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EXECUTIVE SUMMARY
The Office of Inspector General (OIG) audited facilities' compliance with enforcement
instruments nationwide. Our objectives were to determine whether (1) regions adequately
monitored facilities' compliance with enforcement instruments and considered further
enforcement actions if companies did not comply and (2) OECA oversaw regional enforcement
activities to ensure compliance. To accomplish these objectives, we reviewed randomly sampled
cases in the United States Environmental Protection Agency's (EPA) Clean Air, Resource
Conservation and Recovery, Drinking Water, and Clean Water Programs. During our review, we
also identified problems with the Office of Enforcement and Compliance Assurance's (OECA)
reporting of environmental benefits resulting from enforcement activities.
We found that:
• OECA's annual accomplishment reports did not accurately represent the actual
environmental benefits resulting from enforcement activities. For example, an OECA
report stated that fiscal 1999 enforcement actions resulted in the reduction of more than
6.8 billion pounds of pollutants. However, this may have been an understatement or
overstatement since: (1) violators did not always comply with the enforcement
instruments and (2) data was not comprehensive. Also, OECA's performance measures
were not sufficient to determine the program's actual accomplishments. Consequently,
Congress has less useful performance data upon which to base its decision making.
• Regions did not always adequately monitor compliance with enforcement instruments nor
did they always consider further enforcement actions. Ineffective monitoring was due
primarily to the lack of: (1) guidance detailing how or when to monitor enforcement
instruments and (2) emphasis OECA placed on monitoring. Ineffective monitoring may
have contributed to the regions not considering further enforcement actions for
noncompliance with enforcement instruments. Consequently, there is a risk that
violations continued and contributed to environmental harm or increased health risks and
EPA's effectiveness through deterrence was adversely impacted. For example, we found
instances where EPA had no evidence that significant violations had been corrected.
We recommend that the Acting Assistant Administrator for Enforcement and Compliance
Assurance: (1) establish a performance measure for ensuring that facilities under a formal
enforcement action return to compliance and (2) identify a more accurate method for reporting
actual, rather than estimated, accomplishments resulting from EPA's enforcement activities. We
also recommend that OECA issue baseline guidance for (1) monitoring violators' efforts to
comply with enforcement instruments and (2) considering further enforcement actions when
violators fail to comply with instrument requirements. Chapter 3 includes those elements which,
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at a minimum, we believe the guidance should include. We recommend that all Regional
Administrators (1) ensure that the program offices take steps, until OECA issues guidance, to
adequately monitor violators' actions and consider further enforcement actions when appropriate
and (2) determine the status of those cases where our review showed no evidence of violator
compliance.
In responding to recommendation 2-1 in the February 20,2001, draft report, the Acting Assistant
Administrator stated that it is not desirable or realistic for EPA's enforcement program to adopt a
performance measure aimed at perfection. OECA agreed that efforts to ensure the terms of
compliance with judicial instruments should be tracked as a performance measure. Beginning in
fiscal year 2002, OECA intends to have the regions update tracking systems for judicial cases to
reflect compliance schedules and EPA actions to verify violators* compliance. OECA did not
propose tracking administrative actions in the same manner. We agree that a performance
measure aimed at perfection is unrealistic. However, we continue to recommend that a
performance measure for ensuring return to compliance with enforcement instruments be
established. While OECA currently does not intend to track compliance with administrative
instruments in the same manner as judicial instruments, we think OECA should revisit this issue
in the future.
In responding to recommendation 2-2, the Acting Assistant Administrator concurred with the
recommendations that OECA more accurately represent enforcement activities in reporting
accomplishments. OECA intends to clarify language in its future reports. These proposed
actions, when implemented, will resolve this recommendation.
In response to recommendations 3-1 and 3-2, OECA concurred that it and the regions can and
should improve tracking and enforcing compliance with requirements in enforcement
instruments. OECA has already taken steps in this regard. We concluded that OECA's response
to the recommendations was adequate for resolution.
In response to the draft report, Region 2 indicated that they have begun the process of addressing
recommendation 3-3 and completion is expected by September 30,2001. Regions 5 and 6 need
to provide specific corrective actions and milestone dates for addressing the recommendation.
n
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Table of Contents
EXECUTIVE SUMMARY ; i
ABBREVIATIONS v
DEFINITIONS vi
1 INTRODUCTION 1
Purpose 1
Background 1
Scope and Methodology 2
2 ACCOMPLISHMENT REPORTS NOT REPRESENTATIVE
OF ENFORCEMENT EFFORTS 3
Background 3
Annual Reporting 4
Report Based on Anticipated Effects 4
Reports Based on System That Does Not Include All Data 5
Performance Measures 5
Conclusion 7
Recommendations 7
Agency Actions and OIG Evaluation 8
3 REGIONS NEED TO IMPROVE MONITORING EFFORTS 10
Background 10
Regional Actions 11
Significance of Cases 14
Impact on Goals 15
OECA Actions 16
Guidance Needed 16
Conclusion 18
Recommendations 19
Agency Actions and OIG Evaluation 19
EXHIBIT
1 Scope, Methodology, and Prior Audit Coverage 21
in
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APPENDICES
1 Cases with No Evidence of Compliance 26
2 Cases with Late Compliance and Timeliness of Compliance Unknown 28
3 Program Summaries 30
4 OECA Response to the Draft 35
5 Region 2 Comments on the Draft 48
6 Audit Report Contributors 57
7 Distribution 58
IV
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Abbreviations
CAA Clean Air Act
CWA Clean Water Act
DOJ v Department of Justice
EPA United States Environmental Protection Agency
Directive Judicial Consent Decree Tracking and Followup Directive
Manual Manual on Monitoring and Enforcing Administrative and Judicial Orders
i,
OECA Office of Enforcement and Compliance Assurance
OIG Office of Inspector General
RCRA Resource Conservation and Recovery Act
RECAP Reporting for Enforcement and Compliance Assurance Priorities
Results Act Government Performance and Results Act
SDWA Safe Drinking Water Act
Strategy National Performance Measures Strategy
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Definitions
Enforcement Instruments - Any type of enforcement action that EPA issued which included
actions a facility was required to take. These enforcement actions included: administrative
orders, compliance orders, consent agreement consent orders, and consent decrees.
Further Enforcement Actions - Instances where EPA either assessed a penalty or referred a
case to the Department of Justice (DOJ) for a violator's noncompliance with the enforcement
instrument.
Late compliance - Those instances where a facility did not meet the milestone due dates
contained in the enforcement instruments. In cases where EPA approved an extension on the due
date, we did not consider the facility's actions as late if they met the new date. If a facility
submitted a document which subsequently called for revisions based on EPA's review, we did
not consider the facility to be late unless it missed the due date for the submission of the revised
document.
Monitoring - We accepted a case as monitored based on any documented instance of EPA
actions, such as review of submitted documents;, inspections, phone calls, or meetings with the
violator, to follow-up on their compliance.
No monitoring - Those instances where there was no evidence of EPA action to follow-up on a
facility's efforts to comply with the enforcement instruments.
Significant Violation - A violation that was considered significant by EPA policy or regulations,
identified as significant in an EPA database, or determined to be significant by regional staff.
Timely compliance - Determined through comparison of the schedule, or milestone due dates,
established in the enforcement instrument and documentation of a facility's efforts to comply.
VI
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CHAPTER 1
Introduction
PURPOSE
BACKGROUND
The OIG conducted this audit to determine whether (1) regions
adequately monitored facilities' compliance with enforcement
instruments and considered further enforcement actions if
companies did not comply with the instruments and (2) OECA
oversaw regional enforcement activities. During our review, we
also identified problems with OECA's reporting of environmental
benefits resulting from enforcement activities.
Enforcement of the laws EPA administers plays an important role
in EPA achieving its mission of improving and preserving the
environment. A primary goal of enforcement is to bring violators
into compliance with laws and regulations. One tool EPA uses to
achieve this goal is administrative and judicial enforcement
instruments. These instruments serve four purposes: (1) return
violators to compliance, (2) ensure continued compliance, (3)
remedy environmental harm, and (4) prevent new harm from
occurring.
Enforcement instruments may contain injunctions. An injunction
is an order to do, or refrain from doing, a particular act and is
limited to measures necessary to achieve and maintain compliance
and reduce adverse effects the violation caused. Instruments that
include injunctions can be effective hi bringing violators into
compliance and ensuring then* future compliance, especially if
facilities achieve compliance by implementing a compliance
schedule or similar milestones. EPA uses "injunctive relief to
refer to these types of required activities. Injunctive relief yields
tangible benefits such as human health, ecosystem, and worker
protection.
U.S. EPA Headquarters Library
Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
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SCOPE AND
METHODOLOGY
We performed fieldwork in Regions 2,5, and 6 in the Clean Air,
Resource Conservation and Recovery, Drinking Water, and Clean
Water Programs. We also interviewed OECA officials. For
details, see exhibit 1.
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CHAPTER 2
Accomplishment Reports Not
Representative of Enforcement Efforts
OECA's annual accomplishment reports did not accurately
represent the environmental benefits resulting from enforcement
activities. In passing the Government Performance and Results
Act (Results Act), Congress expected that agencies would develop
processes to verify and validate performance data. Report
inaccuracies occurred because: (1) violators may not have
complied with the enforcement instruments thereby not achieving
expected benefits and (2) data was not comprehensive. Also,
OECA's performance measures were not sufficient to determine
the program's actual accomplishments since it had not completed
efforts to develop more comprehensive measures. As a result,
OECA could not ensure it had accurately stated the actual
environmental improvements resulting from the Agency's
enforcement activities.
BACKGROUND
In passing the Results Act, Congress emphasized that the
usefulness of agencies' performance data for its decision making
ultimately depends on the degree of confidence that Congress has
in that data. For Congress to know whether the intended
performance has truly occurred, agencies should produce
performance data that is verified and valid. The Results Act
requires that agencies describe in then* annual performance plans
how they intend to verify and validate performance data. The
procedures should be credible and specific to ensure that
performance information is sufficiently complete, accurate, and
consistent to document performance and support decision making.1
1 An Assessment Guide to Facilitate Congressional Decisionmaking. U. S. General Accounting Office,
February 1998, GAO/GGD/AIMD-10.1.18.
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ANNUAL REPORTING
Report Based On
Anticipated Effects
EPA's Fiscal Year 1999 Annual Performance Report stated that
fiscal 1999 enforcement actions resulted in the reduction of more
man 6.8 billion pounds of pollutants and that about 21 percent of
actions resulted in improvements to the environment, such as
hazardous material removal. The report also stated that 47 percent
of actions resulted directly in changes to facility management
practices, which should lead to environmental improvements.
However, EPA cannot ensure that these accomplishments occurred
since it did not always verify that facilities took the required
actions. For example, as discussed in chapter 3, we found no
evidence that facilities complied with 30 of 122 randomly sampled
enforcement agreements. EPA could verify facilities* actions
through activities such as inspections, document reviews, or phone
calls. Without verification, EPA can not be sure that the required
actions resulted in the desired environmental benefits. Likewise,
OECA indicated that there are instances where it is not possible to
estimate the environmental benefits that will result from
enforcement activities. As a result, OECA may have understated
or overstated the actual environmental improvements resulting
from EPA's enforcement activities. In either case, the reports did
not accurately portray EPA's enforcement achievements.
In response to our June 15,2000, draft report, OECA stated that
"There is a general understanding within OECA (and among many
external consumers) that the environmental benefits claimed hi
[various reports] publicize intended effects" required by the
enforcement instruments. The response further states that the
reports:
... do not intend to suggest subsequent verification through
actual measurement-and logically, it is correct that if no one
monitors and/or enforces compliance with agreements, one
cannot say with comfort that the required effects have been
achieved.
While OECA stated that it had not intentionally implied that the
environmental impacts have happened, OECA also acknowledged
that it would have been more accurate if OECA had stated that
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actions reported were those required to result in pollutant
reductions. Likewise, we spoke to Congressional staff members
who suggested OECA include information on both intended
results, that are clearly defined as "intended", while also including
any information measured on actual results achieved.
