United States Office of
Environmental Protection The Inspector
Agency General
Inspector General
&EPA 6500 - Functions and
Activities of the
Office of the
Inspector General
1985 Edition
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CHECKLIST OF EPA TRANSMITTALS
functions and Activities of the Office of the Inspector General
When kept current, this checklist permits the user to see at a glance which transmittals have been filed.
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EPA Form 1315-4 (Rev. 7-73)
PREVIOUS EDITIONS ARE OBSOLETE.
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FUNCTIONS AND ACTIVITIES OF THE 6500
OFFICE OF INSPECTOR GENERAL 1/22/R5
EPA MANUAL
. FUNCTIONS AND ACTIVITIES OF THE
OFFICE OF INSPECTOR GENERAL
CONTENTS OF CHAPTERS
CHAPTER CHAPTER
TITLES NUMBERS
ESTABLISHMENT, AUTHORITY, AND ORGANIZATION 1
REPORTING TO THE ADMINISTRATOR AND CONGRESS 2
REPORTING VIOLATIONS AND OTHER PROHIBITED ACTIVITIES
TO THE OFFICE OF INSPECTOR GENERAL 3
AUDIT ACTIVITIES 4
INVESTIGATIVE ACTIVITIES 5
MANAGEMENT AND TECHNICAL ASSESSMENT ACTIVITIES ....6
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FUNCTIONS AND ACTIVITIES OF THE • 6500
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CHAPTER 1—ESTABLISHMENT, AUTHORITY, AND ORGANIZATION
Table of Contents
PARAGRAPH PARAGRAPH
TITLES . NUMBERS
Origin and Establ ishment 1
Independent Status of Inspector General 2
St atu to ry Fun ct i on s 3
Specific Duties 4
Del egated Out i es 5
Other Requirements of the Act 6
Specific Authorities 7
Organization and Staff 8
Relationship to Agency Operations 9
External Relationships 10
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FUNCTIONS AND ACTIVITIES OF THE 6500
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CHAPTER 1—ESTABLISHMENT. AUTHORITY, AND ORGANIZATION
1. ORIGIN AND ESTABLISHMENT. The Inspector General Act of 1978, P.L.
No. 95-452, as amended, 5 U.S.C. app. (1982), which took effect on
October 12, 1978, provided for the statutory establishment of Offices of
Inspector General in most departments and major agencies of the executive
branch, including EPA.
a. The Office of Inspector General (OIG) was established by the
Administrator of the Environmental Protection Agency on January 7, 1980.
b. The primary purpose of the Inspector General Act was to establish
and consolidate audit and investigative operations into an independent
organization headed by an Inspector General (IG).
2. INDEPENDENT STATUS OF INSPECTOR GENERAL. The independent status of the
Inspector General is provided for in the Inspector General Act and is
further clarified in the Congressional committee reports and hearings in
support of the act.
The Inspector General reports directly to the Administrator or the Deputy
Administrator; shall not report or be subject to the supervision of any other
official of EPA; and is free from any undue influence or constraints in per-
forming .his or her functions. The independent status of the Inspector
General is described below.
a. The Inspector General is appointed by the President without regard
to political affiliation, is subject to confirmation by the Senate, and can
only be removed from office by the President. The President, however, must
communicate the reasons for any such removal to both Houses of Congress.
b. The Inspector General cannot be prevented or prohibited from
initiating, carrying out, or completing any audit or investigation; issuing
any audit', investigation, or related report; or issuing any subpoena during
an audit or investigation.
c. The Inspector General is free to report matters to the Congress
without the imposition of any restrictions by Agency management which might
influence or alter the subject matters being reported.
d. The Inspector General may enter into any contracts for services and
may select, appoint, and employ any required officers and employees within
the resources available for such activities.
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3. STATUTORY FUNCTIONS. The functions of the OIG are provided in section 2
of the Inspector General Act:
a. Conduct and supervise audits and investigations relating to programs
and operations of the Agency;
b. Provide leadership and coordination and recommend policies to promote
economy, efficiency, and effectiveness and to prevent and detect fraud and
abuse in Agency programs and operations; and
c. Keep the Administrator of EPA and the Congress fully and currently
informed about problems and deficiencies related to the operation of EPA
programs and the necessity for and the progress of corrective action.
4. SPECIFIC DUTIES. The principal statutory duties and responsibilities of
the OIG are set forth in section 4(a) of the Inspector General Act:
a. Conduct, supervise, and coordinate audits and investigations and .-.
provide related policy direction in these areas.
b. Review existing and proposed legislation and regulations and make
recommendations to the Congress in the semiannual reports concerning their
impact on the economy and efficiency of program administration or the
prevention and detection of fraud and program abuse.
c. Recommend policies for and conduct, supervise, or coordinate other
activities of the Agency to promote economy and efficiency in program
administration and prevent and detect fraud and abuse.
d. Recommend policies for and conduct, supervise, or coordinate
relationships between the Agency and governmental entities with respect to
(1) all matters relating to the promotion of economy and efficiency in
program administration or the prevention and detection of fraud and abuse;
or (2) the identification and prosecution of participants in such fraud and
abuse.
e. Keep the Administrator and the Congress fully and currently informed,
by means of reports and otherwise concerning fraud and other serious problems
and deficiencies, recommend necessary action to correct such problems and
deficiencies, and report on the progress in implementing corrective actions.
5. DELEGATED DUTIES. In addition to the above statutory duties, the
Administrator has delegated to the Inspector General the authority to:
a. Implement and maintain protective security measures for the
Administrator as required.
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b. Develop and direct the Agency's personnel security program under the
requirements of Executive Order 10450, "Security Requirements for Government
Employment."
c. Carry out the Agency's administrative enforcement of post employment
restrictions of the Ethics in Government Act of 1978, P.L. No. 95-521 as
amended, and 18 U.S.C. 207 (a), (b), (c) as implemented by 5 CFR Part 737.
The responsibilities noted above neither diminish nor include program
operating responsibilities of other Agency primary organization heads.
Pursuant to section 9(a)(2) of the Inspector General Act, program operating
responsibilities may not be transferred to the Inspector General.
6. OTHER REQUIREMENTS OF THE ACT. In carrying out the statutory duties and
responsibilities, section 4 of the Inspector General Act requires the
Inspector General to:
a. Comply with the governmental audit standards published by the
Comptroller General of the United States.
b. Establish guidelines for determining when it is appropriate to use
non-Federal auditors and ensure that any work performed by such auditors
complies with the governmental audit standards.
c. Give particular attention to the activities of the Comptroller
General with a view toward avoiding duplication and ensuring effective
coordination and cooperation;
d. Report expeditiously to the Attorney General whenever there are
reasonable grounds to believe Federal criminal laws have been violated.
7. SPECIFIC AUTHORITIES. To carry out the statutory duties and
responsibilities described in paragraph 1-4, section 6(a) of the Inspector
General Act authorizes the Inspector General to:
a. Have access to all records, reports, audits, reviews, documents,
papers, recommendations, or other material available to the Agency.
b. Conduct any investigation and issue any reports which the Inspector
General deems necessary or desirable.
c. Request necessary information or assistance from any Federal, State,
or local governmental agency or unit.
d. Require, by subpoena, the production of all information, documents,
reports, answers, records, accounts, papers, and other necessary data and
documentary evidence. (However, procedures other than subpoenas are to be
used to obtain documents and information from Federal agencies.)
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e. Have direct and prompt access to the Administrator when necessary
for any purpose pertaining to the performance of functions and respons-
ibilities under the Inspector General Act.
f. Select, appoint, and employ officers and employees necessary for
carrying out the OIG's functions and duties.
g. Obtain the services of experts and consultants.
h. Enter into contracts and other arrangements for audits, studies,
analyses, and other services with public agencies and private persons,
and make such payments as may be necessary to carry out the Inspector
General Act.
8. ORGANIZATION AND STAFF. The functions and responsibilities of the various
organizations which constitute the OIG are found in the EPA Organizations and
Functions Manual. The OIG is headed by an Inspector General, who reports to
the Administrator of EPA. The Inspector General is assisted by a Deputy
Inspector General, who acts as the Inspector General during the absence or
temporary incapacity of the Inspector General when designated.
The OIG has a Headquarters office in Washington, D.C., and various field
offices. There are three operational offices in Headquarters, each of which
is headed by an Assistant Inspector General (AIG): the Office of Audit, the
Office of Investigations, and the Office of Management and Technical
Assessment.
The Office of Inspector General has six division offices: Internal Audits
(Headquarters), Eastern (New York), Mid-Atlantic (Washington, D.C., and
Philadelphia), Southern (Atlanta), Northern (Chicago), and Western (San
Francisco). In each divisional office there is an audit staff and an
investigative staff headed respectively by Divisional Inspectors General
for Audit and Investigation. Each Divisional Inspector General for Audit
(DIGA) reports to the Assistant Inspector General for Audit, while each
Divisional- Inspector General for Investigations (DIGI) reports to the
Assistant Inspector General for Investigations. All OIG personnel located
in divisional offices are considered members of the EPA OIG Headquarters
staff.
9. RELATIONSHIP TO AGENCY OPERATIONS. The functions of the Office of
Inspector General do not replace established lines of operating authority and
responsibility, nor do they eliminate the need for functional supervision and
line inspections necessary for operating units to discharge their assigned
responsibilities. The relationships below are particularly worthy of mention.
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a. Audits and Investigations. All areas of the Agency's operations and
programs, including operations of grantees, contractors, or subcontractors
participating or doing business with the Agency, are subject to review by the
OIG. The proper fulfillment of this role entails the maintenance of continu-
ing relationships with all EPA organizations. Such relationships may involve:
(1) Considering, planning, and conducting audits suggested
by EPA officials.
(2) Considering and conducting investigations from referrals,
including hotline complaints. .
(3) Obtaining the cooperation of EPA officials and employees
during audits and investigations.
