United States
Environmental Protection
Agency
Office of the Inspector General
401 M Street, S.W (2421)
Washington. D.C. 20460
September 1999
EPA's Office of the
Inspector General
Annual
Superfund Report
to the Congress
for Fiscal 1998
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ANNUAL
SUPERFUND REPORT
TO THE CONGRESS
FOR FISCAL 1998
September 1999
Required by
Section 111(k) of the
Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (CERCLA),
as amended by the Superfund Amendments and
Reauthorization Act of 1986 (SARA)
OFFICE OF THE INSPECTOR GENERAL
U.S. ENVIRONMENTAL PROTECTION AGENCY
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
FOREWORD
This report covers fiscal 1998 activities, and
is our 12th Annual Superfund Report to the
Congress. The Superfund Amendments and
Reauthorization Act of 1986 (SARA) requires
the Office of the Inspector General (OIG) to
audit the Superfund program annually and to
report to Congress annually on these audits.
In addition to reviewing Agency performance,
we also take a proactive role to help the
Environmental Protection Agency (EPA)
prevent future problems. During fiscal 1998,
we assisted EPA management in a number
of ways. To help the Agency to assess the
impact of Superfund enforcement reforms on
timeliness, we analyzed trends in the duration
of remedial design/remedial action
negotiations with potentially responsible
parties (PRPs). We also advised the Agency
on steps it could take to more effectively
implement its reform to improve the
administration of oversight of PRPs. We
helped the Agency improve its financial
management so that it could prepare
acceptable financial statements. We helped
the Agency streamline its response claim
procedures. To help Region 5 complete
closeout of a contract, we developed cost
and usage data used in negotiating with the
contractor. We worked with Region 5 in the
negotiation of Environmental Performance
Partnership Agreements with Ohio. We
continued to work with the Agency in its
efforts to improve its information resources
management.
In our seventh and latest audit of the
Hazardous Substance Superfund financial
statements, we were able for the first time to
give an unqualified opinion on all of the
financial statements. However, the Agency
was unable to meet the mandated March 1
deadline for submitting its audited financial
statements to the Office of Management and
Budget due to weaknesses in its processes
for preparing financial statements, which we
considered a material internal control
weakness. Additionally, EPA had significant
reportable internal control weaknesses
related to tracking Unilateral Administrative
Orders, managing accounts receivable,
approving interagency agreement invoices,
accounting for capitalized property, recording
Superfund State Contract revenue, and
documenting automated controls within the
Agency's accounting system. In
noncompliance issues other than the late
submittal considered a material weakness,
EPA's disbursement process for grants
funded with multiple appropriations did not
always match disbursements with the
benefiting appropriation, and EPA had not
yet substantially complied with the Federal
Financial Management Improvement Act's
Federal financial management system
security requirements.
Our review of the Agency's implementation of
its Superfund quality assurance (QA)
program found that EPA had not
demonstrated a commitment to a cohesive,
centrally-managed, mandatory Agencywide
QA program. Seventy-nine percent 91 the
regional project plans we reviewed either did
not include adequately developed data
quality objectives (DQOs), or did not include
DQOs at all. DQOs are needed to make
sure the environmental data collected at
Superfund sites is of the type and quality
needed to make sound cleanup decisions. At
both the national and regional levels, QA
managers were often not appropriately
located to accomplish QA objectives. In
response to our report, the Agency
developed a comprehensive corrective action
plan to strengthen its Superfund QA program
and , in some respects, the QA program for
the Agency as a whole.
We reviewed the Agency's program to defer
sites for state action rather than listing them
on the National Priorities List for Federal
action. Generally, the states were
proceeding with cleanups, although many
were behind agreed schedules. We had
some concerns about remedies being
protective in the long term since a majority of
the remedies selected were not permanent or
treatment remedies, and in most of these
cases the states had no provisions to
periodically check on protectiveness. We
also found that EPA had no mechanism to
make sure communities around the sites had
the opportunity to express their concerns and
get them considered. The Agency agreed to
take corrective actions on the deficiencies we
noted.
We reviewed the Agency's building of
replacement housing for some residents at
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
ii
the Austin Avenue Radiation site in
Philadelphia, Pennsylvania. We found that
the Agency spent far more to build the
replacement houses than the houses it
replaced were worth. In response to our
report, the Agency advised its regional offices
that EPA will not rebuild residential or
commercial structures except in the rarest of
circumstances. The Agency also began to
develop a comprehensive policy and
guidance document on response actions
impacting residential or commercial
structures.
We reviewed the Agency's billing of
Superfund oversight costs to PRPs in both
Region 2 and Region 9. In both regions, we
found substantial delays in issuing bills, and
making collections on bills that had been
issued. However, both regions were making
progress in reducing their backlogs of
oversight bills. In response to our reports,
both regions indicating that they were taking
actions to improve their billing and collection
processes.
We reviewed Region 5's oversight of
remedial construction projects being
performed by PRPs. We found the Region's
project managers generally were effective in
ensuring that remedies were completed
properly and on schedule. However, we
were unable to determine how effectively the
Region implemented the reduced oversight
administrative reform because it had no
documentation of any cost savings which
might have been achieved.
Our Superfund investigative efforts continued
to produce fines, restitutions, recoveries, and
convictions for fraud and other improper
actions of EPA contractors. A company
which submitted false claims for cleaning up
a Superfund site agreed to repay $4.3 million
and to forego an additional $9.6 million it had
claimed. We obtained a civil judgment of
more than $4.1 million, representing EPA's
cleanup costs, against the CEO of a
company which had maintained and stored
hazardous substances at a Superfund site.
Several other EPA contractors agreed to
settlements an'sing out of false claims and
fraud charges.
The Administration proposed in its fiscal 1998
budget to eliminate the requirement to issue
this report, along with the specific annual
audits the report is required to summarize.
This report is largely duplicative of our
semiannual reports. Elimination of the
specific audit requirements would allow us to
focus our audit efforts each year on those
areas where they can be most productive.
We hope the Congress will take this action.
We will continue to help Agency
management deliver the most effective and
efficient Superfund program through a
comprehensive program of audits,
investigations, fraud prevention, and
cooperative efforts with Agency
management.
c.
Nikki L. Tinsley
Inspector General
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998 Hi
TABLE OF CONTENTS
PURPOSE 1
BACKGROUND 2
ASSISTANCE TO EPA MANAGEMENT 3
HAZARDOUS SUBSTANCE SUPERFUND 6
Superfund Receives Unqualified Opinion on All Financial Statements, However, Further
Improvements Are Still Needed 6
COOPERATIVE AGREEMENTS AND GRANTS 10
EPA's Brownfields Initiative Can Be Strengthened 10
REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES 12
Oklahoma Manages Oklahoma Refining Co. Cleanup Effectively 12
RESPONSE CLAIMS 13
CONTRACTS 14
Contractor Internal Control Weaknesses Resulted in Questioned Costs of $2,251,492 .. 14
INTERNAL AUDITS AND SPECIAL REVIEWS 15
EPA Had Not Effectively Implemented Its Superfund Quality Assurance Program 15
Region 8 Needs to Further Strengthen Its Superfund Field Sampling Quality Assurance
Controls 16
Region 9's Environmental Data Quality System for Superfund Removal Actions Was
Insufficient 16
EPA Paid Excessive Amounts to Build Replacement Housing 17
Region 1's Administrative Reforms Improved the Superfund Process 18
Region 2 Had Not Billed $31.5 Million of Superfund Oversight Costs 19
Additional Effort Needed by Region 9 to Make Superfund Oversight Cost Billing Current
20
State Deferrals: Some Progress, But Concerns for Long-Term Protection Continue .... 21
Region 5 Was Effectively Overseeing Responsible Parties' Remedial Construction
Projects, But Could Do More 22
EPA Accurately Reports Information on Superfund Construction Completions 23
INVESTIGATIVE ACTIVITY 24
FISCAL 1998 SUPERFUND REPORTS 27
APPENDIX 1: AVAILABILITY OF REPORTS 30
APPENDIX 2: ACRONYMS AND ABBREVIATIONS 31
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
PURPOSE
We provide this report pursuant to section
111 (k) of the Comprehensive Environmental
Response, Compensation, and Liability Act
(CERCLA) of 1980, as amended. The
Superfund Amendments and Reauthorization
Act (SARA) of 1986 amended that section of
CERCLA to add several annual requirements
for the Inspector General of each Federal
agency carrying out CERCLA authorities.
These requirements include four audit areas
and an annual report to Congress about the
required audit work. This report covers fiscal
1998 OIG Superfund activities. We discuss
the required four audit areas below.
This report contains chapters on the
mandated audit areas. We also summarize
other significant Superfund audit work,
assistance to EPA management, and
Superfund investigative work. We exceed
the statutory requirements by providing
Congress with the significant results of
Superfund work beyond that specifically
mandated in section 111(k).
Trust Fund
CERCLA requires"... an annual audit of all
payments, obligations, reimbursements, or
other uses of the Fund in the prior fiscal year.
..." We now meet this requirement through
the financial statement audit required by the
Government Management Reform Act.
Claims
CERCLA requires an annual audit to assure
"... that claims are being appropriately and
expeditiously considered ..." Since SARA
did not include natural resource damage
claims as allowable Fund expenditures, the
only claims provided in CERCLA, as
amended, are response claims.
Cooperative Agreements
CERCLA requires audits"... of a sample of
agreements with States (in accordance with
the provisions of the Single Audit Act)
carrying out response actions under this title
..." We perform financial and compliance
audits of cooperative agreements with States
and political subdivisions. Some of our audits
also review program performance.
Remedial Investigations/Feasibility
Studies (RI/FS)
CERCLA requires our"... examination of
remedial investigations and feasibility studies
prepared for remedial actions ..." Our
RI/FS examinations review the adequacy of
the studies to provide a sound technical basis
for remedial action decisions. We usually
perform these examinations as special
reviews by our technical staff.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
BACKGROUND
The Comprehensive Environmental
Response, Compensation, and Liability Act of
1980 (CERCLA), Public Law 96-510, enacted
on December 11, 1980, established the
"Superfund" program. The purpose of the
Superfund program is to protect public health
and the environment from the release, or
threat of release, of hazardous substances
from abandoned hazardous waste sites and
other sources where other Federal laws do
not require response. CERCLA established
a Hazardous Substance Response Trust
Fund to provide funding for responses
ranging from control of emergencies to
permanent remedies at uncontrolled sites.
CERCLA authorized a $1.6 billion program
financed by a five-year environmental tax on
industry and spme general revenues.
CERCLA requires EPA to seek response, or
payment for response, from those
responsible for the problem, including
property owners, generators, and
transporters.