Reports Based On
System That Does
Not Include All Data
PERFORMANCE
MEASURES
OECA annually prepares a ReportmgJbrJEnfbrcement and
Compliance Assurance Priorities (RECAP) report and an
Annual Accomplishment Report. The data for both reports
primarily comes from DOCKET, the official EPA database for
tracking and reporting information on civil judicial and
administrative enforcement cases issued. However, DOCKET data
is not comprehensive2 since the system tracks violators'
compliance with consent decrees-but does not track violators'
compliance with administrative instruments. Yet, administrative
instruments comprised almost 90% of all instruments issued in
fiscal 1998.3 Just like consent decrees, these instruments may also.
contain injunctive relief requirements which, if implemented,
would yield tangible benefits such as human health, ecosystem, and
worker protection.
OECA's performance measures were not sufficient for determining
the environmental benefits resulting from enforcement activities.
OECA has traditionally relied on counting enforcement actions
initiated (outputs) as its means of measuring success. In the last
few years, OECA recognized the need for a more comprehensive
performance measure, including one for compliance with
enforcement instruments. However, as explained below, OECA
did not finalize performance measures to address this need.
OECA's November 1996 Operating Principles stated that in the
development and implementation of a new approach to measuring
performance, EPA would:
2 We did not perform a detailed review of the system. The OIG is currently evaluating the quality of the
data contained in the DOCKET system as part of another review.
3 FY 1998 RECAP Measures of Success Management Report. April 13,1999. We did not include penalty
orders since our review only covered instruments that included injunctive relief.
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• strive to measure accomplishments for all enforcement
activities,
• continue to count activities but also measure the related
actual results and environmental impact,
• collect, analyze, and report on violators' actions and
benefits to human health and the environment, and
• continue to refine its measures of success to identify
measures which are most meaningful for judging the
effectiveness of EPA efforts and the performance of
industry in achieving compliance.
In November 1997, OECA issued a draft Strategic Plan which
included an objective to: "Achieve continuous improvement in
compliance with environmental laws and regulations while
maintaining a strong base program." A performance measure for
this objective was to:
Ensure that 100% of regulated facilities under a
formal enforcement action return to compliance in
accordance with the schedule contained in the final
order or decree.
Because EPA's Results Act goals and EPA's Strategic Plan
incorporated some of OECA's concepts, the draft OECA Plan was
never finalized. The above performance measure was not
incorporated into EPA's Strategic Plan. EPA's Plan contained
more general goals which did not include a specific performance
measure like the measure proposed in the draft OECA Plan. In our
opinion, OECA need not adopt the 100% goal because it is
unrealistic to assume all violators will comply or that EPA has the
resources to verify that all enforcement actions are implemented.
However, a performance measure similar to the above would help
to provide a more accurate measure of EPA's enforcement
accomplishments.
In December 1997, OECA also initiated the National Performance
Measures Strategy (Strategy) to develop and implement an
enhanced set of performance measures to better assess the results
of national enforcement efforts. The Strategy stated that while
output results, or number of enforcement actions taken, were
important for assessing performance and providing accountability
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to the public, they did not reveal the actual compliance among the
regulated community. With the Strategy, OECA developed an
enhanced set of performance measures to assess the effect and
outcomes of enforcement activities. These performance measures
include impact and improvements on environmental and human
health problems. However, the data currently collected does not
address these performance measures since it does not reflect actual
human health or environmental improvements resulting from
activities, it only reflects anticipated results. In addition to
improving OECA's ability to report its accomplishments to the
public, these measures were designed as a tool for strategically
managing its enforcement program and for complying with the
Results Act.
CONCLUSION
RECOMMENDATIONS
OECA cannot provide a completely accurate picture of EPA's
enforcement achievements since OECA is not collecting
comprehensive data or using appropriate performance measures.
Also, OECA implies that all facilities comply with enforcement
instruments in its reporting on the environmental benefits resulting
from enforcement efforts. OECA needs to report accomplishments
based on actions that violators have actually completed along with
the benefits expected as a result of compliance with enforcement
instruments. EPA's enforcement accomplishments, including
environmental benefits, are not accurately reflected if the actual
outcome of enforcement actions is not collected and measured.
Accordingly, OECA is not providing Congress with sufficient or as
accurate information as possible for decision making purposes.
We recommend that the Acting Assistant Administrator for
Enforcement and Compliance Assurance:
2-1 Establish a performance measure for ensuring that facilities
under a formal enforcement action return to compliance in
accordance with the schedule contained in the final order or
decree.
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2-2 Identify a more accurate method for reporting, including
verifying and validating, the actual accomplishments which
result from EPA's enforcement activities.
To help implement recommendation 2-2 and ensure that
performance data is more accurate and useful, chapter 3 discusses
steps EPA can take to improve regional efforts to monitor
violators' compliance with enforcement instruments. These steps
will also help to ensure more accurate data for accomplishment
reports.
AGENCY ACTIONS
AND OIG EVALUATION In responding to recommendation 2-1, the Acting Assistant
Administrator stated that it is not desirable or realistic for EPA's
enforcement program to adopt a performance measure along the
lines of the draft measure cited on page 6. The response indicated
that designing a system aimed at perfection (100%) in this area
would require seriously overbuilding the system. However, OECA
agreed that efforts to ensure the terms of compliance with judicial
instruments should be tracked as a performance measure.
Beginning in fiscal year 2002, OECA intends to have the regions
update EPA's DOCKET system, or appropriate regional databases,
for judicial cases to reflect compliance schedules and EPA actions
to verify violators' compliance. If regional databases are used,
OECA intends to stress the need for regions to ensure that
DOCKET is also regularly updated. Also, EPA is in the process of
developing a new tracking system which programs would use to
track all aspects of enforcement activity. When finished, OECA
will require regions to use the system to track enforcement
instrument compliance. At this time, OECA did not propose
tracking administrative actions in the same manner.
The OIG agrees that a performance measure need not adopt the
100% goal of the prior draft measure. However, we continue to
recommend that a performance measure for measuring violators'
return to compliance with enforcement instruments be established.
While OECA currently does not intend to track compliance with
administrative instruments in the same manner as judicial
instruments, we think OECA should revisit this issue in the future.
If EPA improves its monitoring efforts, EPA should be able to
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track the number of facilities which have complied with both
judicial and administrative enforcement instruments as a
performance measure.
In responding to our draft report and recommendation 2-2, the
Acting Assistant Administrator concurred with the
recommendations that OECA more accurately represent
accomplishments resulting from enforcement activities. OECA
intends to clarify language in its future reports to ensure readers
understand the context and limitation of the data presented.
We believe OECA's proposed action is appropriate and, when
implemented, should help ensure more accurate reporting of
enforcement activity accomplishments.
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BACKGROUND
CHAPTER 3
Regions Need to
Improve Monitoring Efforts
Regions did not always adequately monitor compliance with
enforcement instruments, although they have the primary
responsibility to perform this activity. Also, Regions did not
always consider further enforcement actions for those cases where
there was no evidence of compliance or facilities did not timely
comply. Consequently, Regions did not know whether violations
had continued and further contributed to environmental harm or
increased health risks. Also, EPA's ability to deter others from
similar illegal behavior may have been adversely impacted.
Ineffective monitoring may also have contributed to the regions not
considering further enforcement actions for noncompliance with
instruments. Ineffective monitoring was due primarily to the lack
of: (1) guidance detailing how or when to monitor and (2)
emphasis OECA placed on monitoring.
The responsibility of the regions to monitor violators* compliance
is identified in OECA's 1990 Manual on Monitoring and Enforcing
Administrative and Judicial Orders (Manual). The Manual, in
particular, states that regional program offices are responsible for
routinely checking compliance with the non-penalty requirements.
EPA must have effective monitoring procedures and regions must
monitor instruments until the terms have been met. The Manual
states that vigorous enforcement is essential to enable EPA to
maintain its credibility with the courts, public, and regulated
community and to achieve the desired environmental objective.
The main goal of any enforcement action must be compliance with
the law so public health and welfare is protected. According to the
Manual, if enforcement instrument provisions are allowed to be
violated for an extended period of time, serious environmental and
health concerns may occur.
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REGIONAL ACTIONS
While we found regional staff usually performed some type of
monitoring of violators' efforts to comply with instrument
requirements, only 48% showed evidence of monitoring around the
due dates. We believe that regional efforts to monitor closer to due
dates would have compelled some of the facilities to meet then-
compliance schedules. Our review showed there was no evidence
that 30 of 122 (25%) violators had complied. In addition, another
36 (30%) violators either complied late or the timeliness of
compliance was unknown. (For a summary of findings for the
specific programs reviewed, see appendix 3.) To illustrate the
adverse conditions found:
• A hazardous waste storage, blending, and recycling facility
improperly stored and released hazardous waste. As of the
date of our initial review, there was no evidence that the
facility had complied with the June 1997 enforcement
instrument. Our review five months later found that there
was still no evidence that this facility had complied.
Regional staff believe there were still additional areas of
hazardous waste contamination to inspect and cleanup. The
chemicals found at this site were toxic and corrosive and
included known and suspected carcinogens. The human
health effect of the chemicals included causing damage to
internal organs and effecting the central nervous system.
The chemicals could also be harmful to animals.
• A public water supplier was issued an enforcement
instrument for exceeding its drinking water maximum
contamination levels for radium and barium by about 1.2 to
2.2 tunes EPA's drinking water standards. Over 25 months
had passed since the facility was due to comply, yet there
was no evidence of compliance. During our followup over
five months later, the facilities' compliance was still not
evident. EPA's tracking system indicates that this facility
has had seventeen health-based violations reported between
January 1998 and March 2000. As a result, residents may
continue to be exposed to contaminants which can damage
the heart or cause cancer or high blood pressure.
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7 A stainless steel refinishing plant illegally discharged into a
creek violation of its permit limits for toxicity levels. Hie
facility was 21 months late in complying with the
enforcement instrument. Continuing discharges above the
toxicity levels can be harmful to aquatic life.
OECA officials advised us they did not rank monitoring for
compliance as essential for program success. Instead, they
indicated that compliance with enforcement instruments is of lower
level importance, despite OECA documents which reflect its
significance. For example, the Manual states that once an
instrument is issued, it must be monitored until the terms are met.
The Manual further states that verifying whether violators have
actually accomplished the activities is an essential element in the
overall success of the enforcement program. OECA's fiscal
2000/2001 Memorandum of Agreement guidance stated that to
maintain a viable program necessary for a credible enforcement
presence, programs should track compliance and take all necessary
actions to ensure continued compliance.
As previously cited on page 5, EPA tracks violators' compliance
with consent decrees which a court approves, but does not track
violators' compliance with administrative instruments that EPA
signs. EPA tracks violators' compliance with consent decrees
because of its legal responsibility to the Courts for ensuring that
the terms of each decree are properly met. Focusing solely on
consent decrees', however, is not enough because the majority of
EPA's enforcement actions are administrative. In fiscal 1998,
1,721 of the 1,974 actions were administrative, or almost 90%.4
Because the programs did not always monitor to ensure full
compliance, violations continued for up to 36 months past the
instrument deadlines for those facilities that complied late and
potentially longer for those cases where information was lacking.
For example, an apartment complex was 24 months late in taking
and submitting acceptable samples results for its drinking water.
4 FY 1998 RECAP Measures of Success Management Report. April 13,1999. We did not include penalty
orders since our review only covered instruments that included injunctive relief.
12
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As a consequence of the untimely and inadequate sampling,
residents may have been exposed to water contaminants.
In part, regions did not adequately monitor violators' compliance
with instrument requirements because the Manual only provided
general guidance to EPA staff on their roles and responsibilities for
monitoring. The Manual did not establish basic procedures for
regions to use in monitoring violators' efforts to comply with
enforcement instrument requirements. Various media specific
policies also show the need for monitoring but, like the Manual,
did not provide any standard procedures.5 Media policies provided
timelines for when to take further enforcement actions for
noncompliance. However, these timelines are not triggered if
regions do not monitor and identify violations of instruments. As a
result, further actions for noncompliance may not always have been
taken when appropriate.
Our review also found that Regions 2,5, and 6 only took further
enforcement actions in 10 of 66 (15%) cases with no evidence of
compliance, where violators did not timely comply, or where the
timeliness of compliance with requirements was unknown.6 In 86
of the 122 (70%) enforcement instruments we reviewed, Regions
included warning language to describe penalties that violators may
have to pay if they did not comply with instrument requirements.
However, EPA only assessed penalties hi 4 of the 66 cases. EPA
may also refer violations of instruments to DOJ and used this
process to escalate six cases. In some cases, EPA's threat of
referral, or initial steps to refer, was incentive enough to compel
violators to comply.