(4) Briefing EPA officials on the results of audits and
investigations.
b. Audit Followup System. The primary purpose of this system is to ensure
that audit findings and recommendations are effectively resolved. The primary
responsibility for implementing the audit followup system is vested with EPA's
Assistant Administrator for Administration and Resources Management, the desig-
nated Agency followup official. The audit followup system provides for an
Audits Resolution Board and Audit Review Group. OIG officials serves as non-
voting members of these bodies and provide advice, technical assistance, and
various services to these and other EPA organizations to ensure effective
resolution of audit findings and recommendations. [Also refer to EPA Manual
2750, "Management of EPA Audit Reports and Followup Action" (1984 edition).]
c. Personnel Security Program. The OIG initiates and arranges for
investigations of employees assigned to sensitive positions. The OIG evaluates
the results of these investigations to determine whether employees applicants
meet the requirements of Executive Order 10450, "Security Requirements for
Government Employment."
d. Proposed Legislation and Policy Issuance. Section 4(a)(2) of the
Inspector General Act requires the OIG to review existing and proposed
legislation and regulations and submit recommendations to the Congress based
on these reviews. To assist management in ensuring that legislation and
regulations contain necessary controls to promote economy, efficiency and
effectiveness and prevent and detect waste, fraud, and abuse in Agency pro-
grams and operations or other governmental operations, the OIG reviews draft
legislation, regulations, and policy issuances which (1) originate within
EPA, (2) have national cross-agency concerns, or (3) originate in other
agencies and may involve or concern EPA. This effort involves working with
originating offices to resolve OIG concerns.
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e. The Office of General Counsel. By a Memorandum of Understanding,
the Inspector General Division within the Office of General Counsel
provides legal services to the Office of Inspector General in conjunction
with audits, investigations and GIG operations. These services include
interpreting regulations and policies.
10. EXTERNAL RELATIONSHIPS. Pursuant to section 4(a)(4) of the Inspector
General Act, the Inspector General is responsible for recommending policies
for, conducting, supervising, and coordinating relationships between the EPA
and other Federal agencies, Congress, State and local government agencies,
and nongovernmental agencies with respect to (1) all"matters relating to the
promotion of economy and efficiency in the administration of program and
operations administered or financed by the Agency, or the prevention and
detection of fraud and abuse in such programs and operations; and (2) the
identification and prosecution of participants in fraud or abuse in EPA
programs and operations. As appropriate, the OIG participates with other
Federal departments and agencies on various work-related committees, task
forces, and councils. Major organizations include the Department of Justice,
the Office of Management and Budget, the President's Council on Integrity
and Efficiency, the General Accounting Office, and the Congress. Some of
the OIG's significant relationships are described below.
a. Congress. The OIG reports directly to Congress on significant
audit, investigative, and other related matters as required by section 5
of the Inspector General Act (see chapter 2).
b. EPA Program Participants. Persons and entities receiving financial
or other assistance from EPA are subject to OIG audit and investigative
reviews, when appropriate.
c. General Accounting Office (GAP). Section 4(c) of the Inspector
General Act requires the Inspector General to give particular regard to the
activities of the Comptroller General of the United States to avoid dupli-
cation and ensure effective coordination and cooperation.
d. Department of Justice. Section 4(d) of the Inspector General Act
requires the Inspector General to report expeditiously to the Attorney
General whenever the Inspector General has reasonable grounds to believe
there has been a violation of Federal criminal law. In addition, the OIG
provides assistance to United States Attorneys such as preparing or review-
ing financial data and material pertinent to grand jury presentations or
court cases involving EPA programs.
e. Federal Bureau of Investigation. By a Memorandum of Understanding,
the Federal Bureau of Investigation (FBI) provides investigative resources
to the OIG, such as forensic analysis of evidence, and exchanges information
with the OIG in mutual support of investigative matters. (See chapter 5,
paragraph 4.)
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f. Office of Personnel Management. The OIG, which is responsible for
the personnel security program in EPA, arranges for investigations by the
Office of Personnel Management (0PM) and evaluates investigative data
received from 0PM. The Office of Inspector General participates in 0PM
sponsored training and development programs.
g. President's Council on Integrity and Efficiency. This Council was
established by Executive Order 12301, dated March 26, 1981. The general
objectives of the Council are to coordinate and implement the Federal
Government's policies with respect to promoting integrity and efficiency in
Federal programs through task forces and committee projects that address
governmentwide problems and issues.
The Council is chaired by the Deputy Director of OMB. Membership includes
the Inspectors General, the Deputy Attorney General, the Executive Assistant
Director of Investigations of the FBI, the Director of the Office of Personnel
Management, and other key agency designees.
h. Department of the Treasury. The OIG is responsible for referring to
the United States Secret Service, Department of the Treasury, matters that
involve the alleged forgery of United States checks or irregularities with
regard to imprest funds. (Concurrent referral is also made to the Federal
Bureau of Investigations.) The OIG also uses the Treasury Department's
Law Enforcement Training Center for both initial training of investigators
and white collar crime training for e^erienced investigators.
i. Office of Management- and Budget. As an organizational arm of the
President, the Office of Management and Budget (OMB) has a significant role
in improving the management of the Federal Government's operations. The OIG
works closely with OMB by assisting in the implementation of special
Presidential/OMB initiatives dealing with the curtailment of fraud, waste,
and mismanagement.
j. Merit Systems Protection Board. When applicable, the OIG may be
requested to investigate "whistleblower" reprisal allegations which are
referred to the Administrator by the Special Counsel of the Merit Systems
Protection Board. The OIG is also responsible for referring alleged
violations of the Hatch Act and other prohibited personnel practices to
the Merit Systems Protection Board.
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CHAPTER 2--REPORTING TO THE ADMINISTRATOR AND CONGRESS
Table of Contents
PARAGRAPH PARAGRAPH
TITLES NUMBERS
Purpose and Responsibility 1
Semi annual Reports 2
Immediate Reporting of Flagrant Problems and Abuses 3
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CHAPTER 2—REPORTING TO THE ADMINISTRATOR AND CONGRESS
I. PURPOSE AND RESPONSIBILITY. One of the principal objectives of the
Inspector General Act is to keep the head of the agency and the Congress
fully and currently informed about problems and deficiencies relating to
programs and operations and the necessity for and progress of corrective
action. To accomplish this objective, the act provides that the Inspector
General report to the Administrator and the Congress significant and flagrant
problems, abuses, or deficiencies in the Agency's programs and operations.
The act requires that the Inspector General carry out this reporting semi-
annual ly and as frequently as considered necessary.
?.. SEMIANNUAL REPORTS. Section 5(a) of the Inspector General Act requires
the Inspector General to prepare semiannual reports to the Administrator and
the Congress which summarize the activities of the OIG during six-month
periods ending March 31 and September 30 of each year. Section 5(b) calls
for the Inspector General to furnish the semiannual report to the
Administrator not later than April 30 and October 31 of each year. The
Inspector General Act prohibits the Administrator from making changes in the
reports. Further, it requires the Administrator to transmit the semiannual
reports to the appropriate committees or subcommittees of the Congress within
30 days after their receipt.
a.. Required Content. According to the Act, each semiannual report must
include, but does not have to be limited to:
(1) A description of significant problems, abuses, and deficiencies
disclosed by audits and investigations during the reporting period.
(2) A description of the recommendations for corrective action with
respect to the significant problems, abuses, or deficiencies mentioned above.
(3) An identification of each significant recommendation in previous
semiannual reports on which corrective action has not been completed.
(4) A summary of matters referred to prosecutive authorities and the
prosecutions and convictions which have resulted.
(5) A list of all audit reports completed by the OIG during the
reporting period.
(6) A summary of instances reported to the head of the Agency under
section 6(b)(2) of the Inspector General Act where information or assistance
was unreasonably refused or not provided to the OIG.
(7) A summary of reviews of existing and proposed legislation and
regulations.
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b. Report from the Administrator. In transmitting the Inspector
General's semiannual report, section 5(b) authorizes the Administrator to
provide the Congress with a separate report containing any comments on the
semiannual report which he or she deems appropriate. The Administrator is
prohibited from changing the semiannual report.
c. Availability of Reports. Section 5(c) of the Inspector General Act
requires the Administrator to make copies of the Inspector General's semi-
annual report available to the public upon request and at a reasonable cost.
3. IMMEDIATE REPORTING OF FLAGRANT PROBLEMS AND ABUSES. Section 5(d) of
the Inspector General Act requires the Inspector General to report to the
Administrator whenever he or she becomes aware of particularly serious or
flagrant problems, abuses, or deficiencies in the Agency's programs and
operations.
The Administrator, in turn, is required by section 5(d) to transmit any
such report of the Inspector General to the appropriate committees and
subcommittees of Congress within seven calendar days, together with a
separate report containing any comments the Administrator deems appropriate.
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CHAPTER 3—REPORTING VIOLATIONS AND OTHER
PROHIBITED ACTIVITIES TO THE OTG
Table of Contents
PARAGRAPH PARAGRAPH
TITLES NUMBERS
Authority to Review or Investigate 1
Responsibilities of Agency Management and Employees 2
Cooperation During Audits and Investigations 3
Unreasonable Refusal or Nonprovision of
Information or Assistance 4
Issuance of Subpoenas 5
Protection of Employee Complainants 6
Hotline Activities 7
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CHAPTER 3—REPORTING VIOLATIONS AND OTHER
PROHIBITED ACTIVITIES TO THE 016
1. AUTHORITY TO REVIEW OR INVESTIGATE. As described in this paragraph,
certain laws provide the Inspector General with authority to review and
investigate various alleged violations and other prohibited activities
affecting the Agency, including complaints involving such activities. How-
ever, while the Inspector General is authorized to review all complaints
involving the Agency, other processes exist in the Agency for receiving and
acting on certain complaints (see paragraph 7 of this chapter).
a. Inspector General Act. Section 7(a) of the Inspector General Act
provides for the Inspector General's receipt and investigation of complaints
or information from employees of the Agency concerning the possible existence
of activities constituting a violation of law, rules, or regulations;
mismanagement; gross waste of funds; abuse of authority; or a substantial and
specific danger to the public health and safety.