The Superfund Amendments and
Reauthorization Act of 1986 (SARA), Public
Law 99-499, enacted October 17, 1986,
revised and expanded CERCLA. SARA
reinstituted the environmental tax and
expanded the taxing mechanism available for
a five-year period. It authorized an $8.5
billion program for the 1987-1991 period. It
renamed the Trust Fund the Hazardous
Substance Superfund. The Budget
Reconciliation Act of 1990 reauthorized the
program for three additional years and
extended the taxing mechanism for four
additional years. Congress has continued to
fund Superfund after expiration of the
authorization and the taxing mechanism.
The basic regulatory blueprint for the
Superfund program is the National Oil and
Hazardous Substances Contingency Plan
(NCP), 40 CFR Part 300. The NCP was first
published in 1968 as part of the Federal
Water Pollution Control Plan, and EPA has
substantially revised it three times to meet
CERCLA requirements. The NCP lays out
two broad categories of response: removals
and remedial response. Removals are
relatively short-term responses and modify
an earlier program under the Clean Water
Act. Remedial response is long-term
planning and action to provide permanent
remedies for serious abandoned or
uncontrolled hazardous waste sites.
CERCLA recognized that the Federal
Government can only assume responsibility
for remedial response at a limited number of
sites representing the greatest public threat.
Therefore, EPA must maintain a National
Priorities List (NPL), updated at least
annually. The NPL consists primarily of sites
ranked based on a standard scoring system,
which evaluates their threat to public health
and the environment. In addition, CERCLA
allowed each State to designate its highest
priority site, without regard to the ranking
system.
CERCLA section 104(c)(3) does not allow
EPA to fund remedial actions unless the
State in which the release occurs enters into
a contract or cooperative agreement with
EPA to provide certain assurances, including
cost sharing. At most sites, the State must
pay 10 percent of the costs of remedial
action. EPA may fund 100 percent of site
assessment activities (preliminary
assessments, site inspections), remedial
planning (remedial investigations, feasibility
studies, remedial designs), and removals.
For facilities operated by a State or political
subdivision at the time of disposal of
hazardous substances, the State must pay
50 percent of all response costs, including
removals and remedial planning previously
conducted.
CERCLA sections 104(c)(3) and 104(d)
authorize EPA to enter into cooperative
agreements with States or political
subdivisions to take, or to participate in, any
necessary actions provided under CERCLA.
A cooperative agreement serves to delineate
EPA and State responsibilities for actions to
be taken at the site, obtains required
assurances, and commits Federal funds.
EPA uses cooperative agreements to
encourage State participation in the full range
of Superfund activities - site assessment,
remedial, removal, and enforcement.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
ASSISTANCE TO EPA MANAGEMENT
Besides performing audits and investigations,
the OIG responds to EPA management
requests for review of vulnerable program
areas and OIG input in the development of
regulations, manuals, directives, guidance,
and procurements. These are efforts to
prevent problems that might later result in
negative audit findings or investigative
results. The OIG reviews and comments on
draft documents prepared by Agency offices.
OIG staff also participates in conferences
and EPA work groups to provide input. The
OIG continued to be active in fiscal 1998 in
such assistance to EPA management in the
Superfund area. We summarize below some
of our major activities assisting management.
RD/RA Negotiation Time Frames
Prior OIG case studies of three Superfund
sites indicated that lengthy remedial
design/remedial action (RD/RA) negotiations
had delayed site cleanups and recommended
this area for further review. In cooperation
with the Office of Site Remediation
Enforcement (OSRE), Policy and Program
Evaluation Division in EPA's Office of
Enforcement and Compliance Assurance
(OECA), we reviewed trends in the duration
of RD/RA negotiations.
The primary focus of the Superfund program
is to maximize the protection of human health
and the environment through fast, efficient
cleanups of hazardous waste sites. At the
same time, the Superfund enforcement
program is faced with the challenge of
maximizing potentially responsible party
(PRP) participation and ensuring fair
treatment of these parties. As a result,
EPA's regional offices and the Office of
Enforcement and Compliance Assurance
(OECA) must integrate these competing
priorities at the RD/RA negotiation stage.
Optimally, EPA wants to negotiate a
settlement with the PRPs to conduct and/or
finance the RD/RA. However, EPA must also
ensure that these negotiations do not impede
the sites' progress toward cleanups.
Based on various analyses, we concluded
that average time frames for RD/RA
negotiations lengthened in 1995 and 1996.
We noted that changes in the time frames
appeared to coincide with the institution of
two major policy changes: Enforcement First
and the Superfund reforms. To better gauge
the effect of these changes on negotiation
time frames, we excluded the negotiations for
the years in which the policy changes
occurred (1989 and 1993) and analyzed
average time frames before and after these
policy changes. The results showed that
nationally RD/RA negotiation time frames
decreased 17 percent (from an average of
272 days to 227 days) after "enforcement
first" and increased 11 percent (from an
average of 241 days to 268 days) after the
Superfund reforms were introduced. This is
shown in the charts below.
Time Frames Before & After 'Enforcement First"
300-1
Time Frames Before & After Start of Superfund Reforms
300-i
FY86-FY88
FY90-FY92
FY90-FY92
FY94-FY96
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
Although there appears to be a relationship
between the policy changes and RD/RA
negotiation time frames at the national level,
regional and case-specific factors come into
play as well. Different regional management
approaches appear to have influenced
RD/RA negotiation time frames. Moreover,
case-specific factors, which we did not
include in our analysis, and many of which
are not within EPA's control, can also affect
RD/RA negotiation time frames.
We issued a report (8400015) to the
Directors, Office of Site Remediation
Enforcement, and Policy and Program
Evaluation Division (of OSRE), OECA, on
March 27,1998. We suggested that OSRE
consider: (1) exception reporting and
tracking of RD/RA negotiations that exceed
240 days; (2) a written pojicy establishing a
formal process for extending the negotiations
beyond 180 days and requiring headquarters
approval when appropriate; and (3)
continuing to emphasize early RD starts to
assure negotiation time frames do not impact
the pace of cleanup. OSRE agreed with the
report's conclusions and suggestions. On
June 17,1999, OSRE followed up by issuing
a memorandum to the regions, Negotiation
and Enforcement Strategies to Achieve
Timely Settlement and Implementation of
Remedial Design/Remedial Action at
Superfund Sites.
Improving the Administration of
Potentially Responsible Party (PRP)
Oversight
In 1995 EPA initiated a reform to improve the
administration of PRP oversight, referred to
as the reduced oversight reform. While
auditing Region 5's implementation of this
reform, we identified some concerns as a
result of 1998 changes to the reform. EPA
changed the emphasis from reducing costs
to maximizing the effectiveness and
efficiency of EPA's efforts to oversee PRPs.
The Agency intended to focus on improved
working relationships with PRPs and better
control over costs.
Since EPA changed this reform while we
were conducting our audit, we did not
evaluate how Region 5 implemented the
revised reform. However, we shared two
observations on the revisions with Agency
Headquarters offices. First, the original
guidance still in use focuses on how to
identify PRPs that are cooperative and
capable, and provides examples of how
oversight can be reduced for those parties.
However, it does not include other areas that
are now being emphasized in the reform.
The guidance should be expanded to include
how project managers can improve their
working relationships with PRPs and improve
billing practices. This guidance would make
it easier for project managers to understand
and implement this reform. Second, the
reform should also be directed toward PRPs
where working relationships need
improvement.
We issued a report (8400032) to the
Directors, Office of Emergency and Remedial
Response and Office of Site Remediation
Enforcement (OSRE), on July 8, 1998. We
made no formal recommendations and did
not request any written response.
Response Claims
CERCLA requires us to review claims
submitted by potentially responsible parties
performing responses preauthorized by EPA.
We help Superfund program officials adjust,
as necessary, and pay the claims. During
fiscal 1998, we consulted with Superfund
officials who were considering streamlining
their claim procedures. As part of this effort,
we provided information on laws and
regulations concerning claim payment,
contracting, and Federal fund audits. EPA is
continuing to consider streamlining the claims
procedures, and we anticipate providing
additional advice and assistance during fiscal
1999.
Superfund Contract Closeout
At Region 5's request, we analyzed
provisional rates in an emergency response
cleanup contract to assist the contracting
officer in closing out the contract. Besides
developing cost data, we developed usage
data and other useful information to help
Region 5 formulate a negotiation strategy.
We issued three reports (8400031, 8400044,
and 9400001) covering the prime contractor
and two team subcontractors.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
National Environmental Performance
Partnership System
We actively participated with Region 5 in the
negotiation of an Environmental Performance
Partnership Agreements for the state of Ohio.
The Agreement represents a comprehensive
strategy of how Region 5 and Ohio will work
together to improve the quality of the state's
air, water, and land, including Superfund.
Our role in the process was to ensure that
the Agreement met all regulatory
requirements and was adequate to ensure
state accountability for EPA funds. We
continue to work with Region 5 to improve
the quality of state agreements in meeting
the goals of the National Environmental
Performance Partnership System.
Information Resources Management
(IRM)
Prior audits identified concerns with the
EPA's Information Resource Management
(IRM) program which provides Agency
policies and guidance for Superfund and
other programs. Therefore, we reviewed
proposed changes to the Agency's
Information Security Manual, Directive 2195,
which sets forth requirements for securing
Agency information resources and defines
the security responsibilities of all personnel
who use, develop, operate, or maintain EPA
information systems. During the course of
our review, we met with Agency IRM Officials
to discuss ways to improve or enhance the
policies before they were finalized.
During fiscal 1998, we also participated in
Agency workgroups associated with EPA's
initiative to Reinvent Environmental
Information. In particular, we participated in
the Agency's Data Quality Task Force which
developed a strategic action plan to
implement an Agency-wide approach to
ensuring data quality through a well-defined
and efficient error correction process. In
addition, we participated on the Agency's
Data Gaps Workgroup which focused on
identifying major gaps between
environmental data that EPA, States and
other environmental stakeholders need and
the data EPA currently has available.
We also met with key IRM officials to address
new and outstanding audit issues Vvhich
affect the reliability of Agency information
systems data. In particular, we briefed IRM
officials regarding the inadequacy of
approved information system security plans
for internal control purposes, and provided
them with audit results to support a
continuing material weakness in this area
during the Agency's annual assessment
process.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
HAZARDOUS SUBSTANCE SUPERFUND
The Government Management Reform Act
requires Federal agencies to prepare annual
audited financial statements. The
requirement for audited financial statements
was enacted to help bring about
improvements in agencies' financial
management practices, systems and controls
so that timely, reliable information is available
for managing Federal programs. One of the
major entities covered by these financial
statements is the Hazardous Substance
Superfund Trust Fund. The EPA QIC's
requirement to audit EPA's financial
statements also meets our CERCLA audit
requirement to annually audit the Superfund
Trust Fund, which we previously referred to
as our Trust Fund audit. The following
summary of our fiscal 1998 financial
statement audit relates to all findings
resulting from our audit of EPA's financial
statements, including the Hazardous
Substance Superfund.