We recognize that program offices have discretion on when to take
further enforcement actions and we do not believe these actions are
necessary in every case. However, in accordance with the Manual,
if programs determined further actions should not be taken, the
case files should reflect those decisions. Yet, case files typically
5 In June 2000, Region 5's Drinking Water Program issued guidance which took steps to improve
following up on instruments and indicating when additional actions should be taken.
6 Because the timeliness of compliance was unknown for four cases, EPA would not be able to judge
whether or not further enforcement actions were needed.
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Significance of Cases
did not show whether regional staff considered taking further
actions or supporting why actions were not pursued in the other
cases.
In 26 of the 30 instruments (87%) where files contained no
evidence of compliance, we determined that EPA had issued the
instruments for significant violations (Table 3.1). Also, of the 36
instruments in which compliance was late or timeliness was
unknown, 23, or 64%, were issued for significant violations (Table
3.2). As the tables show, EPA did not take further actions in most
cases.
Table 3.1: No Evidence of Compliance
Further Action
No Further Action
Total
Number of Cases
Significant
4
22
Non-Significant
2
2
30
Table 3.2: Complied Late or
Timeliness of Compliance Unknown
Further Action
No Further Action
Total
Number of Cases
Significant
2
' 21
Non-Significant
2
11
36
Lack of monitoring in these cases may be the result of unclear EPA
guidance on monitoring. For instance, while OECA told us that
EPA prioritizes the monitoring and enforcement of the most
important instruments, regional program managers and staff
indicated that they try to monitor all cases equally and no cases are
flagged for priority monitoring regardless of significance. We
agree with OECA that EPA enforcement programs should
prioritize their efforts. However, we believe that OECA officials
should emphasize monitoring, as described in various documents,
and supplement existing documents with the issuance of basic
procedures that the regions should use.
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We recognize that some violations are more significant than others
since there are risks to the environmental or human health.
However, paperwork violations, such as a facility's failure to
monitor for contaminants and report results to EPA, can be
significant. As regional staff indicated, this type of violation can
be significant because the potential health or environmental harm
is not known without this information. A recent OECA report
recognized that reporting is an integral component of
environmental regulations and enables EPA to monitor facilities'
compliance with those regulations.7 The report stated that
reporting requirements allow EPA to evaluate the level of health
and environmental protection.
Impact on Goals
The main goal of an enforcement action is compliance with the law
so public health and welfare is protected. EPA needs to use both
monitoring and further enforcement actions to ensure a successful
program that meets the Agency's goal of providing a credible
deterrent to pollution while ensuring greater compliance with the
law. If enforcement actions are not effective, this adversely
impacts the:
• Environment. Without timely compliance, facilities'
original violations may continue uncorrected, possibly
adding to environmental or human health problems.
• Deterrent effect of EPA's enforcement actions. EPA must
maximize its effectiveness through deterrence since it will
never be able to bring about compliance at every regulated
facility. If EPA more effectively monitors and takes further
actions when facilities do not comply with instruments,
they are more likely to voluntarily achieve and maintain
compliance. r
• Level playing field. Not following through on enforcement
actions creates an unfair advantage for violators who gain
economic benefits by avoiding the costs of compliance.
OECA has stated that environmental laws must be fairly
and consistently enforced throughout the nation.
7 EPA/CMA Root Cause Analysis Pilot Project, May 1999, EPA-305-R-99-001.
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Audit of Compliance with Enforcement Instruments
OECA ACTIONS
Guidance Needed
The example EPA sets for states. OECA has previously
recognized that EPA must be held to at least the same
accountability for performance that it expects of state
authorized programs.
OECA's role is to provide overall leadership for the enforcement
program, including effective implementation of the program.8
OECA officials explained that, when making resource or priority
decisions, it informally assesses unaddressed risks for the program.
This informal assessment enables OECA to make decisions and
determine those activities which are higher priority. OECA's
response to our June 2000 draft report stated that we did not give
consideration to how enforcement priorities are determined and the
importance of following up on enforcement actions compared to
other program components. Yet, in prior discussions, OECA
officials advised us that they did not believe that enough
information existed for us to perform a study of their priority
setting process. However, we believe that OECA needs to
emphasize monitoring compliance with both judicial and
administrative enforcement instruments.
While OECA officials indicated that monitoring instruments is not
a top priority, they will take steps to improve the implementation
and oversight of both judicial and administrative instruments. In a
memorandum dated February 8,2001, OECA reminded regions of
the need to follow the Manual and comply with the terms of the
1990 Judicial Consent Decree Tracking and Followup Directive
(Directive). OECA also intends to discuss tracking during
regularly scheduled regional visits.
Without more specific guidance and a more consistent process on
how to monitor for compliance, regional employees generally
developed their own monitoring methods. Accordingly, OECA
needs to issue national guidance to improve the uniformity and
effectiveness of its enforcement program. Guidance should
address, at a minimum, the following five areas:
Redelegation of Authority and Guidance on Headquarters Involvement in Regulatory Enforcement Cases.
July 11,1994.
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Audit of Compliance with Enforcement Instruments
(1) Monitoring for compliance with enforcement instrument
requirements. We recognize that it may be appropriate for
monitoring efforts to vary among programs or cases due to
the types of violations involved, but guidance should be
used to establish some baseline monitoring steps for
regions. '
(2) Changing due dates for instrument requirements. While
we understand that EPA has discretion for extending due
dates, EPA needs to ensure that facilities do not use
extensions to their advantage to avoid fines which may
result from delayed compliance.
(3) Documenting violators' receipt of enforcement instruments
to prevent them from claiming non-receipt of the instrument
as a means to delay compliance. To prevent false claims in
this regard, regions should make better use of certified mail
cards. Regions already send the instruments by certified
mail to establish a deadline. Regions should also use
certified mail cards to dispute violators' claims of non-
receipt and, thereby, prevent them from gaining additional
time.
(4) Issuing compliance letters to facilities which have
adequately completed all actions required in enforcement
instruments. These letters are used in Region 5 and we
believe this action would be a good practice to institute
nationally. This action would help to more clearly indicate
whether a facility had complied with an instrument and also
ensure that cases were closed in the enforcement tracking
system.
(5) Improving file documentation. Many of the files reviewed
lacked documentation of violators' efforts to comply with
instruments and EPA's efforts to verify compliance. If
. facilities fail to comply with instruments and EPA
determined that further actions should not be taken; the
files should also reflect those decisions. Documentation is
especially important for maintaining a case history and
enables EPA to effectively monitor cases, particularly
during periods of staff turnover.
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Audit of Compliance with Enforcement Instruments
One good practice was identified in Region 6. Some case
files included Technical Review Action Sheets to reflect
that the Region reviewed violators' submitted documents.
These sheets also indicated whether the Region determined
that the violators' actions were acceptable and fulfilled
instrument requirements. The review sheet also allowed for
any comments regarding the document or the case. The
technical review sheet should be used on a national basis to
ensure that case files more accurately (1) portray regional
monitoring actions and (2) reflect the history of the case.
We believe that the above activities would improve EPA's
monitoring and documenting of violators' compliance with
enforcement instruments. Preparing a technical review action
sheet or issuing a compliance letter could easily be accomplished
as monitoring is performed. Also, improved file documentation
should reduce the learning curve in cases of staff turnover. These
activities would also provide a basis for evaluating the quality and
timeliness of regional monitoring efforts.
CONCLUSION
Although OECA documents reflect the importance of monitoring,
OECA actions have not reflected its commitment to this activity.
In particular, OECA has not placed sufficient emphasis on
monitoring activities or provided sufficient baseline guidance to
ensure regions monitor violators' compliance with all enforcement
instruments., especially administrative. If instrument requirements
are allowed to be violated for an extended period of time, serious
environmental and health concerns may occur. Inconsistent and
inadequate enforcement can lead to inequitable treatment of
facilities, where some facilities pay to come into compliance up-
front or through enforcement actions, while others are allowed to
profit from avoiding requirements. Not following through on
enforcement actions may also result in continuing risks to public
health and the environment.
U.S. EPA Headquarters Library
Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
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Audit of Compliance with Enforcement Instruments
RECOMMENDATIONS
We recommend that the Acting Assistant Administrator for
Enforcement and Compliance Assurance:
3-1 Issue basic guidance for (1) monitoring violators' efforts to
comply with enforcement instruments and (2) considering
further enforcement actions when violators fail to comply
with instrument requirements. We recommend that this
guidance includes those five elements previously discussed.
We recommend that all Regional Administrators:
3-2 Ensure that the regional program offices take steps, until
OECA issues guidance, to adequately monitor violators'
actions and consider further enforcement actions, when
appropriate.
3-3 Determine the status of those cases where files showed no
evidence of violator compliance.
AGENCY ACTIONS
AND OIG EVALUATION In response to the draft recommendations for 3-1 and 3-2, OECA
concurred that it and the regions can and should improve tracking
and enforcing compliance with requirements in enforcement
instruments. OECA has already taken steps to remind the regions
of the need to be familiar with, and follow, current guidance.
OECA also intends to raise compliance with enforcement
instruments at an upcoming National Enforcement Meeting and
during its regularly scheduled regional visits. OECA is currently
working with the regions to update regional plans which address
the monitoring and enforcing issue for both judicial and
administrative actions. While OECA agrees on the importance of
having strategies in place, OECA does not intend to issue new
national guidance at this time. However, at the end of the fiscal
year, OECA intends to revisit the need to issue new national
guidance depending on how well the regional plans are working to
.. : -;.-)(. .;••••-•'•' •••• improve enforcement instrument monitoring and enforcement.
• .~ .<..
We concluded that OECA's response to the recommendations was
adequate for resolution.
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Audit of Compliance with Enforcement Instruments
In response to recommendation 3-3, the Acting Assistant
Administrator attached Region 2's response to the draft report.
Region 2 indicated that they have begun the process of addressing
this recommendation and completion is expected by September 30,
2001. We did not receive any written response to this
recommendation from Regions 5 and 6. Regions 5 and 6 need to
provide specific corrective actions and milestone dates for
addressing the recommendation.
20
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Audit of Compliance with Enforcement Instruments
Scope, Methodology, and Prior Audit Coverage
Exhibit 1
Page 1 of 5
SCOPE AND
METHODOLOGY
This is one of several audits of EPA's enforcement program. The
OIG's Northern Audit Division led the fieldwork with assistance
from the Eastern and Central Audit Divisions. The fieldwork was
performed in Regions 2, 5, 6 and OECA from March 1,1999 to
April 25,2000. We issued a draft report on June 15,2000. To
address issues OECA raised in response to the draft, we performed
supplementary fieldwork from September 6,2000 to November 30,
2000, and revised our draft report. Our work was conducted in
accordance with generally accepted government auditing standards
and included such tests as we determined necessary to complete the
objectives.
We chose Regions 2,5 and 6 since they accounted for about 55%
of the universe of enforcement instruments issued in fiscal 1997
and 1998 which included injunctive relief such as installing a new
air pollution control device.
Based on our survey conducted in Region 5, we selected the
following programs for review:
• Clean Air and Clean Water Programs because they
accounted for a large portion of injunctive relief efforts.
• Safe Drinking Water and Underground Injection Control
(UIC) Programs for insight into how smaller programs
monitor enforcement instruments and to obtain a more
complete assessment of the Water Program. We included
both programs since data obtained from DOCKET made it
difficult to differentiate between the cases.
• Resource Conservation and Recovery Act (RCRA)
Program because the OIG currently has a related Issue Area
Plan.
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Audit of Compliance with Enforcement Instruments
Exhibit 1
Page 2 of5
Sample Selection To evaluate enforcement activities, we reviewed randomly sampled
case files. We used DOCKET data to determine the universe size
for each program in each region.9 We then generated an estimated
sample size and identified a random sample for each regional
program.
Our sampling process resulted in the following sample sizes:
Region 2
Region 5
Region 6
TOTALS
Number of Cases
Air
12
8
4
24
Clean
Water
20
11
30
61
Drinking Water
and UIC
6
20
5
31
RCRA
4
4
5
13
Sample
Size Total
42
43
44
129
During our fieldwork, we eliminated five Clean Air cases due to
difficulties in identifying cases which met our criteria. We also
eliminated one Region 5 Safe Drinking Water file lost in transit
from the archives and one Underground Injection Control case
since it was the only sample case for this program which met our
criteria. Our final sample size was 122 cases, including 19 Clean
Air, 61 Clean Water, 29 Drinking Water, and 13 RCRA cases.