In addition to the specific authority of section 7(a) of the Inspector General
Act to receive and act on complaints or information from employees of the
Agency, the OIG may receive and act on complaints and related information from
any other sources. Such authority stems, in part, from sections 6(a)(l) and
(?.) of the Inspector General Act, which address the Inspector General's access
to all material available to the Agency and authority to conduct any investi-
gations which the Inspector General considers necessary.
b. Civil Service Reform Act. In accordance with section 202(a) of the
Civil Service Reform Act of 1978, 5 U.S.C. 1206, the OIG may be requested by
the Administrator to investigate complaints, allegations, or information
concerning matters similar to those in paragraph 3-la, which are reported by
employees, former employees, or applicants for employment to the Office of
the Special Counsel, Merit Systems Protection Board, and referred by the
Special Counsel to the Administrator. (Such complaints, allegations, or
information will be processed, investigated, and reported by the OIG in
accordance with the rules and regulations of the Office of the Special
Counsel contained in 5 CFR parts 1250-1261.)
c. Ethics in Government Act Regulations. The implementing regulations
for titles II and IV of the Ethics in Government Act of 1978 (5 CFR part 738)
provide for the "designated agency ethics official" (i.e., Deputy General
Counsel) to ensure that appropriate matters are referred to the OIG [5 CFR
738.203 (b)(12)]. Thus, the OIG may investigate actual or potential
violations of the Agency ethics standards.
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d. Standards of Conduct Regulations. The Agency's standards-of-conduct
regulations (40 CFR part 3) provide that employees should furnish, the
appropriate Deputy Ethics Official, the Designated Agency Ethics Official or
the Inspector General with information concerning violations of the standards
of conduct. The OIG may investigate violations of the Agency's standards of
conduct based on information of such alleged violations.
2. RESPONSIBILITIES OF AGENCY MANAGEMENT AND EMPLOYEES. The Office of
Inspector General can fulfill its responsibilities only with the cooperation,
full disclosure, and reporting of information concerning instances of fraud,
waste, or mismanagement. All officials and employees of the Agency are
responsible for complying with laws and regulations and for maintaining high
standards of conduct in the administration of programs and operations of the
Agency. Each employee is responsible for promptly reporting indications of
wrongdoing or irregularity to the Office of Inspector General and for
cooperating and providing assistance during any audit or investigation.
a. Heads of Primary Organizations. Assistant Administrators and other
heads of organizations who report to the Administrator are responsible for
ensuring that (1) any instances of, and information on, any known or
suspected violations of law, rules, or regulations, or mismanagement, gross
waste of funds, abuse of authority are promptly reported to the OIG;
(2) appropriate instructions are issued to employees to facilitate the
reporting of the matters described above; (3) employees are periodically
counseled on the need to report such matters promptly; and (4) appropriate
corrective actions are taken on such reported violations by the appropriate
supervisor when work by the OIG to review the situation is not necessary.
b. Employees. All employees of the Agency, within the limits of their
authority and duties, are responsible for (1) fostering the enforcement of
laws, executive orders, regulations, and other applicable directives;
(2) maintaining high standards of ethical conduct; and (3) promoting
efficiency and effectiveness in the administration of the Agency's programs
and activities.
These responsibilities require that all employees promptly report instances
of and information on any known or suspected violation of law, rules, or
regulations; mismanagement; gross waste of funds; abuse of authority; or
substantial and specific danger to the public health and safety. Employees
should report such instances to their supervisors, or if necessary directly
to the Office of Inspector General (see paragraph 6 of this chapter).
As stated in section 7c of the Inspector General Act, action shall not be
taken or threatened against any employee as a reprisal for making complaints
or disclosing information to the OIG unless the complaint was made or the
information disclosed with the knowledge that it was false or with willful
disregard for its truth or falsity.
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3. COOPERATION DURING AUDITS AND INVESTIGATIONS. The OIG can accomplish the
objectives of the Inspector General Act only with the cooperation of all EPA
employees. The IG Act authorizes the Inspector General to have access to all
records, reports, audits, reviews, documents, papers, recommendations, or
other material available to the Agency. To this end, it is necessary that EPA
manager's and supervisors ensure that all EPA employees cooperate with the OIG
during audits and investigations. Employees should be instructed to:
a. Disclose and provide information pertaining to the matters under
review.
b. Make available applicable files, records, reports, agreements,
contracts, correspondence, or other required information.
c. Advise OIG of matters which they believe warrant review during the
audit or investigation.
Section 701 of the Civil Service Reform Act of 1978, 5 U.S.C. 7114, provides
the employee union an opportunity to be represented at any examination of an
employee in the union's bargaining unit by a representative of the Agency in
the connection with an investigation. The Office of Inspector General is
independent and is not a representative of the Agency. Therefore, an employee
interviewed by a member of Office of Inspector General does not have the right
to have a union representative present
4. UNREASONABLE REFUSAL OR NONPROVISION OF INFORMATION OR ASSISTANCE.
Section 6(b)(2) of the Inspector General Act provides that whenever informa-
tion or assistance requested is, in the judgment of the Inspector General,
unreasonably refused or not provided, the Inspector General is to report the
circumstances to the Administrator without delay.
Section 5(a)(5) of the Inspector General Act requires the Inspector General
to include in the semiannual report to Congress a summary of each report made
to the Administrator in connection with section 6(b)(2) of the act.
The Inspector General will consider a request for information or assistance
as unreasonably refused or not provided when both of the following condition
conditions are present: (1) the OIG's audit, survey, evaluation, or inves-
tigation cannot be satisfactorily completed unless the request is fulfilled;
and (2) the official refusing to honor the request can reasonably and legally
fulfill it.
5. ISSUANCE OF SUBPOENAS. Section 6(a)(4) of the Inspector General Act
authorizes the Inspector General to require by subpoena the production of all
information, documents, reports, answers, records, accounts, papers, and other
data and documentary evidence necessary in the performance of the functions
assigned by the Inspector General Act. The subpoena, is enforceable by order
of any appropriate United States District Court. However, procedures other
than subpoenas are to be used by the Inspector General to obtain documents
and information from other Federal agencies.
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If information cannot be obtained voluntarily, a subpoena may be issued to
prime contractors, grantees, subcontractors, and subgrantees. These may
include State, local, and Indian tribal governments.
6. PROTECTION OF EMPLOYEE COMPLAINANTS.
a. In accordance with Section 7b of the Inspector General Act, the
identify of an employee, other than a supervisor or manager acting in his or
her official capacity, who comes forth with a complaint or information by
contacting the OIG shall be kept confidential. Exceptions can be made to
this general rule where (1) the employee consents to the release of his or
her name, or (2) the Inspector General personally determines such disclosure
is unavoidable during the course of the investigation. The provisions of
confidentiality under Section 7b is limited to EPA employees who directly
contact the OIG. Confidentiality will not be provided pursuant to Section
7b to an employee who provides information to another employee who in turn
passes information to the OIG. The employee who passes the information to
the OIG will receive confidentiality unless the employee is a supervisor or
manager acting in his or her official capacity. The provision of confiden-
tiality under Section 7b does not extend to an employee who is contacted by
OIG staff unless that employee during the course of an interview or other
communication in connection with an audit or investigation, makes a new
complaint or provides new information to the OIG which has not been solicited
by OIG staff. Similar requirements for protecting the identities of sources
of information are found in the Civil Service Reform Act of 1978, the Privacy
Act of 1974, and the Freedom of Information Act.
b. Section 7(c) of the Inspector General Act provides that employees
are prohibited from threatening, taking, recommending, or approving any
personnel action as reprisal against other employee(s) for making disclosures
to the OIG. However, employees who make complaints or disclosures known to
them to be false or with willful disregard for the truth or falsify are not
so protected.
Employee's who wrongfully take reprisal actions against complainants or
employees who report a complaint or disclose information known to such
employees to be false or who do so in willful disregard for its truth or
falsity, may be subject to punitive action in accordance with appendix C of
the EPA Manual of Conduct and Discipline.
7. HOTLINE ACTIVITIES. A telephone hotline, maintained in the OIG, is
available to all EPA employees and the public for reporting Agency activities
involving fraud, waste, or mismanagement. The use of the hotline for
reporting complaints should not be looked upon as a requirement; rather, the
hotline is an alternative to reporting matters directly to one's supervisor
or in person or writing to the OIG (see paragraph 8, chapter 6).
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a. Operation of the Hotline. The hotline number is (202) 382-4977.
Field staff can call the hotline number through the Federal Telecommunications
System by dialing 8-382-4977. The toll-free number is (800) 424-4000. Hotline
calls are answered by OIG personnel between 8 a.m. and 4:30 p.m. (Washington,
D.C. time), Monday through Friday. A telephone answering machine records all
calls received after working hours or on nonworkdays.
b. Processing of Hotline Calls. After initial receipt and preliminary
screening, the complaint or allegation is referred to the appropriate office
within OIG or EPA for appropriate action.
Complaints or allegations dealing with possible criminal matters or complaints
or allegations involving serious noncompliance with applicable EPA regulations,
policies, or requirements are generally referred to the Assistant IG for
Investigation or the Assistant IG for Audit. Other less serious complaints or
matters requiring technical review may be referred to the appropriate EPA
program office.
A complaint or allegation may be administratively closed if it is
nonsubstantive or lacks sufficient information to enable appropriate
followup.
c. Reporting on Results and Final Disposition. The program office
responsible for taking action on the hotline complaint or allegation is
required to inform the Office of Inspector General of the results by
transmitting a copy of the final report or a memorandum summarizing the
action taken.
d. OIG Liaison with Other Hotlines. The General Accounting Office (GAO)
and Office of Management and Budget (OMB) have established hotline numbers
which are available to the public, as well as Government employees, for
reporting fraud, waste, and related irregularities. In addition, other
agencies have established hotlines similar to EPA's. Complaints received
through these hotlines which relate to EPA programs are referred to the OIG.
