enforcement and Compliance Assurance agreed to establish and
approve a system charter and management plan by December
2001. However, the Office stated that a system management plan
was done early in the planning phases of system modernization. It
was replaced with the Information Technology Management
Reform Act submission, which contained all of the information
required in the system management plan and was approved by
Deputy Assistant Administrator. This submission was provided to
the Office of Management and Budget. As this document was
updated each year, the Office believed that it served the purpose of
the system management plan; however, it agreed to update the
plan by December 2001.
OIG Position: We concur with the decision to update the system
management plan by December 2001. However, we were unable to
substantiate that a system management plan was previously prepared.
Further, a system management plan must be approved,by the Assistant
Administrator, rather than the Deputy Assistant Administrator. Also, a
system management plan also must be linked with Agency and
organizational information resource management strategic and multi-year
implementation plans, and be updated to reflect actual and planned
changes as new system decision papers are approved.
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Exhibit 3
Report Contributors
Western Audit Division
Charles McCollum, Divisional Inspector General for Audit
Katherine Thompson, Team Leader
Dan Cox, Assistant Team Leader
Melinda Burks, Auditor
Clem Cantil, Auditor
Jimmy Ko, Auditor
Lori Risby, Auditor
Deborah Stanley, Auditor
Southern Audit Division (North Carolina Audit)
Mary Boyer, Divisional Inspector General for Audit
John Bishop, Audit Manager
James Hatfield, Team Leader
Laurie Adams, Auditor
Jerri Dorsey, Auditor
Chris Dunlap, Auditor
Geoff Pierce, Auditor
Central Audit Division (North Carolina Audit)
Denton Stafford, Auditor
Charlie Watts, Auditor
Headquarters
Eric Hanger, Associate Counsel
Ernest Ragland, Auditor
Bernard Stoll, Engineer
Stephen Schanamann, Environmental Scientist (North Carolina Audit)
Gerald Snyder, Engineer (North Carolina Audit)
Michael Wilson, Environmental Scientist (North Carolina
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I Exhibit 4
Report Distribution
U.S. Environmental Protection Agency
Administrator
Deputy Administrator
' Chief Financial Officer
Assistant Administrator for Water
Assistant Administrator for Environmental Information
Associate Administrator for Congressional and Intergovernmental Relations
_ . Agency Followup Official (27 10)
* Agency Followup Coordinator (2724)
Regional Administrators
State of California
Environmental Protection Agency
State Water Resources Control Board
State Auditor
State of North Carolina
Department of Environment and Natural Resources
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Division of Water Quality
State Auditor
State of Utah
Department of Environmental Quality
" Division of Water Quality
State Auditor
_ Association of State and Interstate Water Pollution Control Administrators
Environmental Council of the States
| General Accounting Office
National Academy of Public Administration
National State Auditors' Association
I Natural Resources Defense Council
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STA Appendix: Agency Response
^>
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
q WASHINGTON, D.C. 20460
JUN 29 2001
OFFICE OF
ENFORCEMENT AND
COMPLIANCE ASSURANCE
MEMORANDUM
SUBJECT: OECA Comments on the Draft Audit Report, "State Enforcement of Clean Water Act
Dischargers Can Be More Effective"
FROM: Sylvia K. Lowrance
Acting Assistant Administrator
TO: Charles McCollum
Divisional Inspector General for Audit
Western Audit Division
Office of the Inspector General
Thank you for the opportunity to review and comment on the April 25,2001 version of the
Draft Audit Report, "State Enforcement of. Clean Water Act Dischargers Can Be More Effective."
We agree with several of the conclusions in the report, including that States need to implement risk-
based approaches to water enforcement and that it would be useful to have a process for periodic
evaluation of the Clean Water Act program in each State. We also agree that modernization of the
Permit Compliance System (PCS) should be a high priority; in fact, the modernization of the Permit
Compliance System (PCS) has been an OECA priority for the last four years. As we have informed
you on at least two previous occasions, part of the justification for this work was to improve the
quality of information in PCS. OECA has funded modernization efforts during this 4 year period
and Agency funds have been provided since FY 2000. OECA's commitment to modernizing PCS is
further demonstrated through our recommendations as early as 1999 that PCS be added as an
Agency-level FMFIA weakness.