We also had difficulty identifying Region 6 RCRA cases which
met our criteria. Many of the Region 2 Air and Region 6 RCRA
cases did not require facilities to perform injunctive relief. These
facilities (1) only had to pay a penalty, (2) had complied prior to
the instrument being issued, or (3) were only required to ensure
future compliance with regulations. We used random sampling so
9 The list of RCRA cases originally included Underground Storage Tank cases. Since this program was not
included in our review because the cases mainly include penalties, we did not count them towards the RCRA
universe. We also modified the universe of Clean Water cases to eliminate cases dealing with the Oil Pollution Act
since they were not included in our audit.
22
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Audit of Compliance with Enforcement Instruments
Exhibit 1
Page 3 of5
V
that we could project results to the universe. However, because of
problems meeting the criteria listed above for the Region 2 Air and
Region 6 RCRA cases, we did not project the results as intended.
Determinations Regarding We considered a case as monitored if we saw any evidence of EPA
Monitoring, Timely
Compliance, and Further
Actions Needed
actions, such as inspections, review of submitted documents, phone
calls, or meetings with the violator. The only cases where we
stated that there was no evidence of monitoring were those which
did not show even one EPA action to follow-up on the facilities'
efforts to comply with the instruments. We also set a basis of
identifying whether EPA had monitored an instrument within a
month before or a month after violators were due to take actions.
In the absence of monitoring guidance, we felt this was a
reasonable time frame for EPA to ensure violators were meeting
instrument requirements.
In determining whether violators timely complied, we used the
enforcement instrument's schedule, or milestone due dates,
established for the required injunctive relief actions. We compared
the due dates to the date the facility took the required action. We
did not allow facilities a grace period before considering their
compliance to be untimely since a Regional official stated that
even one day of noncompliance could be harmful in some cases.
In cases where EPA approved an extension to the original due date,
we used the revised date. We also did not consider a facility late in
meeting a requirement if it was dependent upon a previous
requirement which had not been completed. If EPA asked a
facility to revise a document, we used the due date for the
submission of the revised document.
In reviewing further enforcement actions, such as issuing penalties
or referring cases to DOJ, we recognized that EPA has discretion.
However, in the absence of evidence indicating that EPA decided
against taking further actions, we stated that such action might
have been called for against violators' of instrument requirements.
We did not make a determination on whether EPA should have
23
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Audit of Compliance with Enforcement Instruments
Exhibit 1
Page 4 of 5
escalated enforcement actions to issue penalties or refer cases to
the DO J for those violators where there was no evidence of
compliance or where violators did not timely meet instrument
requirements. Also, while Region 2 subsequently took further
enforcement actions in five additional cases, the report focuses on
those enforcement activities performed prior to our initial review.
Determinations Regarding In response to our June 2000 draft report, OECA's Assistant
Significance Administrator stated that the draft did not discuss the severity of
violations, thereby making it impossible to determine if further
actions were justified. To address this concern, we identified the
significance of the underlying violations which originally resulted
in EPA's issuance of the enforcement instrument in each of the 66
cases in which we found compliance problems. (For more
information on the cases see appendix 1). To determine whether
violations were significant, we (1) talked to program management
and staff in all three regions, (2) reviewed national and regional
program policies, and (3) used data obtained from EPA databases.
Cost Data
Unavailable
Internal Controls
and Criteria
During our review, we tried to compare the costs associated with
issuing an enforcement instrument to the costs associated with
monitoring violators' compliance with an instrument. However,
we were not able to review OECA's activities from a cost-benefit
standpoint since OECA currently does not track costs for
enforcement activities. Program management and staff were not
able to provide cost estimates and indicated that costs would vary
according to each enforcement instrument. OECA acknowledged
in response to a prior OIG report that while it currently did not
track enforcement costs, it intends to pilot a tracking mechanism.10
OECA intends to associate costs to enforcement actions by 2002.
To assess internal controls, we reviewed the 1996 through 1998
Federal Managers' Financial Integrity Act reports for OECA and
Regions 2, 5, and 6.
10
EPA's Multimedia Enforcement Program, 2000-P-000018, June 30,2000.
24
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Audit of Compliance with Enforcement Instruments
Exhibit 1
Page 5 of5
To accomplish our objectives, we reviewed applicable OECA and
program policies and procedures and interviewed OECA and
regional staff. The OIG liaison also spoke with Congressional staff
members regarding OECA accomplishment reporting. We also
assessed the Agency's compliance with laws and regulations that
were specific to our audit and the programs reviewed.
Finally, we evaluated EPA's measures for the area of review as
required under the Results Act. As criteria, we used the Clean Air
Act, Clean Water Act, Safe Drinking Water Act, and RCRA, the
Mamialon^Mojutoringand Enforcing Administrative and Judicial
Orders, the Guidance on Certification of Compliance with
Enforcement Agreements, the Operating Principles for an
Integrated Enforcement and Compliance Assurance Program, the
Final FY 98/99 OECA Memorandum of Agreement.Consolidated
Technical Guidance, and the FY 1999 OECA Memorandum of
Agreement Guidance Update.
PRIOR AUDIT
COVERAGE
In March 1989, the OIG issued a Consolidated Report on Review
of EPA Controls Over Compliance Monitoring of RCRA
Enforcement Program Consent Agreement Provisions (Report No.
Elg2*7-09-0110-9100215). The review, performed in Regions 2,
8, and 9, found that monitoring procedures were not adequate to
ensure compliance with program requirements. Eighty percent of
the facilities sampled were either not complying timely and
adequately or there was no documented evidence of compliance.
25
Report No. 2001-P-00006
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-------
Audit of Compliance with Enforcement Instruments
Clean Air
Monitoring Actions
Further Actions
Program Summaries
Appendix 3
Page 1 of 5
Under the 1990 Clean Air Act, as amended, the Office of Air and
Radiation sets limits on how much of a pollutant can be in the air
anywhere in the United States. Air pollution may damage trees,
lakes, and the stratospheric ozone. Exposure to toxic air pollutants
can increase risks of cancer, respiratory irritation, nervous system
damage, and developmental problems in children.
i
Of the 19 cases reviewed, we found no evidence of the Air
Programs' monitoring efforts in five cases and seven cases did not
show any evidence of monitoring around the due dates.1 Because
the monitoring efforts were not always sufficient to ensure full
compliance, there was no evidence that 9 of 19 (47%) violators
complied or timely complied with the enforcement instruments.
For one additional case, we could not determine if milestone dates
were missed. As a result, both violations of the instrument and the
original violations potentially continued for up to six months for
those violators who complied late and longer for those facilities
where information was lacking.
Clean Air Programs in the three regions took further enforcement
actions in two of nine cases (22%) where there was no evidence of
compliance or violators did not timely comply with instrument
requirements. Of the remaining seven cases, five violators
continued in noncompliance for up to six months, and there was no
evidence that two had complied at the time of our review. Of
those seven cases, four included significant violations. In addition
to those seven cases, we could not determine if milestone dates
were missed in one case, therefore EPA would not be able to judge
whether or not further actions were needed.
1 In fiscal 1999, the Region 5 Air Program began using a Lotus Notes based system for tracking and
monitoring compliance with instruments. This system, which reflects actions that are required for each case and
those that are past due, should help Region 5 to better monitor instrument requirements.
30
Report No. 2001-P-00006
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Audit of Compliance with Enforcement Instruments
Appendix 3
Page 2 of5
Regions included warning language in 12 of 19 (63%)
enforcement instruments reviewed to describe penalties violators
may have to pay for failure to comply. However, EPA did not
assess those penalties where there was no evidence of compliance
or violators did not timely comply. EPA may also refer violations
of instruments to DOJ. Region 5 used this process to take action
against two facilities, one that complied late and one that had not
complied. Case files did not show whether regional staff
considered taking further actions or supporting why further actions
were not pursued in the other seven cases.
Resource Conservation and Recovery
Monitoring Actions
Further Actions
The 1976 Resource Conservation and Recovery Act gave EPA the
authority to control hazardous waste, including its generation,
transportation, treatment, storage, and disposal. RCRA also set
forth a framework for managing non-hazardous waste. RCRA
violations may harm water supplies, groundwater, aquatic life, and
vegetation. Exposure to waste contaminants can increase the risks
of cancer, nervous system damage, and internal organ damage.
There was no evidence of RCRA Programs' monitoring in 2 of the
13 cases reviewed and 2 cases did not show monitoring around the
due dates. Because the monitoring efforts were not always
sufficient to ensure full compliance, there is no evidence that 6 of
13 (46%) violators complied or timely complied with the
enforcement instruments. As a result, both violations of the
instrument and the original violations potentially continued for up
to one month for those violators who complied late and longer for
those facilities where information was lacking.
Regions did not take further enforcement actions in the six cases
where there was no evidence of compliance or where violators did
not timely comply, even though five included significant
violations. Of the six violators, four continued in noncompHance
for up to one month and there was no evidence that two had
complied at the time of our review.
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Audit of Compliance with Enforcement Instruments
Safe Drinking Water
Monitoring Actions
Appendix 3
Page 3 of 5
• Regions included penalty warning language in 10 of 13 (77%)
enforcement instruments reviewed. However, EPA did not assess
' • those penalties where there was no evidence of compliance or
where violators did not timely comply. Regional RCRA Programs
may also refer violations of instruments to DOJ, but did not use
v this process to escalate any of the cases. Case files did not show
whether regional staff considered taking further actions or
supporting why further actions were not pursued.
Under the Safe Drinking Water Act, the Office of Drinking Water
sets national standards to protect the health of the 250 million
people who get water from public water systems. These standards
limit the levels of dangerous contaminants that are known or
anticipated to occur in public water systems. Ingestion of
contaminated drinking water can increase risks for kidney,
intestine, or liver problems and may also delay the physical or
mental development of infants and small children.
Regional Drinking Water Programs' monitoring efforts were not
evident in 6 of the 29 cases reviewed. Twenty-three cases did not
show monitoring around the due dates. Because EPA did not
always sufficiently monitor to ensure full compliance, there is no
evidence that 20 of 29 (69%) violators complied or timely
complied with the enforcement instruments. For one additional
case, we could not determine if milestone dates were missed.2 Of
those 21, both violations of the instrument and the original
violations continued for up to 36 months past the deadlines for
cases where facilities complied late and potentially longer for cases
where information was lacking.
2 In addition to those 21 violators, 5 facilities' instruments were terminated since regions determined the
instrument was not necessary.
32
U.S. EPA Headquarters Library
Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
Report No. 2001-P-00006
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Audit of Compliance with Enforcement Instruments
Further Actions
Clean Water
Monitoring Actions
Appendix 3
Page 4 of5
Drinking Water Programs in the three regions took further
enforcement actions in 3 of 20 cases (15%) where there was no
evidence of compliance or violators did not timely comply with
instrument requirements. Of the remaining 17 violators, 11
continued in noncompliance for up to 36 months. Another facility
also complied late, but we were unable to determine the length of
noncompliance due to limited file documentation. As of our
review, there was no evidence that five other violators had taken
the actions necessary to comply with the instruments. All 17 cases
included significant violations. In addition to those 17 cases, EPA
did not know if milestone dates were missed for one case, and
therefore would not be able to judge whether or not further
enforcement actions were needed.
Regions included warning language in all 29 instruments
reviewed. However, of the 20 cases with compliance problems,
EPA only pursued penalties in three cases, all in Region 2. EPA
may also refer violations of instruments to DOJ. Region 2 used
this process to escalate two of the three penalty cases. The case
files did not document whether regional staff considered taking
further actions or supporting why actions were not pursued in the
other 17 cases.
Under the 1977 Clean Water Act, the Office of Water regulates
pollutant discharges to United.States waters. Continuing
violations could be toxic to aquatic and human life; affect wildlife
habitats and migratory paths for birds; and alter the flow
characteristics of creeks, streams, and storm sewers.
There was no evidence that Clean Water Program staff monitored
8 of the 61 instruments reviewed and 12 cases did not show
monitoring around the due dates. Because the programs did not
always sufficiently monitor to ensure full compliance with
instruments, there is no evidence that 27 of 61 (44%) violators
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Audit of Compliance with Enforcement Instruments
Farther Actions
Appendix 3
Page 5 of 5
complied or timely complied.13 For two additional cases, we could
not determine if milestone dates were missed. As a result, both
violations of the instrument and the original violations continued
, for up to 30 months past the deadlines for cases where facilities
complied late and potentially longer for those cases where
information was lacking.