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CHAPTER 4—AUDIT ACTIVITIES
Table of Contents
PARAGRAPH PARAGRAPH
TITLES NUMBERS
Audit Objectives 1
Types of Audits 2
Compliance with Comptroller General's Standards 3 .
Scope and Frequency 4 ..
Annual Audit Plan 5
Audit Planning Policy and Criteria 6
Request fo r Audi t 7
Advance Notification of Audits 8
Entrance Conference 9
Exit Conference 10
Audit Scope 11
Distribution of Audit Reports Within
the Agency 12
Distribution of Audit Reports Outside
the Agency 13
Requests by the Public for Audit Reports .14
Audit Reports Which May Contain Confidential
Information or Affect Criminal or Civil
Prosecution or Litigation .15
Inquiries Concerning Audit Work Which Is
Planned or in Progress 16
Retention and Disposition of Audit Reports ....17
Audit Guides 18
Action on Audit Reports 19
Audit Followup System 20
OMB Circular A-50 21
Audits by Independent Public Accountants
and State and Local Auditors 22
Attachment P, OMB Circular A-102 23
Objectives of Reporting 24
Focus of Reporting 25
Supporting Evidence 26
Contents of Audit Reports 27
Nature of Audit Findings and Recommendations 28
Questioned and Set-Aside Costs 29
Sustained Costs and Cash Recoveries/Savings 30
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CHAPTER 4—AUDIT ACTIVITIES
1. AUDIT OBJECTIVES. The primary purpose of the OIG's audit program is to
identify, evaluate, and report on the Agency's activities and programs so that
any needed corrective action can be taken and future problems can be prevented.
The principal focus of the audit program is the controls which management has
established or should establish to ensure that operations are carried out in
the most effective manner.
An objective of the OIG's audit program is to make appropriate recommenda-
tions for achieving greater economy, improving efficiency, and obtaining
optimum results in the Agency's operations. Since the DIG is independent of
EPA program management, it is not empowered to direct changes in the Agency's
policies, procedures, and operations. This power and authority are vested
with EPA's Administrator, Deputy Administrator, Assistant Administrators,
Associate Administrators, General Counsel, Regional Administrators and
office directors. The OIG, however, is responsible for determining that
audit report findings and recommendations are acted upon. This includes
reviewing the adequacy of the action taken by the Agency to correct reported
problems and deficiencies. In addition, as appropriate, the OIG will report
unresolved audit findings and recommendations to the Administrator and the
Congress (see chapter 2).
The OIG conducts expanded-scope audits as defined by the Comptroller
General. Such audits are made up of three elements or types of reviews:
a. Financial and Compliance Reviews. These reviews determine whether
books and records are complete and accurate and whether laws or regulations
have been followed.
b. Economy and Efficiency Reviews. These reviews determine whether
resources (funds, property, and personnel) are adequately controlled and
used in an effective, efficient, and economical manner.
c. Program Results Reviews. These reviews determine whether the desired
results or benefits established by the Congress are being achieved.
OIG audits may include any or all of the three elements depending upon the
planned objectives.
2. TYPES OF AUDITS. The audit workload is generally divided into two
main categories, internal and external audits.
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a. Internal Audits. Internal audits (also known as program audits,
performance audits, or management reviews) are made of selected EPA
administrative and program operations to evaluate the effectiveness, economy,
and efficiency of those operations. Audits are directed toward determining
whether management controls, practices, and procedures at the levels reviewed
are adequate and effective.
Internal audits are also made of selected EPA programs and activities to evalu-
ate their effectiveness and to determine whether the anticipated objectives are
being achieved.
b. External Audits. External audits are independent reviews of the
records and performance of organizations or entities (program participants)
receiving financial assistance or benefits from the Agency, such as grant
recipients, contractors, and subcontractors. The OIG performs external audits
or arranges for their performance by Independent Public Accountants or State or
Federal audit agencies.
External audits are also arranged by program participants and performed by
auditors who are responsible to the participants for conducting audits in
conformance with Attachment P to OMB Circular A-102, "Uniform Administrative
Requirements for Grants-in-Aid to State and Local Governments." (See paragrapn
4-23.)
External audits are a means of ascertaining the degree of compliance with
statutes, regulations, and terms and conditions of the agreements under which
the Federal funds are made available. Determinations are also made regarding
the appropriateness of the disposition of funds granted or administered.
3. COMPLIANCE UITH COMPTROLLER GENERAL'S STANDARDS. Section 4(b)(l) of the
Inspector General Act requires the Inspector General to comply with the
standards established by the Comptroller General of the United States for
audits of Federal establishments, organizations, programs, activities, and
functions. In addition, section4(b)(3) of the act requires the Inspector
General to take appropriate steps to ensure that any work performed by non-
Federal auditors complies with the Comptroller General's standards.
The Comptroller General's audit standards cover all major aspects of Federal
audits, such as the qualifications and independence of auditors, the scope
and conduct of audits, and the reporting of audit results. The standards
incorporate by reference the standards prescribed by the American Institute
of Certified Public Accountants and also apply to aduits of a broader scope.
The OIG conducts quality control checks at all supervisory levels to ensure
the OIG's and non-Federal auditors' work complies with the Comptroller
General's audit standards.
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4. SCOPE AND FREQUENCY. All offices and organizational units of the Agency
and all programs and operations are subject to audit at any time. Determi-
nation of the priority, nature, scope, and frequency of audit is the
responsibility of the Inspector General. OMB Circular A-73, "Audit of Federal
Operations and Programs," requires each agency to (1) establish procedures for
periodic review of its individual programs and operations to determine the
coverage, frequency, and priority of audits required; and (2) prepare an audit
plan at least annually, based on certain criteria prescribed in the circular.
(See paragraph 4-5.)
5. ANNUAL AUDIT PLAN. The annual audit plan, prepared, by the OIG's Office of
Audit and approved by the Inspector General, represents the OIG's formal plan
for managing its audit resources and workload during the fiscal year. The plan
is based on information and suggestions obtained from all levels of the OIG and
Agency management and recognizes the concerns of the Congress, the Office of
Management and Budget, other Federal agencies, and the general public. The
plan is flexible and can be revised when changes in audit priorities are
warranted. The annual audit plan is updated quarterly.
The annual audit plan is distributed to assistant administrators, regional
administrators, and other EPA officials. On a request basis, the plan is also
available to other officials who have a need for it. Copies of the plan are
also furnished to GAO and OMB.
6. AUDIT PLANNING POLICY AND CRITERIA. The OIG's policy is to emphasize the
audit of (1) EPA offices which expend significant resources; (2) EPA programs,
functions, or activities according to the prescribed priority factors listed
below; and (3) external operations where known or potential problem areas can
most adversely affect EPA's accomplishment .of its mission. In addition to
specifying the minimum contents of Federal agency audit plans, OMB Circular
A-73 prescribes nine criteria by which priorities should be assigned to
potential audit subjects. OIG's policy regarding priority assignment
recognizes the OMB criteria and includes two other factors: the Inspector
General Act's mandate to prevent and detect fraud and program abuse, and the
special concerns of the President and the Administrator of EPA.
The criteria for planning audits are:
a. Susceptibility to fraud, embezzlement, program manipulation, or other
kinds of irregularities;
b. Mandatory requirements of legislation or other Congressional or GAO
recommendations;
c. Emphasis by the President and the Administrator;
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d. Management needs as developed in consultation with Assistant
Administrators, Associate Administrators, Regional Administrators, General
Counsel, and office directors;
e. Newness, changed conditions, or sensitivity of the oryanization,
program, activity, or function;
f. Dollar magnitude, duration, or resources involved;
g. Prior audit experience, including the adequacy of the financial
management systems and controls;
h. Extent of Federal participation in terms of either resources or
regulatory authority;
i. Availability of audit resources;
j. Timeliness, reliability, and coverage under OMB Circular A-102,
Attachment P, of audit reports by others (e.g., State and non-Federal
auditors); and
k. Results of other reviews, such as inspections, project monitoring
reports, and program evaluations.
7. REQUEST FOR AUDIT. Although the OIG's Office of Audit will contact regional
and assistant administrators before developing the annual audit plan to obtain
suggestions for planning audits, EPA Headquarters and field officials may
request audit services whenever the need arises.
Requests by Headquarters officials for internal audits of specific operations
should be directed to the Assistant Inspector General for Audit. Requests for
external audits of grants and contracts should be addressed to the appropriate
Divisional Inspectors General.
Agency officials, however, may direct to the personal attention of the Inspector
General any matter that warrants audit attention because the matter is extremely
sensitive, requires urgent attention, or involves nationwide problems.
8. ADVANCE NOTIFICATION OF AUDITS. Generally, the OIG will give advance
notification of audits to appropriate organizational officials. However, audits
may sometimes be made without prior notification when time or other conditions
make such notification impractical.
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9. ENTRANCE CONFERENCE. The-entrance conference is a meeting held at the start
of an audit involving a member or members of the audit team and the official(s)
responsible for the organization or operation to be audited. At this conference,
the lead auditor explains the purpose, scope, and objectives of the audit, as
well as the authority for conducting the audit. Other areas covered include the
timetable for completing the audit, access to required records and information,
space accommodations, and introduction of audit team members. Cooperation with
the audit team and identification of potential areas warranting audit review
will be sought at this time.
10. EXIT CONFERENCE. The exit conference is the official meeting to close out
the audit.It involves members of the audit team and persons responsible for
administering the audited entity. Also, in the case of external audits, the
exit conference may include Agency program representatives who have responsi-
bility over the external entity. The exit conference involves a discussion of
the findings, conclusions, and recommendations of the audit (which are usually
made known to the auditee prior to the exit conference). It also includes the
corrective actions proposed or taken by the auditee, points of disagreement,
and the auditee's reasons for disagreeing.
11. AUDIT SCOPE. The Agency activity or function audited is usually identified
in the title of each audit report. The scope stated in the report will show the
functions of the audit entity reviewed and appraised. However, in keeping with
normal audit procedures, only a test of records and transactions in a particular
function.will be examined. Therefore, audit conclusions expressed are based on
the sample examined unless the sampling plan used provides a basis for project-
ing the results of the audit to the total group of records and transactions
from which the sample was selected.