Superfund Receives Unqualified
Opinion on All Financial
Statements, However, Further
Improvements Are Sttll Needed
Findings in Brief
During fiscal 1998, EPA continued to
improve its financial reporting systems
and practices. We also worked jointly
with the Agency to improve the accuracy
and reliability of the Agency's financial
statements. As a result, we issued an
unqualified or clean opinion on the
Superfund Trust Fund's Financial
Statements. However, we noted material
weaknesses in the Agency's processes
for preparing financial statements. These
weaknesses prevented the Agency from
producing reliable financial statements in
a timely manner.
We Found That
The financial statements fairly present the:
• assets, liabilities, and net position;
• net costs;
• changes in net position;
• budgetary resources;
• reconciliation of net costs to
budgetary obligations; and
• custodial activity
for the Superfund Trust Fund, All Other
Appropriated Funds and the Agency as a
whole as of and for the year ended
September 30,1998, in accordance with the
applicable basis of accounting.
Material Internal Control Weakness
The Agency was unable to meet the
legislatively mandated March 1 deadline for
submitting its audited financial statements to
the Office of Management and Budget (OMB)
due to difficulties in obtaining information
from various Agency offices and external
sources, and problems in implementing new
accounting standards and OMB reporting
requirements. In particular, the Agency
encountered significant difficulties in
preparing the Statements of Budgetary
Resources and Financing due to weaknesses
in the Agency's deobligation process,
conversion of accounting information from
EPA's predecessor accounting system, and
errors in recording various accounting
transactions.
These issues highlight the need for the
Agency to strengthen its coordination and
quality control processes to ensure accurate
data is available to prepare the annual
financial statements and to manage the
Agency's program activities on an ongoing
basis. Further, improvements in the
Agency's deobligation process would result in
additional funds being made available to
support EPA's environmental goals.
Reportable Conditions
Reportable conditions are significant internal
control weaknesses that could adversely
affect EPA's ability to ensure: (1)
transactions are executed in accordance with
appjicable laws; (2) assets are safeguarded
against loss from unauthorized acquisition,
use, or disposition; and (3) transactions are
properly recorded, processed, and
summarized to permit the preparation of
reliable financial statements and Required
Supplemental Stewardship Information in
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
accordance with Federal accounting
standards. The reportable conditions we
identified involved the need for improvements
in the following areas:
1. Tracking Unilateral Administrative
Orders
EPA's regions are not consistently tracking
demands for payment made under
Comprehensive Environmental Response,
Compensation and Liability Act Section 106
Unilateral Administrative Orders (UAOs).1
Amounts demanded under UAOs are
significant and need to be tracked and
controlled. In three regions, we identified $11
million in demands made under UAOs. Other
regions had either no record of the amounts
demanded under UAOs, or the amounts were
not demanded because the UAOs did not
include a provision to request reimbursement
of oversjght costs. When amounts are not
tracked in the Integrated Financial
Management System (IFMS), the Agency
cannot follow up on them. Also, the Agency
could potentially issue multiple demands for
the identical cost to the same or different
parties resulting in duplicate collections.
Tracking the amounts demanded in IFMS
would allow the Agency to maintain better
control over the amounts demanded and
collected.
2. Managing Accounts Receivable
During fiscal 1998, the Agency continued its
efforts to improve controls in the accounts
receivable area by issuing additional
guidance and instructing Financial
Management Offices (FMOs) to conduct
quality assurance reviews covering this area.
However, we continued to find a) some
accounts receivable, including those for costs
of overseeing site response actions by
potentially responsible parties, that were not
timely recorded and billed; b) outstanding
receivables that were not timely followed up
on and written off; and c) allowances for
doubtful accounts that were not properly
computed. Consequently, EPA may not have
1. Unilateral Administrative Orders are one of the
Agency's primary enforcement tools to compel
responsible parties to conduct response actions.
The Agency may demand payment for costs it
incurs in overseeing the response actions.
correctly valued and timely collected some
accounts receivable. These problems were
caused primarily by Offices of Regional
Counsel and program offices not timely
forwarding documentation to Agency FMOs,
and FMO staff being unsure about the
methodology they were to use to compute
the allowance for doubtful accounts.
3. Approving Interagency Agreement
Invoices
Some Agency project officers were not
fulfilling one of their program oversight
duties, that of reviewing invoices for
interagency agreements. In addition, some
project officers were not obtaining and
reviewing supporting cost information for
amounts billed by other agencies. The
Agency needs to continue making
improvements in this area, so that it can be
assured that payments are only made for
costs billed that are valid and allowable under
the terms of its interagency agreements.
4. Accounting for Capitalized Property
For a number of years, we have reported on
the need for the Agency to make
improvements in its accounting for its
property. The Agency has taken actions to
permanently resolve these issues, and we
commend the Agency for its continuing
efforts to correct weaknesses in this area.
However, the Agency still needs to make
some additional improvements. We again
found property that was not recorded timely
or accurately, and property that was
capitalized when it should have been
expensed. In addition, we found weaknesses
in the reconciliation of property information in
the Agency's accounting system with
information contained in the property
subsystem. Such weaknesses reduce the
quality of data available to manage the
Agency's resources and increase the risk of
theft, loss, or misuse of the property.
5. Recording Superfund State Contract
Revenue
During fiscal 1998 and prior years, EPA did
not properly recognize revenue on its
Superfund State Contracts, one mechanism
used for states to pay their required cost
share for Superfund remedial actions.
Although significant progress has been made
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
8
in resolving problems that have existed in this
area, we found a few remaining issues,
primarily at three of the six FMOs where we
tested these accounts. Consequently, EPA
needed to make material adjustments to fairly
present the financial statements. If regional
FMOs had been performing analytical
reviews of these accounts, they could have
identified and corrected these errors before
they became an audit issue.
6. Documenting Automated Controls
Within the Agency's Accounting
System
We continue to be unable to assess the
adequacy of the automated internal control
structure for accounting transactions
contained in IFMS. During past audits, we
reported that the Agency's documentation for
the system did not contain the level of detail
necessary to construct tests of automated
controls necessary for a financial statement
audit. Agency management acknowledged
that the IFMS data dictionary could be
improved. However, management also
believes that data dictionary enhancements
would not be cost effective considering the
system's maturity, and concurs with a recent
Department of Treasury review which
recommends that the Agency defer
development of a detailed data dictionary
until it is ready to transition to a new system.
We will obtain and assess the Treasury
review team's analysis concerning
documentation requirements, as a part of our
fiscal 1999 financial statement audit. In
addition, we will continue to participate as a
consultant on the Agency's workgroup to
replace the payroll system.
Noncompliance Issues
We did not identify any instances of
noncompliance with laws and regulations that
would result in material misstatements to the
audited financial statements. However, we
did note the following three significant
noncompliance issues:
1. EPA makes disbursements for grants
that are funded from more than one
appropriation using the oldest available
funding (appropriation) first which may or
may not be the appropriation that
benefitted from the work performed.
Thus, EPA is not complying with Title 31
U.S.C. 1301 which requires EPA to
match disbursements to the benefitting
appropriation. Even though this instance
of noncompliance did not result in a
material misstatement of EPA's financial
statements, it is a significant issue the
Agency must address.
2. As previously noted, the Agency did not
meet the Government Management and
Reform Act's March 1 deadline for
submission of its financial statements to
OMB.
3. The Federal Financial Management
Improvement Act (FFMIA) requires us,
during our annual financial statement
audits, to determine whether EPA's
financial management systems
substantially comply with Federal
financial management system
requirements, applicable accounting
standards, and the Standard General
Ledger at the transaction level. In
addition to the previously discussed
material weaknesses in the Agency's
process for preparing financial
statements, we also identified an issue of
noncompliance with FFMIA system
requirements.
Our review of Agency financial
management systems under
development or operational, as of
September 30, 1998, found that
management had not approved security
plans for seven financial or mixed
financial systems, and the approved
security plans for the remaining eight
systems did not comply with the
requirements of OMB Circular A-130,
Management of Federal Information
Resources. As a result, the Agency
lacked reasonable assurance that
existing controls would prevent
unauthorized disclosure or manipulation
of data, or the loss of data in the event
of a disaster or accidental or intentional
damage. The Agency also reported
information security planning as a
material weakness in its fiscal 1998
Integrity Act Report.
What Action Was Taken
We issued our final report (99B0003) to the
Chief Financial Officer (CFO) on
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
September 28, 1999. In responding to our
draft report, the CFO indicated that her office
believes some of the issues we identified as
material weaknesses and reportable
conditions were not properly categorized.
The CFO agreed with many of the
recommendations and indicated corrective
actions are planned or ongoing to implement
these recommendations. The CFO noted her
office is committed to continued
improvements in financial management with
specific emphasis on improving the process
that produces the Agency's financial
statements. Management's goal is to
prepare reliable, timely financial statements.
The CFO appreciated the cooperation from
our office over the past several months to
resolve the outstanding issues. With respect
to compliance with the FFMIA, the CFO
believes the Agency is in substantial
compliance and steps are being taken to
remedy the deviations with the procedural
requirements we noted.
We will continue to support the Agency's
efforts to improve its processes for preparing
reliable, timely financial statements. We look
forward to working with the Agency to bring
about process improvements in financial
practices, systems and controls for future
financial statements. We have not changed
the classification of the reported weaknesses,
nor have we changed our conclusion about
the Agency's noncompliance with FFMIA.
The Agency's response to our final report is
due by December 28, 1999.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998 10
COOPERATIVE AGREEMENTS AND GRANTS
In fiscal 1998, we issued reports reviewing costs on cooperative agreements with one state,
one tribe, and one other recipient. The combined financial results of these three reviews were
as follows:
FINANCIAL RESULTS OF FISCAL 1998 SUPERFUND
COOPERATIVE AGREEMENT COST REPORTS
Amount audited
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$23,397,602
32,734
183,672
0
Total Costs
$25,883,360
36,193
197,936
0
1 . Costs questioned because of an alleged violation of a provision of a law, regulation, contract, grant,
cooperative agreement or other agreement or document governing the expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by adequate
documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
In addition, we issued both performance reports on cooperative agreements with one state.
Finally, we issued a report on the Brownfields grant program, summarized below.
EPA's Brownfields Initiative Can
Be Strengthened
To help the nation address environmental
concerns associated with idled, underutilized
or abandoned urban industrial and
commercial properties, EPA announced the
Brownfields Economic Redevelopment
Initiative. The overall objective of the
Initiatjve is to return Brownfield properties to
sustainable and beneficial reuse. To help
accomplish this objective, EPA awarded 121
site assessment grants, primarily to cities, to
assist with environmental activities
preliminary to cleanup, such as site
identification, site assessment, and site
characterization.