However, we remain very concerned about the way some of the issues, as well as EPA's role,
are characterized in the report and that many of the findings are based on anecdotal information. In
brief, the draft report does not recognize that: 1) the Office of Enforcement and Compliance
Assurance (OECA) has an exhaustive process for setting national enforcement priorities, including
stakeholder meetings and a Federal Register notice and comment period (p. ii), 2) States should be
responsible for setting "watershed-specific enforcement priorities"(p. 13), and 3) flexibility in
NPDES program requirements (e.g., tradeoffs of major and minor inspections are allowed) supports
U.S. EPA Headquarters Library
Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
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State enforcement strategies (p. 7). We are also concerned that the issues related to PCS have been
oversimplified in the report.
OECA's national enforcement priority setting process includes consultation with the Regions,
States, Tribes, and the national program managers. In addition, the views of the public are solicited
through the publication of a Federal Register notice identifying proposed priorities. Public health
and environmental risk is a major criterion used in identifying possible priorities, and documents
coming from States, such as the 305(b) report, are used in determining which environmental
problems pose the greatest risks. Wet weather issues, such as,sewer overflows and contaminated
urban and agricultural runoff, were identified as major sources of water quality impairment in the
305(b) reports and were identified as an OECA priority for FY 2000-2001. Storm water was added
at the request of EPA's Office of Water. A stakeholder meeting held in the fall of 2000, which
included State representation, verified that "wet weather" should be a priority again for FY 2002-
2003. The audit report fails to recognize the involvement of States in the OECA national priority
setting process, as well as the significance given to environmental issues identified by the States. A
chronology of OECA's stakeholder process is included in response 2-1 of the attachment.
OECA believes it has been sending a consistent and strong message to the Regions and the
States that enforcement resources should be concentrated on the most significant pollution sources.
OECA has developed national risk-based strategies for addressing sewer overflows, concentrated
animal feedlot operations, and storm water; each of these emphasize the importance of focusing on
impaired watersheds. We agree more needs to be done, but we question whether additional guidance
documents and further rounds of consultation would help, or whether they would drain scarce
resources in redundant and time consuming bureaucratic processes with little environmental result.
We believe that the real issue is not OECA's priority setting process but whether risk-based
strategies are being implemented in the field by the States. The draft report reveals that several
States have no risk-based planning at all. States need to assume a greater share of responsibility in
addressing significant pollution problems. For example, they are often in the best position to identify
watershed-specific priorities and develop field level implementation plans. A constructive
recommendation would be that EPA should place more emphasis on program reviews and improve
its efforts to share information (e.g., on "best practices") with the States.
OECA disagrees with the finding that the core NPDES program inhibits the development of State
strategies. In its FY 2000/2001 OECA Memorandum of Agreement (MOA) Guidance ("the MOA
Guidance"), OECA's focus was not on major point sources, but on the same "wet weather" risks to
water quality cited by OIG in its report, including CAFOs and storm water. The MOA Guidance
does state that it is an Agency goal to inspect 100% of all major point sources annually because
major point sources generate the majority of effluent flow and toxic pollutant loadings which can
significantly affect water quality in receiving waters. OECA believes that implementing a risk-based
approach means evaluating all dischargers contributing to water quality impairment and an important
component of that is maintaining a field presence at major facilities. Consistently inspecting major
facilities in the past may be responsible for the relatively high levels of compliance among majors.
We need to recognize that we would lose significant environmental benefits associated with higher
levels of compliance among majors if we were to allow a total shift to minors. OECA's MOA
Guidance allows Regions/States flexibility in shifting a portion of their total inspection resources
from major to minor facilities, particularly in priority watersheds, where those minor facilities
represent a significant risk. OECA's guidance makes clear that minor inspections can be traded for
major inspections at a 2:1 ratio, using a risk-based rationale, if the Region/State is willing to report
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the minor inspection results in PCS. Resistance sometimes arises from a lack of rationale (e.g., no
risk-based strategy), unwillingness to commit to the tradeoff ratio, and/or unwillingness to report
minor data in PCS. Reporting and tracking outcomes from these inspections is critical to addressing
OIG's concerns regarding the lack of data on minors and for EPA to document results under the
Government Performance and Results Act (GPRA).
Other guidance documents issued by OECA (e.g., the "Revision to Inspection Coverage and
Frequency Criteria of Clean Water Act Permittees," dated September 1,1995, the "Compliance
Assurance Implementation Plan for Concentrated Animal Feeding Operations," dated March 5,1998,
and the "2000 Storm Water Enforcement Strategy Update," dated February 1,2000) also emphasize
the importance of focusing Regional and State resources on non-major diffuse sources of pollution
that carry a large risk to human health and the environment. In fact, historically, 45% of the formal
enforcement actions tracked in PCS were against minor facilities.