Clean Water Programs in the three regions took further
enforcement actions in five cases, one hi Region 2 and four in
Region 5. Of the remaining 22 violators, 10 continued in
noncompliance for up to 30 months. Another facility complied
late, but we were unable to determine how long it was in
noncompliance. At the time of our review, there was no evidence
that 11 violators had taken the actions necessary to comply with the
instruments. Of those 22 cases, 13 included significant violations.
In addition to those 22 cases, we could not determine if milestone
dates were missed in 2 cases, therefore EPA would not be able to
judge whether or not further actions were needed.
Regions included warning language m 57% (35 of 61 cases) of the
enforcement instruments. However, EPA only assessed penalties
hi one case, hi Region 2. EPA may also refer violations of
instruments to DOJ, which Region 5 did in four cases. In Region
2, EPA's threat of referral was incentive enough for one facility to
comply. Case files did not show whether regional staff considered
taking further actions or supporting why further actions were not
pursued in the other 22 cases.
13 In addition to those 27, two facilities did not have to comply since they never received the enforcement
instrument.
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Audit of Compliance with Enforcement Instruments
Appendix 4
Page 1 of 13
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MAR 23 2001
OFFICE OF
ENFORCEMENT AND
COMPLIANCE ASSURANCE
MEMORANDUM
SUBJECT: OECA Response to Office of Inspector General Draft Audit Report:
"Compliance With Enforcement Instruments"
FROM: Sylvia K. Lowrance
Acting Assistant Administrator
TO: Kimberly O'Lone
Audit Manager, Northern Audit Division
Office of the Inspector General
The Office of Enforcement and Compliance Assurance (OECA) has reviewed the draft
report entitled, "Compliance With Enforcement Instruments." OECA appreciates the effort
expended by your office to develop the findings and suggestions in the report on a subject • the
effective tracking and enforcement of compliance requirements in enforcement instruments - of
mutual concern to the Inspector General (IG) and OECA. We appreciate the opportunities you
provided to us to submit Assistant Administrator Steven Herman's July 17,2000 comments on
the initial version of the report, respond on November 29,2000 to questions from your staff on
those comments, and discuss die draft Report with your staff at the February 27,2001 exit
conference. It is apparent that you put considerable effort into developing your recommendations
and made it a priority to promote effective communication between our offices throughout the
process.
The attached document responds to the recommendations in the draft Report. It
documents steps OECA and the Regions have already taken to address the IG's concerns, as well
as planned future actions. As explained in the attachment, while OECA disagrees with some of
the analysis and recommendations in the draft Report, we acknowledge that OECA and the
Regions need to do more to improve how we track and enforce violations of compliance
requirements in enforcement instruments. While the steps proposed in this response are not
identical to the draft Report's recommendations in every respect, we believe they will
Note: The original response was signed by Michael M. Stahlfor Sylvia K. Lawrance.
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successfully address the issues and concerns you have identified.
The comments OECA is submitting today incorporate the views of our Office of
Regulatory Enforcement (ORE), Office of Compliance (OC), and Office of Planning, Policy
Analysis, and Communications (OPPAC), and were developed with Regional input. OECA's
comments are addressed primarily to the broader policy and management issues and
recommendations in the report. We are also attaching thoughtful comments from Region 2 with
which we concur. Regions 5 and 6 do not intend to submit separate comments. Please address
any questions concerning our response to OECA's OIG Audit Liaison, Gregory Marion, at 202-
564-2446.
Attachments
cc: Michael Stahl
Eric Schaeffer
Mary-Kay Lynch
Connie Musgrove
Bruce Weddle
Frederick Stiehl
Jon Silberman
Walter Mugdan (R2)
Gail Ginsberg (R5)
Lawrence Starfield (R6)
Jori Spolarich (OIG)
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OECA RESPONSE TO OIG DRAFT REPORT:
"Compliance with Enforcement Instruments"
The OIG draft Report contains a number of recommendations and suggestions for action that
OECA and the Regions could take to address the concerns raised in the body of the Report. In
response to the draft Report, OECA and the Regions have taken, or will take, the following
actions. The list is followed by a detailed response to each of the IG's recommendations.
Summary of OECA and Regional Actions in Response to OIG Draft Report:
1. For judicial settlements, beginning in FY 2002, OECA intends to have the Regions
update the Consent Decree Enforcement Tracking Subsystem (CDETS) in DOCKET, or
appropriate alternative Regional database(s), to reflect key schedules/milestones for terms
of compliance and actions taken to ascertain continued compliance.
2. When the Integrated Compliance Information System (ICIS) is in place, OECA will
expect the Regions to use this system to track enforcement instrument compliance.
3. OECA will clarify, in our Accomplishment Reports and other similar documents, that the
information we provide on enforcement outcomes are estimates, made at the time of
settlement, assuming die injunctive requirements in the underlying enforcement
instruments are implemented.
4. OECA determined that the requirements in our 1990 Judicial Consent Decree Tracking
and Follawup Directive (Directive), Manual on Monitoring and Enforcing Administrative
and Judicial Orders (Manual), enforcement response policies, and penalty policies
provide sufficient and appropriate criteria for the Regions to use to track compliance
milestones, analyze violations of judicial and enforcement instruments, and prioritize
them for response. However, OECA also determined a need to improve familiarity with,
and implementation of, the Manual and Directive.
5. In response to this determination, OECA asked the Regions to develop revised Region-
specific enforcement instrument compliance tracking and enforcement plans, covering
both judicial consent decrees and administrative orders, that address the need for effective
tracking, enforcement, and documentation. The attachments to this response include all
ten plans.
6. While OECA determined mat new guidance is not needed at this time, we will reconsider
this finding at the end of the fiscal year based on how well the revised Regional
implementation plans are working. If new or additional guidance is needed, OECA,
working closely with the Regions, will ascertain what is required, and develop and issue
such guidance.
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7. In a February 8,2001 memorandum, signed by the Directors of ORE and the Office of
Site Remediation Enforcement (OSRE), to die Regional Counsel, Regional Enforcement
Division Directors, and Regional Enforcement Coordinators (attached), OECA reminded •
the Regions of the need to be familiar with, and follow, the Manual and Directive.
8. OECA further stressed the importance of complying with the Directive and the Manual in
the OECA-Regional Senior Management Conference Calls for January and March, 2001.
8. OECA will include the iG's Report, its findings, and EPA's responses to it as an agenda
item in the upcoming April 5,2001 National Enforcement Meeting. This meeting will be
attended by senior legal enforcement managers from ORE, OC, the Regions, and the
Department of Justice (DOJ).
9. The Acting Assistant Administrator, Acting Deputy Assistant Administrator, and other
OECA program managers will raise compliance with enforcement instrument tracking
and enforcement as a discussion issue during their regularly scheduled, frequent visits to
each Region to review performance, address major policy issues, and identify needs for
technical assistance.
Detailed Response to 1C Recommendations in Draft Report:
Recommendations addressed to the Acting Assistant Administrator for Enforcement and
Compliance Assurance:
1. Establish a performance measure for ensuring that facilities under a formal
enforcement action return to compliance in accordance with the schedule contained
in the final order or decree.
On page 6, the auditors recommend that OECA establish a performance measure to
ensure mat facilities under a format enforcement action return to compliance. We agree that
efforts to ensure the terms of compliance with consent decrees should be tracked as a
performance measure in connection with our handling of our judicial cases, which are already
tracked in the OECA DOCKET. Therefore, for judicial cases, we intend, beginning in FY 2002,
to have the Regions (and any Headquarters offices responsible for judicial cases) update the
Consent Decree Enforcement Tracking Subsystem (CDETS) in DOCKET, or appropriate
alternative Regional databases), to reflect key schedules/milestones for terms of compliance and
actions taken to ascertain continued compliance. If a Region elects to utilize a Regional
database(s) for mis purpose, we will stress the need for the Region to also ensure that the
applicable case fields in DOCKET are updated regularly to summarize the status of the case with
respect to consent decree tracking and enforcement. This approach should provide an acceptable
level of uniformity, and Headquarters access to timely information on the status of Regional
efforts to track and enforce consent decree requirements. Additionally, the Agency is presently
in the process of developing a multimedia compliance information system, the Integrated
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Compliance Information System (ICIS). This system is expected to provide a uniform Regional
platform for recording all aspects of enforcement activity, from compliance monitoring to
enforcement actions to return to compliance. At such time as ICIS is in place, the Regions will
be expected to use mis system to track enforcement instrument compliance.
We utilize this approach to tracking judicial actions because they tend to be highly
significant due to the injunctive relief they require, and in view of the United States' obligation to
the Courts to ensure that court orders are satisfied or referred for contempt proceedings and/or
stipulated penalties collected where due. As a practical matter, we are able to do so, despite
resource limitations, because the total number of such cases is a relatively small subset of our
total case docket Administrative actions, by contrast, are much more numerous, generally
smaller in size, and on average require less complex injunctive relief. Balancing these factors
together with our resource limitations is why, historically, we have not routinely tracked
administrative actions identically to judicial cases and are not proposing to do so now.
In reviewing this and the other recommendations in the draft Report, an important general
consideration for OECA - one that we have emphasized repeatedly to the IG in connection with
this and other completed or ongoing audits - is OECA's obligation, as national program
managers for enforcement and compliance, to balance our numerous statutory obligations, GPRA
requirements, and program goals and priorities so as to best protect human health and the
environment from noncompliance with statutory and regulatory requirements. To put these
obligations in perspective, consider that our latest efforts to update our numbers on the size of the
environmental regulatory universe subject to the statutes and rules administered by EPA suggests
that the enforcement and compliance assurance program has responsibility for assuring the
compliance of approximately 41 million entities. Compliance data is maintained for
approximately 600,000 of these facilities. Inspecting, enforcing against, and following up on the
compliance and performance of this large a universe necessarily requires us to make hard
choices, on a daily basis, regarding our priorities for a wide range of activities, including
tracking, monitoring, performance measurement, and database management and maintenance.
It is in this context that, in our view, it is not a desirable or realistic goal for EPA's
enforcement program - either for measuring performance or allocating compliance and
enforcement resources - to adopt a performance measure for judicial or administrative
enforcement instruments along the lines of the draft objective cited in the draft Report at page 5,
viz., "ensure that 100% of regulated facilities under a formal enforcement action return to
compliance in accordance with the schedule contained in the final order or decree." Designing a
system aimed at perfection in this area would require seriously overbuilding the system, with
significant opportunity costs. While in theory OECA could perhaps generate such a system, this
would not promote environmentally beneficial outcomes because it would require us to spend
huge sums of money and time chasing small gains at the expense of other pressing priorities.
This is why OECA rejected that draft performance measure when we finalized our Strategic Plan.
Given this history, we question whether it is helpful even to reference the draft measure in the
draft Report.
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2. Identify a more accurate method for reporting, including verifying and validating,
the actual accomplishments which result from EPA's enforcement activities.
OECA agrees with the Inspector General that OECA can more accurately represent and
qualify expected outcomes from the enforcement actions reported in our Accomplishment
Reports and other similar documents so as to better represent that the information we provide are
estimates, made at the time of settlement, assuming the injunctive requirements in the underlying
enforcement instruments are implemented. In response to the IG's recommendation in this area,
OECA will clarify this point in future Accomplishments Reports so readers understand the
context and limitations of the data we provide in such documents.
At the same time, however, we ask the auditors to amend the draft Report to clarify the
IG's intent in offering the above recommendation. When ORE and OC staff met, on February
27,2001, with their counterparts on the Inspector General's staff, staff from OC asked whether
the IG's intent was to suggest that OECA and the Regions reprogram our resources to fund
routine facility re-inspections, once enforcement actions are concluded, in order to make ambient
measurements, examine industrial construction, or otherwise determine actual measured results
hi order to compare them to what presumably would need to be equally rigorous measurements
undertaken at the time of settlement. It was our understanding, as a result of the February 27
meeting, that this is not the IG's intent Rather, the intent is to ensure, in the context of
enforcement instrument tracking and enforcement, that OECA and the Regions pay sufficient
attention to enforcement instruments to assure compliance through appropriate means. These
might range from site visits to document reviews, exchanges of letters, or phone calls to confirm
mat actions were taken. This understanding of the IG's intent is supported by the statement at
page 19 of the draft Report, which describes how the auditors themselves determined whether
cases were being adequately monitored for purposes of the audit:
"We considered a case as monitored if we saw any evidence of EPA actions, such as
inspections, review of submitted documents, phone calls, or meetings with the violator.