We Found That
Pilot cities that we visited were using EPA
funds to conduct site assessments, develop
inventories, conduct community involvement
activities, and develop Brownfield work
groups and forums. While these activities
are authorized, we found that some have had
relatively little impact on actual
redevelopment. We believe the Agency
needs to both improve the focus of future
grants and assist cities in developing
technical expertise to continue the
Brownfields program after EPA funds have
been expended. Maintaining the Brownfields
momentum and leveraging private Brownfield
investments require successful
redevelopments. EPA should encourage
cities to focus their efforts on those activities
which have the greatest potential for
promoting rapid site redevelopment.
Because the goal of the Brownfields Initiative
is to return properties to sustainable and
beneficial reuse, cleanups must be sufficient
to protect the health and safety of those who
will be occupying the former industrial
property. To ensure that environmental data
collected as part of a site assessment is of a
known quality and that decisions made as a
result of the data collected are defendable,
EPA developed a planning tool known as the
Quality Assurance Project Plan (QAPP).
Two cities we reviewed did not develop site-
specific QAPPs as required by the National
Contingency Plan and Agency policy.
Uncertainties as to the amount of quality
assurance needed for Brownfield sites led
the Agency to form a work group which had
drafted a quality assurance guidance
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document for Brownfield site assessments
and planned on finalizing it during fiscal
1998.
EPA also awards grants to provide cities with
funds to make low interest loans for actual
cleanups of urban sites. However, city
officials indicated that many of the sites that
have the greatest potential for redevelopment
may not be redeveloped due to the
restrictions placed on the use of cleanup
funds by CERCLA and the requirements of
the National Contingency Plan. Most notably,
CERCLA restricts using funds to cleanup
asbestos, lead-based paint, and petroleum.
These restrictions may limit the usefulness of
the revolving loan fund pilot projects.
We Recommended That
The Acting Assistant Administrator for Solid
Waste and Emergency Response:
• Revise the proposal evaluation and
ranking criteria to give credit and
higher ranking to those cities whose
work plan: identifies sites; proposes
to conduct site assessments;
contains the largest number of
components of a successful
redevelopment effort; contains
specific objectives and milestones;
and contains in-house technical
expertise or a commitment from the
city to obtain or develop technical
expertise.
• Issue the Brownfields quality
assurance guidance to the EPA
regional offices as well as pilot
recipients and remind project
officers and recipients of the need
for EPA-approved QAPPs prior to
beginning field work.
• Explore legislative and regulatory
alternatives to help cities address
the restrictions and requirements
placed on the Revolving Loan Fund
by CERCLA and the National
Contingency Plan.
What Action Was Taken
The final report (8100091) was issued to the
Acting Assistant Administrator for Solid
Waste and Emergency Response on
March 27, 1998. In responding to the draft
report, the Acting Assistant Administrator
agreed to implement our recommendations
and provided milestone dates for doing so.
Therefore, we closed the report upon
issuance.
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REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES
In fiscal 1998, we issued a technical report
on remedial investigation/feasibility study
(RI/FS) activities at one Superfund site. The
OIG Engineering and Science Staff
conducted this review, which we summarize
below.
Oklahoma Manages Oklahoma
Refining Co. Cleanup Effectively
The Oklahoma Refining Co. site in Cyril,
Oklahoma, was an oil refining facility whose
owners went bankrupt in 1984 and ceased
operations. The facility included refinery
process areas, bulk storage tanks, waste
pits, wastewater treatment ponds, and a land
treatment area. After finding large-scale
organic and heavy metal contamination of the
soil and groundwater, EPA conducted
removal actions in 1990 and 1992. The
Oklahoma State Department of Health was
the lead agency for remedial planning at the
site. The remedy for the site includes in-situ
stabilization, capping, excavation,
containment, neutralization, on-site disposal,
and prepared-bed bioremediation. After it is
determined to what extent these source
control activities will beneficially affect
groundwater contamination, the State and
EPA will determine what remedial action is
needed for the groundwater.
We Found That
The State performed remedial planning
activities in a manner generally consistent
with the National Contingency Plan and
applicable guidance. The State used an
effective, interactive (with EPA and the
community) management approach that
facilitated a long-term cleanup of the site.
Site managers conducted a Value
Engineering Study during the early stages of
remedial design. Based upon study results,
they identified ways to effectively adapt to the
lack of a recycling market for the asphalt
materials. Site managers saved time, effort,
and money by combining, stabilizing, and
capping the asphalt wastes on-site. After
verifying that groundwater contamination
posed no immediate threat to drinking water
supplies, site managers postponed the
groundwater remedy so that it could be
reassessed after evaluating the impact of the
source removal on groundwater
contamination.
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RESPONSE CLAIMS
Section 111 (a)(2) of CERCLA, as amended
by SARA, authorizes EPA to pay any claim
for response costs incurred by "any other
person" as a result of carrying out the NCP.
Additionally, section 122(b)(1) of CERCLA,
as amended by SARA, authorizes the
President to reimburse Potentially
Responsible Parties (PRPs) for "certain costs
of actions under the agreement that the
parties have agreed to perform but which the
President has agreed to finance." The
President delegated this authority to the EPA
Administrator under Executive Order 12580,
January 26,1987, who further delegated it to
EPA's Office of Solid Waste and Emergency
Response. Authority for decisions regarding
claims against the Fund is currently
delegated to the Director, Office of
Emergency and Remedial Response.
During fiscal 1998, we issued memorandums
concerning our reviews of two response
claims. Our reviews were not audits, but
rather followed instructions in the Agency's
claims guidance.
Tybouts Comer Landfill
We reviewed costs claimed for work
performed to clean up the Tybouts Corner
Landfill site in New Castle, Delaware. In our
memorandum dated December 9, 1997, we
found insufficient support for claimed costs
totaling $645,582.46. The claimant
subsequently provided additional information
to support its claim. In a memorandum dated
July 1,1998, we noted that $267,546.00 in
costs related to a purchase of soij still lacked
adequate support. We also identified the
kinds of documentation needed to support
those costs.
Army Creek
We reviewed costs claimed for work
performed to clean up the Army Creek site in
New Castle, Delaware. In our memorandum
dated June 22,1998, we recommended
perfection of the claim except in connection
with bid information for a management
contract awarded by the claimant. The
claimant may provide additional
documentation on this matter. In addition, we
questioned $33,264 of response costs, which
resulted in $13,306 being withheld from the
contractor due to lack of documentation.
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14
CONTRACTS
The OIG is responsible for conducting and
supervising independent and objective audits
of Superfund programs and operations. To
carry out this responsibility, the OIG performs
financial and compliance audits and special
reviews of EPA contractors. Each Public Law
authorizing EPA to award contracts provides
the Agency authority to audit and examine
the books and records of the contractors and
subcontractors receiving Federal funds.
Each EPA contract also contains audit
provisions. Our primary audit objectives are
to determine (1) whether the controls
exercised by the contractors and
subcontractors through their accounting,
procurement, contract administration, and
property management systems are adequate
to account for costs claimed; and (2) costs
claimed are reasonable, allowable, and
allocable, in accordance with applicable laws
and regulations, to the sponsored project.
Audits of contracts not only yield financial
benefits to the Agency, but also aid in
improving Agency management. These
audits also play an integral part in supporting
EPA's cost recovery actions.
Of the 79 contract reports we issued in fiscal
1998, 57 covered incurred costs under EPA
contracts. Another 14 of our reports were
initial pricing reviews in which we reviewed
costs proposed by offerers or bidders
seeking EPA contract awards. Because
these are only proposed costs, our reviews
do not question costs. Instead, we
recommend as efficiencies costs that we
believe EPA should not incur. We also
issued 1 report on proposed indirect cost
rates, 11 system survey reports, 3 Cost
Accounting Standards reports, and 3
advisory reports to management on EPA
contractors.
In the Federal government, normally one
audit agency performs all the contract
reviews for each Federal contractor,
depending on which Federal department or
agency has the largest volume of work with
that contractor. Regardless of who does the
actual audit work, the EPA OIG finally issues
all audit reports on EPA contracts to EPA
management. In fiscal 1998, the Defense
Contract Audit Agency performed the audit
work for 62 of our contract audit reports, and
EPA OIG staff performed the audit work for
the remaining 17 reports.
We summarize below one of our more
significant contract financial reports.
Contractor Internal Control
Weaknesses Resulted in
Questioned Costs of $2,251,492
Our audit of a contractor's indirect cost rate
proposal disclosed unallowable costs totaling
$2,251,492. We disallowed most of the
questioned costs ($2,091,425) because of
unsupported incentive compensation costs.
The contractor was unable to provide
evidence of an evaluation of an employee's
performance, measured against goals or
objectives listed in the employee's
compensation agreement. The Federal
Acquisition Regulation requires the contractor
to provide support for the basis for the
incentive award. We also found the
contractor did not: (1) exclude expressly
unallowable costs from claimed amounts; (2)
differentiate between claimed costs and
incurred costs in its indirect cost rate
proposal; (3) have records storage and
retention procedures that permitted it to
provide supporting documentation in a timely
manner; and (4) properly allocate costs to the
appropriate final cost objectives.
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INTERNAL AUDITS AND SPECIAL REVIEWS
In addition to reviews required by CERCLA,
as amended, we conduct other reviews of
EPA's management of the Superfund
program. We summarize below some
particularly significant internal audits and
special reviews completed in fiscal 1998 not
summarized elsewhere in this Report.
EPA Had Not Effectively
Implemented Its Superfund
Quality Assurance Program
EPA relies on environmental data to make
important decisions on complex issues that
have significant environmental, social, health,
and economic impacts. Each year EPA and
the regulated community spend about $5
billion collecting environmental data. This
data must be accurate and relevant to the
decision-making process to be useful. The
Office of Research and Development (ORD)
has primary responsibility for developing the
national quality assurance (QA) program and
directing and overseeing its implementation.
While our report focused on QA in the
Superfund program, we also made
recommendations concerning broader,
Agencywide QA activities.
We Found That
Although EPA had developed many critical
elements necessary for an effective QA
program, it had not fully developed,
implemented, and reported on the program's
effectiveness. EPA had not demonstrated a
commitment to a cohesive, centrally-
managed, mandatory Agencywide QA
program. The national QA program had not
used its authority to impose minimum project
planning requirements on all EPA
organizations. Project managers responsible
for Superfund data collection lacked the
training and guidance needed to perform QA
activities effectively.
Senior EPA managers had not consistently
implemented EPA s policy to develop project
specific data quality objectives for Superfund
environmental data collection. Seventy-nine
percent of the regional project plans we
reviewed either did not include adequately
documented data quality objectives, or did
not contain any at all. The policy was only
minimally successful in the Superfund
program because managers had not
provided sufficient direction or tools to
implement the policy and had not assessed
program implementation. Without the
consistent use of a systematic planning
process with clear cnteria, EPA cannot be
sure the environmental data it collects is of
the type and quality needed to make sound
cleanup decisions. EPA must perform
adequate and effective oversight in this area
or risk making inaccurate decisions that could
adversely affect human health and the
environment.