OECA's actions are not keeping the States from implementing a risk-based approach or from
addressing watershed priorities. Our MOA Guidance, national enforcement guidance, and strategies
provide States with the flexible framework they need to implement a risk-based program. Where a
State is authorized to implement and enforce the NPDES program, the State is responsible for
identifying its high-risk priorities and focusing its resources in those areas.
In general, OECA agrees with many of the criticisms raised by OIG regarding the PCS system.
OECA disagrees, however, with the conclusion that PCS is not designed to accept data on minor
facilities or that EPA does not require States to input some minor data. Of the 55,660 facilities in
PCS, 49,044 are minors and 6,616 are majors. Historically, of the total number of facilities with
some information on them in PCS: 13,444 (27%) minors have enforcement action data, 29,883
(61%) minors have inspection data, and 22,128 (45%) have effluent limit data. The PCS system will
accept data on minor sources, including CAFOs and storm water sources if the requirements for
CAFOs and storm water monitoring are consistent with those for NPDES individual permits.
Moreover, the PCS Policy Statement requires States to enter facility and inspection data into PCS for
minor sources, and 40 CFR Part 123.45(c) requires authorized NPDES States to submit an annual
statistical noncompliance report on "nonmajor" permittees indicating the total number reviewed, the
number in noncompliance, and the number of enforcement actions. We recognize that the majority
of storm water dischargers are covered under general permits and that EPA does not currently require
storm water general permit data to be entered into PCS and we don't have guidance on PCS data
entry for general permits. OECA is committed to modernizing PCS, updating the Policy Statement,
pursuing the option of electronic reporting, and exploring ways of tracking new program areas (such
as storm water). However, ultimately, it is up to the States to commit the resources needed to keep
up with their responsibility to input data into PCS and to report on the noncompliance status of
nonmajors.
Attached are detailed responses for each recommendation in the audit report. The Office of
Enforcement and Compliance Assurance is working in all of the subject areas covered and will
consider your recommendations as we continue to move forward.
Please give me a call if you have any questions or have your staff call
Kathryn Greenwald at (202)564-3252.
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cc: Eric Schaeffer, ORE
Michael Stahl, OC
Mary Kay Lynch, OPPA-C
Michael Cook, OW/OWM
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ATTACHMENT
OECA Responses to Recommendations in Draft OIG Report,
"State Enforcement of Clean Water Act Dischargers Can Be More Effective"
I. Executive Summary
OIG is recommending that the Office of Enforcement and Compliance Assurance, in partnership with the Office of
Water and EPA regions, collaborate with states to develop risk-based enforcement priorities. EPA also should make
modernization of its Permit Compliance System a high priority. Teaming with the Office of Water and the states, the
Office of Enforcement and Compliance Assurance should ensure that the new system will meet both federal and state
needs.
OIG is also recommending that the Office of Enforcement and Compliance Assurance revise its enforcement
guidance to better define significant violations for toxicity test failures, minor facilities, and storm water dischargers.
Lastly, the Office of Enforcement and Compliance Assurance should routinely determine whether states are fulfilling
their obligations to monitor and enforce discharge programs. To do so, it should develop consistent criteria for in-
depth program evaluations of state programs. These evaluations, along with state performance measures, should be
accessible to the public.
EPA Response: The Office of Enforcement and Compliance Assurance (OECA) has an exhaustive stakeholder process
in place to determine what the national enforcement priorities are; it includes consultation with the Regions, States, and
the Office of Water (OW). OECA has developed national risk-based strategies for the wet weather priorities and will
continue to assist the Regions in working with the States to implement them. Modernization of the Permit Compliance
System (PCS) is and will continue to be a high priority for OECA. OW and the States have been involved in workshops
to help identify the data requirements needed for management of the NPDES program. Additionally, an
OECA/OW/State data requirements team will be established at the PCS national users meeting in July 2001 to review,
validate, and finalize the identified requirements. The final data requirements as identified by OECA, OW, and the States
will be incorporated in the modernized PCS system.
Existing national enforcement guidance has flexibility to address toxicity, minors, and storm water violations. OECA
will work with the Regions to ensure that the States are aware of the guidance and will consider OIG's specific
recommendations when guidance is updated in the future.