12. DISTRIBUTION OF AUDIT REPORTS WITHIN THE AGENCY. The Office of Inspector
General will transmit audit reports to Agency officials in accordance with
agreed-upon distribution schedules. The report will be addressed and submitted
to the Agency officials (action officials) who have the responsibility for
taking action on the reported matters. Copies of the reports will be furnished
to other officials having an interest in the matters covered in the report.
The action official(s) or the Assistant Inspector General for Audit may furnish
copies of the audit reports to other Agency officials who need the reports in
the course of their work.
a. Draft Audit Report. Draft audit reports should not be released outside
of the Agency other than to the auditee. EPA personnel receiving reports for
review and consideration shall exercise due caution to avoid improper dis-
closure inside or outside EPA of information in the audit reports. Requests
for draft audit reports should be made to the Inspector General.
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b. Final Audit Reports. Copies of issued audit reports are provided only
to action addressees and others by previous agreement. The action official
should make all, or relevant (and non-confidential) portions of the information
contained in the final report available to the auditee. It is the responsi-
bility of those regular recipients to advise the Assistant Inspector General
for Audit or applicable Divisional Inspector General for Audit of any chanyes
in the agreed-upon distribution of the final audit reports.
13. DISTRIBUTION OF AUDIT REPORTS OUTSIDE THE AGENCY. The Agency's policy is
one of full and responsible disclosure of its identifiable records and informa-
tion consistent with the public interest concerning national security, personal
privacy, and business confidentiality, as recognized by the Freedom of
Information Act, 5 U.S.C. 552. A requested record shall not be withheld from
copying or inspection unless it comes within one of the nine exemptions in 5
U.S.C. 552.
14. REQUESTS BY THE PUBLIC FOR AUDIT REPORTS. Audit reports shall be released
by the Office of Inspector General to the public upon request after the auditee
has received the issued audit report. Requests for audit reports should be
directed to the Freedom of Information Officer (A-101), Environmental Protection
Agency, Washington, D.C. 20460, who will refer them to the Office of Inspector
General.
Audit reports and related audit information may be requested by members of the
public, State and local governments, other Federal agencies, members of Congress
or their staffs, Congressional committees or subcommittees, and other bodies of
Congress including the General Accounting Office. Requests for records which
are submitted by either House of Congress or by a Congressional committee or
subcommittee are not subject to the Freedom of Information Act. All other
requests for information will generally be treated as requests under the Freedom
of Information Act.
15. AUDIT REPORTS WHICH MAY CONTAIN CONFIDENTIAL INFORMATION OR AFFECT CRIMINAL
OR CIVIL PROSECUTION OR LITIGATION.Portions of an audit report which constitute
confidential business information or findings indicating a possible need for
criminal or civil action or information which may affect litigation will not be
releasable under the Freedom of Information Act. In the latter case, the OIG
will delete those portions of the report the disclosure of which might create
obstacles to a successful criminal or civil prosecution by jeopardizing a fair
trial or alerting certain parties to cover up their unlawful acts.
16. INQUIRIES CONCERNING AUDIT UORK UHICH IS PLANNED OR IN PROGRESS. Inquiries
concerning audit work which is planned or in progress shall be referred to the
Assistant Inspector General for Audit or to the appropriate Divisional Inspector
General for Audit. The Divisional Inspectors General for Audit are authorized
to respond to such inquiries, but will generally limit their responses to an
appropriate statement regarding the status of the audit (i.e., audit is planned,
audit is in progress, or report will be issued in due course).
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17. RETENTION AND DISPOSITION OF AUDIT REPORTS. Disposition of Inspector
General audit reports distributed within the Agency is the responsibility of
the receiving office. The reports should not be returned to the Office of
Inspector General but should be disposed of under the authorized disposition
schedules of the receiving office. In determining the retention period, the
offices should consider that the Office of Inspector General maintains or
has access to the record copy of such reports.
18. AUDIT GUIDES. The OIG's audit work is performed by following audit
guides which spell out the objectives, scope, and procedures to be followed
in conducting audits. Audit guides for external audits are used repeatedly
and are only updated as required. Each internal audit is usually unique and
requires the development of an original audit guide. The OIG also develops
the audit guides used by non-Federal auditors in conducting audits of
certain Agency program grantees.
19. ACTION ON AUDIT REPORTS. EPA action officials are required to take
responsive and timely action on all audit findings and recommendations for
which they have appropriate responsibility pursuant to OMB Circular A-50,
"Audit Followup and Resolution," and section 305 of the Supplemental
Appropriations and Rescission Act, 1980, P.L. No. 96-304, 94 Stat. 857, 928.
Such officials are further responsible for taking the necessary action to
correct the reported adverse conditions and to ensure that the reported
adverse conditions do not recur.
20. AUDIT FOLLOUUP SYSTEM. The audit tracking and control system tracks the
status of open audit reports.- The responsibility for resolving open audit
reports is vested with EPA's Assistant Administrator for Administration and
Resources Management. Assistant Administrators, General Counsel, Regional
Administrators or individuals designated by them are the Agency's Action
Officials under the Agency's audit followup system. Action Officials are
responsible for ensuring that timely adequate responses and determinations
are transmitted on findings and recommendations contained in audit reports,
and that both monetary and non-monetary actions are implemented. The audit
followup system is fully described in EPA Manual 2750, "Management of EPA
Audit Reports and Followup Actions" (1984 edition). The audit followup
system is designed to:
a. Identify promptly for top EPA management any major problems
disclosed by audits;
b. Ensure that the implementation of audit recommendations is
initiated.in a timely fashion; and
c. Ensure appropriate followup on the implementation of audit
recommendations.
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21. OMB CIRCULAR A-50. OMB Circular A-50, "Audit of Federal Operations and
Programs," prescribes policies to be followed by agencies in the resolution
of audit findings. The circular provides that:
a. Each agency must establish policies for prompt and proper resolution
of audit recommendations.
b. Agency followup systems must provide for a complete record of actions
taken on audit findings and associated disallowed, suspended, or questioned
costs. In establishing such systems, each agency is required to:
(1) Designate officials responsible for audit followup.
(2) Maintain accurate records of all audit reports or significant
findings until final resolution. Records are to be maintained to ensure
appropriate accounting and collection controls over amounts determined due
the Government. This latter responsibility has been assigned to the
Assistant Administrator for Administration and Resources Management.
(3) Make written determinations promptly on all audit findings and
initiate action to ensure that these determinations are carried out. Such
determinations are to be made within six months after issuance of the
report. Final resolution is to proceed as rapidly as possible.
(4) Ensure that resolution actions are consistent with laws and
regulations, including written justification and legal basis for decisions
not to seek recovery of amounts due as a result of audit reports.
(5) Provide semiannual reports to the Agency head on the status of
all audit reports over six months old, the number of reports or findings
resolved during the period, collections or offsets made, and demands for
payment made. This responsibility has been assigned to the Assistant
Administrator for Administration and Resources Management.
(6) Evaluate whether the audit followup system is adequate and
results in timely and proper resolution of audit findings and recommendations.
Evaluations are to be made periodically.
c. When audit recommendations requiring corrective action involve more
than one program, agency, or level of Government, the agency making the audit
must coordinate its corrective action with the other affected organizations.
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22. AUDITS BY INDEPENDENT PUBLIC ACCOUNTANTS AND STATE AND LOCAL
a. Non-Federal Audits Extend OIG Resources. The Inspector General Act
requires the OIG to establish guidelines for determining when it is
appropriate to use non-Federal auditors. These auditors must follow
federally prescribed guidelines.
Non-Federal audits are used as an extension of the OIG resources and usually
are performed by State or local government auditors or by Independent Public
Accountants (IPAs).
The OIG contracts with non-Federal auditors to perform external audits of EPA
grantees and contractors. The OIG is responsible for arranging and conducting
audits upon notification of project completion. The audit work of non-Federal
auditors is monitored by the OIG for quality and completeness.
b. Qualifications of Independent Public Accountants. To perform audit
services for EPA, an IPA must be a Certified Public Accountant (or a public
accountant licensed or registered on or before December 31, 1970, by a
regulatory authority of a State or other political subdivision of the United
States).
c. Monitoring of non-Federal Audits by the OIG. Non-Federal audit work
and reports involving EPA program participants are subject to review by the
OIG. The Inspector General Act requires the Inspector General to take
appropriate steps to ensure that any work performed by non-Federal auditors
complies with the standards established by the Comptroller General of the
United States for audits of Federal establishments, organizations, programs,
activities, and functions. If the OIG's review of Independent Public
Accountant audit work indicates deficiencies and actions to correct such
deficiencies are not taken by the IPA, administrative sanctions may be
necessary in conjunction with the cognizant contracting offices. Sanctions
include reporting an IPA to the appropriate State regulatory authority or
the American Institute of Certified Public Accountants or initiating possible
debarment or suspension from participation in EPA programs.
The OIG also has responsibilities with respect to non-Federal auditors in
connection with OIG's role as designated cognizant audit agency under
Attachment P, OMB Circular A-102. Cognizant agency responsibilities are
fully described in paragraph 4-23.
d. Resolution of Non-Federal Audit Findings. Upon accepting each non-
Federal audit report, the OIG will transmit the report to the EPA action
official. The transmittal memorandum will identify those audit findings
which are to be controlled and resolved pursuant to the EPA audit followup
system. (See EPA Manual 2750, "Management of Audit Reports and Followup
Actions," and paragraph 4-20 of this chapter.)
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23. ATTACHMENT P, OMB CIRCULAR A-102. Attachment P to OMB Circular A-102,
"Uniform Administrative Requirements for Grants-in-Aid to State and Local
Governments," establishes audit requirements for State, local, and Indian
tribal governments that receive Federal assistance. The circular provides for
independent audits of financial operations, including compliance with certain
provisions of Federal law and regulations. These requirements were established
to ensure that audits are made on an organizationwide basis rather than on a
grant-by-grant basis.