Both the Agencywide and national Superfund
QA managers were at too low a level to effect
needed change and were not viewed by
regional staff as being in positions of
authority. Regional quality management
plans showed that QA managers and staff
were often not appropriately located within
their respective regions to accomplish QA
objectives. For example, in one region the
QA staff reported to a manager responsible
for data collection activities, which was a
conflict of interest. Five regions had QA
managers located in the regional laboratories
rather than in regional offices, making
oversight difficult.
We Recommended That
The Acting Assistant Administrator for
Research and Development:
• Develop a strategy to institutionalize
the QA program.
• Establish and implement a method
of ensuring adherence to minimum
criteria for an adequate systematic
planning process.
• Place QA managers at
organizational levels where they can
be effective and independent quality
advocates.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
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The Acting Assistant Administrator for Solid
Waste and Emergency Response:
• Perform management and technical
assessments of regional QA
performance.
• Develop adequate oversight
procedures to ensure data is of
sufficient quality to support decision-
making.
• Provide Superfund staff with
sufficient tools to implement EPA's
data quality objectives policy.
What Action Was Taken
The final report (8100240) was issued to the
Acting Assistant Administrators for Research
and Development, and Solid Waste and
Emergency Response on September 30,
1998. In response to the final report, the
Agency prepared a Corrective Action Plan
addressing all of the recommendations we
made.
Region 8 Needs to Further
Strengthen Its Superfund Field
Sampling Quality Assurance
Controls
EPA requires that each region or major
organization have a quality assurance
program to ensure that activities generate
data of known and adequate quality. EPA
developed a data quality objectives process
as its systematic planning tool to help ensure
it consistently collected data at an
appropriate level of quality to support
technical decisions.
We Found That
Region 8 had established policy and controls
to correct previous field sampling quality
assurance deficiencies but had not effectively
implemented those controls to ensure an
effective quality assurance program.
Superfund project managers should have
better defined, documented, and updated
data quality objectives in their project plans in
accordance with Region 8's quality
management plan. Data quality objectives
were too broadly defined to ensure sufficient
and appropriate data was gathered. Also,
some project managers neglected to ensure
that project plans were appropriately
reviewed and approved, and had accepted
deficient contractor-prepared plans. Thirteen
of 35 staff needing quality assurance training
had not completed mandatory training.
Some project managers continued to perform
limited oversight, relied too heavily on
oversight contractors, did not use the
Regional quality assurance group's
assistance, and had not appropriately
documented their oversight activities to
ensure that data collected was reliable and
defensible.
We Recommended That
The Regional Administrator:
• Develop Regional Superfund
controls to ensure staff appropriately
develop and document data quality
objectives.
• Hold Superfund supervisors
accountable for ensuring project
managers properly review and
approve project plans.
• Direct Superfund supervisors to
identify staff needing quality
assurance training and ensure that
staff receives the training.
What Action Was Taken
We issued our final report (8100082) to the
Regional Administrator on March 25, 1998.
In response to the draft report, Region 8
agreed with all the findings and
recommendations. In its response to the final
report, the Region provided an updated
Action Plan for implementation of all our
recommendations.
Region 9rs Environmental Data
Quality System for Superfund
Removal Actions Was
Insufficient
EPA's Emergency Response Program
responds to threats posed by the sudden or
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
17
unexpected release of hazardous
substances. Region 9's Emergency
Response Office manages the majority of
these responses, called removal actions, for
California, Nevada, Arizona, Hawaii, and the
Pacific Islands. The Region's Superfund
Program experienced serious problems with
environmental data quality which needed
management attention. Risks to
environmental data are significant because
data is the basis for EPA's decision-making
and enforcement actions.
We Found That
Region 9 did not have a quality management
plan which adequately documented and
described the quality
system for removal
actions. Further, our
review of five
removal actions
showed that most of
the site-specific
quality assurance
project plans: (1)
were not based on
the seven-step data
quality objectives
process, EPA's
systematic planning
method, (2) were not
"Data cannot be
evaluated as good or
not good until the
use of that data has
been clearly
defined."
-Principles of
Environmental
Sampling, Second
Edition, 1996
designed to prevent
and detect inappropriate quality data, (3) did
not include defensible or optimal plans for
collecting data, (4) were not implemented or
monitored, and (5) were not reviewed or
approved by the Region's Quality Assurance
Office.
We believe the quality system was
insufficient primarily because decision-
makers did not perceive data quality as a risk
to decision-making, and thus did not require
adequate implementation of the system.
Consequently, data was not of known and
acceptable quality for decision-making.
We Recommended That
The Regional Administrator, Region 9:
• Develop a quality management plan
for Superfund removal actions.
• Develop data quality objectives for
all removal actions using a team
approach that involves facilitators,
on-scene coordinators, quality
assurance experts, statisticians, and
technical experts.
• Amend on-scene coordinators'
responsibilities for quality assurance
project plans to include the
consideration of critical quality
assurance activities along with
approval, implementation, and
monitoring of project plans.
• Require the Quality Assurance
Office to review and approve all
quality assurance project plans.
What Action Was Taken
We issued the final report (8100223) to the
Regional Administrator, Region 9, on
September 4, 1998. In responding to the
draft report, the Region agreed with all
recommendations and said it believed that
these actions, together with other ongoing
efforts, should greatly enhance the
management of data quality at Superfund
removal actions. The Region also said that it
"firmly believes that the five removal actions
considered in preparation of the report were
appropriate and protective of human health."
Because the Region's response to the draft
report committed to adequate corrective
actions, we closed the final report upon
issuance.
EPA Paid Excessive Amounts to
Build Replacement Housing
The Superfund program protects public
health and the environment from the release,
or threat of release, of hazardous substances
through relatively short-term removal actions
and more permanent long-term remedial
actions. EPA used both removal and
remedial actions to address radium and
thorium contamination at the Austin Avenue
Radiation Site in the suburbs of Philadelphia,
Pennsylvania at a cost of $55 million for 40
properties.
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We Found That
At the Austin Avenue Radiation Site, EPA
Region 3 spent an average of $651,700 each
to build 10 replacements for houses which
were demolished in the cleanup process.
The appraised value of the old houses
averaged only $147,000 each. The cost
difference was so high because the Region
built new houses, rather than relocate the
owners, as EPA had usually done in similar
situations. EPA Headquarters had not issued
guidance on building replacement houses
under the Superfund program.
Region 3 adopted the position that EPA was
obligated to replace "like for like" houses.
The Region sought to duplicate the
appearance and other characteristics of the
old houses, rather than build new houses
using today's standard building designs.
Thus the houses were custom built. We
found no evidence to support that EPA was
mandated to replicate houses. The difficult
process of negotiating architectural and other
details with home owners lengthened the
time to complete the cleanup and increased
the costs. For example, the Region spent
more than $700,000 to replicate one house
whose appraised value was $161,000, and
then spent more than $100,000 in moving,
storage and rental fees for the owner.
We Recommended That
The Acting Assistant Administrator for Solid
Waste and Emergency Response:
• Establish a policy where instead of
building new houses under
Superfund, EPA gives preference to
other options that consider the fair
market value of the properties. For
example, EPA could give the
owners: (a) the replacement value of
their property, as the insurance
industry does; or (b) the amount
EPA would have paid to
permanently relocate the owners.
• Develop a policy explicitly defining
equivalent housing.
What Action Was Taken
We issued our final report (8100090) to the
Acting Assistant Administrator for Solid
Waste and Emergency Response on
February 11,1998. In response to our
report, the Acting Assistant Administrator
issued a memorandum to EPA regional
offices advising that it is EPA policy not to
rebuild residential or commercial structures,
except under the rarest of circumstances.
EPA also began an effort to develop a
comprehensive policy and guidance
document on how best to cpnduct a response
action that will impact a residential or
commercial structure.
Region 1% Administrative
Reforms Improved the Superfund |
Process
The Superfund program has been criticized
because of the pace and cost of cleaning up
hazardous waste sites, the fairness of EPA s
approach for holding waste contributors
liable, and the role of States and
communities in the cleanup process. In
response to the criticism, EPA initiated three
rounds of Superfund administrative reforms,
consisting of various initiatives and pilots that
were implemented by the regions.
We Found That
Region 1's use of various Superfund reforms
helped achieve the Agency's goals to
improve the equity and effectiveness of the
Superfund process However, we were
unable to document an overall improvement
in expediting the Superfund process from
listing on the National Priorities List to
construction completion (pipeline). Before
the initiation of Superfund reforms. Region 1
sites took an average of seven years and two
months to reach construction completion.
Afterwards, the average time increased to
nine years and 11 months. There were
tradeoffs in implementing the reforms.
Improved equity or community buy-in may
come with the price of additional time spent
in the pipeline which may or may not equate
to increased costs. The Region was not
required to evaluate the impact reforms had
on the cleanup process.
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Region 1 was one of the few regions to
aggressively implement the Updating
Remedy reform, saving $75 million at 11
sites. Use of enforcement reforms such as
de minimis, mixed funding, orphan share,
and Alternative Dispute Resolution provided
greater equity to the Superfund process.
One reform, the use of a Community
Advisory Group, resulted in community
consensus and cost savings of approximately
$45 million by adopting a new remedy.
However, these successes also came at a
price. It took five years for the Advisory
Group to reach a consensus. Enforcement
reforms, in particular, required more detailed
information and documentation, thus
increasing the amount of time a site spent in
the pipeline.
Presumptive remedies were developed to
streamline the Remedial Investigation/
Feasibility Study (RI/FS) process, thus saving
time and costs. We found that this reform
did not always expedite the Superfund
process as envisioned. Regional Project
Managers (RPMs) believed the use of
presumptive remedies provided a more
focused RI/FS and promoted consistency.
However, the RI/FS phase for most sites took
longer than the 18-month completion goal set
by Headquarters. The Agency had not
developed a plan to evaluate the use of this
reform. As a result, there was no assurance
that the use of presumptive remedies actually
saved time or money. Additionally, the RPMs
said they were unable to quantify time or cost
savings which they believed resulted from the
use or the reform.
We Recommended That
The Regional Administrator, Region 1:
• Instruct the regional enforcement
staff to work with Headquarters
Office of Enforcement and
Compliance Assurance staff to
determine the feasibility of
implementing regional suggestions
to help expedite the Superfund
enforcement process.
Instruct the Office of Site
Remediation & Restoration staff to
develop an evaluation plan to
determine if the use of presumptive
remedies achieves the desired
results.
What Action Was Taken
We issued our final report (8100254) to the
Regional Administrator, Region 1, on
September 29,1998. In response to the
draft and final reports, the Region generally
concurred with the report findings and
recommendations.
Region 2 Had Not Billed $31.5
Million of Superfund Oversight
Costs
Superfund legislation authorizes EPA to
recover its costs for cleaning up sites from
the responsible parties to help replenish the
Superfund Trust Fund. This includes costs
EPA incurs to oversee cleanup activities.
