EPA-350-R 08-003
May 2008
OFFICE OF INSPECTOR GENERAL
Semiannual Report to Congress
October 1, 2007 - March 31, 2008
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EPA Inspector General
Vision
The Inspector General Act of 1978, as amended, requires the Inspector General to
(1) conduct and supervise audits and investigations relating to programs and operations of
the Agency; (2) provide leadership and coordination, and make recommendations
designed to (a) promote economy, efficiency, and effectiveness; and (b) fully inform the
Administrator and the Congress about problems and deficiencies identified by the Office
of Inspector General relating to Agency programs and operations.
We are catalysts for improving the quality of the environment and Government through
problem prevention and identification, and cooperative solutions.
Mission
Add value by promoting economy, efficiency, and effectiveness within EPA and the
delivery of environmental programs. Inspire public confidence by preventing and
detecting fraud, waste, and abuse in Agency operations and protecting the integrity of
EPA programs.
To find out more about the U.S. Environmental Protection Agency
Office of Inspector General and its activities, visit our Website at:
http://www.epa.gov/oig
Cover photos: From left: Setting up for air sampling during an emergency response at Capitol Hill
following the 2001 anthrax attacks in Washington, DC (EPA photo); a couple of children
drinking water (EPA photo); and work being done at a petroleum refinery, an industry for
which we reviewed air standards (photo courtesy U.S. Department of Energy).
Printed on 100% recycled paper (minimum 50% postconsumer)
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Message to Congress
The Office of Inspector General (OIG) of the U.S. Environmental Protection Agency
(EPA) continues to make significant improvements in the quality and timeliness of its
products. An evaluation of the Fiscal Year (FY) 2007 performance measures for the OIG
indicated positive trends in a number of key areas. We decreased the time it took to issue
a final report by 22 percent. Further, the average cost of an OIG report decreased by
5.4 percent. Other quality measures showed a 30-percent improvement. Quality
products increase the likelihood of the Agency accepting our recommendations for
operating more efficiently and better protecting the environment.
On December 4, 2007, we established, in coordination with the Agency, an improved
audit resolution process. In addition to appealing to the Audit Resolution Board, a final
appeal can now go directly to the Deputy Administrator.
For FY 2008, our budget was increased by $7.4 million, and we have been working to
increase our staffing levels as directed by Congress. Difficulties in the hiring process
have hindered our efforts. Of the 62 total staffing actions initiated during the first half of
FY 2008, only 6 new staff members had come on board as of March 31, 2008. An
additional 56 staffing actions are in various stages of the recruitment and selection
process. As a result of this staffing gap, there will likely be additional FY 2008 carryover
funds into FY 2009.
During the semiannual period, we conducted many reviews focusing on how well EPA
has been protecting the environment. We also noted nearly $25 million in potential
monetary benefits.
EPA earned an unqualified opinion on its FY 2007 financial statements. However, in
evaluating internal controls, we noted seven significant deficiencies, and improving the
recording and accounting of accounts receivable could result in $13.5 million in cost
efficiencies. We performed quick reaction reviews of five Special Appropriation Act
Project grants, and noted $2.6 million in ineligible costs claimed. Also, for grants
involving U.S.-Mexico border water projects, we found that EPA was awarding funds for
construction years before the actual construction was to begin. If EPA does not take
action, Federal funds will continue to be unspent for several years rather than addressing
immediate environmental needs.
A joint investigation with several other organizations resulted in convictions of several
U.S. Virgin Island officials involved with a $1.4 million bribery and kickback scheme.
As a result of another investigation, a Florida company was ordered to pay $1.86 million
in restitution stemming from a scheme to sell unnecessary water treatment systems. In
another case, a company was sentenced for violating the Clean Water Act for
inappropriately discharging waste into storm drains leading to a creek.
EPA regions recovered 56 percent of the total Superfund costs from sites we reviewed,
but can recover more. EPA has recovered $165 million of the $294 million Superfund
costs reviewed. However, EPA determined that it will not attempt to collect between
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$30 million and $90 million of the remaining $129 million. EPA needs to improve its
efforts in this area.
In response to a congressional request, we examined the progress wastewater treatment
facilities made in meeting 2010 goals for reducing nutrients in the Chesapeake Bay
watershed. We found that goals may not be met if key facilities are not upgraded in time.
We recommended that EPA work with States to establish interim construction milestones
for priority facilities.
This semiannual report includes details on these and other issues. We will continue to
work with both the Agency and Congress, as we pursue a common goal of safeguarding
human health and improving the environment.
Bill A. Roderick
Deputy Inspector General
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Table of Contents
OIG Management's Focus 1
Measuring Quality of OIG Reports Has Helped Improve Effectiveness 1
Audit Resolution Appeal Process Improved 2
OIG Budget Boost Initiates Staffing Increases 2
Agency Has Agreed to Make Improvements as a Result of OIG Work 3
Congressional Requests Addressed 4
Significant OIG Activity 5
Air 5
Water 7
Superfund/Land 9
Grants 11
Contracts 15
Financial Management 16
Public Liaison 18
Investigations 19
Testimony 22
Chemical Safety and Hazard Investigation Board 23
Other Activities 24
Statistical Data 29
Profile of Activities and Results 29
Audit Report Resolution 30
Summary of Investigative Results 32
Scoreboard of Results 33
Appendices 34
1 - Reports Issued 34
2 - Reports Issued Without Management Decisions 37
3 - Reports with Corrective Action Not Completed 62
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Index of Reporting Requirements
Inspector General Act of 1978, as Amended
Requirement Subject Pages
Section 4(a)(2) Review of legislation and regulations 26-27
Section 5(a)(1) Significant problems, abuses, and deficiencies 5-21
Section 5(a)(2) Significant recommendations for corrective action 5-17
Section 5(a)(3) Reports with corrective actions not completed 4, 27, 62-63
Section 5(a)(4) Matters referred to prosecutive authorities 19-21,29, 32
Section 5(a)(5) Information or assistance refused None
Section 5(a)(6) List of reports issued 34-36
Section 5(a)(7) Summaries of significant reports 5-17
Section 5(a)(8) Audit reports - questioned costs 29-31,33-36
Section 5(a)(9) Audit reports-funds to be put to better use 29-31,33-36
Section 5(a)(10) Prior audit reports unresolved 30-31, 37-61
Section 5(a)(11) Significant revised management decisions None
Section 5(a)(12) Significant management decisions with which OIG disagreed None
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OIG Management's Focus
Measuring Quality of OIG Reports Has Helped Improve Effectiveness
During Fiscal Year (FY) 2007, the U.S. Environmental Protection Agency (EPA) Office
of Inspector General (OIG) made noteworthy improvements in the timeliness, quality,
and impact of its reports, according to a report published by the OIG in February 2008.
Many of these improvements were a result of the OIG's measuring its own performance
and then taking necessary actions, and the improvements have been continuing in
FY 2008. Measuring the quality of work is important because it provides data that can be
used to identify and then focus on areas in which processes can be improved.
The measures indicated significant improvements in the area of timeliness during
FY 2007. The number of days from the kickoff date of a project to the date a final report
was published decreased from an average of 426 days for the first quarter to 332 days for
the fourth quarter. That represents a 22-percent decrease in time to issue a final report.
As the Government Auditing Standards note, it is important to provide review results to
officials in a timely manner.
In part, these timeliness statistics were impacted by the OIG starting to produce quick
reaction and early warning reports during the fiscal year. In the current semiannual
reporting period ending March 31, 2008, the OIG issued five quick reaction reports that
focused on reviews of costs claimed for specific Special Appropriation Act Project grants.
These five reports noted $2.6 million in potential savings; details are provided later in this
semiannual report.
Further, teams' efforts to meet the quality characteristics in the OIG quality scorecard
improved as the year progressed. The average project score increased from 19.2 in the
first quarter to 25.0 in the fourth quarter of FY 2007, a 30-percent increase. The
scorecard that the OIG used is designed to objectively evaluate the work leading up to the
preparation of a report. The scorecard evaluates the adequacy of the evidence gathered in
preparing the report, as well as supervision, planning, significance of findings, readability
of reports, and timeliness. Also, for FY 2006, the OIG had received an "unmodified"
(clean) opinion based upon an independent peer review of OIG work regarding
compliance with generally accepted government auditing standards.
The average cost of an OIG report (excluding the audit of the Agency's financial
statements) also decreased during FY 2007, from $333,000 in the first quarter to
$315,000 in the fourth quarter, a 5.4-percent decrease. Improvements in such areas as
timeliness had a direct bearing on reducing costs.
Adhering to the quality assurance characteristics helps to ensure a high percentage of
OIG recommendations are accepted by the Agency and thus helps EPA operate more
efficiently and better protect the environment.
Our complete report, Measuring the Quality of Office of Inspector General Reports
Issued in Fiscal Year 2007 (Report No. 08-A-0081, issued February 12, 2008) can be
viewed at http://www.epa.gov/oig/reports/2008/20080212-08-A-0081.pdf
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Audit Resolution Appeal Process Improved
On December 4, 2007, the OIG, in coordination with the Agency, established an
improved audit resolution appeal process that allows an appeal to go directly to the
Deputy Administrator. The EPA's Audit Management Process Manual, 2750 CHG 2
(Dec. 1998), governs the resolution of disputes between the OIG and an Agency
component that arise from OIG reports. The manual establishes an Audit Resolution
Board composed of the Chief Financial Officer, EPA General Counsel, and a Regional
Administrator or Assistant Administrator not involved in the audit, to "... issue decisions
on audit resolution." The OIG proposed that there be a final appeal right to the Deputy
Administrator, and the Administrator authorized this change on an interim basis.
OIG Budget Boost Initiates Staffing Increases
The Consolidated Appropriations Act for 2008, passed by Congress and signed by the
President in December 2007, provided $52.6 million (after a 1.56-percent across-the-
board rescission) for the EPA OIG for FY 2008. This amount represents an increase of
$7.4 million over the President's budget request.
As directed by Congress during the FY 2008 appropriations process, the OIG has been
working to increase its staffing levels. Difficulties in the hiring process have hindered
the OIG's efforts to do so as quickly as anticipated. For that reason, the OIG is seeking
contractor assistance to help expedite its hiring efforts to planned levels by the end of
FY2008.
Of the 62 total staffing actions initiated during FY 2008 based on the additional funding,
only 6 new staff members had come on board as of March 31, 2008. An additional
56 staffing actions are in various stages of the recruitment and selection process. As a
result of this staffing gap, there will likely be additional FY 2008 carryover funds into
2009. The OIG will use these carryover funds to support the increased staffing level in
FY 2009, realized from the actions initiated during FY 2008. The OIG is also applying
available funds to contract work for expert services in support of the OIG's audit,
program evaluation, and investigative mission.
As mentioned in the OIG's previous semiannual report, the FY 2008 President's Budget
contained a transfer of responsibility for funding contract audit work performed by the
Defense Contract Audit Agency from the OIG to EPA's Office of Administration and
Resources Management. To assist in the transition, the OIG has funded Defense Contract
Audit Agency work in the amount of $1.8 million for FY 2008.
Following is a table that summarizes the OIG actual and projected resource levels for the
period FYs 2000 though 2008. As noted above, a lag in the hiring process created a gap
between the funding and staffing levels, which was significant and could not be
anticipated because of the late date the Continuing Resolution enacted by Congress
became effective. The carryover funds resulting from the gap will be required to fully
fund the total staffing level in FY 2009.
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Historical Budget and Manpower Summary
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Enacted Budget
(after rescissions
where applicable)
$43,379,700
$45,493,700
$45,886,000
$48,425,200
$50,422,800
$50,542,400
$50,241,000
$50,459,000
$52,585,000
to be determined
On-Board Staff
(as of October 1 )
340
351
354
348
363
365
350
326
290
349**
Expenditures
(includes carryover)
$39,384,100
$41,050,807
$45,238,608
$46,023,048
$52,212,862
$61,733,781
$49,583,584
$48,658,217
$50,320,000*
$57,500,000*
* projected ** target
Sources: OIG archives and analysis and EPA Integrated Financial Management System.
Agency Has Agreed to Make Improvements as a Result of OIG Work
During this reporting period, EPA agreed to take many actions as a result of OIG work.
The following actions related to the OIG's two external goals; further details on each are
provided throughout this semiannual report.
To contribute to improved human health and environmental quality:
• EPA agreed to work more closely with States to establish interim construction
milestones for upgrading wastewater treatment facilities in the Chesapeake Bay
watershed.
• EPA agreed to revise its Emergency Response Business Plan for responding to
national-level incidents to be better prepared in the event of an attack or an
emergency.
• Our followup review on five prior air-related reports found that EPA had
generally taken needed corrective actions; EPA will review its Management
Audit Tracking System to improve the system's accuracy.