Under Attachment P, the audit entity could be an agency or department of a
State or local government; it need not be the entire unit of government. The
circular requires State, local, and Indian tribal governments to arrange for
independent audits at least every two years and to prescribe the scope of
audits, provided that they comply with the requirements of Attachment P.
The provisions of Attachment P do not limit the authority of EPA or any other
agency to make audits of recipient organizations. However, if independent
audits arranged for by program recipients meet prescribed requirements,
Federal agencies shall rely on them, and any additional audit work is to build
upon the work already done.
a. Audit Standards and Guidelines. Attachment P requires that audits
be made in accordance with the Comptroller General's Standards for Audit of
Governmental Organizations, Programs, Activities, and Functions ("Yellow
Book" 1981); the Comptroller General's Guidelines for Financial and
Compliance Audits of Federally Assisted Programs ("Red Book" 1980); any
compliance supplements approved by OMB; and generally accepted auditing
standards established by the American Institute of Certified Public
Accountants.
b. Scope of Audits and Related Testing of Charges. According to
Attachment P, audits must, at a minimum, include an examination of the systems
of internal control, systems established to ensure compliance with laws and
regulations affecting the expenditure of Federal funds, financial transactions
and accounts, and financial statements and reports of recipient organizations.
Attachment P requires these examinations to be based on a testing of a
representative number of charges to Federal awards. The examinations are to
determine whether:
(1) There is effective control over and proper accounting for
revenues, expenditures, assets, and liabilities.
(2) The financial statements are presented fairly in accordance
with generally accepted acccounting principles.
(3) The Federal financial reports contain accurate and reliable
financial data and are presented in accordance with the terms of
applicable agreements and Attachment H to OMB Circular A-102.
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(4) Federal funds are expended in accordance with the terms of
applicable agreements and those provisions of Federal law or regulations
that could have a material effect on the financial statements or on the
awards tested.
c. Period of Audits. Attachment P provides that audits should be made
annually, but not less frequently than every two years. Audits are to cover
the period since the previous audit.
d. Detection of Irregularities. Attachment P requires auditors to notify
the cognizant agency and recipient management officials above the level of
involvement whenever they become aware of irregularities in the recipient
organization. Irregularities include such matters as conflicts of interest,
falsification of records or reports, and misappropriation of funds or other
assets.
e. Contents of Audit Reports. Attachment P requires the following
to be included in audit reports.
(1) Financial statements, including footnotes, of the recipient
organization.
(2) Comments on the recipient's financial statements, including,
but not limited to, a statement that the audit was performed in accordance
with applicable audit standards (paragraph 4-3) and an expression of an
opinion as to the fairness of the financial statements.
(3) Comments on the recipient's noncompliance with the systems
of internal control and the terms of agreements and those provisions of
Federal law or regulations that could have a material effect on the
financial statements and reports. The report is also required to
include an expression of positive assurance concerning compliance with
requirements for tested items and negative assurance for untested items.
(4) Comments on the accuracy and completeness of financial reports
and claims for advances or reimbursement to Federal agencies.
(5) Comments on corrective action taken or planned by the recipient.
f. Retention and Availability of Audit Workpapers and Reports.
Attachment P requires that the audit workpapers and reports be retained for a
minimum of three years from the date of the audit report unless the auditor
is notified in writing by the cognizant agency of the need to extend the
retention period. The audit workpapers are to be made available upon request
to the cognizant agency or its designees and the General Accounting Office or
its designees.
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g. Cognizant Agency Responsibilities. Attachment P assigns audit
responsibility for major recipient organizations to Federal agencies known
as cognizant agencies for State departments and agencies that are major
recipients of Federal aid. Similar lists are being developed for local and
Indian tribal governments. Each cognizant agency is required to:
(1) Obtain or make quality assessment reviews of the work of
non-Federal audit organizations and provide the results to other
interested audit agencies. (If a non-Federal audit organization is
responsible for audits of recipients that have different cognizant
audit agencies, a single quality assessment review will be arranged.)
(2) Assure that all audit reports of recipients that affect
Federally assisted programs are received, reviewed, and distributed to
appropriate Federal audit officials. These officials will be responsible
for distributing audit reports to their program officials.
(3) Notify Federal awarding agencies and the recipient
organizations if the auditors do not take action to correct significant
inadequacies disclosed in a review of an audit. Major inadequacies or
repetitive substandard performance of independent auditors shall be
referred to appropriate professional bodies.
(4) Ensure that satisfactory audit coverage is provided in a
timely manner and in accordance with the provisions of Attachment P.
(5) Provide technical advice and act as a liaison 'between Federal
agencies, independent auditors, and recipient organizations.
(6) Maintain a followup system on audit findings and investigative
matters to ensure that audit findings are resolved.
(7) Inform other affected audit agencies of irregularities
uncovered. The audit agencies, in turn, shall inform all appropriate
officials in their agencies. State or local government law enforcement
and prosecuting authorities shall also be informed of irregularities
within their jurisdiction.
h. Recipient Responsibilities. Attachment P provides that recipients are
to require subrecipients that are State, local, or Indian tribal governments
to adopt the requirements in Attachment P. The recipient is required to ensure
that subrecipient audit reports are received as required and shall submit the
reports to the cognizant agency. The cognizant agency will be responsible for
such reports.
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FUNCTIONS AND ACTIVITIES OF THE 6500
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?4. OBJECTIVES OF REPORTING. -The Inspector General Act requires that the
Inspector General provide a means for keeping the Administrator and the
Congress fully and currently informed about problems and deficiencies relating
to the administration of EPA programs and operations and the necessity for and
progress of corrective action.
It is primarily through written audit reports that the OIG communicates its
observations, findings, conclusions, and recommendations relative to problems
and deficiencies in program administration. The OIG strives to produce clear,
fair, and accurate audit reports which place primary emphasis on matters
needing attention. It is the objective of the OIG to present matters in an
objective, unbiased, and convincing manner to prompt management to take
corrective action where needed.
25. FOCUS OF REPORTING. The OIG reports significant matters to EPA manage-
ment in its audit reports. Although "significant" as applied to audit
reporting is a relative term, the following examples typify matters that the
OIG may address in its internal and external audit reports.
a. A substantial loss to the Federal Government has occurred or may occur.
b. A serious violation of a law or regulation has occurred.
c. An unreasonable or impractical policy or practice is seriously
undermining the success of a program or activity.
d. Substantial duplication of effort by employees or between
organizational units is adversely affecting overall efficiency.
e. Substantial procurement of unneeded or excess quantities of property,
materials, or supplies is taking place.
f. Program objectives are not being accomplished.
26. SUPPORTING EVIDENCE. All factual data, findings, conclusions, and
recommendations in OIG audit reports are supported by objective evidence to
sufficiently demonstrate or provide the basis for any matter reported and to
ensure its correctness and reasonableness. Except as necessary to make a
convincing presentation, detailed supporting data are not normally included
in OIG audit reports. Such data, however, are maintained on file by the OIG
as part of the audit workpapers and are used to provide support for the
matters reported.
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FUNCTIONS AND ACTIVITIES OF THE 65UO
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27. CONTENTS OF AUDIT REPORTS.
a. Basic Contents. Information that is common to both internal and
external audit reports includes:
(1) Introductory material, consisting of a brief outline of the
purpose, objectives, scope, and period covered by the audit;
(2) A summary of the significant results of the audit;
(3) Background material designed to give the reader an understanding
of the nature and size of the area audited and any special problems or
circumstances which have a bearing on the audit results; and
(4) Findings and recommendations of the audit, consisting of a
written explanation of problems, weaknesses, deficiencies, and other adverse
conditions; their causes and effects; and the corrective actions that are
necessary.
b. Financial Statements and Opinions. Each audit report which contains
financial statements will express the auditor's opinion on whether the
information contained in the statements is presented fairly. If the auditor
cannot express an opinion, the reasons therefore will be stated in the audit
report. The audit report will also contain appropriate explanatory informa-
tion about the contents of the financial statements as may be necessary for
full and informative disclosure about the financial operations of the
organization, program, function, or activity audited. Violations of legal
or other regulatory requirements, including instances of noncompliance,
will be explained in the audit report.
c. Opinions on Internal Controls. External audit reports covering
grantees in which EPA has a continuing interest, as well as internal audit
reports covering EPA fiscal activities, will express an opinion regarding
the adequacy of selected elements of the system of internal control.
d. Unresolved Prior Audit Findings. Some audit reports will list prior
audit findings that have not been resolved. When appropriate, such prior
audit findings will be updated and presented as findings of the current
audit, along with applicable recommendations.
e. Views and Comments on Audit Reports. As prescribed in EPA Manual
2750, the views and comments of responsible auditee officials on the findings,
conclusions, and recommendations of the audit will be considered and
appropriately expressed in the final audit report.
f. General Comments. When necessary, the audit report will include
informative general comments which do not involve audit findings (e.g.,
potential budget overruns, financial trends). Such comments will normally
cover matters which are necessary to place the report in a proper perspective.
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FUNCTIONS AND ACTIVITIES OF THE 6500
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28. NATURE OF AUDIT FINDINGS AND RECOMMENDATIONS.
a. Audit Findings. Errors, weaknesses, deficiencies, problems, and
the need for improvements are reported by the OIG in the form of audit
findings. Audit findings include:
(1) Statement of condition (what is);
(2) Criteria (what should be);
(3) Effect (results of difference between what is and what
should be); and
(4) Cause (why it happened).
b. Audit Recommendations. The OIG will include recommendations in its
audit reports whenever the audit indicates that actions are needed to bring
about improvements or to correct deficiencies. Recommendations will still
be made even though the necessary actions have been promised or initiated.
Audit recommendations are made directly to the official who has authority to
the take recommended action. Recommendations calling for major policy or
regulatory changes will be made to the appropriate Assistant Administrator
or the General Counsel.