OECA agrees that State compliance and enforcement programs need to be periodically evaluated. EPA Regions do assess
State programs on a rotating basis and OECA now has a national evaluation process which focuses on "program element
reviews."
Chapter 2: State Enforcement Strategies Need to Be Modified
OIG recommends that the Acting Assistant Administrator for Enforcement and Compliance Assurance:
3- 1. In partnership with the Office of Water and EPA regions, collaborate with states to develop risk-based
enforcement priorities. Encourage states to develop mechanisms to evaluate tradeoffs in enforcement
investments.
EPA Response: OECA already has a consultation process in place, in which Regions, States, EPA's Office of Water,
and other stakeholders are extensively consulted in determining what the national water enforcement priorities should be
for each 2-year cycle. A major factor in identifying the candidates for priorities is the element of risk. To start the FY
2002/2003 process, in the Spring of 2000, Regions were asked to begin by engaging States and Tribes in a discussion of
national priorities. We received comments, suggested changes for existing priorities, and recommendations for new
priorities from 16 individual States and their environmental agencies, as well as receiving collective State comments from
3 EPA Regional offices. Based on feedback received and combined with an analysis conducted at Headquarters, a
Federal Register (FR) notice was published on September 28, 2000 soliciting public comment on a list of 15 potential
priorities and encouraging suggestions for additional nominations. The comments received from the FR notice helped set
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the stage for OECA's "National Priorities Meeting" held on November 14, 2000. State, Tribal, Regional and
Headquarters managers attended the meeting. Fifteen priority candidates were described and discussed and attendees
were then requested to recommend their top choices for OECA's FY 2002/2003 MOA priorities. Six State
representatives and 12 representatives from State associations attended the meeting and they all contributed to the
outcome. The 6 recommended priorities are all current priorities, sending a clear signal that stakeholders and our
regulatory partners want OECA to continue working on those national priorities in FY 2002/2003.
While Regions can and do recommend that States participate in national water priorities, suggest where States might
focus their resources, and meet with States to conduct joint work planning, ultimately it is the State's decision as to the
priorities it will set. We believe OIG should recognize State involvement in identifying national priorities and that a
more appropriate recommendation would be for OECA to develop a process to ensure States are implementing the risk-
based strategies we have.
3- 2. Initiate action to eliminate the regulatory requirement to inspect all major dischargers annually.
EPA Response: Our regulations at 40 CFR Part 123.26(e)(5) require that State programs have the "procedures and
ability" to inspect all majors annually. We believe that it is important to retain this regulatory requirement because not all
States are authorized to implement the NPDES program yet and this requirement sets a minimum, quantifiable standard
for States to be held to (i.e., a State applying for approval to implement the NPDES program must have procedures and
resources in place to at least inspect all of its largest dischargers annually). Major facilities are considered high risk
facilities because they generate the majority of effluent flow and toxic pollutant loadings. As shown in the maps included
in this audit report (p. 17 and 39), there still are numerous noncompliance problems with major dischargers indicating
that it is important that we maintain a field presence at these facilities.
OECA recognizes that a risk-based approach, such as addressing impaired watersheds, requires addressing majors and
minors which is why we issued the September 11, 1995 memorandum to the Regions entitled "Revision to Inspection
Coverage and Frequency Criteria of Clean Water Act Permittees." This memorandum, as well as OECA's Memorandum
of Agreement (MOA) Guidance, provides EPA Regions and States flexibility in shifting some inspection resources from
lower risk majors to higher risk minors. OECA's guidance makes clear that minor inspections can be traded for major
inspections at a 2:1 ratio, using a risk-based rationale, if the Region/State is willing to report the minor inspection results
in PCS. Resistance sometimes arises from a lack of rationale (e.g., no risk-based strategy), unwillingness to commit to
the tradeoff ratio, and/or unwillingness to report minor data in PCS. Reporting and tracking outcomes from these
inspections is critical to addressing OIG's concerns regarding the lack of data on minors and for EPA to document results
under the Government Performance and Results Act (GPRA).
We believe an appropriate alternative recommendation would be for OECA to ensure that any State that does not commit
to inspect 100% of its majors develops and implements an inspection plan that targets an appropriate mixture of high risk
dischargers (i.e., majors and minors) in priority areas such as impaired watersheds.
Chapter 3: Permit and Other Information Systems Inadequate
OIG recommends that the Acting Assistant Administrator for the Office of Enforcement and Compliance Assurance:
3-1. Make modernization of the Permit Compliance System a high priority. Further, ensure that future systems:
Allows for submission and evaluation of self-monitoring reports for all dischargers, including minor
facilities and storm water.