• EPA agreed to take additional steps to improve its Indian General Assistance
Program by developing and implementing an overall framework for improving
tribal capacity for operating environmental programs.
To improve EPA's management, accountability, and program operations:
• EPA Region 8 reclassified approximately $3 million remaining in special
accounts that were no longer needed for the Portland Cement Superfund site, and
agreed to reclassify as much as $5 million more, which will result in up to
$8 million being available to support other Superfund work.
• EPA has deobligated nearly $7.3 million from Superfund cooperative agreements
for four of the six sites in New York and New Jersey that we had cited in a prior
report as needing deobligation out of about $9.6 million.
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• EPA is looking into savings of up to $2.6 million in Special Appropriation Act
Project grant funds for five different grants.
• EPA has agreed to bill two Superfund sites about $1.8 million to recover EPA's
cleanup costs from responsible parties.
• EPA continues to move away from using Cost-Plus-Award-Fee contracts, which
provide monetary awards to contractors.
It should be noted that improvements resulting in potential monetary benefits result in
more funds being available to contribute to improved human health and environmental
quality.
Congressional Requests Addressed
During the semiannual period, the OIG performed several reviews specifically requested
by Congress.
On December 7, 2007, the House Committee on Oversight and Government Reform
requested the EPA OIG to provide a list of recommendations made by the OIG that had
not been implemented by Agency officials or Congress, as well as summary information
on each recommendation and the status. On February 29, 2008, the OIG provided the
committee with details on significant unimplemented recommendations from 26 reports.
OIG determined that these recommendations were significant because they could have a
material impact on the economy, efficiency, effectiveness, or integrity of EPA programs
and operations. We issued our findings more formally in the Congressionally Requested
Report on Office of Inspector General Unimplemented Recommendations (08-P-0123),
issued on March 31, 2008.
Stemming from that congressional request, the OIG has recently undertaken a project to
verify and report on the status of Agency actions taken in response to OIG
recommendations. This fiscal year, we plan to begin providing inventory reports to EPA
senior management on the status of recommendations from selected OIG reports. Also,
during our recent followup-related work, we identified issues in the followup process
used by the OIG and EPA that we plan to address in subsequent reviews.
As part of a 2005 request from a U.S. Senator seeking information on various issues
regarding progress in cleaning up the Chesapeake Bay watershed, we looked at the
impact of wastewater treatment facilities on the watershed. These facilities risk not
meeting the 2010 goal for nutrient reductions. Although EPA and its State partners have
taken a number of steps to lay the foundation for achieving the 2010 wastewater
treatment goals, more needs to be done. Further details are on page 7. In response to the
2005 request, we previously issued reports related to agricultural, air deposition, and
developed land issues. These reports can be found at
http: //www .epa. gov/oig/reports/che sapeake .htm.
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Significant OIG Activity
Helping to make air safe and healthy to breathe.
Improvements Needed in Air Toxics Emissions Data Used for
Assessments
EPA's National Emissions Inventory (NEI) data indicate an overall decline in air
toxics emissions, and we believe implementing maximum achievable control
technology (MACT) standards played a role. The quality of EPA's air toxics
inventory data has taken on increased importance with EPA's decision to rely on
NEI data to conduct residual risk assessments. To better assess remaining
public health risk from MACT sources, EPA should improve the reliability of its
NEI data.
EPA has issued 96 MACT standards covering 174 categories of industrial sources of air
toxics. EPA completed the last standards in 2004. Standards are for such industries as
petroleum refining, aluminum production, and pulp and paper. Now, EPA must assess
the remaining, or residual, public health risk for each MACT standard. Residual risk
assessments require accurate facility-specific emission
data in order for EPA to determine the public health risk
resulting from exposure to air toxics.
While EPA plans to use NEI data to assess the remaining
public health risks from MACT sources of air toxics
emissions, the reliability of NEI data for site-specific
emissions varies considerably. EPA has not established
objectives to define an acceptable level of quality for NEI
data used in the residual risk process. Given these
uncertainties, EPA could over- or under-estimate public
health risk. Over-estimating could result in regulations on
industries that are not cost beneficial. Under-estimating
could result in EPA regulations not sufficiently protecting
public health.
In June 2007, EPA's Science Advisory Board
recommended several actions to improve the residual risk
assessment process. These included developing a
framework for improving the NEI data and analyzing the
impact of data uncertainty on risk assessments. EPA has
sought public comment on the framework for improving
NEI data.
In our report, we recommended that EPA develop data
quality objectives for using NEI data in conducting
residual risk assessments, and establish requirements for
State reporting of air toxics emissions data. EPA agreed
Work being done at a petroleum refinery, an
industry for which we reviewed MACT standards
(photo courtesy U.S. Department of Energy).
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to document its current planning process for residual risk assessments to show that it is
equivalent to the data quality objectives process. EPA did not agree to establish air toxics
reporting requirements. We do not believe that voluntary reporting provides reasonable
assurance that the NEI data are reliable and accurate.
(Report No. 08-P-0020, Improvements in Air Toxics Emissions Data Needed to Conduct
Residual Risk Assessments, October 31, 2007 - Report Cost: $1,288,566)
Corrective Actions on Air-Related Audit Reports Generally Taken,
But Better Documentation Needed
EPA's Office of Air and Radiation generally took corrective actions to implement
recommendations for five air-related reports reviewed, but documentation on
actions taken was incomplete.
Audit followup is essential to good management and improving the efficiency and
effectiveness of EPA programs and operations. EPA is required to report to Congress on
audit followup. For five air-related OIG audits, EPA's documented evidence of
completion of agreed-to corrective actions was in the files for only 1 of 29 corrective
actions. Further review found that corrective actions had been completed for 26 of the 29
agreed-to recommendations that we reviewed, but for the remaining 3, corrective action
had not been implemented within 1 year as required.
EPA's Management Audit Tracking System was incomplete and contained mistakes for
16 of the 29 agreed-to corrective actions reviewed. Prior to issuing our report, EPA
updated its tracking system to correct the errors and omissions we noted.
We recommended that EPA biannually review audit management information for
accuracy and completeness, complete the certification progress for closing out reports,
and maintain a list of specific corrective actions taken. We also recommended that EPA
ensure that newly appointed audit followup coordinators receive audit management
training before they take over the position's roles and responsibilities. EPA concurred
with our recommendations.
(Report No. 08-P-0080, EPA 's Office of Air and Radiation Needs to Improve Compliance
with Audit Followup Process, February 12, 2008 - Report Cost: $142,924)
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Water
Ensuring that drinking water is safe and sources are protected.
Oversight of Wastewater Upgrades in Chesapeake Bay Watershed
Needs Improvement
Wastewater treatment facilities in the Chesapeake Bay watershed risk not
meeting the 2010 goal for nutrient reductions if key facilities are not upgraded in
time.
As part of our response to a request from a U.S. Senator to look into EPA efforts to clean
up the Chesapeake Bay, we looked at progress in controlling discharges from wastewater
treatment facilities. Such facilities are responsible for approximately 20 percent of
nutrient discharges into the Bay. Of this amount, the 483 largest "significant" facilities
account for 95 percent of the nutrient discharges.
EPA and its State partners have taken a
number of steps to lay the foundation for
achieving the 2010 wastewater nutrient
reduction goals. However, States need to
finish adding nutrient limits to the
permits, and the facilities will need to
make significant reductions before 2010.
Even after these reductions are achieved,
it will be crucial to maintain the
established reductions. Significant
challenges include generating sufficient
funding and addressing continuing
population growth.
We recommended that EPA work with
States to establish interim construction
milestones for priority facilities, monitor
milestone and financial funding progress
for these facilities, and continue efforts in
developing effective and credible water
quality trading programs. EPA
concurred with our recommendations and estimated that wastewater facilities will come
close to achieving the nutrient reduction goals in 2010. EPA's estimate was based on
new information that we were not able to evaluate during our review.
(Report No. 08-P-0049, Despite Progress, EPA Needs to Improve Oversight of
Wastewater Upgrades in the Chesapeake Bay Watershed, January 8, 2008 - Report Cost:
$571,638)
The Blue Plains Wastewater Treatment Plant in Washington, DC,
a major treatment facility within the Chesapeake Bay watershed
(photo courtesy District of Columbia Water and Sewer Authority).
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EPA Addressing Drinking Water Issues Raised by OIG
EPA is addressing all of the evaluation report recommendations that we made
from September 2003 to May 2007 regarding EPA's drinking water program.
EPA oversees implementing the Safe Drinking Water Act for the
Nation's 156,000 public water systems. We found that significant
developments occurred in many areas since 2003. These included
such areas as rule and performance measure developments, drinking
water security, source water protection, capacity development,
sustainable infrastructure, underground injection control, logic
model development, State oversight, and analytical methods
development.
Still, the drinking water program faces many challenges, notably
limited resources, emerging contaminants and new regulations, and
system security issues. We suggested future evaluations in several
areas to allow EPA to (1) determine how well its programs are
working and (2) more efficiently use its resources. Priority should
be given to water security-response capability, chemical security at
drinking water facilities, variances/exemptions and waivers,
effectiveness of Agency funding, and the contaminant selection
process. We suggested several areas in which future evaluations
would be beneficial, but did not make any recommendations.
(Report No. 08-P-0120, Summary of Recent Developments in
EPA 's Drinking Water Program and Areas for Additional Focus,
March 31, 2008 - Report Cost: $260,084)
A couple of children drinking water;
we looked into additional EPA
challenges regarding drinking water
(EPA photo).
For details on additional water issues, please refer to:
• Page 11, "Reviews of Special Appropriation Act Project Grants Note Potential Savings."
• Page 12, "Managing Grants for U.S.-Mexico Border Water Projects Needs Improvement."
• Page 20, "Florida Company Ordered to Pay $1,863,264 in Restitution."
• Page 20, "Printing Company Sentenced for Making False Statements."
• Page 21, "Company Sentenced for Violating the Clean Water Act."
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Superfund/Land
Improving waste management and cleanup.
EPA Can Recover More Superfund Money
EPA regions have recovered 56 percent of the total Superfund costs from sites
we reviewed, and can recover more.
EPA regions have recovered $165 million of $294 million of the total Superfund costs
from sites we reviewed. Potentially responsible parties at these sites have generally paid
what they have been billed. EPA has not collected as much as $129 million (44 percent),
and has determined that it will not attempt to recover between $30 million and
$90 million of this amount. This indicates a potentially significant breakdown in controls
over Superfund cost recovery.
Regions generally use similar billing processes to recover their Superfund costs from
private parties, but we found some exceptions. For example, we found that two EPA
regions discovered they should have billed two sites about $1.8 million, but did not.
These costs are now being billed. One EPA region did not include about $8 million in a
negotiated settlement for a site because the costs were incorrectly assigned to another site.
We recommended that EPA (1) enhance cost recovery guidance for all the regions,
(2) implement mechanisms to determine how efficiently it is recovering site costs, and
(3) implement performance measures to track how efficiently it is recovering these costs.
EPA concurred with all recommendations.
(Report No. 08-P-0116, EPA Can Recover More Federal Superfund Money, March 26,
2008 - Report Cost: $478,784)
EPA Can Better Use Nearly $8 Million from Utah Site's
Superfund Special Accounts
Region 8 can reclassify, or transfer to the Superfund Trust Fund, nearly $8 million
from the special accounts for the Portland Cement site in Salt Lake City, Utah.
Construction was complete at the site in September 2006. The Region had said there
would be minimal but undetermined future costs for site maintenance, to be paid from an
$8.5 million balance. However, the Region did not timely review, reclassify, or transfer
any of these funds because the Region considered doing so a low priority.
After receiving our draft "Early Warning" report in February 2008, Region 8 reclassified
approximately $3 million from the Portland Cement special accounts. The Region said
these funds will be used for cleanup needs at the Libby Superfund site in Montana and
Superfund records center site-specific work. The Region documented its plans to
reclassify some portion of the remaining special account balance (about $5 million) after
it determines the amount of funds it will reimburse the State of Utah. Had Region 8 more
timely reclassified these special account funds, cleanup needs at other sites that receive
Trust Fund appropriations may have been met sooner. After the Region reclassifies the
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special account funds reviewed, more funds will be available to support other Superfund
priorities.
We also found that Region 8 can reclassify, or transfer to the Trust Fund, approximately
$16,000 from special accounts for four other sites.
EPA agreed with our recommendations to reclassify or transfer the $8 million from the
Portland Cement special accounts and the approximately $16,000 from special accounts
for four other sites.
(Report No. 08-P-0102, Making Better Use of Superfund Special Accounts in Region 8,
March 17, 2008 - Report cost part of overall report to follow)
EPA's National Emergency Response Planning Needs Improvement
EPA's Emergency Response Business Plan for responding to national-level
incidents needs improvement.