29. QUESTIONED AND SET ASIDE COSTS. Findings in audit reports may involve
ineligible or questionable costs.Such costs will be identified in the
caption of the findings as either questioned or set-aside costs.
a. Questioned Costs. Claimed or proposed costs that the auditor has
concluded should not be reimbursed by the Government or incurred as part of
project-eligible costs because they are not allowable under the provisions of
applicable laws, regulations, policies, cost principles, or terms of the
grant or contract.
b. Set-Aside Costs. A proposed or claimed amount which the auditor has
not questioned but which the auditor cannot accept without additional
information or evaluations and approvals by responsible Agency program
officials.
30. SUSTAINED COSTS AND CASH RECOVERIES/SAVINGS. Set-aside or questioned
costs which EPA management agrees are ineligible or unallowable and is
committed to recover or offset against future payments are considered
"sustained."
a. Costs to be Recovered. The Agency is committed to recover the
sustained amount through billing and collecting from the grantee or contractor
or through offsets against payments under existing and future grants or
contracts.
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FUNCTIONS AND ACTIVITIES OF THE 6bOO
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b. Cost Efficiencies. Cost efficiencies represent estimated amounts
which will be avoided as a result of management's commitment to implement
auditors' recommendations. They include:
0 Deobligations and/or reprogramming of funds as a result
of OIG reviews of Ayency programs;
0 Costs proposed in contract or grant agreements which will
not be incurred as a result of management's concurrence with
pre-award recommendations; and
0 Estimated costs associated with the Agency's, contractor,
or grantee operations paid for with Federal funds which will
not be incurred as a result of management's commitment to
take or require recommended improvements.
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FUNCTIONS AND ACTIVITIES OF THE 6bOO
OFFICE OF INSPECTOR GENERAL 1/22/85
CHAPTER 5—INVESTIGATIVE ACTIVITIES
Table of Contents
PARAGRAPH PARAGRAPH
TITLES NUMBERS
Organizational Role 1
Major Categories of Investigations 2
Liaison With the Department of Justice 3
Liaison With the Federal Bureau of Investigation
and Use of FBI Information 4
Referrals to the Office of Inspector General by
Headquarters Personnel ,...5
Referrals to the Office of Inspector General by
Field Personnel 6
Ref err a 1 s o f B r i be ry 7
Investigation Without Referrals or Requests 8
Processing of Complaints Against Employees 9
Distribution of Investigative Reports 10
Restriction on Distribution and Use of
Investigative Reports 11
Action on Investigative Reports 12
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FUNCTIONS AND ACTIVITIES OF THE 6500
OFFICE OF INSPECTOR GENERAL 1/22/85
CHAPTER 5—INVESTIGATIVE ACTIVITIES
1. ORGANIZATIONAL ROLE. The investigative efforts of the OIG are directed
toward promoting the integrity of Agency programs and personnel. The Office
of Investigations is responsible for detecting and investigating indications
or allegations of irregularities, or violations of Agency regulations or
Federal criminal statutes.
2. MAJOR CATEGORIES OF INVESTIGATIONS.
a. Criminal Matters. Generally, the OIG investigates all criminal
matters involving waste, fraud, and abuse by EPA employees, contractors or
grantees. Pursuant to the Inspector General Act and a memorandum of under-
standing, the OIG refers all matters relating to bribery or attempted
bribery, significant allegations of fraud which culpably involve an EPA
employee and organized crime to the Federal Bureau of Investigation.
Pursuant to a separate memorandum of understanding, the OIG refers all
violations of EPA's environmental statutes to the EPA Office of Enforcement
and Compliance Monitoring which investigates such matters.
b. Violations of the Standards of Conduct. The OIG generally
investigates allegations against employees for unethical or other conduct
prejudicial to the Government (40 CFR Part 3).
3. LIAISON WITH THE DEPARTMENT OF JUSTICE. Section (4)(d) of the Inspector
General Act and 28 U.S.C. 535(b) require the Inspector General to report
expeditiously to the Attorney General whenever the Inspector General has
reasonable grounds to believe there has been a violation of Federal criminal
law.
4. LIAISON WITH THE FEDERAL BUREAU OF INVESTIGATION AND USE OF FBI
INFORMATION. By memorandum of understanding, the FBI provides investigative
resources to the OIG, such as forensic analysis of physical evidence, and
exchanges information with the OIG in mutual support of investigative matters.
Reports and other communications received from the FBI, or the contents of
these documents, may be disseminated only to persons who need the information
in their official capacity. Advance permission must be obtained from the
Assistant Inspector General for Investigation before an FBI report or other
document is copied, reproduced, paraphrased, quoted, or extracted from. No
FBI document may be used as a part of, exhibit to, or reference in any report,
file, or other record which may have a distribution broader than that outlined
in this paragraph. FBI documents shall not be made available to the
individuals investigated or their representatives.
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FUNCTIONS AND ACTIVITIES OF THE 6500
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5. REFERRALS TO OFFICE OF INSPECTOR GENERAL BY HEADQUARTERS PERSONNEL.
a. Referral to Immediate Supervisor. All Headquarters staff should
report promptly to their supervisor (or other supervisory official within the
chain of command up to the appropriate Assistant Administrator) all informa-
tion or allegations indicating a possible irregularity or violation of law or
regulation. Subordinate officials shall in no case delay or withhold
transmittal of such information. Promptly upon receipt of such information,
Assistant Administrators, division directors, and office supervisors shall
transmit it along with any documents or evidence directly to the Assistant
Inspector General for Investigations.
b. Referral to Office of Investigations.
(1) Promptly upon receipt of such information, the Assistant
Administrators or General Counsel shall transmit the referral directly to the
Assistant Inspector General for Investigations.
(2) Employees at Headquarters may report matters they believe should
be investigated directly to the Office of Inspector General if they believe
such a matter should not be reported to their supervisor or through the chain
of command to the appropriate Assistant Administrator or General Counsel.
(3) Employees seeking confidentiality should report matters they
believe should be investigated directly to the Office of Inspector General,
as reporting through the chain of command precludes an employee's opportunity
for confidentiality, (see chapter 3, paragraph 26).
6. REFERRALS TO OFFICE OF INSPECTOR GENERAL BY FIELD PERSONNEL. All field
staff should report promptly to the appropriate Regional Administrator,
division director, or office supervisor all information or allegations
indicating a possible irregularity or violation of law or regulation.
Subordinate officials shall in no case delay or withhold transmittal of such
information. Promptly upon receipt of such information, Regional Admini-
strators, division directors and office supervisors shall transmit it along
with any documents or evidence directly to the Divisional Inspector General
for Investigations serving their region.
Field employees are free to report to the Headquarters Office of Investigations
or the appropriate Divisional Inspector General for Investigations any matter
they believe should be investigated. This shall be done if the employees
believe they should not report the matter directly to their superiors or if
they wish confidentiality as provided for in the Inspector General Act.
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FUNCTIONS AND ACTIVITIES OF THE 6500
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7. REFERRALS OF BRIBERY. All Assistant Administrators and Regional
Administrators will report to the OIG directly and promptly by telephone any
allegations relating to bribery or attempted bribery of an Agency employee
or the solicitation and/or acceptance of a bribe by an Agency employee.
8. INVESTIGATION WITHOUT REFERRALS OR REQUESTS. In carrying out the Inspector
General's responsibilities for detecting and investigating irregularities and
abuses and for providing a positive mechanism to help maintain the integrity of
Agency activities, the Assistant and Divisional Inspectors General for
Investigations are authorized to initiate investiyations of cases falling with-
in their areas of assigned responsibility without receipt of referrals from
other sources or authorities. The Assistant or Divisional Inspectors General
for Investigations generally shall advise the appropriate Assistant
Administrator or other official of a pending investigation unless such notice
would interfere with that investigation.
9. PROCESSING OF COMPLAINTS AGAINST EMPLOYEES. One of the Agency's most
important assets is its personnel.Accordingly, complaints against members
of the staff must be processed promptly. Protection must be provided against
employee violations of EPA standards of conduct, regulations, or Federal
criminal statutes and, at the same time, against unfounded accusations.
While wrongdoing should be uncovered and corrective action taken with respect
to the employee who has been found deficient in the discharge of his or her
public trust, the maligned employee should be exonerated. Consequently, to
help ensure the integrity of EPA operations and confidence of citizens in the
government, any allegations of violations by Agency officials, employees, and
temporary employees of the EPA standards of conduct (40 CFR Part 3) or of the
provisions of Federal criminal statutes will be reported promptly to the OIG.
Allegations of standard of conduct violations which are civil rights issues
will be referred to the Office of Cvil Rights.
a. Referrals of Complaints of Discrimination in Agency Employment.
Al1egations of discrimination in EPA employment involving race, age, religion,
color, sex, national origin or physical or mental handicaps are investigated
by the EPA Office of Civil Rights.
b. Complaints Involving Other Federal Agencies. Complaints against
employees of the Agency which fall within the cognizance of other Federal
agencies will be referred directly and expeditiously to the appropriate
agencies by the Office of Investigations.
c. Inquiry by the Office of Investigations. Complaints against employees
of the Agency not referred to other cognizant agencies will be scheduled for
timely investigation by the Office of Investigations. Complaints over which
the Federal Bureau of Investigation has declined to exercise jurisdiction will
also be investigated by the Office of Investigations.
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10. DISTRIBUTION OF INVESTIGATIVE REPORTS. Distribution of reports of
investigation is governed by the contents. Reports of investigation are
distributed by the Assistant Inspector General for Investigations to the action
officials. All requests for investigative information except from Congress or
other Federal agencies will generally be treated as requests under the Freedom
of Information Act and may only be released with concurrence of the Assistant
Inspector General for Investigations.