The only cases where we stated that there was no evidence of monitoring were those
which did not show even one EPA action to follow-up on the facilities' efforts to comply
with the instruments."
We also request that the draft Report be amended to ensure that readers do not
misconstrue or misuse the Report to suggest that the IG found in this matter that OECA routinely
overstates the impacts of our compliance and enforcement programs. An example is the
introductory language in page i. This language appears sufficiently imprecise to us to risk
leaving readers with a misimpression that OECA knowingly or negligently misrepresents the
environmental benefits resulting from enforcement activities. It could also be read as suggesting
that the IG believes EPA should invest whatever resources are required to improve the accuracy
of case impact projections made at the time of settlement and/or document actual results once die
injunctive relief is in place. Our discussion with the auditors on February 27, however, led us to
understand that the IG's intent is primarily to suggest that OECA needs to be clearer hi our.
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public statements (especially the Annual Performance Report under GPRA) that cited pollution
improvements are estimates and projections which can be fully realized only if the underlying
compliance actions are completed.
It has never been OECA's intent, in developing estimates of the outcomes of enforcement
actions at the time of settlement, to implement unduly burdensome processes or require
perfection. OECA has devoted a great deal of effort to promoting the use of our Case
Conclusion Data Sheets (CCDS) to generate and document this information, including the
development of our new Case Conclusion Data Sheet Training Booklet (106 pages), Quick Guide
for Case Condition Data Sheet (111 pages), and related CD Rom-based interactive training
materials. Still, OECA's Enforcement Accomplishments Reports generally contain conservative
assessments of the emission reductions that are likely to be achieved through compliance with
both consent decrees and administrative orders. This is because, as our CCDS guidance
recognizes, in many instances, even when the actions violators must undertake in settlement will
produce real pollution reductions, if quantifying them would be impossible or unduly expensive
for technical or resource reasons, the results need not be quantified and OECA will not include
specific numbers in our reports. This results in accomplishment reporting that in many instances
understates the results we are actually achieving.
A broad set of actions with results that are difficult to quantify fall in to the category of
"work practices," as opposed to what are traditionally known as "end-of-pipe controls." Others
involve injunctive relief that is primarily preventative. For example, consider the consent
decrees that EPA has negotiated with some refineries pursuant to OECA's Petroleum Refinery
Strategy. These decrees contain provisions intended to vastly improve the defendants' Leak
Detection and Repair (LDAR) programs. Under LDAR programs, refinery operators are required
to use monitoring instruments to detect gas leaks from process valves, flanges and pumps. If any
of these parts is leaking above a set threshold, it must be repaired as soon as possible. EPA
analyses have shown that these emissions can be very high, but every valve leaks at a different
rate, so calculation of emission reduction benefits from this program ranges from difficult in
some instances, to not possible in others.
Another example are our Clean Water Act (CWA) actions against large municipalities.
These cases typically require major injunctive relief to eliminate sanitary sewer overflows (SSOs)
and combined sewer overflows (CSOs). The City of Atlanta, a defendant in one such action, has
an average of one SSO somewhere in their system every day with an average volume of 100 or
more gallons per overflow. In addition, the City has approximately 240 CSOs annually.
Atlanta's rivers and streams have very high pathogen counts. A recent EPA survey of waterways
in Region 4 states, using six years of monitoring data, demonstrates that the urban streams in
metro Atlanta are polluted with the highest levels of sewage-related bacteria in the Southeast.
When the injunctive relief is completed, Atlanta will have eliminated nearly all SSOs and is
expected to reduce CSOs per year to 24. Discharges from the CSOs are expected to receive
primary treatment and disinfection and to meet Water Quality Standards. When one considers
that the population served in Atlanta is 421,000 people, it becomes apparent that this case will
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bave dramatically positive environmental consequences, yet the results are extremely difficult to
quantify for accomplishments reporting purposes.
When a reliable accounting of emission and release reductions from cases such as these
cannot be generated, OECA does not believe it appropriate to include the reductions in the tally
of benefits, despite the fact that the benefits are known to be substantial. Input data needed to
develop a pollutant reduction calculation for CSOs, for example, include the amount of flow that
bypasses treatment before the control action; the amount of flow that bypasses treatment after
control action; and typical concentrations of the overflow; and concentrations of treated effluent
from the municipal wastewater treatment plant. To generate numbers sufficiently rigorous for all
cases, and enter mem into our Accomplishments Reports would require, in some cases, technical
efforts on a scale normally reserved for rulemakings of general applicability. OECA and the
Regions simply do not have the budget or human resources to do this type of work at this time.
While the auditors did indicate that some Congressional staffers wished for OECA implement a
process to supply more rigorous after-the-fact measurements of actual environmental results
achieved through enforcement, again, our understanding is that this is not the IG's
recommendation in this audit.
3. Issue basic guidance for (1) monitoring violators' efforts to comply with
enforcement instruments and (2) considering further enforcement actions
when violators fail to comply with instrument requirements. Guidance should
address, at a minimum: (1) Monitoring for compliance with enforcement
instrument requirements; (2) Changing due dates for instrument requirements;
(3) Documenting violators' receipt of enforcement instruments to prevent them from
claiming non-receipt of the instrument as a means to delay compliance; (4) Issuing
compliance letters to facilities which have adequately completed all actions required
in enforcement instruments; (5) Improving file documentation.
Recommendations addressed to the Regional Administrators:
4. Ensure that the regional program offices take steps, until OECA issues guidance, to
adequately monitor violators' actions and consider further enforcement actions,
when appropriate.
Because recommendations #3 and #4, in our view, are closely related, OECA will
respond to diem together. OECA accepts the IG's findings that OECA and the Regions can and
should do a better job of tracking and enforcing compliance with requirements in enforcement
instruments. Consequently, we are working with the Regions to implement concrete actions that
respond to the IG's concerns. These include developing and implementing formal, written,
revised Regional enforcement instrument compliance tracking and enforcement plans that
address both judicial and administrative orders pursuant to the IG's recommendation at page 13
of the draft report. While OECA is not proposing to issue new OECA guidance on enforcement
instrument tracking and enforcement at this time, we are reviewing the need for new guidance
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with the Regions. ORE plans to reconsider whether such guidance is needed at the end of this
fiscal year based on how well the revised Regional implementation plans are working to improve
enforcement instrument tracking and enforcement.
In analyzing our processes and procedures in response to the audit, OECA separated our
current strategy into three components:
-1- substantive criteria for analyzing enforcement instrument violations and prioritizing
them for response;
-2- general requirements governing the tracking and enforcement of compliance with
enforcement instruments by all of the Regions;
-3- Region-specific processes and procedures to ensure that existing criteria and
requirements for enforcement instrument tracking and enforcement are implemented.
Following are detailed descriptions of each component, and the steps we are taking, or proposing
to take, to improve our performance.
Substantive criteria for analyzing enforcement instrument violations and prioritizing them for
response:
These criteria are set forth in EPA's Enforcement Response Policies (ERPs), civil penalty
policies, and Enforcement Directives and Manuals. As the IG is aware, OECA has, over the
years, issued numerous ERPS and civil penalty policies, both general, and for specific statutes,
media, or programs. OECA's ERPs and civil penalty policies apply, in most cases, to judicial
and administrative enforcement, and are developed carefully in consultation with the Regions, in
some cases with additional input from other stakeholders such as the EPA program offices and
our state enforcement partners. OECA's predecessor office, OECM, provided specific guidance
on how to prioritize judicial Consent Decree violations for response in the January 1990 Judicial
Consent Decree Tracking andFolhwup Directive (Directive). The Directive lists the following
factors and criteria for selecting an appropriate enforcement response to CD violations:
"Environmental Harm Caused By Violation; Duration of Violation; Good Faith/Bad Faith
(Compliance history); Deterrence Value; Ability to Respond; and Economic Gain."
These factors are either identical to, or consistent with, those stressed in all of our ERPs and civil
penalty policies, i.e., they are the factors EPA's statutes require us to consider in prioritizing for
response all regulatory violations.
The decision whether to enforce against specific violations of enforcement instrument
provisions requires case-specific analyses of the seriousness of the violations, whether they are
ongoing, and whether they may result in significant environmental harm, as opposed to tracking
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administrative milestones determined to be less significant in terms of the potential for harm. In
practice, this means that the Regions place a high priority on tracking and enforcing enforcement
instrument provisions that require significant injunctive relief or provide for Supplemental
Environmental Projects (SEPs). Tracking or reporting provisions that do not relate directly to
significant injunctive reliefer SEPs receive a relatively lower priority. This practice is consistent
with our general and media-specific penally policies, which provide guidance on how to
prioritize violations - including violations of CDs and orders - for response.
The Directive, at page 7, provides:
"Violations for which a decision not to take a formal action based on competing
priorities might be appropriate would generally find the party on the positive side of the
factors above (i.e., no or limited environmental harm from the violation, good compliance
record, etc). Situations where the Agency might exercise its discretion not to take an
action might include:
- Late reporting with no environmental consequence and without a past pattern of
delay or noncompliance.
- Missed milestone, not a major requirement, with expectation they will be in
compliance with/by the next milestone.
- Violation of an interim limit, magnitude of the exceedence is minor, with
compliance now achieved or anticipated shortly."
Note mat terms and phrases such as "pattern," "not a major requirement," "expectation,"
"exceedence is minor," etc., are not further defined in the Directive. This reflects Agency policy
delegating to the Regions the responsibility for determining these issues on a case-specific basis,
taking into account the totality of the circumstances and competing national and Regional
compliance and enforcement priorities.
It is OECA's opinion that these existing criteria and policies provide sufficient and
appropriate substantive criteria for the Regions to use to analyze violations of enforcement
instruments and prioritize them for response. Consequently, OECA is not proposing to issue new
criteria in mis area.
General requirements governing the tracking and enforcement of compliance with enforcement
instruments bv all of the Regions:
These requirements are set forth primarily in two EPA guidances, the Directive, and the
Manual on Monitoring and Enforcing Administrative and Judicial Orders (Manual), which
OECM (now OECA) transmitted to the Regions by memorandum dated February 6,1990. The
two documents, among other things: divide tracking and followup responsibilities between the
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Offices of Regional Counsel and the Regional program divisions; emphasize the need for
adequate documentation of violations; establish database management criteria which allow each
Region flexibility to select an appropriate method based on its internal caseload and database
capabilities; require all currently due and overdue consent decree milestones to be extracted from
the Regional management system, and made available to staff and supervisors, on a not-less-
than-quarterly schedule; delegate to the Regions the authority to decide what followup actions, if
any, to take in response to violations; list factors and criteria to consider in prioritizing violations
for response; and require a decision not to take formal action to be made jointly by the Office of
Regional Counsel and appropriate Regional program division at the Branch Chief or higher level.
The Directive applies specifically to enforcement and tracking of judicial consent
decrees. The lengthier and more detailed Manual, however, applies to both judicial and
administrative enforcement. Assistant Administrator Steven Herman, in his July 17,2000
memorandum to the Inspector General commenting on an earlier draft of die Report, noted,
among other tilings, that many policies and procedures the enforcement program relies on have
been in effect for some time, and that he did not see the need to update or reissue the Directive
and Manual because they remained appropriate and applicable.
Bom the Directive and Manual remain in effect today, and we are not proposing to
update, reissue, or augment them now. However, as communicated previously to the IG's staff
by ORE, we determined that it would be appropriate to remind the Regions of the need to be
familiar with, and follow, the Directive and the Manual. We did so in a memo, signed by the
Directors of ORE and the Office of Site Remediation Enforcement (OSRE), dated February 8,
2001, addressed to the Regional Counsel, Regional Enforcement Division Directors, and
Regional Enforcement Coordinators (attached). The importance of complying with the Directive
and the Manual was also stressed in the OECA-Regional Senior Management Conference Calls
for January and March, 2001. The Actbg Assistant Administrator, Acting Deputy Assistant
Administrator, and other program managers have agreed to raise compliance with enforcement
instrument tracking and enforcement as a discussion issue during their regularly scheduled,
frequent visits to each Region to review performance, address major policy issues, and identify
needs for technical assistance. Finally, OECA will identify the IG's Report, its findings, and
EPA's responses to it as an agenda item for the upcoming April 5,2001 National Enforcement
Meeting, attended by ORE, OC, and DOJ senior legal enforcement managers.