EPA developed the plan in 2006 as the framework for responding to national-level
incidents while maintaining an effective day-to-day emergency response and removal
program. The plan involves EPA's resource needs to respond to three different national
emergency scenarios (involving various combinations of radiological, biological, and
chemical attacks).
EPA's plan did not disclose the basis for EPA's resource estimates. EPA management
stated they did not consider State and local resources in their resource estimates because
they believed they would be working with the affected
State and local governments in a unified command
structure.
The plan does not satisfy EPA's need for a framework to
respond to incidents of national significance. Assumptions
are undocumented, resource requirements unsupported, and
internal and external coordination of response planning
minimal. The plan may focus EPA's preparation on the
wrong resource allocations, leaving the Agency unprepared.
EPA intends to address some of these issues as the plan is
revised; the plan is evolving as EPA continues to make
progress and improvements.
Setting up for air sampling at Capitol Hill
following the 2001 anthrax attacks in
Washington, DC (EPA photo).
We recommended that EPA revise the plan to incorporate
methodology and assumptions used, the rationale for selecting
incidents of national significance, lessons learned from past incidents, logistics of resource
deployment, and risk communications. EPA concurred with our recommendations.
(Report No. 08-P-0055, EPA Should Continue to Improve Its National Emergency
Response Planning, January 9, 2008 - Report Cost: $136,702)
For details on an additional land issue, please refer to page 17, "EPA Deobligates
Nearly $7.3 Million Cited in Prior Audit Report."
10
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Grants
Improving EPA's use of assistance agreements.
Reviews of Special Appropriation Act Project Grants Note
Potential Savings
At the request of the EPA Office of Water, we initiated reviews of costs claimed
under Special Appropriation Act Project grants, and noted various instances of
ineligible costs claimed.
Since 1992, EPA has awarded over 5,000 Special Appropriation Act Project grants,
totaling over $5 billion, based on congressional earmarks. EPA awarded these grants to
State and local governments and quasi-governmental agencies (such as water
improvement districts) to assist in planning, designing, and constructing wastewater and
drinking water facilities.
Starting in FY 2007, we began reviewing selected Special Appropriation Act Project grants
awarded in Regions 2, 5, 8, and 9. To date, we have identified $3,456,277 in ineligible and
questioned costs claimed that can be recovered, including $2,603,458 identified in reports
published during the semiannual reporting period ending March 31, 2008. Specifically, we
identified the following during the latest semiannual reporting period:
• The City of Bad Axe, Michigan, purchased two parcels of land totaling $51,297
without obtaining prior approval as required by Federal regulations. The grantee
also paid an engineering firm $211,143 to design a water treatment facility but
did not use the design. As a result, EPA needed to recover $262,440. Region 5
issued a preliminary determination letter to the grantee on April 9, 2008,
reinstating the cost of the land because it was necessary and reasonable for the
project. Region 5 agreed with the OIG's conclusion that the engineering costs
were not necessary. (Report No. 08-2-0095, City of Bad Axe, Michigan-
Unallowable Costs Claimed Under EPA Grant XP98578301, February 27, 2008
-ReportCost: $73,616)
• The Borough of Carteret, New Jersey, did not meet the Federal requirements
for financial management systems. Based on directions from EPA, the grantee
claimed $1,360,429 in costs for reimbursement for work that was not within the
scope of the original project.
The grantee also claimed up to
$214,962 in unallowable pre-
award costs. The grantee
incurred additional project costs
that EPA has not reviewed for
eligibility that could have been
claimed. (Report No. 08-2-0084,
Borough of Carteret, New Jersey
- Unallowable Costs Claimed
Under EPA GrantXP98247001,
Februarv 20 2008 - Renort Stormwater holding pond at the Hill District
reoruaryzv zvva nepon Stormwater Pumping Station in Carteret (EPA OIG
Cost: $51,628) photo)
11
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• The City of Elizabeth, New Jersey, claimed and was reimbursed under its Clean
Water State Revolving Fund loan for $335,232 in excess of actual costs incurred.
The grantee initially paid for all project construction costs using its internal
service funds, and was reimbursed with draws from either State loans or the EPA
grant. The grantee did not associate all reimbursements with contract invoice
payments. As part of audit resolution, the grantee submitted documentation of
additional eligible expenses that Region 2 accepted. (Report No. 08-2-0062, City
of Elizabeth, New Jersey - Excess Clean Water State Revolving Funds Claimed,
January 23, 2008 - Report Cost: $38,479)
• The Wayne County (New York) Water and Sewer Authority claimed and was
reimbursed for preaward costs that are unallowable under Federal regulations as
well as grant terms and conditions. As a result, EPA will need to recover
$151,947 under Grant No. XP98247201. Also, the grantee's financial
management system does not provide accurate information to ensure costs are
claimed in accordance with Federal regulations. (Report No. 08-2-0045,
Unallowable Federal Funds Drawn on EPA Grant No. XP98247201 Awarded to
the Wayne County Water and Sewer Authority, New York, December 17, 2007 -
Report Cost: $44,093)
• The Village of Laurelville, Ohio, did not maintain an acceptable financial
management system in accordance with Federal regulations to support $278,448
in drawdown requests submitted to EPA. Invoices provided either did not
reconcile to the drawdown spreadsheets or included costs that were not
allowable. Further, of the total amount, $207,476 was also not allowable because
it was associated with pre-award expenses, repayment of a loan and interest, a
garage extension, office and maintenance equipment, and consultant fees.
We also questioned $5,018 of the overall amount claimed for an ultraviolet
disinfection system that was not installed. Region 5 issued a final determination
letter on March 28, 2008, agreeing with the audit and requesting repayment of
$278,448 (Report No. 08-2-0039, Village of Laurelville, Ohio-Unallowable
Costs Claimed Under EPA Grant XP97579701, Decembers, 2007 - Report
Cost: $79,582)
We plan to continue auditing Special Appropriation Act Project grants.
Managing Grants for U.S.-Mexico Border Water Projects
Needs Improvement
Construction at the Nogales International Wastewater
Treatment Plant in Rio Rico, Arizona (EPA photo).
While EPA has been improving
management of grant funds for
U.S.-Mexico border water projects, EPA
needs to make more changes.
The U.S.-Mexico border region extends more
than 2,000 miles from the Gulf of Mexico to
the Pacific Ocean, and over 60 miles on each
side of the international boundary line.
Many heavily populated unincorporated areas
along this border lack adequate sanitation and
12
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CAltfOXHIA
TfUW*
8AJA
CALIFORNIA
sun
GUfOf
CAi.'rCPVA
A map of the U.S.-Mexico border region (EPA map).
drinking water services. Outhouses are often the only available means of sewage
disposal. Pollutants from both countries contaminate shared waters due to inadequate
sewage treatment. EPA's Border Program focuses on developing infrastructure to deliver
safe drinking water and treat wastewater.
In FYs 2005 and 2006, EPA awarded $35.1 million to the North American Development
Bank to construct border projects that could not be built until they were planned and
designed, which takes about 2 years. Since 1998, the bank has accumulated an
unliquidated balance of $233 million by EPA awarding construction grants before design
was complete. EPA managers said they provided grant funds in advance to ensure funds
were available after planning was completed. If this process continues, between $34 and
$57 million of the funds Congress appropriated for the program in FYs 2007 and 2008
will not be needed until at least FY 2010.
Also, work plans for grants did not always include specific projects, measures,
milestones, or costs associated with projects. When EPA awards grants with incomplete
work plans, an overall reduction in accountability results. In January 2008, subsequent to
completion of our field work, Regions 6 and 9 began including the additional required
information in their grant work plans.
We recommended that EPA require project planning and design be completed before
awarding grant funds for construction. We also recommended that EPA develop a plan
to fund other projects with the unobligated funds, and prepare work plans that contain
required information. Although EPA generally concurred with our recommendations, it
expressed reservations about being able to make the changes without the agreement of all
program partners, including the Mexican government, U.S. States, and U.S. Department
of Agriculture.
13
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(Report No. 08-P-0121, Improvements Needed to Ensure Grant Funds for U.S.-Mexico
Border Water Infrastructure Program Are Spent More Timely, March 31, 2008 -
Report Cost: $417,493)
Development of Tribal Capacity Needed in the Indian General
Assistance Program
Indian General Assistance Program (IGAP) grants are supposed to help tribes
develop environmental programs; over 70 percent of tribes have met at least one
of EPA's strategic goals for improving human health and the environment in
Indian country. However, only 12 percent of tribes are implementing Federal
environmental programs.
Since 1992, EPA has awarded $455 million in IGAP funds. But many tribes have not
developed long-term plans that describe how they will build environmental capacity to
operate their environmental programs.
For tribes that do have plans and long-
term goals, EPA has not tracked
progress against the plans and goals.
Of 27 reviewed tribes that have
received funding for more than
5 years, 6 had activities limited to
outreach, training, and meetings;
how the activities will lead to their
ability to implement environmental
programs is unclear. EPA has not
provided a framework for tribes to
follow or adapt in order to develop
their capacity to implement
environmental programs. As a result,
it is not clear whether IGAP funding
will result in tribes being able to
operate their own environmental
programs.
EPA Tribal
Portal logo
(courtesy EPA).
We recommended that EPA develop and implement an overall framework for achieving
capacity, take various steps to improve tribes' environmental planning, and revise how
IGAP funding is distributed to tribes. EPA concurred with our recommendations, stating
that the American Indian Environmental Office is committed to evaluating the IGAP
program and incorporating new ways to improve the program's effectiveness.
(Report No. 08-P-0083, Framework for Developing Tribal Capacity Needed in the Indian
General Assistance Program, February 19, 2008 - Report Cost: $470,169)
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Contracts
Improving EPA's use of contracts.
EPA Should Further Limit Use of Cost-Plus-Award-Fee Contracts
Although EPA has begun to move away from using Cost-Plus-Award-Fee
(CPAF) contracts, we believe their use should be further limited and their
administration improved.
CPAF contracts are used to motivate contractors to provide a high level of performance
by providing base fees and award amounts based on a judgmental evaluation of
performance by EPA. While EPA has paid contractors nearly $16 million in award fees
over the past 10 years on the nine contracts reviewed, it has no assurance that using
CPAF contracts leads to a higher level of performance than other types of contracts. We
found that EPA consistently provided contractors with high ratings and award fees; it
appears that award fees are more
*/HJ of an expectation for contractors
rather than a factor that
motivates excellence. We could
not determine if EPA properly
awarded fees because it did not
sufficiently document the basis
for the ratings.
In some contracts, EPA paid a
higher base fee than allowed by
the EPA Acquisition Regulation.
For two contracts, we estimated
that EPA overpaid about $100,000
through July 2007, and could
overpay another $760,000 over the
remaining life of these contracts if
changes are not made.
A site in Benton Harbor, Michigan, that had been cleaned up using an
EPA Cost-Plus-Award-Fee contract (EPA photo).
Developing and administering CPAF contracts is a labor-intensive process that could be
made less burdensome. For example, eliminating the requirement for contractors to submit
self evaluations could save up to $50,000 over the course of a contract.
We recommended that EPA further limit using CPAF contracts by revising the Contracts
Management Manual to require that a cost-benefit analysis be conducted prior to the award
of any CPAF contract. We also recommended better documenting the basis for decisions
and simplifying the CPAF process. EPA agreed with the majority of our recommendations
or provided an acceptable alternative.
(Report No. 08-P-0093, EPA Should Further Limit Use of Cost-Plus-Award-Fee Contracts,
February 26, 2008 - Report Cost: $336,936)
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Financial Management
Improving the Agency's financial management.
EPA Earns Unqualified Opinion on Financial Statements
EPA earned an unqualified opinion on its FY 2007 financial statements. That
means we found the statements to be fairly presented and free of material
misstatements. However, in evaluating internal controls, we noted seven
significant deficiencies.
Significant deficiencies are deficiencies in internal control that adversely affect the
entity's ability to report financial data reliably in accordance with generally accepted
accounting principles such that there is more than a remote likelihood that a misstatement
of the entity's financial statements will not be prevented or detected.
One of the significant deficiencies represented a material weakness in internal controls.
This deficiency primarily involved Superfund receivables. During FY 2006, EPA
materially understated the FY 2006 asset value for 31 accounts by writing off
$150 million that was collectible. EPA recorded the write-offs based on implementation
of its new "Currently Not Collectible" policy, which mandates automatic write-off from
accounts receivable for those receivables that had no collection activity for 2 years.
However, during FY 2007, EPA collected the $150 million in receivables written off.
EPA restated its FY 2006 financial statements to correct a material understatement of
accounts receivable, and reversed the policy that led to the understatement and material
weakness.