Tracks storm water permits, inspections, compliance rates, and enforcement actions.
EPA Response: Modernization of PCS is, and will continue to be, a high priority for OECA. The modernized system
will build in the capacity to allow for entry of all data element fields needed to track all dischargers, including minor
facilities and storm water facilities. Information tracked for those dischargers will include permit limits, inspections,
compliance and enforcement action data. PCS modernization is scheduled for implementation by the end of 2003.
3-2. Accelerate the development of the state data transfer system for the Permit Compliance System. Also, before
proceeding further into design and development, work with the Office of Water to ensure there is an up-to-date
policy statement for water system criteria.
EPA Response: Over the last year, OECA and the Office of Environmental Information (OEI) have been working
closely with our State partners in implementing the PCS Interim Data Exchange Format (IDEF). IDEF will ease the
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States' entry of required information from their modernized State systems into legacy PCS, and will simplify the
transition of that information entry into the modernized PCS. OEI is the lead for implementing the IDEF project and has
developed the schedule for implementation of the project. Acceleration of that implementation schedule needs to be
addressed by OEI. Currently IDEF is scheduled for full implementation in February/March 2002.
While OECA agrees that there is a need to update the PCS Policy Statement to address new data requirements, we do not
agree that this must occur before design and software development. Broad capacity will be built into the system as
indicated in the response to 3-1. Only a subset of that capacity is likely to be Federally required. Therefore, the Policy
Statement can be updated during system design and development.
3-3. Have regions work with states to help ensure data elements needed for the new Permit Compliance System are
included in state systems being developed.
EPA Response: OECA is in the process of finalizing the overall data requirements for the modernized PCS system. We
will continue to work closely with the States in developing those detailed data requirements. Until those requirements are
finalized, those States modernizing their systems should include in their modernized system the current PCS data entry
requirements as referenced in the current PCS Policy Statement.
For the most part, States do not coordinate or consult with OECA when modernizing their State systems as they are built
primarily to accommodate State needs. We will, however, request of Regions that they make a special effort to discuss
State modernization plans during their EPA/State program status meetings. Additionally, we hope that extensive
involvement of State representatives in the PCS modernization process will have a spill over effect in getting States to
include the necessary data elements in their systems.
3-4. Continue to report the Permit Compliance System as an Agency-level weakness until the modernization project
is implemented and the system data is reasonably accurate and complete.
EPA Response: OECA will continue to report PCS as an Agency-level weakness until all milestones have been met.
One of the milestones is the completion of PCS modernization which is scheduled to occur by the end of 2003.
3-5. Revise guidance to specify that whole effluent toxicity violations are significant violations. Revise regulations
to require whole effluent toxicity violations to be reported on quarterly noncompliance reports.
EPA Response: In many ways, whole effluent toxicity (WET) is treated like any other parameter in the NPDES
program, i.e., the permittee reports self-monitoring data on its discharge monitoring report, WET results are entered into
PCS and tracked, and violations should be reviewed and are subject to a range of enforcement responses. The major
exception is that WET violations are not automatically flagged as significant noncompliance or "SNC." Because of the
variability in permit requirements (e.g., many permits just require monitoring with a trigger for follow-up study instead of
a numeric limit) and the variation in frequency of compliance monitoring required (e.g., quarterly or annually),WET
violations do not neatly fit under our existing SNC criteria. However, EPA's existing regulations and guidance provide
Regions and States flexibility to identify WET violations as significant. The regulations at 40 CFR Part 123.45(a)(2)(G)
currently provide the Director with flexibility to report any violation of "substantial concern" on the QNCR. EPA's 1989
"Whole Effluent Toxicity Permitting Principles and Enforcement Strategy" states that any violation of a WET limit is of
concern and should be reviewed. EPA's "Enforcement Management System" enforcement response guide was last
revised in 1989 and recommended responses to WET violations were added.
When OECA revises the NPDES definition of SNC, we will re-consider the applicability of SNC criteria to WET.
3-6. Establish a definition of significant violations for minor facilities, including storm water dischargers. At a
minimum, include nonsubmission of self-monitoring reports in this definition. Also, define "significant"
minor facilities. Include facilities impacting impaired waterways in this definition.