On page 13 of the draft Report, the IG notes with approval ("a positive step") OECA's
intent to remind the Regions of the need to comply with judicial consent decree tracking, but
states that "we believe OECA also needs to improve the tracking of administrative orders since
the majority of EPA's enforcement actions are administrative." Please note that the February 8
memorandum transmitted to the Regions does address both judicial and administrative tracking
and enforcement. It does so by, among other things, referencing both the Directive and the
Manual. Additionally, in response to die IG's concerns and as discussed further below, ORE
expanded its request for revised Regional tracking and enforcement implementation plans to
expressly include administrative actions, using the IG's own definition of "enforcement
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instruments" in the draft Report as our guide in this endeavor: "Any type of enforcement action
that EPA issued which included actions a facility was required to take. These enforcement
actions include: administrative orders, compliance orders, consent agreement consent orders, and
consent decrees." Thus, while we continue to believe it is not appropriate to require identical
Regional procedures for tracking and enforcing requirements in judicial and administrative
enforcement instruments, we agree with the 1C on the importance of having strategies in place to
address both and have acted accordingly.
In addition, in the February 8 memorandum, ORE and OSRE solicited input from the
Regions as to whether modifications or updates to the Manual and/or Directive may be
appropriate in the future. Again, while OECA's present intent is to address the issues and
concerns raised by this audit by significantly upgrading our implementation of the Manual and
Directive (because we believe the root cause of the IG's concerns to be the inconsistent
implementation of already existing guidance), ORE intends to reconsider whether new or
additional guidance is needed at the end of this fiscal year. If experience demonstrates this to be
the case, OECA, working closely with the Regions, will ascertain what is required, develop and
issue the guidance.
Region-specific processes and procedures to ensure that existing criteria and requirements for
enforcement instrument tracking and enforcement are implemented:
As discussed above, OECM (now OECA) transmitted the Directive and Manual to the
Regions in 1990. In the cover memorandum to the Directive, OECM directed each Region to
submit "a memorandum detailing the steps they have taken to implement the Directive" Given
mat -1- over a decade has now passed since these memoranda were prepared, and -2- OECA's
analysis points to inconsistent implementation of the already existing guidance, ORE and OSRE
asked the Regions, in February 8,2001 memorandum, to either resubmit their original Directive
implementation plans or edit them to reflect changed circumstances. Upon further consideration
of the IG's concerns - particularly in connection with administrative enforcement instruments -
ORE re-contacted the Regions to ask for substantially revised implementation plans that include
processes and procedures for addressing administrative consent agreements and orders, in
addition to consent decrees. ORE further asked the Regions to ensure that the revised
implementation plans address the case file documentation problems noted in the draft Report,
i.e., the need to confirm, in the case files or elsewhere, whether and when requirements are
tracked, followup actions taken by the Region to confirm or rebut compliance, and the bases for
decisions not to respond formally to noncompliance where deemed inappropriate or unnecessary.
The Regions responded by submitting the revised Regional enforcement instrument
tracking and enforcement plans attached to this response. Please note that the revised
implementation plans you receive today will likely be edited further in the future. As of the date
of this response, not all of the Regions had sufficient time to review and react to each others'
plans in order to amend them to adopt or incorporate "best practices" from other Regions.
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OECA's initial review of the revised plans, however, suggests that they will be effective in
addressing die tracking and enforcement problems identified hi the draft Report.
- When reviewing the revised implementation plans, please keep in mind that the Manual
and the Directive intentionally provide the Regions with significant discretion in designing and
implementing Region-specific enforcement instrument tracking and enforcement systems and
databases, taking into account each Region's internal organization, procedures, and needs. As a
result, the revised implementation plans differ. For example, some Regions employ similar
approaches to enforcement instrument tracking throughout the Region, while in others, there is
more program-to-program variation. This is not a shortcoming in the system or an overlooked
matter, but rather reflects a conscious effort on OECA's part to empower each Region to select,
develop, and implement the databases and systems it requires to best match and support its own
internal organizational structure and needs. Finally, please note that OECA does not require or
expect the Regions to use DOCKET to track the enforcement of administrative orders and
agreements. The Regions typically use DOCKET for tracking judicial consent decrees, but not
administrative actions, though the Directive itself provides each Region the flexibility to select
the most appropriate method of maintaining its own databases even for judicial actions. When
ICIS is implemented, it is expected that the Regions and OECA will be able to use this new
system to track enforcement instrument compliance.
5. Determine the status of those cases where files showed no evidence of violator
compliance.
Region 2's response to the draft Report is attached. OECA concurs with the views
expressed in the Regional response. Regions 5 and 6 did not develop separate Regional
responses, but will follow up on the Report's findings.
Attachments
Note: The attachments to this response are not included in the report.
47
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Audit of Compliance with Enforcement Instruments
Appendix 5
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 2
DATE: MAR 15 2001
SUBJECT: Region 2 Comments on OIG Draft Audit of
Compliance with Enforcement Agreements
Report No. XXXXXXX
FROM: Herbert Barrack
Assistant Regional Administrator for Policy and Management
TO: Sylvia Lowrance, Acting Assistant Administrator
Office of Enforcement and Compliance Assurance
Region 2 comments on the above-referenced draft report emailed to Region 2 on February 20,
2001, are provided as Attachment 1 to this memo. .
If you have any questions, please let me know or have your staff contact Scott Opis, Policy,
Planning and Evaluation Branch, at (212) 637-3699.
Attachments
cc: H. Maletz, OIG
Note: The original response was signed by Joann Brennan-McKeefor Herbert Barrack
48
U.S EPA Headquarters Library
Mail code 3201
1200 Pennsylvania Avenue NW
Washington DC 20460
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Attachment 1
Region 2 Comments on OIG's Draft Report
Compliance with Enforcement Instruments
General Comments
Region 2 concurs with the need to remind regional managers, program staff and attorneys of the
existing guidance concerning the monitoring of administrative and judicial consent decrees.
Since existing guidance and regional implementation procedures were developed prior to the
1996 regional reorganization, periodic redistribution of such guidance is a sound measure to
ensure consistent application across all Divisions with enforcement responsibilities. As noted in
our response to the recommendations, Region 2 has done this.
The Region also agrees that the 1990 Manual on Monitoring and Enforcing Administrative and
Judicial Orders offers a sound methodology for ensuring that all compliance obligations of
administrative orders are tracked, that any non-compliance with the terms of such orders are
appropriately evaluated for follow-up action, and that timely and appropriate follow-up action is
taken. It is important to recognize, however, that the timing and extent of follow-up action for
non-compliance with administrative orders is contingent upon the availability of both program
and legal enforcement resources. Since the pool of violations is dynamic and generates the need
for timely and appropriate enforcement actions, the number of formal actions requiring
monitoring and follow-up may not match the resources available for same. As a result, for cases
where adequate justification for delays is provided by the respondent and where compliance is
likely to be achieved, the Region may choose to forego additional action in order to focus on
more pressing program and regional priorities. In this vein, Region 2 strongly recommends that
OECA carefully consider the resource implications of the OIG's recommendations when
responding to this draft report and in the issuance of final guidance.
Specific Comments
• Page 3, end of the first J: Here OIG writes "we found no. evidence that facilities complied
with 30 of 122 randomly sampled enforcement agreements...." The same formulation
(i.e., "...we found no evidence that facilities complied...") is also used elsewhere in the
document (e.g., page 8, first bullet; page 11, If 1; page 19, first full f; page 22, page 26,
page 27, page 28, page 29). We have two concerns with respect to this formulation:
• OIG categorized enforcement instruments as having had no EPA compliance
monitoring if there was no written documentation in the case file of at least one
activity such as inspection, review of submissions, phone calls or meetings. (See
page 19, first full ft) Where this criterion yielded no evidence of EPA
monitoring, and there was no other written documentation confirming a
respondent's status of compliance with an instrument, OIG apparently categorized
the instrument as having "no evidence of compliance."
49
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This approach is appropriate to support one of the points in the Audit Report,
namely that EPA enforcement staff should improve their written documentation
of compliance monitoring activities. But the presentation in the draft Report
seems to imply that al] cases where there was "no evidence of compliance" were
in fact instances of "non-compliance" with the terms of the instrument. For
example, OIG's discussion of "Determinations of Significance" (e.g., page 20;
and the Tables starting on page 22) would likely be understood to mean that OIG
(a) determined that the respondents named in these instruments were in fact in
violation of the terms of the instrument, and (b) determined whether such
violations were significant or not. The strong implication is that jU 66 cases
listed in the Tables on pages 22-25 were instances where there was, in fact non-
compliance by the respondent with the terms of the instrument.
We are not persuaded that this is a justifiable implication. For some of these
cases there may be no evidence of non-compliance, just as there is no evidence of
compliance. In other words, there may be no written documentation one way or
the other. Thus, it is possible that the respondents in some of these cases were in
fact in compliance with the terms of the instruments, but that there was no written
documentation in the file to confirm that Indeed, our review of the Region 2
cases included in the OIG data set indicates there were several such situations.
And OIG itself makes a similar point when it challenges EPA's use, in end-of-
year enforcement accomplishments summaries, of information about the benefits
anticipated from case conclusion instruments, which may or may not be actually
achieved during the life of the instrument. (See, eg., page 3, Tf 1.)
• We appreciate and do not disagree with OIG's recommendation that all
compliance monitoring activities be documented in writing. However, we note
mat in some of the cases identified by OIG as having "no evidence of EPA
monitoring," although there may have been no written evidence in the case file,
there is. evidence (for example, oral evidence) that such monitoring activities did
take place. For example, in a Clean Water Act case involving pump stations
operated by the Puerto Rico Aqueduct and Sewer Authority (PRASA), there were
conference calls and/or meetings with the respondent to discuss its non-
compliance. Moreover, this particular instance of non-compliance (along with
several others like it) was included in a major litigation referral sent to the
Department of Justice (DOJ) in March 2000, a fact not reflected in the OIG
Report.
Page 4, U 1. The draft Report says: "However, DOCKET data is incomplete" because it
tracks compliance with judicial consent decrees, but not administrative instruments. The
statement about the scope of DOCKET is accurate, but the word "incomplete" is
misleading. It suggests that Regions have failed to use DOCKET properly. In fact, the
Regions have never been asked to use DOCKET for tracking compliance with
administrative instruments, only judicial instruments.
50
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Most EPA guidance on monitoring compliance with enforcement instruments has focused
primarily on two areas: judicial instruments specifically, and the tracking and collection
of monetary penalties from both judicial and administrative instruments. For example,
most of the 1990 Manual on Monitoring and Enforcing Administrative and Judicial
Actions is devoted to the tracking of monetary penalties. With respect to documenting
our compliance monitoring efforts, Region 2 has similarly concentrated on these two
areas during the past years. This does not mean we have failed to monitor compliance
with the injunctive elements of administrative instruments, but we have not focused on
documenting those efforts as fully as we might have.
The OIG Report suggests, on page 5, that an appropriate goal for EPA would be to ensure
that "100% of regulated facilities under a forma! enforcement action return to compliance
in accordance with the schedule contained in the final order or decree." (This was a
proposed performance measure in a 1997 draft OECA Strategic Plan, but it was never
adopted.) We agree that mis would be a desirable goal in the abstract, but it is probably
unrealistic. We must have the latitude and flexibility to assign our scarce enforcement
resources among many competing priorities - monitoring compliance among regulated
entities, development of new enforcement cases where violations are identified,
prosecution of ongoing cases, and monitoring compliance with enforcement instruments.
A substantially increased focus on the last of these four objectives will translate directly
to a reduced focus on the remaining three. Balancing among these competing objectives
is best done at the regional level, by the managers most familiar with the case load and
the problems needing to be addressed.
Page 7, f 1: OIG should be asked to insert the word "always" after "did nof' on the 3rd
line. With respect to Region 2, at least, we did and we do "consider further enforcement
actions when facilities did not comply or timely comply." OIG's own data tables confirm
this: 16 of the 66 cases listed on the two tables are Region 2 cases. Of these, 9 (56%) are
shown as having "Further Action (Penalty or Referral)."
Later in the same paragraph OIG ascribes "ineffective monitoring" to a lack of guidance
on how and when to monitor, and a lack of emphasis by OECA on monitoring. To the
extent there have been instances of ineffective monitoring, we disagree mat a cause has
been a lack of guidance. The existing guidance is clear and complete. The same
comment applies to the statement in the first sentence on Page 10 of the draft Report; and
the first sentence after Table 3.2 on Page 11, which also ascribe inadequate monitoring by
Regions to insufficient guidance. Again, we disagree; the guidance is sufficient.