Further, we noted the following six significant deficiencies:
• EPA did not properly compute an allowance for doubtful accounts.
• In addition to the material weakness discussed above, EPA needs to improve
internal controls in recording and accounting for accounts receivable.
• Key applications do not meet Federal and EPA information security requirements.
• EPA needs to improve access and security practices for critical information
technology assets.
• EPA needs to improve controls over the Integrated Financial Management
System Suspense Table.
• EPA did not maintain adequate documentation for obligating accounting
adjustments.
None of these deficiencies resulted in a material misstatement of the FY 2007 financial
statements.
Regarding compliance with laws and regulations, we found that EPA did not comply with
regulations relating to reconciling intragovernmental transactions. EPA had over
$375 million in net unreconciled differences with 46 of its trading partners.
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The Agency agreed with the issues raised and indicated it has begun taking corrective
actions. Corrective actions include making various changes in internal controls to
improve recording and accounting for accounts receivable that could result in
$13.5 million in cost efficiencies.
(Report No. 08-1-0032, Audit of EPA 's Fiscal 2007 and 2006 (Restated) Consolidated
Financial Statements, November 15, 2007 - Report Cost: $2,367,128)
EPA Deobligates Nearly $7.3 Million Cited in Prior Audit Report
EPA Region 2 has deobligated nearly $7.3 million from Superfund cooperative
agreements for four of the six sites in New York and New Jersey that we had
cited in a prior report as needing deobligation.
Our October 2006 review identified $9.6 million under six agreements with New York
and New Jersey that could be deobligated. During this review, we found that EPA
Region 2 deobligated nearly $7.3 million. For one site (Ellis Property), the amount
deobligated exceeded what was previously identified because EPA found additional
funds that were no longer needed. For three agreements, as the remaining obligated
funds are expected to be used for ongoing work, we are not requesting that EPA take
additional corrective actions at this time. Details on amounts deobligated follow.
Status of Obligations
Site Name
Imperial Oil
Ellis Property
Burnt Fly Bog
Combe Fill South
Syncon Resins
New York Multi-Site
Total
State
New Jersey
New Jersey
New Jersey
New Jersey
New Jersey
New York
Amount in Prior
OIG Report
$5,000,000
500,000
1,000,000
2,000,000
600,000
486,744
$9,586,744
Amount
Deobligated
$5,000,000
543,500
0
1,336,578
0
384,892
$7,264,970
Sources: OIG Report No. 2007-2-00003, the Financial Data Warehouse, and information
provided by Region 2 Grants and Contracts Management Branch staff and project officers.
We did not make any recommendations in this followup report because EPA was taking
appropriate actions.
(Report No. 08-2-0099, Followup on Information Concerning Superfund Cooperative
Agreements with New York and New Jersey, March 4, 2008 - Report Cost: $54,227)
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Public Liaison
Addressing specific concerns of the public.
Several Hotline Reviews Completed
During the semiannual reporting period, the Public Liaison staff completed reviews of
several cases submitted through the OIG Hotline.
• Our review of allegations surrounding a lack of EPA monitoring of Florida's
National Pollutant Discharge Elimination System program found that EPA did
perform oversight, identify issues requiring corrective action, and follow up on
corrective actions taken.
• Regarding an environmental assessment of a proposed gas exploration and
development project located at Gunnison National Forest, Spaulding Peak,
Colorado, we found that EPA's lead reviewer did share comments with an
environmental group. These comments were not shared with the complainant's
company. The complainant also alleged that the environmental group had a
unique and undue influence on EPA's decision. However, our review of the
Agency's technical specialists review found no evidence to indicate that the
environmental group had a unique and undue influence on EPA's final position.
We did recommend that, in the future, the EPA not share information about
environmental assessments with other than the requesting agencies.
Hotline Activity
The following table shows EPA OIG Hotline activity regarding complaints of fraud,
waste, and abuse in EPA programs and operations that occurred during the past
semiannual period.
Inquiries and Complaints Received During Period
Issues Handled by EPA OIG
Inquiries Addressed Without Opening a Complaint
Complaints Opened
Complaints Closed
Complaints Open - Beginning of Period
Complaints Open - End of Period
Issues Referred to Others
EPA Program Offices
EPA Criminal Investigation Division
Other Federal Agencies
State/Local Agencies
Semiannual Period
(October 1,2007 -
March 31, 2008)
426
110
108
2
6
10
6
316
80
18
42
176
18
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Investigating laboratory fraud, financial fraud,
and computer crimes.
U.S. Virgin Islands Officials Found Guilty in $1.4 Million Bribery and
Kickback Scheme
On February 27, 2008, following a 2-week trial, a Federal jury in St. Thomas found Dean
C. Plaskett, former Commissioner of the U.S. Virgin Islands Department of Planning and
Natural Resources (DPNR), guilty of demanding and accepting bribes and obstructing
justice. The same jury also found Marc A. Biggs, former Commissioner of the
Department of Property and Procurement, guilty of demanding and accepting bribes in a
$1.4 million bribery and kickback scheme. Sentencing has been scheduled for July 2,
2008.
In November 2007, Plaskett and Biggs were charged with demanding and accepting a
series of bribes and kickbacks in exchange for awarding approximately $1.4 million in
government contracts and then authorizing more than $ 1 million in payments on these
contracts, despite little or no work having been performed. Plaskett and Biggs were also
charged with obstructing justice, stemming from attempts to thwart the criminal
investigation into the underlying bribery and kickback scheme.
Plaskett and Biggs were found guilty of demanding and accepting bribes and kickbacks
associated with a $650,000 contract awarded to a "shell" company created by others
involved in this elaborate scheme. Plaskett was also found guilty of obstructing justice
for attempting to have documents created and backdated to falsely document work never
done by the shell company.
To date, four individuals, including three other former U.S. Virgin Islands government
officials, have pleaded guilty to felony charges as a result of this investigation. Former
DPNR Director of the Division of Environmental Protection Hollis L. Griffin, former
Virgin Islands Fire Services employee Earl E. Brewley, and businessman Esmond J.
Modeste of Atlanta, Georgia, have pleaded guilty to violating the Federal bribery statute,
honest services mail fraud, and structuring currency transactions in furtherance of the
underlying bribery and kickback scheme. The three defendants have been sentenced to
prison - Griffin for 4 years, Modeste for 30 months, and Brewley for 21 months - and
ordered to pay restitution in the approximate amount of $1.1 million. In addition, former
DPNR Director of Permits Brent E. Blyden pleaded guilty to conspiring to obstruct the
criminal investigation into the bribery and kickback scheme. Blyden is currently
awaiting sentencing.
In early 2000, with Blyden's assistance, Griffin, Brewley, Modeste, and others formed a
sham business by the name of Elite Technical Services (Elite) and used the entity, as well
as other companies, to seek and be awarded at least seven government contracts valued at
approximately $1.4 million. The contracts were authorized and awarded by Plaskett,
Biggs, Griffin, and Blyden. Although little or no work was completed, payments totaling
more than $ 1 million were authorized by Plaskett, Biggs, Griffin, and Blyden, and paid to
Elite and the other complicit companies. After the contract proceeds were negotiated,
Modeste, Brewley, and others kept a portion of the illicit proceeds for themselves and
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paid cash bribes and kickbacks totaling between $300,000 and $350,000 to government
officials, including Plaskett, Biggs, Griffin, and Blyden.
This investigation is being conducted jointly with the Federal Bureau of Investigation, the
Internal Revenue Service Criminal Investigation Division, the U.S. Postal Inspection
Service, and the U.S. Virgin Islands Inspector General. (Case Cost: $228,072)
Florida Company Ordered to Pay $1,863,264 in Restitution
All County Water Association, Inc. (ACWA), and company president James Basi were
ordered to pay $1,863,264 in restitution to more than 500 victims of their fraudulent
scheme to sell unnecessary water treatment systems to south Florida residents. ACWA
and Basi had falsely claimed that local water supplies were injurious to the residents'
health. The restitution was ordered by the U.S. District Court for the Southern District of
Florida.
The defendants were sentenced for their respective roles in the fraud on December 14,
2007. ACWA, of Hollywood, Florida, was convicted of conspiracy to commit mail and
wire fraud and sentenced to 60 months of probation, a $500,000 fine, and a $400 special
assessment. Basi was convicted of conspiracy to commit mail and wire fraud, mail fraud,
wire fraud, and misuse of a government seal. He was sentenced to 41 months in Federal
prison, followed by 36 months of supervised release, and ordered to pay a $25,000 fine
and a $400 special assessment. Lou Banos, a salesman for the company, was convicted
of misuse of a government seal and was sentenced to 60 months of probation and ordered
to pay a $100 special assessment.
From approximately May 2002 until July 2007, ACWA, Basi, and Banos falsely advised
residents of southern Florida that the quality of their drinking water was impaired,
injurious to their health, and potentially life threatening. They then sold, facilitated,
financed, installed, and maintained unnecessary water treatment systems for these south
Florida residents. The defendants falsely claimed that these systems were capable of
removing contaminants, carcinogens, and toxins, including E. coli and anthrax, thereby
making their municipally-supplied water safe to drink. ACWA used the EPA seal on
some of its marketing materials and represented to the residents that their system was
"EPA Approved" when it was not. Approximately 2,000 people were victims of this
scheme.
This case is being conducted with the U.S. Postal Inspection Service. (Case Cost:
$744,592)
Printing Company Sentenced for Making False Statements
On October 25, 2007, Ramallo Brothers Printing, Inc. (Ramallo Brothers), of San Juan,
Puerto Rico, was convicted of making false statements to EPA and the Puerto Rico
Environmental Quality Board (EQB). The company was sentenced to 4 years of
probation, a $750,000 fine, and an $800 special assessment. Subsequently, on February
27, 2008, Angel Ramallo-Diaz, former President and Chief Executive officer of the firm,
was convicted of negligent discharge of a pollutant into waters of the United States and
sentenced to 3 years of probation, a $25,000 fine, and a $25 special assessment. These
judicial proceedings occurred in the U.S. District Court for the District of Puerto Rico.
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Ramallo Brothers created a variety of wastes and byproducts from its printing business,
including ink, which were placed in drums and transported to "La Finca" ("The Farm")
on a regular basis. In September 2000, EPA requested information from Ramallo
Brothers pertaining to the hazardous substances and industrial wastes that were used,
stored, generated, disposed of, or otherwise handled by them at the La Finca location. In
June 2001, Ramallo Brothers responded by telling EPA the company had not disposed of
any industrial waste at La Finca even though they knew that they had placed, stored,
handled, and disposed of industrial waste at the site.
In addition, in February 2005, EQB requested information and documents from Ramallo
Brothers concerning the disposal of industrial liquid waste. In response to that request,
Ramallo Brothers submitted fraudulent "dump tickets" or manifests reflecting the
disposal of the liquid industrial waste at the Puerto Nuevo wastewater treatment plant,
even though this plant was closed and not accepting industrial wastewater.
Angel Ramallo-Diaz was also the vice president of Caribbean Forms Manufacturing, Inc.
(CFM). The CFM facility used a variety of inks and generated ink and other liquid
wastewater. The facility included an outside wastewater storage tank that held the ink
and other industrial wastewater. During an inspection at the facility in February 2004,
EQB discovered a rupture in a pipe leading to the outside storage tank. The rupture
allowed blue ink and other wastewater to leak onto the ground and saturate the area
behind the facility. EQB determined that the discharge of ink and wastewater from the
pipe reached the Loiza River via a creek that was located behind the manufacturing
facility. Neither Ramallo nor CFM had a permit to discharge into the creek or the Loiza
River. Ramallo failed to contain the release, thereby allowing the waste to enter into the
ground water and the Loiza River.
This investigation was conducted with the EPA Criminal Investigation Division.
(Case Cost: $189,060)
Company Sentenced for Violating the Clean Water Act
On March 5, 2008, Archer Daniels Midland Company (ADM) was convicted of violating
the Clean Water Act and was sentenced to a $100,000 fine, a $500 special assessment,
and community service. The community service was in the form of a $50,000 payment
to the Tennessee Department of the Environment and Conservation, $25,000 to the City
of Chattanooga, and $25,000 to the Southern Environmental Enforcement Network.
ADM, based in Decatur, Illinois, owned and operated a cellulose processing facility in
Chattanooga, Tennessee, located adjacent to the Chattanooga Creek, a tributary of the
Tennessee River. During 2003 and 2004, ADM discharged wastewater containing cotton
fibers and other pollutants into storm drains that led to the creek without obtaining the
proper permit authorizing such discharge.
This investigation was conducted with the EPA Criminal Investigation Division.
(Case Cost: $26,246)
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Testimony
Providing testimony before congressional committees.