EPA Response: The Director has discretion to designate any facility with violations of concern as a "major" thereby
subjecting the facility to SNC criteria, and 40 CFR Part 123.45(a)(2)(G) currently provides the Director with discretion
to report any violation of "substantial concern" on the QNCR. OECA will commit to consider developing guidance on
when a minor should be designated as a major and to include factors such as non-submission of discharge monitoring
reports and impact of the discharge on impaired waterways.
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Chapter 4: Storm Water Compliance Systems Have Deficiencies
OIG recommends that the Acting Assistant Administrator for Enforcement and Compliance Assurance:
4-1. Work with EPA regions in assisting states to:
Develop mechanisms to better balance their limited resources between all categories of dischargers, as is
indicated by the states' analysis of risks to voter quality,
Create effective strategies for identifying storm water nonfilers.
Develop sound storm water inspection programs which include risk-based inspection schedules and tracking
and follow-up of inspection results.
Establish tracking systems for citizen complaints.
EPA Response: OECA will continue to work with the Regions and States to implement risk-based approaches to water
enforcement; OECA's MOA guidance and national strategies provide flexibility to address majors as well as minors.
OECA's 2000 Storm Water Enforcement Strategy outlines a recommended "sweep" approach of targeting a priority
watershed/geographic area, then focusing storm water inspections and enforcement actions on a category of non-filers
(e.g., a priority industrial sector or large construction sites) in that area. While EPA can assist the States by providing
direction, guidance, training, and work-sharing, States must take responsibility to develop appropriate planning
mechanisms to develop and implement risk-based strategies (which should include a sound inspection program and a
system to track citizen complaints), and balance their limited resources.
4-2. Facilitate the development of a system which allows self-monitoring reports to be electronically scored for
compliance. Consider low- cost options such as scan sheets (commonly used for electronic scoring of tests) and
web-based reporting.
EPA Response: The current PCS system already determines compliance based on the electronic review of the discharge
monitoring reports, though some improvements are needed in the system. Modernized PCS will certainly have this
capability. Additionally, modernized PCS will provide the capability for facilities and States to electronically report
information utilizing the Agency's Central Data Exchange portal and the National Environmental Information Exchange
Network for the transfer of NPDES data.
Chapter 5: Enforcement Actions Late and Penalties Insufficient
OIG recommends that the Acting Assistant Administrator for Enforcement and Compliance Assurance:
5-1. Establish a clear and consistent standard for measuring the promptness of enforcement actions.
EPA Response: The NPDES program already has a "timely and appropriate" standard described in the NPDES
"Enforcement Management System." We believe that a more appropriate recommendation would be for OECA to review
the consistency of its standard and ensure that the Regions and States are aware of it.
5-2. Continue to work with the regions to assist states in establishing proactive enforcement strategies to help
faculties avoid long-term serious violations due to plant or system obsolescence or capacity limits.
EPA Response: OECA, in conjunction with OW, has developed guidance documents and training workshops to assist
the regulated community in avoiding noncompliance due to plant or system obsolescence or capacity problems. Some
specific examples are guidance with regard to implementation of nine minimum controls and a long-term control plan for
combined sewer overflows (CSOs) as well as guidance documents and training workshops for municipal officials and
their system operators and consultants on procedures to eliminate and prevent sanitary sewer overflows (SSOs) and
CSOs.
OECA is involved in the development of a Guide for Evaluating Capacity Management, Operation and Maintenance
(CMOM) Programs at Sanitary Sewer Collection Systems which describes the management practices and operation and
maintenance techniques that have served municipalities best in the reduction and elimination of SSOs from their systems.
The audience for this guidance is State and EPA personnel who are assisting municipalities to comply with SSO
requirements. The guidance will also help municipalities make decisions on the rehabilitation and repair of their
collection systems and ways to better operate those systems. The guidance is scheduled for release as an interim-final
document early in fiscal 2002, and is planned to be finalized following the final publication of the SSO Rule.
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Guide for Evaluating Capacity Management, Operation and Maintenance Programs (CMOM) at Wastewater Treatment
Plants will provide guidance to assist compliance monitoring inspectors in determining whether a CMOM program is
adequate for a particular wastewater treatment plant. The guidance will also be useful to municipalities for determining
whether their plants are following accepted practices and for addressing any discrepancies as needed in order to improve
or maintain compliance. The guidance is scheduled for release as an interim-final document early in FY 2002, and is
planned to be finalized following the final publication of the SSO Rule.