Recovery is initiated through negptiation with,
or legal action against, a responsible party
(RP). Judicial and non-judicial actions
establish EPA's legal right to be reimbursed
by the RP for oversight costs. Based on
these orders, Region 2 prepares bills and
establishes accounts receivables.
We Found That
Region 2 did not bill and collect in a timely
manner accumulated Superfund oversight
costs. The Region did not recover cleanup
oversight costs from RPs for as long as 11
years. Also, when delayed bills were sent,
RPs disputed the amounts and requested
extensive supporting documentation.
Collections were further delayed. At least 17
of the 68 (25 percent) delayed bills for
oversight since 1989 contained errors and
were reduced by $5.4 million.
The Region issued enforcement documents
with oversight reimbursement provisions for
115 Superfund sites. However, from April
1989 to September 1997, the Region issued
bills for only 68 sites (60 percent). As of
September 30, 1997, Region 2's fiscal year
1997 Unbilled Oversight Closing Balance
Calculation was $31.5 million for 89
Superfund sites. This was an increase of
$2.1 million since September 30, 1996.
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EPA Office of Inspector General Annual Super-fund Report to the Congress for Fiscal 1998
20
The Region's inadequate management
control system generally caused the billing
delays. Contributing factors were other
competing priorities, inadequate tracking
systems, vague or nonexistent billing
requirements in Consent Decrees,
inadequate coordination between program
offices and the Office of Regional Counsel,
and difficulty in segregating oversight from
other response costs.
Untimely oversight billings and collections
resulted in unnecessary delays in
replenishing the Superfund Trust Fund. The
delays limited EPA's ability to clean up other
priority sites and further protect human health
and the environment. Unbilled costs also
caused understatements in the account
receivable and revenue account balances in
EPA's financial statements. Significant
amounts of interest that would have accrued
to the Trust Fund were also lost or
postponed.
Before fiscal 1998, Region 2 oversight bills
were a low priority. However, since the first
quarter of 1998, the Region has been
concentrating on the backlog of bills. As of
May 1998,14 bills had been issued, 14 were
included in larger negotiations, 3 had no
further costs to be billed, and 8 others were
to be addressed in fiscal 1999.
We Recommended That
The Regional Administrator, Region 2:
• Emphasize oversight billings as a
priority activity and ensure that all
pending bills are issued by the end
of fiscal 1998. The Region should
prepare a quarterly reconciliation,
address backlogged bills, and take
necessary actions.
• Ensure that future oversight costs
are billed in accordance with the
enforcement agreements signed by
the Region or within 120 days of the
anniversary date if the agreement is
silent as to billing requirements.
• Modify existing written oversight
billing procedures to include time
frames for initiating, assembling,
reviewing, and issuing oversight bills
by all participating offices.
• Initiate and document periodic
meetings between officials involved
in the oversight process to improve
coordination and timeliness between
the offices.
What Action Was Taken
We issued our final report (8100206) to the
Regional Administrator, Region 2, on
August 13, 1998. In response to the final
report, Region 2 indicated that only four sites
with unbilled oversight costs as of
September 30,1997 were still unbilled as of
September 30,1998. The Region stated it
had established a process for tracking and
issuing oversight bills and the process was
effective. It made a commitment to issue all
future bills within 120 days of the anniversary
date.
Additional Effort Needed by
Region 0 to Make Superfund
Oversight Cost Billing Current
EPA incurs oversight costs while monitoring
cleanup work performed by responsible
parties (RPs) at Superfund sites. CERCLA
authorizes EPA to recover these costs to
help replenish the Superfund Trust Fund.
Such recoveries are accomplished by the use
of a Consent Decree or an Administrative
Order on Consent.
We Found That
Region 9's procedures and internal controls,
if property implemented, were generally
adequate to ensure that Superfund remedial
action oversight costs were property
classified, recorded, and billed to RPs. By
July 1998, the Region had made significant
progress in reducing a sizable longstanding
backlog. However, the Region needed to
provide continued attention to assure that it is
able to meet EPA's goal to prepare current
oversight billings within 120 days of the
consent degree or administrative order
anniversary date. We found delays of up to
36 months in billing oversight costs. Also, for
overdue bills, Region 9 was not sending
dunning letters or follow-up bills to RPs. We
attributed some of the delays in billing
oversight costs to the complexity of the cost
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
21
package process, the lengthy periods being
billed, extended delays in preparing bills, and
the extent to which cost packages were being
documented. We identified some
opportunities for the Region to improve its
oversight billing processes.
We Recommended That
The Regional Administrator, Region 9:
• Evaluate current processes to
identify streamlining opportunities,
such as minimizing documentation
being supplied to RPs.
• Strengthen regi9nal procedures for
follow-up on delinquent accounts
receivable.
• Assure that adjustments to accrued
unbilled oversight costs are
appropriately documented and
approved.
What Action Was Taken
We issued our final report (8100259) to the
Regional Administrator, Region 9 on
September 30, 1998. In its response to the
final report, the Region reported completed or
planned corrective actions responsive to our
recommendations.
State Defer rats; Some Progress,
But Concerns for Long-Term
Protection Continue
In June 1993, EPA initiated the State Deferral
program to reduce the number of hazardous
waste sites awaiting listing to the National
Priorities List (NPL). The program allows the
cleanup of deterred sites with minimal
oversight from EPA. After cleanup and
certification from the states, EPA can remove
the deferred sites from its Superfund tracking
system.
We Found That
While 14 of 30 deferred sites were behind the
schedules agreed to in consent decrees or
other enforceable documents, generally the
cleanups were progressing. For the three
sites completed, relatively simple remedies
were performed, including soil disposal and
groundwater and deed restrictions.
Although the State Deferral program is a low
priority, EPA should be aware of the
significant concessions being made. The
National Contingency Plan (NCP) establishes
the preference for permanent remedies, and
requires treatment remedies in some
instances and five-year reviews when
hazardous contaminants remain on site.
States are not required to follow the NCP for
deferred sites even though they were
expected to be NPL caliber sites. Eleven of
the 18 remedies selected to date have not
been permanent or treatment remedies. For
8 of thel 1 cases, five-year reviews or
periodic checks on the protectiveness of the
remedies were not required. Thus, remedies
may not protect human health and the
environment for the long term.
State Deferral guidance provides for
community input on deferrals and the
termination of deferrals based on valid
community objections. EPA has no
mechanism to monitor or evaluate community
support. In addition, state officials did not
always inform EPA when communities raised
significant concerns. EPA could terminate a
deferral if the community's objections are not
addressed by the state. However, EPA may
not be aware of any concerns because it
does not closely monitor the activities at the
site or in the community. EPA did not have
an effective monitoring system and
evaluation program to track the status of
deferral agreements, sites, and cleanups.
We Recommended That
The Acting Assistant Administrator for Solid
Waste and Emergency Response:
• Establish a mechanism to ensure
that five-year reviews or an
equivalent process will be performed
where hazardous contaminants will
remain on site.
• Establish a mechanism to ensure
that community concerns about
deferrals are brought to EPA's
attention.
• Require regional officials to track
deferrals more closely.
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EPA Office of Inspector General Annual Super-fund Report to the Congress for Fiscal 1998
22
• Implement performance measures
that will reflect the desired outcomes
of the State Deferral program.
What Action Was Taken
We issued the final report (8100234) to the
Acting Assistant Administrator for Solid
Waste and Emergency Response on
September 10, 1998. During the audit,
Agency officials made changes to track
deferral starts and completions. They also
added state deferrals to a draft Government
Performance and Results Act sub-objective
so that they can track the percentage of sites
that have final assessment decisions. In
response to the final report, the Acting
Assistant Administrator agreed to take
corrective actions responsive to our
recommendations.
Region $ Was Effectively
Overseeing Responsible Parties*
Remedial Construction Projects,
But Could Do More
After determining the nature and extent of
contamination at a Superfund site, EPA
announces the proposed cleanup method in
the record of decision. Responsible parties
perform the majority of Superfund cleanup
activities. EPA s role is to ensure responsible
parties comply with all applicable laws,
regulations, requirements, and performance
standards in any settlement agreement. EPA
has three sets of Superfund reform initiatives
designed to assist state and local
governments, communities, and industries by
making cleanups easier. One of the
administrative reforms is focused on reducing
oversight where responsible parties are
cooperative and capable.
We Found That
Region 5 project managers ensured that
remedies were being completed in
accordance with the record of decision and
that schedules in settlement agreements
were met. The project managers
accomplished effective oversight by
establishing good working relationships with
the responsible parties. This included open
communication and working through issues
as they occurred, before they turned into
major problems. One way Region 5 could
improve its oversight is by more frequently
using independent quality assurance teams
during construction cleanup.
The impact of the reduced oversight
administrative reform in Region 5 was difficult
to measure because (a) there is not a defined
level of oversight due to the inherent nature
of the oversight process, and (b) the Region
did not compute the cost savings from
reductions in oversight.
As a result, for fiscal years 1996 and 1997,
the Agency could not determine whether the
reform was successful in Region 5. The
reform had only a limited effect on how
Region 5 determined the appropriate level of
oversight at responsible party cleanups. For
fiscal year 1998, the Agency had developed
an evaluation form that, when completed,
may have provided management with the
information it needed to evaluate the impact
of the reform.
We Recommended That
The Acting Regional Administrator, Region 5:
• Require the Superfund Division to
(1) use independent quality
assurance teams for Potentially
Responsible Party lead remedial
design and remedial action sites,
and (2) verify that independent
quality assurance teams are being
used appropriately.
• Ensure that the Superfund Division
annually completes the evaluation
form for sites in the reduced
oversight administrative reform in
order to compute cost savings.
What Action Was Taken
We issued the final report (8100208) to the
Acting Regional Administrator, Region 5, on
August 17, 1998. In response to the draft
report, the Acting Regional Administrator
agreed with the report's recommendations.
Based on this response, we closed the report
in our tracking system.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
23
EPA Accurately Reports
Information on Superfund
Construction Completions
The Superfund program uses construction
completion as an indicator of its progress in
cleaning up sites. At construction completion
EPA has done everything technologically
practicable to clean up a site. However, at
this stage, sites may still require long term
soil or groundwater treatment. Construction
completion only indicates that the remedy is
constructed, operating property, and fully
protective of surrounding residents. At times
EPA has overstated what the construction
completion statistic represents. Such
overstatements can lead to
misunderstandings on the status of the
cleanup of Superfund sites.
We Found That
The sites EPA reported as construction
completion met its established criteria. EPA
had good management controls to ensure the
accuracy of this statistic because of its high
visibility as an indicator of program progress.
As a result, Congress and the public could
rely upon EPA's construction completion
statistics.
While EPA generally accurately
communicated the construction completion
statistic, it had at times portrayed sites where
construction was complete as if (1) all
cleanup work were done, and (2) sites could
be returned to economic use. However, this
was not always the case. As a result, EPA
might have been misinforming Congress and
the public as to status of the cleanup of
Superfund sites.