Assistant Inspector General Testifies for Second Time on EPA's
Environmental Justice Activities
On October 4, 2007, Wade Najjum, the OIG Assistant Inspector General for
Program Evaluation, testified before the House Energy and Commerce
Subcommittee on Environment and Hazardous Materials during a hearing on
EPA's environmental justice programs. This marked the second time in 2007
that Mr. Najjum testified before Congress on how EPA has incorporated
environmental justice within its programs and activities.
A 2004 OIG report found that EPA had not identified minority and low-income
communities, or defined the term "disproportionately impacted," in accordance with
Executive Order 12898 on environmental justice. Even without the creation of these
definitions, criteria, or standards from EPA, many regional and program offices
individually took steps to implement environmental justice policies. "The result was
inconsistency in determining environmental justice communities across EPA regions and
programs," said Mr. Najjum. "We concluded that EPA had not fully implemented the
Order and was not consistently integrating environmental justice into its day-to-day
operations at that time." The OIG made 12 recommendations; EPA disagreed with 11 of
them.
A 2006 report found that EPA program and regional offices have not routinely performed
environmental justice reviews and that these offices lacked clear guidance to follow when
conducting environmental justice reviews. "We concluded that EPA cannot determine
whether its programs have a disproportionately high and adverse human health or
environmental effect on minority and low-income populations without performing these
types of reviews," said Mr. Najjum. Recommendations were made to address these
issues, to which EPA agreed.
Mr. Najjum noted in his testimony that EPA has taken some steps to address
environmental justice issues since the issuance of the OIG's reports. In 2005, for
example, the Administrator reaffirmed EPA's commitment to environmental justice by
directing staff to establish measurable commitments that address environmental priorities.
"These are all positive steps but EPA recognizes that more work needs to be done,
particularly in its efforts to making environmental justice part of its mission by
integrating environmental justice into its decision making, planning, and budgeting
processes," said Mr. Najjum. He noted that EPA needs to be able to determine if its
"programs, policies, and actions have a disproportionate health or environmental impact
on minority or low-income populations."
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Chemical Safety and Hazard Investigation Board
The U.S. Chemical Safety and Hazard Investigation Board (CSB) was created by the
Clean Air Act Amendments. The Board's mission is to investigate accidental chemical
releases at facilities, to report to the public on the root causes, and to recommend
measures to prevent future occurrences.
In FY 2004, Congress designated the EPA OIG to serve as the Inspector General for the
CSB. As a result, the EPA OIG has the responsibility to audit, evaluate, inspect, and
investigate CSB's programs, and to review proposed laws and regulations to determine
their potential impact on CSB's programs and operations.
Board Earns Unqualified Opinion on Financial Statements
CSB received an unqualified opinion on its FYs 2007 and 2006 financial statements. The
statements were found to be presented fairly, in all material respects, and in conformity
with applicable standards. Further, no material weaknesses involving internal controls
over financial reporting were noted, nor were any instances of noncompliance with
certain provisions of laws and regulations noted.
The audit was performed by an independent accounting firm. We reviewed the firm's
report and related documentation, and found no instances in which the audit did not
comply, in all material respects, with generally accepted auditing standards.
In FY 2007, CSB reported a net cost of operations of $9.4 million. For that year, CSB
completed 12 safety products, including 4 full investigation reports, 1 safety study, 4 case
studies, and 3 safety bulletins. These products included a total of 83 recommendations
for promoting chemical safety and health reduction. In addition, the CSB closed 55
safety recommendations.
We transmitted the financial statement report to CSB on November 15, 2007. The
financial statements report is incorporated into CSB's FY 2007 Performance and
Accountability Report, which can be found at http://www.csb.gov.
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Other Activities
OIG Issues 2007 Annual Performance Report Demonstrating
Value Added
The OIG issued its Annual Performance Report for FY 2007, its sixth such annual report.
The report presents statistical and narrative summaries of OIG performance, and
demonstrates the OIG's value added and return on investment to the public.
This report fulfills the reporting requirements of the Government Performance and
Results Act (GPRA) in demonstrating how well the EPA OIG achieved results in
FY 2007 compared to its 2007 annual performance targets. It also presents OIG
cumulative results for FYs 2003 through 2007 compared to the cumulative goal targets
for those periods.
This Annual Performance Report, designed to provide full accountability for the
operations of the OIG, supplements the OIG summary statistics presented in EPA's
FY 2007 Performance Accountability Report. It specifically includes financial
summaries, management challenges, summaries of OIG operations and productivity,
narrative highlights of how OIG work is improving EPA operations, and the costs and
timeliness of all issued products. The report is available at
http://www.epa.gov/oig/reports/2008/2007EPAOIGAnnualPerformanceReport.pdf
OIG Reviews EPA's FY 2007 Draft Performance and Accountability
Report
Our review of EPA's FY 2007 draft Performance and Accountability Report found that
the report fulfilled GPRA requirements.
Congress directed OIGs to annually review and report on their agencies' general
compliance with GPRA. We reviewed the Agency's draft annual Performance and
Accountability Report and reported on any omissions and areas where the spirit of
transparent accountability envisioned by GPRA can be improved. We did not verify the
quality, accuracy, or completeness of the data presented, except for the Agency's
presentation of information required by the Inspector General Act amendments of 1988.
EPA's report had some improvements based on what we had suggested in prior years,
such as its new discussion of challenges associated with each goal objective area.
However, the report had areas that still needed to be structurally strengthened. Based on
our review, we provided comments and suggestions. Key examples follow.
• Better balance and linkages to future needed. The report needs consistency in
the balanced presentation of activities, outputs, outcomes, and results, along with
a frank discussion of where and why performance is not being achieved. Also,
the report needs to concentrate more on the discussion of actual results and how
results translate to outcomes. For many of the objectives within the goal
sections, there was a leap to a foregone conclusion of future anticipated results.
Without substantive evidence of established trends, such a leap is speculative, if
24
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not misleading. Because this is an annual report of progress toward the long-
term goals, the report should emphasize current results in relation to prior
progress toward achieving the long-term goals. This report, with few exceptions,
neither discusses where and why progress is not being made, nor does it put
current performance in context to those long-term goals and aspirations.
• Better information on partners needed. Thirty Federal agencies have an
environmental mission as well as over 50 State and territorial environmental
agencies. Many of the results and challenges depend upon Federal and State
partners interacting. This report should better describe the contribution to results
or barriers attributable to those partners. General mention is made of a few
grantees and Federal agencies, but this mention should be more specific and
woven into the fiber of the discussion since the majority of EPA programs are
delegated. There is a discussion of the role and contribution to results by
industry through the voluntary partnerships, but not of States.
• Results should better address confluence across goals. There is an interaction
and relationship between many of the programs, objectives, and program
measures results. However, presenting results by goals and objectives is narrow,
and does not recognize confluence across goals and objectives. EPA should
attempt to reference those interactions across goals and measures to present a
more consolidated, mutually supportive view of EPA performance.
• Little or no recognition given to regional goals, initiatives, or results.
We are aware that some of EPA's most significant environmental progress is
made through regional activities in local or regional venues. While these may
not be prominent national issues or make a significant contribution to national
goals, they nonetheless deserve recognition as examples of environmental
improvements and results as they relate to the public.
• Inspector General Act reporting requirements on audit management not
complete. As required by the Inspector General Act, EPA reports statistics on
resolution of OIG reports through the Performance and Accountability Report.
However, some of the numbers the Agency reported were inconsistent with
information the OIG tracked and verified. Also, the Performance and
Accountability Report did not include the required description of OIG reports for
which final action was not taken within 365 days of a management decision.
In response to our review comments, EPA's Office of the Chief Financial Officer made a
number of improvements in the final version of the Agency's Performance and
Accountability Report, including listing the Management Challenges in the
Management's Discussion and Analysis, moderating several of the long-term future
results, deleting narratives highlighting incorrect numbers in the status of resolution, and
adding a footnote about the discrepancy. However, the Agency did choose to exclude
summaries of several OIG reports that were submitted for Appendix A - a listing of
program evaluations
Also, for the first time, the Agency produced a. Highlights version of the Performance and
Accountability Report. To present a balanced, accurate picture of EPA performance, we
strongly suggested that the Performance and Accountability Report include the Major
25
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Management Challenges, a brief description of targets not met, and a description of other
excluded sections of the Performance and Accountability Report with electronic links.
Legislation and Regulations Reviewed
Section 4(a) of the Inspector General Act requires the Inspector General to review existing
and proposed legislation and regulations relating to EPA's programs and operations and to
make recommendations concerning their impact. The primary bases for our comments are
our audit, evaluation, investigation, and legislative experiences, as well as our participation
on the President's Council on Integrity and Efficiency. During the reporting period, we
reviewed 23 proposed changes to legislation, regulations, policy, and procedures that could
affect EPA and provided comments on 9 of those proposed changes reviewed. We also
reviewed drafts of Office of Management and Budget Circulars, program operations
manuals, directives, and reorganizations. Details on several items follow.
Proposed Acquisition Handbook Unit 18.1, EPA Emergency Contracting. EPA's
Office of Acquisition Management proposed a new Acquisition Handbook Unit
establishing EPA's emergency contracting policy and procedures. The new policy and
procedures serve as an EPA-specific supplement to the Emergency Acquisitions Guide
issued by the Office of Federal Procurement Policy on May 31, 2007, and Federal
Acquisition Regulation Part 18, Emergency Contracting. Specifically, these procedures
identify pre-emergency and communication planning, emergency operations, post-
emergency operations, acquisition flexibilities and tools, and a list of designated essential
Agency contracts. The OIG commented that its Office of Investigations is a criminal
investigative and law enforcement entity that has an essential mission in emergency
situations. To support that mission, the OIG has a number of contracts/orders essential to
this office performing effectively during an emergency, and we provided the list of our
essential contracts. We also noted that we consider our interagency agreement with the
U.S. Public Health Service to be mission critical. We depend on the U.S. Public Health
Service for our medical services, such as inoculations and testing.
Proposed Revision to the Resource Management Directive (RMDS) 2540-03, Fund
Balance with Treasury (FBWT) Management; and the Standard Form (SF) 224,
Reconciliation Procedure. RMDS 2540-03 establishes accounting policy and
reconciliation steps for managing FBWT. FBWT is EPA's "checkbook balance" of
funds deposited in the Treasury, available to EPA to make authorized expenditures and
pay liabilities. We provided several comments on the proposed revision, including:
• We observed that according to section 2e, measuring success is determined based
on whether issues were found by "internal reviews" or auditor examination of
records. This implies if an error occurs and is not identified, EPA would be
successful with its cash management activities. We recommended that additional
success measures should be implemented that would encourage lower differences
and be internal in nature, rather than relying on an audit or review that would
occur much later than the actual event. An example of an internal measure
would be keeping differences lower than the Treasury's $10 million threshold.
• We noted that if the Agency does use manual adjustments, the amount of the
manual adjustments is determined by what is needed to reduce the difference
with Treasury below Treasury's $10 million threshold. No limit is placed on the
26
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amount of the manual adjustment. Without a limit, the manual adjustment could
dwarf Treasury's threshold. We suggested that the Agency impose a dollar limit
on manual adjustments for the SF 224.
Examples Demonstrate Results from Audit Followup Reviews
The OIG has a responsibility to monitor the progress of agreed-upon corrective actions
being taken by EPA managers in response to report recommendations. Many
recommendations require complex, time consuming actions, but Agency managers are
expected to make reasonable efforts to comply with agreed-upon completion schedules.
Most open recommendations are completed or are on track for timely implementation.
Below are a few examples of reports highlighted in prior Semiannual Reports to
Congress for which Agency management has not implemented the recommended
improvements, as well as examples of where the Agency has implemented the
recommendations. Appendix 3 provides a list of OIG reports from previous semiannual
reporting periods with recommendations on which actions have not been completed.
This information will be used as the basis for improved reporting in the future.
Unimplemented
EPA's Response to the World Trade Center Collapse: Challenges, Successes, and
Areas for Improvement, Report No. 2003-P-00012, August 21, 2003: The OIG
addressed six questions regarding how EPA responded to the World Trade Center towers
collapse and how it could better respond in the future. One of the six questions related to
what additional actions, if any, EPA should take to improve its response and recovery
efforts in the World Trade Center area related to indoor air quality. The majority of
officials contacted indicated EPA did not need to take additional actions to address
outdoor ambient air quality concerns, although concerns were expressed regarding indoor
contamination. We recommended that EPA implement a testing program to ensure the
indoor cleanup effectively reduced health risks from all pollutants of concern, and
implement a verification program to determine whether previously cleaned residences
have been re-contaminated. Although the Agency has not fully determined the status of
actions on all recommendations from this report, the U.S Government Accountability
Office recently reported that three recommendations have not been implemented,
including one involving the impact of indoor air contamination.