Chapter 6: Improved Performance Evaluation and Measurement Needed
OIG recommends that the Acting Assistant Administrator for Enforcement and Compliance Assurance
routinely determine whether states are fulfilling their obligations to monitor and enforce discharge
programs. Specifically:
6- 1. Develop consistent criteria and measures for in-depth program evaluations of state programs:
a. At a minimum, all of the oversight criteria and measures in the 1986 Policy Framework should
be included along with additional elements included in the Clean Water Act discharge
guidance. Include the accuracy and completeness of data systems, the quality of inspections,
and the reliability of self-monitoring reports.
b. Evaluate all significant discharge programs including storm water, minor dischargers, and
concentrated animal feeding operations.
c. Use a uniform, objective scoring mechanism.
EPA Response: OECA agrees that a process for periodic evaluation of the Clean Water Act (CWA) discharge
program in each State would be useful. In fact, most Regions do conduct an assessment of State water
enforcement programs, either annually or bi-annually, though the nature of the assessment varies. Some
variability in the assessment process is necessary since priorities vary by State, as does work sharing with the
Region. For your information, the content of the review of State performance for any program, not just the
CWA discharge program, must be governed principally by the authorization agreements, grant work plans and
agreements and the Performance Partnership agreement between the Region and State. Those policies and
agreements should define priorities, describe work sharing arrangements between the Region and State, and
define the evaluation process to be used, among other things.
OECA now has a national evaluation process which focuses on "program element reviews" among programs.
These reviews focus on examining policy and implementation of a particular program element in all Regions and
a sample of States. OECA is responsible for working with the Regions and States to evaluate a wide scope of
statutory programs, and while resources do not permit a commitment to ensure a top to bottom evaluation of the
enforcement of the CWA discharge program in every State, OECA will consider how best to concentrate on key
concerns of the program.
Since the OECA program element reviews will each address a different program or problem, there will not be a
standing uniform scoring mechanism. However, within each review, the questions used and the weight assigned
to the answers will be the same. OECA agrees to continue to develop for each of its program element reviews a
consistent set of criteria and measures as part of its design for each review. All applicable policy is considered
in designing each review. For NPDES, this will include criteria from the 1986 Policy Framework. However, we
are not yet in a position to identify what reviews will be undertaken in the future.
6- 2. Have regions perform in-depth evaluations of state enforcement programs every two to three years.
Make these evaluations available to the public through publicity releases or the EPA website.
EPA Response: Many Regions do perform in-depth evaluations of State enforcement programs on a rotating
basis, using the Performance Partnership Agreement, grant agreements, and existing policy as a basis for those
evaluations. Again, OECA agrees that it would be ideal to have these evaluations of enforcement programs in
all States every 2 or 3 years; however, resources simply would not allow that in some Regions. OECA also
agrees that publicity can be an effective factor to ensure competent program operations; however, active
publication of all evaluations on a website may exacerbate Federal/State tensions and inhibit a frank, open
review process. OECA reserves use of the website as conditions dictate.
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6- 3. Continue to remind state partners, including the Environmental Council of the States, of their
obligation to use core performance measures that address the effectiveness of enforcement programs.
EPA Response: OECA agrees to continue to do so, and suggests that OIG encourage the States directly where
possible to do so as well. In FY 1999, $1.8 million was awarded to eleven States to develop outcome measures,
and in FY 2000, another $1.2 million was awarded to 10 States to develop outcome measures specifically for
compliance assistance. OECA is also discussing with States possibilities for funding performance measurement
work within the NEPPS framework.
6- 4. Have regions collect and use all core performance measures to consistently measure the effectiveness
of state enforcement programs on an annual basis. Consolidate these measures nationwide and make
them public.
EPA Response: States currently report on the required core measures through national data systems. It is the
optional measures which the States have opted not to use. OECA will continue to promote the use of the
optional measures through all means available to us, including grants. OECA does consolidate information on
required core measures of outputs nationally, and this information is used by the Regions in their performance
discussions with their States and is available to the public on request.
6- 5. Work with regions to assist states in setting specific goals and standards for compliance, recidivism,
the timeliness of enforcement actions and other important measures.
EPA Response: While the above measures are not "core measures" for States, OECA has established
performance standards for the timeliness of enforcement actions which, for the most part, derive directly from
the 1986 Policy Framework. Regions have worked with States to have them adopt these standards. In fact,
OECA includes State performance on this standard in some of its program management reports. Since the
measure for recidivism is new, OECA has wanted to get some experience with the measure before establishing
performance goals. Likewise, we have not set performance goals for compliance rates, recognizing that
compliance rates are the product of many factors, not just our OECA activities. OECA does plan to work with
the States through an ECOS grant to assist in developing a consistent approach to determining compliance rates.