We Recommended That
The Acting Assistant Administrator for Solid
Waste and Emergency Response issue a
memorandum emphasizing the need to use
the construction completion statistic
accurately in all documents, and not to
overstate what it represents.
What Action Was Taken
The final report (8100030) was issued to the
Acting Assistant Administrator for Solid
Waste and Emergency Response on
December 30,1997. In response to the draft
report, the Acting Assistant Administrator
agreed to issue the memorandum by
June 30, 1998. Based on this response, we
closed the report in our tracking system.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
24
INVESTIGATIVE ACTIVITY
During fiscal 1998, our Superfund
investigative efforts resulted in 6 indictments,
2 convictions, and 26 civil/administrative
actions. Monetary fines, restitution, and
recoveries resulting from investigations
totaled more than $8.9 million. At the end of
fiscal 1998, we had 70 active Superfund
investigations, 35 percent of all active OIG
investigations at EPA.
The OIG Office of Investigations (Ol) is
continuing a major proactive investigative
effort in the Superfund program. TheOI
continues to focus on all stages of the
Superfund program, with a special emphasis
on contracting for removals and remediation.
As a result of Ol proactive efforts in prior
years, we continue to initiate criminal
investigations across the nation. We have
also seen a corresponding increase in the
number of civil cases filed as a result of this
investigative activity. We expect to see a
continued increase in significant civil actions
as Ol's investigative emphasis on major
Agency contracting continues to increase.
We give examples of Superfund investigative
activity with results in fiscal 1998 in the
following synopses.
Corporation Repays $4.3 Million and
Will Forgo $9.6 Million in Repudiated
Claims
IT-Davy Joint Venture, International
Technology Corporation, and Davy-McKee
Corporation (collectively IT-Davy) entered
into a civil settlement in U.S. District Court,
Eastern District of Pennsylvania, to resolve
fraud allegations under the Federal False
Claims Act. The fraud allegations arose out
of IT-Davy's construction of an environmental
cleanup project at the Helen Kramer Landfill
in Mantua, New Jersey. In 1989, the U.S.
Army Corps of Engineers (USAGE), on
behalf of the EPA, contracted with IT-Davy to
perform the site cleanup. As a result of
changes to the project specifications and
certain differing site conditions, the project
was delayed and IT-Davy incurred additional
costs over the original contract price. A joint
investigation by the EPA OIG, the Defense
Criminal Investigative Service, the Defense
Contract Audit Agency, and the U.S. Army
Criminal Investigation Command uncovered
information that IT-Davy had submitted false
claims in connection with'the additional costs
by double charging for certain labor and
equipment costs using a complex accounting
scheme. As a result of the investigation, IT-
Davy agreed to pay $4.3 million to the United
States as part of a global resolution of all
claims under the Helen Kramer Landfill
cleanup contract. Of more than $24 million in
submitted but unpaid claims, the USAGE has
agreed that only $14.5 million in additional
costs were legitimately incurred. Therefore,
the United States realized an additional $9.6
million in cost savings from the repudiated
claims.
CEO Ordered to Pay More than $4.1
Million in Cleanup Costs
On June 26, 1998, the U.S. District Court,
Southern District of New York, issued a civil
judgment ordering Kurt J. Washerman, CEO
of Barrier Industries, Inc. (Barrier), to pay
$4,131,576 plus post-judgment interest for
reimbursement of cleanup costs incurred by
EPA at the Barrier site in Port Jervis, New
York. The order also voided a property
transfer from Kurt Wasserman to Mildred
Wasserman, his wife, rendering the property
available to satisfy the judgment against him
and enjoined him and his wife from
transferring, encumbering, or disposing of
any of his personal or real property.
As a result of an OIG investigation focusing
on property transfers, a civil complaint had
been filed in October 1995 against Barrier,
Kurt Wasserman, Mildred Wasserman, and
others under the CERCLA for recovery of
$3.4 million in expenses incurred by EPA as
a result of the Barrier site cleanup. Kurt
Wasserman and Harvey Scott Wasserman,
his son who served as president, were
responsible for Barrier's business operations.
Barrier, a manufacturer of janitorial
chemicals, maintained and stored hazardous
substances at the Port Jervis site. Earlier, in
December 1997, a partial consent decree
was issued ordering Harvey Scott
Wasserman and his wife, Linda Wasserman,
to pay the government $120,000 as part of
the cleanup costs.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
25
Environmental Testing Contractor to
Pay $250,000 in Civil Settlement
Agreement
On December 17, 1997, the United States
entered into a civil settlement agreement with
National Environmental Testing, Inc. (NET),
and NET Midwest, Inc. (Midwest), a wholly
owned subsidiary of NET. Under the terms
of the agreement, NET will pay $242,499 to
the United States and $7,500 to the relator
(i.e., private plaintiff) in a False Claims Act
qui tarn suit. The criminal investigation
resulting in this settlement was conducted
jointly by the EPA OIG, the Naval Criminal
Investigative Service, the Air Force Office of
Special Investigation, and the Army Criminal
Investigation Command. On July 30, 1996,
the relator filed a complaint in U.S. District
Court for the Northern District of California,
alleging that NET and Midwest violated the
False Claims Act concerning payment by the
government for certain scientific testing and
analytical services provided under their
government contracts and subcontracts.
Between 1989 and May 1995, NET, Midwest,
or both, entered intp contracts with the U.S.
Army Corps of Engineers, the EPA, and one
subcontract with Planning Research
Corporation, Environmental Management,
Inc. (PRC), in connection with a contract
between PRC and the U.S. Navy. Under the
terms of the contracts, Midwest was to test
for the presence of volatile or semi-volatile
organic compounds, or inorganic substances,
in samples provided to them by the
government in connection with environmental
investigation and remediation. The complaint
alleged that Midwest failed to comply with
mandatory testing procedures in the
performance of these tests, and that NET,
Midwest, or both submitted false payment
invoices to the government predicated on full
compliance with the contracts.
Former Contract Lab Supervisor and
Two Lab Operators Plead Guilty to
Fraud
On July 30, 1998, Gene Kong Lee, a former
supervisor at Anlab Analytical Laboratories
(Anlab), a Sacramento company that
specialized in water and wastewater testing,
was indicted in U.S. District Court, Eastern
District of California, on charges that he
falsified test results and filed a false claim of
$10,500 to EPA for payment for the work.
The testing was performed during the
cleanup of a Superfund site in Davis,
California. Lee, a gas chromatography/mass
spectrometry supervisor at Anlab, was
charged with having manipulated the
computer-generated testing data in order to
make the results appear to meet quality
assurance criteria and to avoid performing
quality control measures. Also, Lee was
charged with falsely reporting the sampling
analyses as having been done within
specified holding times when in fact he knew
that this was untrue. On June 3,1998, two
operators at Anlab, Xiaomang Pan and Brett
Huffman Williams, pleaded guilty to
misdemeanor charges of fraudulent demands
against the government and aiding and
abetting for their action in falsifying the
laboratory results by manipulating the data.
On November 19,1998, Lee pleaded guilty to
one count of falsifying laboratory test data.
This investigation was conducted jointly by
the EPA OIG and the EPA Criminal
Investigation Division.
Continuing Results from Methyl
Parathion Investigations
Under the relocation program [funded by the
EPA Superfund and administered locally by
the U.S. Army Corps of Engineers (USAGE)],
EPA pays relocation costs and related
subsistence for residents whose homes have
been contaminated with methyl parathion, a
toxic pesticide licensed for agricultural use
and banned for indoor use. Benefit levels are
based on the number of occupants residing
in the contaminated homes. EPA is also
paying for the contamination cleanup costs.
On November 24, 1997, EPA recovered a
$10,425 overpayment from Juanita Aquart, a
recipient under the Agency's methyl
parathion relocation program. This action
stemmed from Aquart's receiving an
overpayment of relocation benefits after she
failed to nptify either EPA or the USAGE of
the reduction in the size of her household
from nine to three members. Aquart had
received benefits due to the contamination of
her Mississippi home with methyl parathion.
On July 18, 1998, Sandra Lastie and Betty
Morgan, two Louisiana recipients under the
relocation program, were indicted in Criminal
District Court, Parish of Orleans, Louisiana,
on state charges of theft of money by fraud.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998 26
Lastie had previously been arrested on
charges that she was overpaid more than
$2,500 in benefits based on her false
certification that nine occupants lived in her
residence. Morgan had previously been
arrested on charges that she was overpaid
more than $3,000 in benefits based on her
false certification that eight occupants lived in
her residence. Cleanup costs were $60,000
for Lastie's residence and $26,946 for
Morgan's residence. On December 16,
1998, Morgan pleaded guilty in Criminal
District Court, Parish pf Orleans, Louisiana,
to an amended bill of information charging
her with theft of less than $100. She
requested immediate sentencing and was
sentenced to one day in the parish prison
with credit for time served from the date of
her arrest and ordered to pay $500
restitution.