EPA's Allowing States to Use Bonds to Meet Revolving Fund Match Requirements
Reduces Funds Available for Water Projects, Report No. 2007-P-00012, March 29,
2007: Congress created the State Revolving Funds to provide States with a continuous
source of funding for needed water projects. EPA regulations and policies allowing
States to use bonds repaid from State Revolving Fund interest to State Revolving Fund
match requirements are resulting in fewer dollars being available for water projects. We
recommended that the Assistant Administrator for Water revise the regulations and
policy on State match options to no longer allow States to use bonds repaid from the State
Revolving Fund to meet State match requirements.
27
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Implemented
Followup on Information Concerning Superfund Cooperative Agreements with
New York and New Jersey, Report No. 08-2-0099, March 4, 2008: We performed this
followup review to determine the status of the $9.6 million in deobligations for
cooperative agreements identified in an earlier report. We found that EPA Region 2 had
deobligated $7.3 million from four of the six sites in New York and New Jersey cited in
our prior report. Since the remaining funds obligated under the agreements are expected
to be used for ongoing work, we did not request that EPA take additional corrective
actions at this time.
Progress Made in Improving Use of Federal Supply Schedule Orders, but More Action
Needed, Report No. 2007-P-00037, September 20, 2007: The objectives of our audit
were to determine whether EPA implemented the agreed-upon corrective actions from a
previous OIG report on Federal Supply Schedule orders. EPA implemented all but one of
the recommendations in our original report. As a result of this previous report, EPA:
(1) published guidance in its Contract Management Manual for issuing orders against the
Federal Supply Schedule; (2) provided training to contracting officers; and (3) is
acquiring anew, commercial off-the-shelf Federal acquisition system. Regarding the one
recommendation not implemented, due to technology challenges, EPA did not provide
samples of sole source justifications to program offices as agreed. However, posting
justifications on EPA's intranet should resolve the issue.
OIG Trains Staff on 2007 Government Auditing Standards Revisions
Deborah Heckman of the OIG's Office of Planning, Analysis, and Results designed and
delivered a training program to 156 staff members on the 2007 revision to the
Government Auditing Standards issued by the Comptroller General of the United States.
The training was given multiple times from Headquarters to provide efficient coverage to
nearly all OIG auditors, analysts, and evaluators nationwide, either in person or by video
conference. By making each session interactive, this innovative training not only taught
OIG staff about the revisions but helped them better understand how specific standards
apply to their work.
OIG Purchase Card Program Found to Be Effective
As a required part of the Agency's biennial purchase card review, the OIG reviewed its
OIG purchase card program to assess (1) compliance with laws and regulations,
(2) efficiency of operations, and (3) adequacy of internal controls. We found the OIG
purchase card program to be an effective tool for streamlining the procurement process
by applying e-commerce practices and decentralizing purchase authority to save time and
money. The OIG has successfully expanded using purchase cards while implementing
sound controls and limiting the number of card holders and approving officials. Even
though approving officials and cardholders have a greater awareness of purchase card
requirements since the last review in 2005, several administrative processes and
documentation can be improved. Best practices were also identified during the review.
28
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Statistical Data
Profile of Activities and Results
Audit Operations
Office of Inspector General Reviews
October 1, 2007 to
March 31, 2008
($ in millions)
Questioned Costs *
• Total $2.4
• Federal $2.1
Recommended Efficiencies *
• Federal $22.8
Costs Disallowed to be Recovered
• Federal $6.2
Costs Disallowed as Cost Efficiency
• Federal $16.6
Reports Issued - Office of Inspector General
Reviews 18
Reports Resolved
(Agreement by Agency officials
to take satisfactory corrective actions) ** 103
Audit Operations
Other Reviews
(Reviews Performed by Another Federal Agency
or Single Audit Act Auditors)
October 1, 2007 to
March 31, 2008
($ in millions)
Questioned Costs *
• Total $69.6
• Federal $1.6
Recommended Efficiencies *
• Federal $0
Costs Disallowed to be Recovered
• Federal $5.5
Costs Disallowed as Cost Efficiency
• Federal $0
Reports Issued - Other Reviews
• EPA Reviews Performed by
Another Federal Agency 56
• Single Audit Act Reviews 44
Total 100
Agency Recoveries
Recoveries from Audit Resolutions of Current
and Prior Periods (cash collections or offsets
to future payments) *** $8.7
Investigative Operations
Total Fines and Recoveries ****
Cost Savings
Cases Opened During Period
Cases Closed During Period
Indictments/Informations of
Persons or Firms
Convictions of Persons or Firms
Civil Judgments/Settlements/Filings
October 1, 2007 to
March 31, 2008
($ in millions)
$3.448
$0
26
40
12
14
3
Questioned Costs and Recommended Efficiencies
are subject to change pending further review in the
audit resolution process. Total Questioned Costs
include contracts of other Federal agencies.
Reports Resolved are subject to change pending
further review.
Information on Recoveries from Audit Resolutions is
provided by EPA's Office of Financial Management
and is unaudited.
Total includes actions resulting from joint
investigations.
29
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Audit Report Resolution
Status Report on Perpetual Inventory of Reports in Resolution Process
for Semiannual Period Ending March 31, 2008
Report Category
A. For which no management
decision was made by
October 1,2007*
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management
decision was made during the
reporting period
E. For which no management
decision was made by
March 31, 2008
F. Reports for which no
management decision was
made within 6 months of
issuance
No. of
Reports
131
118
37
212
105
107
66
Report Issuance
($ in thousands)
Questioned
Costs
$57,772
$3,677
$0
$61,449
$17,469
$43,980
$41,350
Recommended
Efficiencies
$14,514
$22,790
$0
$37,304
$21,876
$15,428
$14,514
Report Resolution Costs
Sustained
($ in thousands)
To Be
Recovered
$10,909
$865
$0
$11,774
$11,774
$0
$0
As
Efficiencies
$0
$16,551
$0
$16,551
$16,551
$0
$0
Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this
report and our previous semiannual report results from corrections made to data in our audit tracking system.
Status of Management Decisions on Inspector General Reports
This section presents statistical information as required by the Inspector General Act of 1978, as
amended, on the status of EPA management decisions on reports issued by the OIG involving monetary
recommendations. As presented, information in Tables 1 and 2 cannot be used to assess results of
reviews performed or controlled by this office. Many of the reports were prepared by other Federal
auditors or independent public accountants. EPA OIG staff do not manage or control such assignments.
Auditees frequently provide additional documentation to support the allowability of such costs
subsequent to report issuance.
30
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Table 1 - Inspector General-Issued Reports with Questioned Costs for Semiannual Period Ending
March 31, 2008 (dollars in thousands)
Report Category
A. For which no management decision was made by
October 1 , 2007 **
B. New reports issued during period
Subtotals (A + B)
C. For which a management decision was made during the
reporting period
(i) Dollar value of disallowed costs
(ii) Dollar value of costs not disallowed
D. For which no management decision was made by
March 3 1,2008
Reports for which no management decision was made
within 6 months of issuance
No. of
Reports
62
30
92
42
35
7
50
15
Questioned
Costs *
$57,772
$3,677
$61,449
$17,469
$11,774
$5,695
$43,980
$41,350
Unsupported
Costs
$37,477
$2,014
$39,491
$10,018
$4,939
$5,079
$29,473
$27,653
Questioned costs include the unsupported costs.
Any difference in number of reports and amounts of questioned costs between this report and our previous
semiannual report results from corrections made to data in our audit tracking system.
Table 2 - Inspector General-Issued Reports with Recommendations that Funds Be Put to Better Use
for Semiannual Period Ending March 31, 2008 (dollars in thousands)
Report Category
A. For which no management decision was made by October 1 , 2007 *
B. Which were issued during the reporting period
Subtotals (A + B)
C. For which a management decision was made during the reporting period
(i) Dollar value of recommendations from reports that were
agreed to by management
(ii) Dollar value of recommendations from reports that were
not agreed to by management
(ii) Dollar value of non-awards or unsuccessful bidders
D. For which no management decision was made by March 31, 2008
Reports for which no management decision was made
within 6 months of issuance
No. of
Reports
2
4
6
3
2
1
0
3
2
Dollar
Value
$14,514
$22,790
$37,304
$21,876
$16,551
$5,325
$0
$15,428
$14,514
Any difference in number of reports and amounts of funds put to better use between this report and our
previous semiannual report results from corrections made to data in our audit tracking system.
Audits with No Final Action as of March 31, 2008, Which Are Over 365 Days Past the Date of the
Accepted Management Decision (including Audits in Appeal)
Audits
Program
Assistance Agreements
Contract Audits
Single Audits
Financial Statement Audits
Total
Total
30
2
0
15
1
48
Percentage
62.5%
4.2%
0.0%
31.2%
2.1%
100.0%
31
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Summary of Investigative Results
Summary of Investigative Activity during Period
Cases open as of October 1, 2007
Cases opened during period
Cases closed during period *
Cases pending as of March 31, 2008
111
26
40
97
Includes one case closed in a prior period
Investigations Pending by Type as of March 31, 2008
Contract
Assistance Agreement
Employee Integrity
Program Integrity
Computer Crime
Laboratory Fraud
Other
Total
Superfund
7
0
0
2
0
2
1
12
Management
11
28
13
5
2
18
2
79
Split Funded
2
2
0
1
0
0
1
6
Total
20
30
13
8
2
20
4
97
Results of Prosecutive Actions
Criminal Indictments / Informations / Complaints
Convictions
Civil Judgments / Settlements / Filings
Fines and Recoveries (including Civil)
Prison Time
Prison Time Suspended
Probation
Community Service
EPA OIG Only
2
5
1
$8,862
0 months
0 months
156 months
240 hours
Joint **
10
9
2
$3,375,690
41 months
0 months
300 months
40 hours
Total
12
14
3
$3,384,552
41 months
0 months
456 months
280 months
Administrative Actions
Suspensions
Debarments
Compliance Agreements
Other Administrative Actions
Total
Administrative Recoveries
EPA OIG Only
10
1
4
16
31
$63,773
Joint **
0
1
0
0
1
$0
Total
10
2
4
16
32
$63,773
With another Federal agency.
32
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Scoreboard of Results
Scoreboard of OIG Second Quarter (March 31, 2008)
Performance Results Compared to Annual Performance Goal Targets
All results reported in FY 2008, from current and prior years' work, are as reported in OIG
Performance Measurement and Results System and the Inspector General Operations Reporting system.
All data not verified.
OIG FY 2008 Government Performance and Results Act
Annual Performance Targets Compared to
FY 2008 Second Quarter Results Reported
Supporting Measures
Goal: Contribute to Human Health and Environmental Quality Through Improved Business Practices,
Accountability, and Integrity of Program Operations
Environmental Improvements/Actions/Changes
Improvements in Business/Systems/Efficiency
Risks Reduced or Eliminated
Target: 347; Reported: 156 (45%)
0 Legislative/regulatory changes/decisions
0 Examples of environmental improvement
0 Environmental best practices implemented
0 Management best practices implemented
6 Environmental policy, process, practice, control
changes
22 Management policy, process, practice, control
changes
126 Certifications/validations/verifications/corrections
2 Environmental/mgt. risks reduced/eliminated
Environmental and Business Recommendations,
Challenges, Best Practices, and Risks Identified
Target: 971; Reported: 332 (34%)
6 Environmental recommendations
(for Agency/stakeholder action)
246 Management recommendations
(for Agency/stakeholder action)
3 Critical congressional or public management
concern addressed
1 Best environmental practice identified
0 Best management practices identified
3 Referrals for Agency action
7 New FMFIA/A-123/mgt. challenges/risks identified
1 Environmental risk identified
65 Followup certifications/validations, verifications
Return on Investment: Potential dollar return
as percentage (150%) of OIG budget ($52.5 million)
Target: $78.75 M; Reported: $28.50 M (EPA) (36.2%)
(Dollars in Millions)
$ 2.25 Questioned costs (net EPA)
$ 22.80 Recommended efficiencies, costs saved (EPA)
$ 3.45 Fines, recoveries, settlements
Criminal, Civil, and Administrative Actions
Reducing Risk of Loss/Operational Integrity
Target: 80; Reported: 61 (76%)
14 Criminal convictions
12 Indictments/informations/complaints
3 Civil judgments/settlements/filings
32 Administrative actions
Sustained Monetary Recommendations and Savings
Achieved from Current and Prior Periods: $ 28.1 M
Sustained Environmental and Management
Recommendations Sustained for Resolution:
(no goals established)
101
(Dollars in Millions)
$11.6 Questioned costs sustained
$ 16.5 Cost efficiencies sustained or realized
2 Environmental recommendations sustained
99 Management recommendations sustained
Second Quarter Targets = 50% of Annual Goal
NOTE: Targets increased to reflect continuation of Defense
from 334 to 347 (outcomes) and from 120% to 150% (dollar
Contract Audit Agency funding and oversight,
return on investment in budget).