OECA does monitor and report on recidivism and timeliness on a national basis and is considering setting a
national target for recidivism for all programs as well as a national target for improving compliance.
Exhibit 2: Other Matters, Key Management Decisions Needed for PCS
In evaluating whether the modernized system and components would remedy problems with data gaps, OIG
identified several concerns that they believe should be promptly addressed:
Data Entry Requirements Not Updated.
Incomplete Requirements Document.
EPA's Response: OECA has already worked extensively with OW, particularly the Permits Division, to
identify data requirements. A number of special sessions were held with OW personnel when they were unable
to attend the established sessions. We intend to continue to work with OW and the states to finalize data
requirements, both for existing programs and for new regulatory activities which are not currently well handled
in PCS. In the next several months, PCS modernization managers will be working with OW to verify that
requirements provided previously by them are still accurate and complete. Additionally, an OECA/OW/State
data requirements team will be established at the PCS national users meeting in July to review, validate, and
finalize the identified requirements.
Once the data requirements are finally established, a workgroup, including EPA Headquarters and Regional
representatives, as well as States, will be formed to identify the subset of data requirements which will be
federally mandated for entry into PCS and, which currently
required data elements can be eliminated. The PCS Policy Statement will then be modified to incorporate the
data elements which States/Regions are required to enter into PCS as well as the universe to which those
requirements will apply.
Key Decision Documents Are Needed.
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EPA Response: The System Management Plan (SMP) is a document which contains information on why the
system is needed, what contract will be used, who is the project manager, what is the estimated cost, etc. While
such a plan was done very early in the planning phases of PCS modernization, it was replaced with the OECA
ITMRA submission. This submission contains all of the information required in the SMP, is reviewed by all
management levels and is approved by OECA's Deputy Assistant Administrator. It is then reviewed by peer
review teams within the Agency and annually provided to OMB as part of the Agency's overall response to IT.
investment reporting requirements of the Clinger-Cohen Act. As this document is updated each year, we believe
that it serves the purpose of the SMP; however, we will update the SMP by December 2001.
OIG suggests that the Office of Enforcement and Compliance Assurance collaborate with the Office of
Water to create an updated data entry policy. Upon completion of this policy, OIG suggests that the Acting
Assistant Administrator for Enforcement and Compliance Assurance:
Complete the systems requirements document.
EPA Response: Data requirements were collected from EPA (OW and OECA) and States to determine the
scope of the modernized PCS system. The next phase of PCS modernization is the design phase. One of the
major products from that phase is a design specification document. This document will be developed with very
intense participation by EPA and States (both direct users and interface States). The design specification
includes data elements to be collected in PCS, data entry screens, report formats, and specific functionality to be
supported, including electronic reporting efforts being managed elsewhere in the Agency. This effort will begin
in July of this year with the National PCS meeting and will be completed by March of 2002.
Execute memoranda of agreements with the Office of Water and state participants to help ensure (1)
that the baseline requirements for the new system design are formally agreed to and (2) that both
federal and state needs are addressed in the design of the new system.
EPA Response: While we agree that full consultation and coordination with the Office of Water and the States
is necessary, we do not agree that the development of MO As with these parties is necessary or desirable. Such a
process would be extremely time consuming and resource intensive, and the goals of such a process can be
achieved in other ways. Coordination has already occurred (and will continue) with ASWIPCA and the Water
Subcommittee of ECOS. Decisions on policy and system issues will be handled at a senior level between OW
and OECA with recommendations coming from the PCS Steering Committee (representing EPA Headquarters,
Regions, and States). One of the tasks before the PCS Steering Committee and senior water managers is the
updating of the PCS Policy Statement and the identification of Federally required data elements. The schedule
below addresses this task. Again, Regions and States will be involved in regular formulation and decision on
these issues.
Update System Management Plan 05/01-12/01
System Design Specification Document 07/01 -03/02
Update Federally Required Data Element List 04/02-09/02
Update PCS Policy Statement Ongoing-09/02
Perform a cost-benefit analysis of the new system that addresses the electronic reporting and data
entry requirements, the system development costs, and the projected operational and maintenance
costs over the life of the system.
EPA Response: This analysis is underway and should be completed by September 2001.
* Establish and approve a system charter and system management plan.
EPA Response: We agree and will complete them by December 2001.
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