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
27
FISCAL 1998 SUPERFUND REPORTS
Exhibit 1
Page 1of3
Internal and [management Reports
Number Description Date
Reviews Related to Statutory Requirements (other than IG Act)
8400014 RI/FS Review - Oklahoma Refining Co.. OK 3/20/98
Other Performance Audits
8100254 Administrative Reforms Implementation - Region 1 9/29/98
8100091 Brownfields: Potential for Urban Redevelopment 3/27/98
8100030 Construction Completion Reporting 12/30/97
8100223 Environmental Data Quality at Region 9 Removal Sites 9/ 4/98
8100082 Field Sampling Activities in Region 8 - Follow-up 3/25/98
8100208 Oversight of PRP-Lead Remedial Design/Remedial Action - Region 5 8/17/98
8100090 Replacement Housing at Austin Ave. Radiation Site. PA 3/30/98
8100234 State Deferrals: Some Progress, But Concerns Remain 9/10/98
8100206 Superfund Oversight Costs Billing - Region 2 8/13/98
8100259 Superfund Oversight Costs Billing - Region 9 9/30/98
8100240 Superfund Quality Assurance Program Implementation 9/30/98
Advisory and Assistance Reviews
8400032 Administration of PRP Oversight Reform 7/ 8/98
8400015 Remedial Design/Remedial Action Negotiation Time Frames 3/27/98
Allegation Review
8100046 Fiscal 1997 Year-end Enforcement Spending in Region 5 1/23/98
[Cooperative Agreement Reports
1
8300010 Clean Sites. Inc.. VA - Innovative Technologies 2/20/98
8100131 MI Dept. of Environ. Quality-Parsons Chemical & Core Program 5/12/98
8400034 MI Department of Environmental Quality - Advisory on Compliance 7/13/98
8100248 Shoshone-Bannock Tribes. ID - Eastern Michaud Flats Site 9/28/98
8300002 TX Natural Resource Commission - Sikes Disposal Pit Site 127 9/97
interagency Agreement Reports
J
8100002 Agency for Toxic Substances & Disease Registry - Fiscal 1996
8100258 Army Corps of Engineers - Fiscal 1997
10/14/97
9/29/98
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
28
FISCAL 1998 SUPERFUND REPORTS
Exhibit 1
Page 2 of 3
Contract Reports
Brown &
Black &
Fiscal 1994
Fiscal 1995
- 1994
Number Description
Initial Pricing Reviews
8400022 COM Federal Programs Corp.. VA
8100098 Foster Wheeler Environmental Corp.. NJ
8400013 Malcolm Pirnie. Inc.. NY - Response Action Contract - Region 2
8400030 Waste Policy Institute. VA
Incurred Costs
8100216 Aerovironment, Inc.. CA - Research - Fiscal 1997
8100138 Aegeiss Environmental, CO - Tech. Enf. Services - Fiscal 1996
Bechtel National. Inc., CA - 1992 Indirect Costs
Brown & Root Environmental - ARCS Subc. to NUS -
Root Environmental - ARCS Subc. to NUS -
Veatch Special Projects Corp.. MO - ARCS
C&C Johnson & Malholtra. MD - Fiscal 1993-5 - Subcontract
COM Federal Programs Corp.. MA - Fiscal 1995
COM Federal Programs Corp.. VA - Fiscal 1995
Computer Systems Development Corp.. VA - Fiscal 1994
Earth Tech. WI - ARCS - Fiscal Year 1993
Earth Tech. WI - ARCS - Fiscal Year 1994
Earth Tech. WI - ARCS - Fiscal Year 1995
Ebasco Services. Inc.. NJ - ARCS - Fiscal 1996
Inc.. NY - Fiscal 1990
Inc.. NY - Fiscal 1991
Inc.. NY - Fiscal 1992
Fiscal 1993
Management Support, Inc.. MD - Fiscal 1996
Quality Management. Inc.. OH - 1993
Quality Management. Inc.. OH - 1994
Technology. Inc.. VA - ERCS - Fiscal 1993
Technology. Inc.. VA - ERCS - Fiscal 1994
Environmental Corp., NJ - 1994
Date
8100119
8100197
8100196
8100022
8100074
8100199
8100084
8100111
8100041
8100054
8100077
8100246
8100190
8100224
8100260
8100015
8100107
8100081
8100243
8100072
8100184
8100109
8100139
8100171
8100201
8100010
8100210
8100162
8100006
8100143
8100187
8100163
8100186
8100183
8100129
8200004
8100008
8100061
8100255
8100253
Ecology & Environment.
Ecology & Environment.
Ecology & Environment,
EG&G Dynatrend, Inc.
Environmental
Environmental
Environmental
Environmental
Environmental
Foster Wheeler
PA - 1996
Gannett Fleming Environmental Engineering, Inc.
Griffin Services. Inc., GA - Fiscal 1995
Hughes STX Corp.. MD - Fiscal 1993
InfoPro, Inc.. MD - Enforcement Software Support - FY1995
Info. Systems and Solutions Int'l. Inc.. MD - Fiscal 1995-96
Lockheed Environmental, TX - Fiscal 1994
Marasco Newton Group. Ltd.. VA - Mgmt. Support - Fiscal 1996
Morrison Knudsen Corp.. WA - Fiscal 1995
OHM Remediation Services Corp., OH - ERCS - 1996
Roy F. Weston, PA - Fiscal 1995
Roy F. Weston, PA - Fiscal 1996
Scientex Corp. subcontracts to ICF - Fiscal 1993-96
Southwest'Research Institute - Fiscal 1997
Sverdrup Environmental, Inc., MO - ARCS/RAC - 1996
TAMS Consultants. Inc.. NY - ARCS - 1995 Internal Controls
TAMS Consultants, Inc.. NY - ARCS - 1996 Internal Controls
Techlaw, Inc., VA - Enforcement Support - Fiscal 1997
URS Consultant Corp.. WA - Fiscal 1996
4/22/98
4/ 1/98
3/ 9/98
6/ 4/98
9/ /1/98
6/ 2/98
4/30/98
7/29/98
7/29/98
11/20/97
3/ 6/98
8/ 5/98
3/24/98
4/29/98
1/20/98
2/ 6/98
3/10/98
9/25/98
7/29/98
9/ 2/98
9/30/98
ll/ 3/97
4/29/98
3/19/98
9/23/98
3/ 6/98
7/13/98
4/29/98
6/ 2/98
6/16/98
8/ 5/98
10/22/97
8/20/98
6/10/98
10/22/97
6/ 3/98
7/17/98
6/10/98
7/17/98
7/13/98
9/ 1/98
12/ 4/97
10/22/97
2/27/98
9/29/98
9/29/98
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998 29
FISCAL 1998 SUPERFUND REPORTS
Exhibit 1
Page 3 of 3
Contract Reports (continued)
Number Description
Final Audits
8400051 Alliance Technologies. MA -
8100193 Bionetics Corp. VA - Fiscal
COM Federal Programs Corp.,
COM Federal Programs Corp.,
COM Federal Programs Corp..
COM Federal Programs Corp..
8100122
8100124
8100121
8100120
8100148
8100147
8100241
8100155
8100053
8100021
8100018
8100222
8100123
Tech. Enforcement Support-1983-86
1987-1993
VA - ARCS Region 1 - 1989-94
VA - ARCS Region 2 - 1989-94
VA - ARCS Region 4 - 1989-94
. _. r.. VA-ARCS Regions 6/7/8-1989-94
IT Corp.. NJ - Army Corps of Engineers contract delivery order
Morrison Knudsen Corp.. WA - ARCS - Fiscal 1996
OHM Remediation Services Corp.. OH
PRC Env. Management. IL - Technical
Roy F. Weston. PA - ARCS Region 1 -
Roy F. Weston, PA - ARCS Region 4 -
Roy F. Weston. PA - ARCS Region 5 -
Sverdrup Environmental.
Syracuse Research Corp.
Army Corps of Engineers DO
Enforcement Support
1995
1992-94
1992-94
Inc.. MO-Response Action Contract-1996
NY - Fiscal 1994-96
Indirect Costs
8100245 ICF Kaiser International. Inc. - Fiscal 1987
System Surveys
8100205 CET Environmental Services. Inc. - Floorcheck
8100225 CH2M Hill. Inc.. CO - ARCS - Floorcheck
8100154 DPRA. Inc.. KS - Enforcement Support - Accounting System
8100137 Environmental Engineering. CO - Accounting System
8100157 Environmental Engineering. CO - Accounting System
8100095 Environmental Quality Management. Inc.. OH-Floorcheck
8400052 Malcolm Pirnie. Inc.. NY - Floorcheck
8100099 McLaren/Hart Environmental. CA - Subcontract Adjustment
8100226 Morrison Knudsen Corp.. WA - ARCS - Cost Impact
8100188 OHM Remediation Services Corp.. OH - ERCS - Delivery Order
8100170 TAMS Consultants. Inc.. NY - ARCS - Floorcheck
Cost Accounting Standards
8100221 CH2M Hill. Inc.. CO - Cost Accounting Standards 403 and 408
8100220 CH2M Hill. Inc.. CO - Cost Accounting Standards 404 and 405
8100217 CH2M Hill. Inc.. CO - Cost Accounting Standards 406 and 409
Assistance to Agency
8400031 CMC. Inc.. KY - ERCS - Subcontractor to EQMI - Region 5
8400035 Proposed ERRS Subcontractors Accounting Systems - Region 1
8400044 Samsel Services. OH - ERCS - Subcontractor to EQMI - Region 5
Date
9/30/98
7/29/98
4/30/98
4/30/98
4/30/98
4/30/98
6/ 4/98
6/ 4/98
9/23/98
6/ 5/98
21 4/98
11/17/97
ll/ 3/97
9/ 1/98
4/30/98
9/25/98
8/11/98
9/ 4/98
6/ 5/98
5/13/98
6/ 5/98
4/ 1/98
9/30/98
4/22/98
9/ 4/98
7/23/98
6/16/98
9/ 1/98
9/ 1/98
9/ 1/98
6/30/98
7/22/98
9/21/98
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998 30
APPENDIX 1: AVAILABILITY OF REPORTS
Most of the internal and management audit reports we issue are available to the public
upon request. Many of our financial reports contain Confidential Business information and are
not available for full public release.
We make audit reports for which we expect the widest public interest available on the
World Wide Web at . Printed copies of reports may
be requested from:
U.S. Environmental Protection Agency
Office of the Inspector General
Office of Audit (Mail Code 2421)
401 M St., S.W.
Washington, DC 20460
(202)260-1106
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EPA Office of Inspector General Annual Super-fund Report to the Congress for Fiscal 1998 31^
APPENDIX 2: ACRONYMS AND ABBREVIATIONS
ARCS Alternative Remedial Contracting Strategy
CA California
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended
CFO Chief Financial Officer
CO Colorado
Co. Company
Corp. Corporation
Dept. Department
DQO Data quality objectives
Env. Environmental
EPA Environmental Protection Agency (U.S.)
EQMI Environmental Quality Management, Inc.
ERCS Emergency Response Cleanup Services (EPA contracts)
FFMIA Federal Financial Management Improvement Act
FMO Financial Management Office (EPA)
FY Fiscal Year
GA Georgia
ID Idaho
IFMS Integrated Financial Management System (EPA)
IG Inspector General
IL Illinois
Inc. Incorporated
Info. Information
Int'l International
IRM Information resources management
KS Kansas
KY Kentucky
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998 32
Ltd. Limited
MA Massachusetts
MD Maryland
Mgmt. Management
Ml Michigan
MO Missouri
NCR National Oil and Hazardous Substances Contingency Plan, 40 CFR Part 300
NET National Environmental Testing, Inc.
NJ New Jersey
NPL National Priorities List
NY New York
OECA Office of Enforcement and Compliance Assurance (EPA)
OH Ohio
Ol Office of Investigations (EPA OIG)
OIG Office of the Inspector General
OK Oklahoma
OMB Office of Management and Budget
ORD Office of Research and Development (ORD)
OSRE Office of Site Remediation Enforcement (OECA)
PA Pennsylvania
PRC Planning Research Corporation
PRP Potentially Responsible Party
QA Quality assurance
QAPP Quality Assurance Project Plan
RAC Response Action Contract (EPA)
RD/RA Remedial design/remedial action
RI/FS Remedial Investigation/Feasibility Study
RP Responsible party
RPM Regional Project Manager (EPA)
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EPA Office of Inspector General Annual Superfund Report to the Congress for Fiscal 1998
33
SARA
Subc.
Tech.
TX
UAO
U.S.
USAGE
U.S.C.
VA
WA
Wl
Superfund Amendments and Reauthorization Act of 1986
Subcontract or subcontractor
Technical
Texas
Unilateral Administrative Order
United States
U.S. Army Corps of Engineers
United States Code
Virginia
Washington
Wisconsin
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