It is not clear whether OIG is suggesting that EPA's compliance monitoring work has
usually or generally been "ineffective." If that is the suggestion, we disagree. The OIG's
own data suggests that in over 75% of the cases reviewed there was some monitoring.
Page 11, f 1: Here, as on page 20, and in the Tables on pages 22-25, there is the
implication that the violations characterized as "significant" are violations of the
enforcement instrument. However, it is our understanding that the characterization of
"significant" refers to the underlying violation(s) which gave rise to the enforcement
51
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• Audit of Compliance with Enforcement Instruments
Appendix 5
Page 5 of9
action in the first place, not to any potential violations of the enforcement instrument
itself. If our understanding is correct, the Audit Report should be revised to make this
clear.
Page 13, Final |: As noted above, we disagree that additional guidance is necessary. We
agree that regional staff should be reminded to comply with existing guidance, and that
more emphasis should be placed on having staff document in writing the compliance
monitoring activities they perform.
Page 14, Item (4): In particular, we disagree with this recommendation. While such
letters are sometimes appropriate (and are, in fact, often used in CERCLA cases in
Region 2), we do not believe they should be used in alt or even most regulatory cases.
Even fairly extensive compliance monitoring activities (e.g., phone calls, review of
submissions, or an inspection) may not reveal all instances of noncompliance by a
respondent/defendant with the terms of an enforcement instrument. If a "compliance
certification letter" is issued in such a case, and subsequently found to have been based
on incomplete or even misleading information, the mere existence of the letter will
complicate follow-up enforcement action.
As noted above, requiring the issuance of compliance letters would create a significant
resource burden as such letters would necessitate extensive compliance monitoring over
some period of time. For example, if a facility were in violation of a record keeping
requirement and the Administrative Order required the facility to keep the appropriate
records required by the rule, additional reporting requirements would have to be imposed
and then reviewed for some period of time so that the compliance letter could be issued.
The additional expended resources thus used would cause a reduction in other
enforcement activities or initiatives. Based on this, we do not believe that issuing
compliance letters for these types of actions, would be the best use of the Agency's
limited resources. We strongly counsel against making use of such letters mandatory. At
most, any new guidance should allude to such letters as an available mechanism which
regions may wish to adopt in appropriate cases.
Page 15, f 1: We do not have any specific information on Technical Review Action
Sheets, such as, what type of information is required to fill one out or how long this task
will take to complete, therefore, we cannot comment on the specific form. However, we
do not believe mat such a form is necessary or the most efficient means of documenting
compliance with the enforcement instrument. As is indicated in the 1990 Manual,
accurate records of compliance milestone accomplishment should be maintained hi the
programmatic data base. It is inefficient to maintain large paper files for all
administrative cases. For example, last fiscal year, the Region issued over 500 Orders to
individual public water supply systems for failure to publish the annual Consumer
Confidence Report. An electronic record of responses was maintained and the data base
was updated. To complete over 500 forms would have been both impractical and
inefficient in terms of resource utilization and our paper reduction goal.
Page 16, "Recommendation": As set forth above, we do not believe additional guidance
is necessary as suggested in 3-1.
4
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Page 17,2"" bullet: We do not understand the statement that "DOCKET made it difficult
to differentiate" between "Safe Drinking Water and Underground Injection Control
(UIC)" programs. (We presume that OIG means the "Public Water Supply" program
when it refers here to the "Safe Drinking Water" program.) DOCKET does distinguish
between Public Water Supply and UIC programs.
Page 19, first full f. The last two sentences of this paragraph indicate that OIG considers
monitoring an instrument within a month before or after a milestone date to be a
reasonable time frame. Existing EPA guidance for judicial Consent Decree tracking calls
for monitoring to be done quarterly.
Page 19, f 2: The last line of mis paragraph indicates that OIG considered lateness of
even one day in meeting a milestone date to represent untimely compliance. This
statement is obviously true, but may obscure the relative insignificance of most very short
delays. We would usually not expect our staff to spend valuable time and effort pursuing
a delay of, e.g., a couple of days, especially in a case where major milestones are being
met on time or very close to it.
Pages 22 - 25, Appendices: Region 2 has three general comments on the data in these
tables, case specific comments follow.
In general mere are no Region 2 cases involving judicial consent decrees listed on
these tables; this tends to confirm that we are carefully monitoring compliance
with such instruments and documenting, in writing, such activities.
* As noted above, of the 16 Region 2 cases listed on the two tables (24% of the
total), we are shown as having taken "Further Action (Penalty or Referral)" in 9 of
mem, or 56%. In fact, others were also the subject of further action, but after OIG
completed its data collection activities.
• The tables distinguish between "Compliance Orders" (COM), "Administrative
Orders" (AO), and "Orders" (0). (See listing of Instrument Types at the end of
each Table.) We do not understand the difference between these categories. A
Compliance Order is, by definition, an administrative order, and both are
"orders." We recommend that OIG combine these three categories into one -
either "COM" or "AO."
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Region 2's Case-specific Comments
CWA: Cases with No Evidence of Compliance
For Case No. 16, PRASA-Bayamon, Docket 98-0273, it is indicated that no further action has .
been taken. However, this is not the case. As noted in Region 2's comments of May 19,2000
and July 13,2000, the Region prepared and submitted to the DOJ on March 30,2000, an
Island-wide referral of PRASA pump stations. This Island-wide referral was consistent with the
Region's strategy to handle a large number of pump station Sanitary Sewer Overflow cases in the
most efficient manner available considering the need for penalties for past violations and the
development of collection system maintenance programs for each sewer jurisdiction to prevent
future overflows. The timing of the referral was dependent on the availability of both program
and legal resources necessary to prepare same. Once referred to DOJ, EPA cannot take further
enforcement action until a Court Order has been entered. This follow-up action should be noted
in the chart in Appendix 1.
For Case No. 17, PRASA Isabella, Docket 97-0280, Region 2 advised the OIG that the plant was
issued an order requiring a short-term return to compliance. PRASA responded that it did not
have adequate capabilities to meet permit Nitrogen requirements. EPA agrees with PRASA.
This issue should have been addressed at the time of the last permit reissuance and the limit may
in fact not be necessary to maintain water quality. Based on this, Region 2 informed the OIG
mat it intends to evaluate the appropriateness of the limit during the permit renewal process
currently underway. If necessary, a companion Order will be issued with the renewal permit to
address the need for additional facilities. This follow-up activity should be noted in the chart.
CWA: Cases with Late Compliance
For Case Nos. 22-25, PRASA pump stations cases, the OIG chart indicates that no further
actions were taken and that compliance was achieved from one to six months late. As explained
above and in the Region's prior responses, the Region is currently addressing pump station
maintenance deficiencies via an Island-wide judicial action, initiated on March 30,2000. Region
2 decided to take judicial action in 1999 as a result of PRASA's non-compliance or delayed
compliance with the Region's pump station initiative. This initiative involved administrative
actions issued hi 1998. The chart in Appendix 2 should be revised to include these further
actions taken for Case Nos. 22 - 25.
For Case No. 26, Manuel Monsignor, Docket, 97-047, no further enforcement action was
necessary since the respondent submitted a storm water management plan which was revised
based on EPA review comments until it met all regulations. Upon implementation of the plan,
required controls were complete and the respondent was in compliance with the intent of the
Order. Region 2 believes mat existing guidance provides ample discretion to the Region in
regard to whether to proceed formally or informally to obtain compliance.
* SDWA: Cases with No Evidence of Compliance
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For Cases No. 6 and No. 7, PRASA Vegas Arriba and PRASA Jaguas, Dockets 98-020 and
97-259, the OIG found no evidence of compliance. Although this is the case, the Region had
informed the OIG in our response to the earlier draft report that appropriate follow-up action had
been taken via a judicial referral in March 1999. As noted above, once referred to DOJ, EPA
cannot take further enforcement action until a Court Order has been entered. The referral
resulted in a judicial Consent Decree entered in January 2001.
For Case No. 8, Belleza - La Hoya, Docket 97-038, the OIG found no evidence of compliance.
As previously explained, there are 125 active orders to "non-PRASA" drinking water systems in
Puerto Rico. These orders involve small systems located in rural communities in need of
substantial financial and technical assistance. As a result, traditional enforcement actions are
ineffective in these cases, unless substantial compliance assistance and system financial
sponsorship are developed. EPA works with the Puerto Rico Department of Health in a joint
initiative to ensure such assistance is provided and attained in these cases. Where a commitment
to eliminate the system or connect it to a PRASA supply can be obtained, follow up Orders are
issued to establish the new compliance schedule.
SDWA: Cases of Delayed Compliance
For Case No. 12, Servicio de Agua, Docket 89-350, see Case No. 8 above. For Case No. 11,
PRASA Humacao, Docket 98-345, see Case Nos. 6 and 7 above.
Region 2 Actions in Response to Draft OIG Report
The draft OIG Report recommends (page 16,3-2) that regions ensure they are adequately
monitoring violators' actions, and consider further enforcement actions when appropriate. In
Region 2, we believe that we have been monitoring violators' actions adequately over the past
decade, although we fully recognize there are always opportunities for improvement. For
example, over just the last three fiscal years (FY-2000, -1999 and -1998) we had fourteen
referrals to DOJ for enforcement of judicial consent decrees. During die same period we had
nearly $6 million in stipulated penalty collections arising out of consent decree enforcement
actions, plus another $700,000 in penalty assessments for violations of injunctive relief
provisions of previous administrative orders. We also had four referrals for collection of
penalties owed under administrative orders but unpaid. A number of our other DOJ referrals
during this time period arose out of cases where Respondents had violated the injunctive relief
provisions of earlier administrative orders. (An example is our massive FY-2000 PRASA
Island-wide pump station referral, alluded to earlier.) These statistics reflect our continuing high
level of attention to enforcement instrument tracking and enforcement, both for judicial as well
as administrative actions. • '
Although the OIG Report addresses only CAA, C WA, RCRA and SDWA cases, and by
extension other regulatory enforcement cases, we recognize that Superfund cases also require the
same vigilant compliance monitoring.
7
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The draft OIG report recommends (page 16,3-3) that regions determine the status of those cases
where files showed no evidence of violator compliance. As indicated in our prior responses and
in the case specific comments above, we have already initiated this process and have made
compliance determinations in many cases. This process will be completed by September 30,
2001.
During the past several weeks, meetings have been held among Region 2 management and staff
to discuss the tracking and enforcement of Judicial and Administrative Orders. On March 10,
2001, Region 2's Regional Counsel composed a memorandum which memorializes these
discussions. This memo will also serve to initiate a reminder by management to all regional
enforcement staff about the importance of carrying out and documenting (in writing)
enforcement instrument compliance monitoring activities. A copy of that memorandum is
provided as Attachment 2.
Attachment
Note: The attachment to this response is not included in the report.
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Audit of Compliance with Enforcement Instruments
Audit Report Contributors
Northern Audit Division
Central Audit Division
Eastern Audit Division
Mid-Atlantic Audit Division
Headquarters Office of Audit
Kimberly O'Lone
Jori Spolarich
James Clark
Robert Evans
Chad Kincheloe
Mara Notbusch
Lora Schaefer
Ann Weiland ,
David Boyce
Randy Holthaus
Daniel Howard
David Johnson
Les Partridge
Nancy Ronk
Sandra Stafford
Ira Brass
Gerald Bernstein
Phillip Cleveland
Frank Pelczarski
Gary Sternberg
Ernie Ragland
Appendix 6
Page 1 of 1
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Distribution
Headquarters
Assistant Administrator for Enforcement and Compliance Assurance (2201 A)
Agency Follow-up Official (2710A)
Agency Audit Follow-up Coordinator (2724A)
Audit Follow-up Coordinator, Office of Enforcement and Compliance
Assurance (2201 A)
Associate Administrator for Congressional and Intergovernmental Relations (1301 A)
Director, Office of Regional Operations (1108 A)
Associate Administrator for Communications, Education, and Media Relations (1101 A)
Headquarters Library (3404)
Regions
Regional Administrators
Regional Enforcement Coordinators
Regional Audit Followup Coordinators
Regional Public Affairs Offices
Office of Inspector General
Inspector General (2410)
Divisional Inspectors General for Audit
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