33
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Appendices
Appendix 1 - Reports Issued
The Inspector General Act requires a listing, subdivided according to subject matter, of each report issued
by the OIG during the reporting period. For each report, where applicable, the Inspector General Act also
requires a listing of the dollar value of questioned costs and the dollar value of recommendations that
funds be put to better use.
Report No.
Title
Final
Report
Issued
Ineligible
Costs
Questioned Costs
Unsupported Unreasonable
Cost Costs
Federal
Recommended
Efficiencies
PERFORMANCE REPORTS
08-P-0020
08-P-0049
08-P-0055
08-P-0080
08-P-0083
08-P-0093
08-P-0102
08-P-0116
08-P-0120
08-P-0121
08-P-0123
MACT Implementation Progress and Challenges
Chesapeake Bay Point Sources
Emergency Response Business Plan
Followup Process for Air Evaluation Reports
Tribal Capacity for Indian General Assistance Program
Use of Cost-Plus-Award-Fee Contracts
Utilization of Superfund Special Accounts - Region 8
Recovery of Superfund Expenditures
Summary Assessment of EPA Drinking Water Program
U.S. Mexico Border Water Projects Grant Program
Congressionally Requested Report on OIG Unimplemented Recs.
TOTAL PERFORMANCE REPORTS = 11
31-0ct-07
8-Jan-08
9-Jan-08
12-Feb-08
19-Feb-08
26-Feb-08
17-Mar-08
26-Mar-08
31-Mar-08
31-Mar-08
31-Mar-08
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
$0
$0
0
0
0
0
0
$762,000
$7,990,100
0
0
0
$8,752,100
ASSISTANCE AGREEMENT REPORTS
08-2-0039
08-2-0045
08-2-0062
08-2-0084
08-2-0095
08-2-0099
Village of Laurelville, OH (Special Appropriation Act Project)
Wayne County, NY (Special Appropriation Act Project)
City of Elizabeth, NJ (Special Appropriation Act Project)
Borough of Carteret, NJ (Special Appropriation Act Project)
City of Bad Axe, Ml (Special Appropriation Act Project)
NY/NJ Cooperative Agreement Followup
TOTAL ASSISTANCE AGREEMENT REPORTS = 6
5-Dec-07
17-Dec-07
23-Jan-08
20-Feb-08
27-Feb-08
4-Mar-08
$207,476
0
0
0
$51,297
0
$258,773
$65,954
0
0
$1,575,391
0
0
$1,641,345
$5,018
0
0
0
$211,143
0
$216,161
0
$151,947
$335,232
0
0
0
$487,179
SINGLE AUDIT REPORTS
08-3-0017
08-3-0018
08-3-0019
08-3-0024
08-3-0028
08-3-0030
08-3-0031
08-3-0033
08-3-0034
08-3-0035
08-3-0037
08-3-0038
08-3-0041
08-3-0042
08-3-0043
08-3-0044
08-3-0047
08-3-0048
08-3-0050
08-3-0051
08-3-0052
Genesse County Drain Comm. Div. Water and Waste Services
Yankton Sioux Tribe FY 2005
Chippewa Cree Tribe FY 2005
Fort Bidwell Indian Community Council FY 2005
Anvik Tribal Council FY 2005
Las Vegas Valley Water District FY 2005
Norman, City of FY 2005
Association of Farmworker Opportunity
Harris County FY 2005
Taylor, City of FY 2006
Lake Michigan Air Directors Consortium, IL - FY 2006
Canton, City of, IL-FY 2006
Taylor, City of FY 2005
Guam, Government of, FY2006
Water Environment Federation, FY 2005
Northern Mariana Islands, Commonwealth of, FY 2006
Pyramid Lake Paiute Tribe, FY 2004
Pyramid Lake Paiute Tribe, FY 2005
City of Conrad, MT - FY 2006
City of Hartford, SD - FY 2006
Battelle Memorial Institute OH - FY 2006
25-Oct-07
25-Oct-07
25-Oct-07
1-Nov-07
8-Nov-07
13-Nov-07
13-Nov-07
15-Nov-07
15-Nov-07
20-Nov-07
4-Dec-07
4-Dec-07
10-Dec-07
10-Dec-07
10-Dec-07
11-Dec-07
18-Dec-07
18-Dec-07
8-Jan-08
8-Jan-08
8-Jan-08
0
0
0
0
$734
$70,129
0
0
0
0
0
$3,744
0
$564
0
0
0
0
0
0
0
0
0
0
0
$2,200.00
0
0
0
0
0
0
$1,128
$187,393
$85,119
0
$9,378
$74,555
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
34
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Report No.
08-3-0053
08-3-0054
08-3-0056
08-3-0059
08-3-0060
08-3-0061
08-3-0079
08-3-0082
08-3-0086
08-3-0087
08-3-0089
08-3-0101
08-3-0103
08-3-0105
08-3-0106
08-3-0107
08-3-0108
08-3-0109
08-3-0110
08-3-0111
08-3-0112
08-3-0113
08-3-0115
Title
City of Rockford, IL - FY 2006
City of Sun Praire ,WI - FY 2006
City of Wisconsin Rapids, Wl - FY2006
City of Douglas, AZ
Kingbrook Rural Water System Inc., SD
Hoopa Valley Tribe, CA
Los Coyotes Band of Indians, CA
Match Be Nash She Wish Band of Pottawatomi Indians - FY 2006
Carteret, Borough of FY 2005
FOCUS: HOPE -FY 2006
Putnam County WV-FY 2005
Scott's Run Public Service District WV - FY 2005
Guam Waterworks Authority
Pace University FY 2005
Pace University FY 2006
Puerto Rico Water Pollution Control Revolving Fund FY 2005
Wyandotte Nation - FY 2006
ChippewaCree Tribe - FY 2006
Great Lakes Commission FY 2007
Blackfeet Tribe of the Blackfeet Indian Reservation - FY 2005
Wyoming, University of - FY 2006
Lower Brule Sioux Tribe - FY 2006
Minnesota Public Facilities Authority - FY 2006
TOTAL SINGLE AUDIT REPORTS = 44
Final
Report
Issued
8-Jan-08
8-Jan-08
10-Jan-08
22-Jan-08
22-Jan-08
22-Jan-08
11-Feb-08
14-Feb-08
21-Feb-08
21-Feb-08
25-Feb-08
12-Mar-08
18-Mar-08
20-Mar-08
20-Mar-08
20-Mar-08
20-Mar-08
20-Mar-08
20-Mar-08
20-Mar-08
20-Mar-08
24-Mar-08
25-Mar-08
Ineligible
Costs
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$75,171
Questioned Costs
Unsupported Unreasonable
Cost Costs
0 0
0 0
0 0
0 0
0 0
0 0
$10,841 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
$1,554 0
0 0
0 0
0 0
$372,168 $0
Federal
Recommended
Efficiencies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
DEFENSE CONTRACT AUDIT AGENCY (DCAA) CONTRACT REPORTS
08-1-0001
08-1-0002
08-1-0003
08-1-0004
08-1-0005
08-1-0006
08-1-0007
08-1-0008
08-1-0009
08-1-0010
08-1-0057
08-1-0068
08-1-0071
08-1-0076
08-1-0078
08-1-0088
08-1-0090
08-1-0091
08-1-0092
08-1-0096
08-1-0100
08-1-0104
08-1-0114
08-1-0118
08-1-0119
08-1-0122
08-2-0001
08-2-0002
08-2-0003
08-2-0004
08-2-0005
08-2-0006
08-2-0007
08-2-0008
Bionetics Corporation - FY 2005 Incurred Cost
The Cadmus Group, Inc. - FY 4/30/2005 Incurred Cost
Metcalf & Eddy, Inc. -FY 2005 Incurred Cost
Black & Veatch Spec. Proj. Corp.-FY2002 Incurred Cost
IBM Global Services - Federal - FY 2003 Incurred Cost
IBM Global Services - Federal - FY 2004 Incurred Cost
DynCorp. Inc-FYE 3/31/2003 Incurred Cost (15-month period)
Versar, Inc. - FY 2005 Incurred Cost
DPRA, Inc. - FY 03/31/2006 Incurred Cost
COM Federal Programs Corporation - FY2005 Incurred Cost
Battelle Memorial Institute- Colulmbus FY2006 Incurred Cost
Nat'l Academy of Public Admin - FY 09/30/2005 1/C
Environmental Quality Management, Inc. - FY 12/31/04 I/C
Booz-Allen & Hamilton, Inc. FYE 3/31/2004 Incurred Cost
ABT Associates Inc. - FYE 3/31/2003 Incurred Cost Audit
Arcadis Geraghty & Miller - FY 12/31/2004 Incurred Cost
Computer Sciences Corporation- FY 2001 Incurred Cost
Parsons Engineering Science, Inc - FYE 12/31/03 Incurred Cost
Alpha-Gamma Technologies, Inc. - FY 2003 Incurred Cost
Roy F. Weston-FY 1999 Incurred Cost
InfoPro, Inc. - FY 09/30/2005 Incurred Cost
S. Cohen and Associates - FY 2005 Incurred Cost
Weston Solutions Inc - FY 12/31/2004 Incurred Cost
Integrated Laboratory Systems - FY 2005 Incurred Cost
EA Engineering Science and Technology- FY 2006 Incurred Cost
Alpha-Gamma Technologies, Inc. - FY 2004 Incurred Cost
COM Federal Programs FY 2004 RAG 68-W5-0022
COM Federal Program Corp. - FY 2004 RAG 68-W9-8210
Weston Solutions, Inc. - FY 2004 RAG - 68-W7-0026
CH2MHHI, Inc. - FY 2003 RAG - 68-W6-0025
Toeroek Associates - FY 2005 Incurred Cost
Bevilacqua-Knight Inc. - FY 2005 Incurred Cost
Black & Veatch Spec. Proj. Corp.-FY2001 RAG 68-W5-0004
Tetra Tech EC, Inc. - FY 2005 RAG 68-W9-8214
1-0d-07
3-Oct-07
3-Oct-07
4-Oct-07
4-Oct-07
4-Oct-07
4-Oct-07
5-Oct-07
11-0d-07
13-Nov-07
10-Jan-08
24-Jan-08
29-Jan-08
5-Feb-08
7-Feb-08
25-Feb-08
25-Feb-08
25-Feb-08
25-Feb-08
28-Feb-08
10-Mar-08
18-Mar-08
24-Mar-08
26-Mar-08
27-Mar-08
31-Mar-08
2-Oct-07
4-Oct-07
5-Oct-07
11-0d-07
1-Nov-07
6-Nov-07
6-Nov-07
6-Dec-07
0
$4,633
$1,929
0
$264,947
$65,437
$2,435
0
$1,760
0
$38,512
0
0
$118,251
0
0
$0
$3,771
$27,604
0
0
0
$197,869
$81,616
0
$153,301
$3,698
$18,919
0
0
0
0
0
$0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
35
-------
Report No.