11. RESTRICTION ON DISTRIBUTION AND USE OF INVESTIGATIVE REPORTS.
a. Marking of Investigative Reports. Investigative reports issued by the
OIG and all correspondence relating to these reports, except responses to
requests for reports under the Freedom of Information Act, will be marked "FOR
OFFICIAL USE ONLY."
b. Review of Investigative Reports. Within the Agency, investigative
reports may be reviewed only by persons who need the information in their
official capacity. Officials receiving reports for review and consideration
shall exercise every precaution to avoid embarrassment to the subject or any
person who furnished information in connection with an investigation.
c. Distribution to the General Accounting Office. The GAO, upon request,
will be furnished copies of investigative reports under the following
conditions:
(1) That release of the report is not prohibited by law or other
special circumstances.
(2) That the copies of investigative reports will not be
transmitted to the GAO until Agency officials have had a reasonable
opportunity to receive and examine the reports.
(3) That no further release of the reports will be made by GAO
without prior clearance by the Inspector General.
d. Distribution to Law Enforcement Agencies Outside EPA. Investigative
reports or information contained in the reports will be made available to
other Federal offices of investigation and local law enforcement agencies
with the concurrence of the Assistant Inspector General for Investigations
and in conformity with procedures of the Privacy Act, where applicable.
e. Safeguarding and Disposition of Investigative Reports. While Agency
officials have investigative reports in their possession, they will be
responsible for ensuring that the reports and their contents are adequately
safeguarded or maintained in a safe area. When Agency officials have
determined that they have no further need for the investigative reports, the
reports should be returned to the Office of Investigations.
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12. ACTION ON INVESTIGATIVE REPORTS. Action officials to whom reports of
investigation are sent are responsible for reviewing, adjudicating, and
initiating appropriate administrative action within 120 days of the date the
OIG sends the report to them. Investigations involving EPA employees must have
action initiated within 30 days. Administrative action is initiated when the
first documented action is taken by the action official leading to disposition
of the case. Statements of intent are not considered actions initiated.
Action officials are responsible for advising the OIG, in writing, of the
action initiated. When action officials consider that final disposition of an
investigative case has been effected, they will advise the Assistant Inspector
General for Investigations of the full and complete administrative action
taken. Assistance is available from the Office of General Counsel and the
Personnel Management Division concerning appropriate administrative actions.
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FUNCTIONS AND ACTIVITIES OF THE 6500
OFFICE OF INSPECTOR GENERAL 1/22/85
CHAPTER 6—MANAGEMENT AND TECHNICAL ASSESSMENT ACTIVITIES
Table of Contents
PARAGRAPH PARAGRAPH
TITLES NUMBERS
General 1
Organ i zat ion 2
Semiannual Reports to Congress 3
Personnel Security Program 4
Employee Awareness Program 5
Review of Legislation and Regulations 6
Suspensions and Oebarments 7
Hotline 8
Management Control Efforts 9 .
Fraud Prevention Activities 10
Freedom of Information Act Requests 11
Administrative Functions 12
Committee on Integrity and Management Improvement 13
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FUNCTIONS AND ACTIVITIES OF THE 6bOO
OFFICE OF INSPECTOR GENERAL 1/22/85
CHAPTER 6—MANAGEMENT AND TECHNICAL ASSESSMENT ACTIVITIES
1. GENERAL. The Assistant Inspector General for Management and Technical
Assessment is responsible for initiating and carrying out OIG efforts
concerning the prevention and detection of fraud, waste, and mismanagement in
Agency programs and operations; evaluating management controls; reviewing and
analyzing Agency issuances; initiating employee awareness programs, including
the operation of the Hotline; coordinating personnel security investigations;
preparing the IG's semiannual reports to Congress and "IG Highlights;"
responding to Freedom of Information Act requests; coordinating debarment and
suspension activities; and carrying out OIG administrative functions.
2. ORGANIZATION. The Office of Management and Technical Assessment is located
in the OIG's Washington, D.C., Headquarters and comprises tne Management and
Administrative Services Division and the Technical Assessment and Fraud
Prevention Division.
3. SEMIANNUAL REPORTS TO CONGRESS. The Administrative and Management Services
Division is the focal point for production of the semiannual reports to Congress
as required by section 5 of the Inspector General Act of 1978. The Management
and Administrative Services Division plans the production schedule for report
preparation and coordinates the development, collection, analysis, editing, and
review of information for inclusion in the semiannual reports.
4. PERSONNEL SECURITY PROGRAM. The Assistant Inspector General for Management
and Technical Assessment monitors the personnel security investigations
conducted by the Office of Personnel Management and other agencies; evaluates
investigative data received; and determines the security, suitability, and
integrity of EPA employees and prospective employees in accordance with the
requirements of Executive Order 10450, "Security Requirements for Government
Employment."
5. EMPLOYEE AND PUBLIC AWARENESS PROGRAM. One of the most powerful ways of
achieving the objectives of the OIG is an active program to inform EPA employees
and program participants about the OIG and to make these individuals aware of
their responsibility to prevent, detect, and report fraud, waste, and mismanage-
ment. This employee and public awareness program is carried out through fraud
information bulletins, hotline posters, "IG Highlights" (a digest of semiannual
reports to Congress), published articles to EPA management and employees,
brochures on the OIG operations, public service announcements, and mailings to
EPA program participants.
6. REVIEW OF LEGISLATION AND REGULATIONS. As required by section 4(a)(2) of
the Inspector General Act, reviews are made of existing or proposed legislation
and regulations relating to programs and operations. In addition to providing
comments within the Agency, the OIG can make recommendations to Congress on the
impact of such legislation and regulations on the economy and efficiency in the
administration of EPA programs and operations or the prevention and detection
of fraud and abuse.
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7. SUSPENSIONS AND DE8ARHENTS. It is necessary that grants and contracts
awarded by the Agency be made only to those who are honest and responsible
and who comply with applicable rules and reyulations. EPA regulations (40
CFR Part 32 and 48 CFR subpart 1509.5) authorize the Agency to deny any
individual, organization, or unit of government the opportunity to parti-
cipate in EPA-assisted programs or operations because of misconduct or poor
performance. The Technical Assessment and Fraud Prevention Division
coordinates implementation of these EPA regulations; maintains liaison with
affected Agency components; and arranges for audit, engineering, and
investigative support for Agency debarment and suspension actions.
8. HOTLINE. The 016 maintains a 24-hour, toll-free hotline for the receipt,
screening, and disposition of complaints concerning the possible existence
of any activity constituting a violation of law, rules, or regulations;
mismanagement; gross waste of funds; abuse of authority; or a substantial
and specific danger to the public health and safety. The hotline toll-free
number is (800) 424-4000. EPA employees should dial 8-382-4977. (See
chapter 3, paragraph 7.)
9. MANAGEMENT CONTROL EFFORTS. Experience has shown that mismanagement,
waste, and abuse can often occur where there is a lack of proper manage-
ment controls or where those controls are not followed or enforced. The
Technical Assessment and Fraud Prevention Division provides assistance
and advice to Agency officials in their efforts to implement management
controls in EPA's programs and operations. OMB Circular A-123 requires
that agencies review and improve internal controls to eliminate fraud,
waste, and mismanagement in the Federal Government by outlining internal
control standards and a system of Agency responsibilites and requirements
to address the numerous instances of fraud, waste, and abuse of Government
resources. Congress expressed support for this effort by passing the
Federal Managers' Financial Integrity Act of 1982, 31 U.S.C. 3512. The act
requires that internal accounting and administrative control standards be
prescribed by the Comptroller General; annual evaluations of internal
accounting and administrative controls be conducted by each executive
agency; and an annual statement by the head of each agency be submitted to
the President and the Congress. The annual statement is to address the
agency's compliance with internal control standards and requirements
prescribed by the Comptroller General.
The role of the OIG is to provide technical support and advice to the
Agency and to conduct independent evaluations of the Agency's implementation
of the act.
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FUNCTIONS AND ACTIVITIES OF THE 6500
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10. FRAUD PREVENTION ACTIVITIES. As the focal point for EPA's fraud
prevention, the Technical Assessment and Fraud Prevention Division is
responsible for.developing and recommending (1) long-range strategies and
goals to minimize the opportunities for the occurrence of fraud and waste in
Agency programs and operations and (2) innovative techniques and systems for
the detection of fraud. This effort includes:
a. Reviewing and analyzing Agency programs, activities, and functions
to identify those areas vulnerable or sensitive to fraud and abuse.
b. Developing, coordinating, and conducting training courses,
information, or presentations for OIG staff and appropriate EPA personnel
in fraud detection and prevention techniques or activities and management
control systems.
c. Operating as principal liaison with EPA and other government
agencies on fraud control matters, including the President's Council on
Integrity and Efficiency.
11. FREEDOM OF INFORMATION ACT REQUESTS. The Management and Administrative
Services Division receives, coordinates, and responds to requests for informa-
tion under the Freedom of Information Act. Requests are coordinated with the
appropriate Assistant Inspector General to determine if the request can be
honored in full or if there is any legal basis for denying all or part of the
request. The OIG maintains a policy of full disclosure unless the material
requested falls into one of nine exemptions which may limit its release.
12. ADMINISTRATIVE FUNCTIONS. The Management and Administrative Services
Division is responsible for the administrative functions for the operation
of the Office of Inspector General. These functions include processing
personnel matters, developing and presenting the budget and related material,
coordinating and issuing operational policies and procedures, managing space
and equipment, and coordinating and carrying out Agency administrative
regulations.
13. COMMITTEE ON INTEGRITY AND MANAGEMENT IMPROVEMENT. The Committee on
Integrity and Management Improvement is part of the Agency's effort to
eliminate fraud, waste, and mismanagement in EPA programs and operations.
The Committee serves as the Administrator's main policy advisor on matters
relating to fraud prevention and detection. The Committee, which is chaired
by the Inspector General, consists of representatives from each of the
Assistant Administrators, General Counsel and staff offices in EPA. As
chairperson of the Committee, the Inspector General serves primarily in an
advisory and coordinating capacity. Committee members participate in conduct-
ing studies or projects aimed at improving policies or procedures to prevent
or detect fraud, waste, and mismanagement. The Technical Assessment and Fraud
Prevention Division provides technical assistance and support to the Committee
and its projects. See EPA Order 1130.1 on the Committee on Integrity and
Management Improvement.
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