08-2-0046
08-2-0058
08-2-0072
08-2-0073
08-2-0085
08-2-0097
08-2-0117
08-4-0001
08-4-0002
08-4-0003
08-4-0004
08-4-0005
08-4-0006
08-4-0063
08-4-0064
08-4-0065
08-4-0066
08-4-0067
08-4-0069
08-4-0070
08-4-0075
08-4-0077
Title
Stratus Consulting, Inc. - FY2005 Incurred Cost
COM Federal Program Corp. - FY 2005 RAG - 68-W9-8210
COM Federal Programs Corp. FY 2005 RAG - 68-W5-0022
Bristol Environmental & Engineering - FY2006 Incurred Cost
Black & Veatch FY 2002 RAG Spec Projects 68-W5-0004
Black & Veatch Special Proj Corp - FY 2002 RAG 68-W9-9043
TechLaw, Inc. - FY 9/30/2005 Incurred Cost
Cadmus Group - FY2006 CAS 416
SAIC - Company 1 - Compensation Follow-Up
Eisenstein Malanchuk, LLP - Preaward Accounting System
Weston Solutions, Inc. - CAS 414
CH2M Hill Companies, Ltd (LTD) - FY2006 CAS 403
SAIC - Company 9 - FY 2006 CAS 403
Cadmus Group-CAS 412 (follow-up on ESOP plan)
Cadmus Group-Disclosure Statement dated 5/1/03 (Capitalization)
Cadmus Group-Cost Impact Analysis-Capita Threshold Computer
IBM Federal. Inc.-FY 2006 Accounting System
Cadmus Group-CAS 420 (IR&D/B&P)
CH2M Hill Companies, Ltd. (LTD) - FY2006 CAS 415
Horsley Witten Group - Preaward Accounting System
IBM Federal, Inc. -FY 2006 EDP
Horsley Witten Group - Preaward - Initial Pricing
TOTAL DCAA CONTRACT REPORTS = 56
Final
Report
Issued
18-Dec-07
15-Jan-08
30-Jan-08
30-Jan-08
20-Feb-08
28-Feb-08
27-Mar-08
2-Oct-07
2-Oct-07
3-Oct-07
31-0d-07
31-0d-07
8-Nov-07
24-Jan-08
24-Jan-08
24-Jan-08
24-Jan-08
24-Jan-08
25-Jan-08
28-Jan-08
4-Feb-08
7-Feb-08
Questioned Costs
Federal
Ineligible Unsupported Unreasonable Recommended
Costs Cost Costs Efficiencies
0
$13,878
$3,934
0
$60,442
$49,981
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$1,112,917
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
$0 $0
FINANCIAL STATEMENT REPORTS
08-1-0032
Audit of ERA'S FY 2007 & 2006 (Restated) Financial Statements
TOTAL FINANCIAL STATEMENT REPORTS = 1
15-Nov-07
0
$0
0
$0
$13,550,500
$0 $13,550,500
TOTAL REPORTS ISSUED = 118
$1,446,861 $2,013,513
$216,161
$22,789,779
36
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Appendix 2 - Reports Issued Without Management Decisions
The Inspector General Act requires a summary of each audit report issued before the commencement of the
reporting period for which no management decision has been made by the end of the reporting period (including the
date and title of each such report), an explanation of the reasons such management decision has not been made,
and a statement concerning the desired timetable for achieving a management decision on each such report.
(The OIG provides the summary, the date and title of each such report. The Agency provides the explanation of the
reasons such management decision has not been made, and a statement concerning the desired timetable for
achieving a management decision on each such report.)
IG Followup Status Codes of Agency's Response at 03/31/2008:
[ ] No Response
0 Resolution Pending Receipt of Additional Information
1 Proposed Response Received Awaiting Final Determination
2 Incomplete Response Received
3 Proposed Response Received in Review Process
5 Report Reactivated/Awaiting Response
6 Resolution Under Negotiation in Headquarters
7 Referred to Audit Resolution Board
Office of Air and Radiation
Report No.: 2004-P-00033
Title: Effectiveness of Strategies to Reduce Ozone Precursors
Date Issued: 09/29/2004
Our analysis of EPA emissions data for "serious," "severe," and "extreme" ozone nonattainment areas indicated that
some major metropolitan areas may not have achieved the required 3-percent annual emission reductions in ozone
precursor emissions. While EPA air trends reports have emphasized that ozone levels are declining nationally and
regionally, only 5 of 25 nonattainment areas designated serious to extreme had substantial downward trends. For
some areas, EPA data indicated emission controls for the last 10 years have generally offset growth but have not
significantly reduced ozone levels (reductions should be net of growth). States may have used inaccurate data,
assumptions, and projections of emission growth, resulting in fewer reductions planned than appropriate. The ozone
emissions reduction plan for the Atlanta metropolitan area assumed a growth rate that was about half of the population
growth rate the area experienced from 1980 to 2000; a rate that was about one-third of Atlanta's growth rate for
employment. The Act requires emission reductions of at least 3 percent annually over and above an area's growth.
Since passage of the 1990 Amendments EPA has not issued rules requiring States to demonstrate progress in
reducing precursor emissions, despite the Act's requirement to do so. The Agency's response generally agreed with
the report's findings except for use of National Emissions Inventory (NEI) data as an indicator as to whether selected
nonattainment areas had achieved ozone precursor emission reductions required by the Act. The NEI is the same data
EPA used for regulatory planning and for reporting National, regional, and State emission trends to the public.
EPA provided an action plan to the OIG that provided a partial list of actions planned, and we closed 8 of the 25
recommendations (Recs. 3-1, 3-4, 3-6, 6-2, 6-3, 8-1, 8-2, and 8-4). We sent a memo to EPA in May 2005 explaining
that, once the final Milestone Compliance Demonstration (MCD) rule is promulgated, we may close out six additional
recommendations (Recs. 2-2, 3-3, 5-1, 5-2, 5-3, and 5-5) if the MCD rule adequately addresses these
recommendations. Additionally, we explained that we may be able to close six other recommendations (Recs. 2-1,
5-3, 5-4, 6-1, 7-1, and 7-2) that the Agency was considering in concert with its efforts to address the
recommendations of the National Academy of Sciences/National Research Council's Clean Air Act Advisory
Committee Air Quality Management work group. We also explained that we needed more specifics about the
action(s) being taken or planned to address other recommendations (Recs. 3-2, 3-5, 4-1, 4-2, 8-3, 8-5). In May 2006,
we met with management and staff of EPA/Research Triangle Park's State and Local Programs Group/Air Quality
Policy Division of the Office of Air Quality Planning and Standards (OAQPS), and were told the Agency had decided
not to issue the MCD rule. Instead, they planned to issue guidance to EPA regions that they could share with States.
They explained that such guidance would be faster than a regulatory approach, and there were only a limited number
37
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of areas at the time that fell into the serious, severe, or extreme non-attainment category under the new .08 ppm,
8-hour ozone standard. Staff acknowledged that more areas may come under these categories in the future.
We did not agree that guidance is an acceptable alternative to following through on the Clean Air Act's (CAA's)
mandate to promulgate rules requiring that States demonstrate progress in reducing precursor emissions, including a
reliable method to measure ozone precursor emission reduction efforts. We met again with OAQPS in October 2007
regarding the MCD Rule. According to OAQPS, section 182(g)(2) has proven to be both difficult to implement and
ineffective in verifying milestone compliance. One problem with the mandate has been that the required 90-day
submittal period is not reasonable for assessing actual area-wide emissions reductions. According to OAQPS, it is not
possible for States to develop and produce accurate, quality-assured emissions inventories within 90 days. EPA stated
that it has struggled to resolve the disconnect between the CAA section 182(g)(2) requirement and the timing of the
comprehensive emissions inventory update, but never to the full satisfaction of the mandate. The Agency believes that
the other attainment planning and emissions reduction requirements in CAA section 182 and EPA's 8-hour ozone
implementation rule (70 FR 71612, November 29, 2005) collectively provide effective technical assurance of continued
progress toward attainment of the ozone national ambient air quality standard. These requirements include periodic
updated emissions inventory submissions, attainment demonstrations, reasonably available control technology
requirements and other enforceable emissions reduction measures, and classification bump-up provisions. The
Agency believes these provisions ensure similar progress-based accountability as the MCD mandate.
We continue to believe EPA should issue an MCD rule for serious, severe, and extreme ozone nonattainment areas.
The 1990 Act required these areas to demonstrate a 3 percent per year reduction in ozone precursor emissions, net
of growth. This would involve developing a local emissions inventory for the area and demonstrating that they
actually reduced emissions. While developing such an inventory within 90 days may not be feasible, EPA could seek
authority to develop a rulemaking that would implement Congress' intent in passing the 1990 CAA amendments by
requiring milestone demonstrations periodically, such as once every 3 years. As noted in our report (pp 38-40):
"OAQPS officials were asked if statutory changes in the Act's requirements were sought to remedy the timeframe
inconsistencies, to which they replied recommendations on statutory changes could only come from the Assistant
Administrator level and no such recommendations had been made." Ozone continues to be a serious human health
problem (particularly in major metropolitan areas). In March 2008 EPA issued the .075 ppm ozone National Ambient
Air Quality Standard, indicating that ozone is deleterious at lower levels and over longer periods than known at the
time Congress passed the 1990 Act. Many more Metropolitan Statistical Areas will likely be in nonattainment. We
will continue to followup on the Agency's actions.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
OAQPS briefed the OIG on 10/16/07, concerning the ineffectiveness of an MCD rule/guidance considering the recent
Ozone Rule impact and Office of Management and Budget (OMB) Good Guidance requirements. OAQPS submitted
an alternative solution to OIG and awaits the OIG's response.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Resolution expected by January 2009
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Report No.: 2005-P-00003
Title: Development of the Proposed MACT for Utility Units
Date Issued: 02/03/2005
Evidence indicated that EPA senior management instructed EPA staff to develop a Maximum Achievable Control
Technology (MACT) standard for mercury that would result in national emissions of 34 tons annually, instead of
basing the standard on an unbiased determination of what the top performing coal-fired units were achieving in
practice. The CAA requires that a MACT standard should, at a minimum, be based on the emissions levels achieved
by the top performing 12 percent of units- not a targeted national emissions result. The 34-tons-per-year target was
based on the amount of mercury reductions expected to be achieved from the co-benefit of implementing nitrogen
oxide and sulfur dioxide controls under a separately proposed, but related, air rule, known as Clean Air Interstate
Rule. The 34-ton target was prescribed by EPA senior management, and prior estimates were lower.
Because the results of the MACT standard were prescribed and prior estimates were lower than what was proposed,
we believed it was likely that the standard understated the average amount of mercury emissions reductions achieved
by the top performing 12 percent of power units. Some EPA officials told us that, in their opinion, the true MACT floor
would result in lower mercury emissions than the 34 tons estimated from current MACT floor limits. Thus the MACT
standard, if adopted, would not achieve the maximum emission reductions achievable. Further, as proposed, it did not
38
-------
provide a reasonable basis for comparison in determining which of EPA's two proposed regulatory alternatives (i.e., the
MACT standard or the mercury cap-and-trade program) provided the better cost-benefit.
We reported that EPA's cap-and-trade proposal could be strengthened to better ensure that emission reductions
would be achieved. Also, the proposal did not adequately address the potential for hot spots, and the provisions for
units emitting small amounts of mercury could be improved. Further, we found that EPA's rule development process
did not comply with certain Agency and Executive Order requirements, including not fully analyzing the cost benefit of
regulatory alternatives and not fully assessing the rule's impact on children's health. On 3/31/05, EPA issued a final
rule, the Clean Air Mercury Rule (CAMR), which adopted a cap-and-trade approach to controlling mercury emissions.
Based on EPA's 5/4/05 response to our final report, we agreed to close two recommendations, hold three in
abeyance pending the outcome of litigation, and hold four open pending receipt of a corrective action plan for
implementing those recommendations. After our report, EPA decided to open CAMR for reconsideration and
requested an extension on 1/25/06 for completing its response to our report until the rule reconsideration process
was completed. The reconsidered CAMR rule was issued 5/31/06, essentially unchanged from the earlier rule. On
6/19/06, 16 States filed lawsuits challenging CAMR. Since our report raised questions about the data and process
EPA used in developing CAMR, we agreed to hold the recommendations in abeyance until the court case is settled.
The U.S. Court of Appeals for the District of Columbia Circuit vacated the CAMR rule on 2/8/08. EPA appealed the
Court's decision on 3/24/08. We continue to hold the recommendations in abeyance until the Court's ruling on EPA's
appeal, and we continue to monitor Agency actions regarding the findings in our report.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Per OIG, resolution on Hold; Beyond Agency Control. EPA received ruling on CAMR and is determining the next
action.
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2006-P-00017
Title: Emissions Factors Management, Use, and Benefits
Date Issued: 03/22/2006
Industry, EPA, State, local, and tribal agencies, environmental groups, and others use emissions factors to develop the
emissions data that underlie a host of important environmental decisions. These decisions include setting permit limits
for industrial facilities, developing control strategies, measuring environmental progress, assessing facility compliance,
and demonstrating results under the Government Performance and Results Act of 1993. About 80 percent of
emissions determinations are the result of emissions factors. EPA has made progress in emissions factors
development since the OIG reviewed the program in 1996, but a large number of factors continue to be rated low.
The number of EPA-rated factors increased by nearly 94 percent, from 8,838 in 1996 to 17,110 in 2004. However, the
percentage of emissions factors rated below average or poor increased from 56 percent in 1996 to 62 percent in 2004.
EPA faces significant challenges in improving emissions factors. We found (1) conflicting guidance on the
appropriate use of emissions factors, (2) a rating system which did quantify the uncertainty associated with the
emission factor, (3) inadequate funding of the emissions factor program, and (4) lack of a comprehensive plan to
improve data collection and set emissions factor priorities. EPA guidance states that the user must take into account
the uncertainty of the emission factor when considering its use; however, for three industry sectors EPA examined,
inappropriate use of emissions factors contributed to more than one million tons of pollutants not being controlled.
These management-related issues contribute to the impairment of emissions factor development, hampering
achievement of the CAA's requirements and program goals. Without reliable emissions factors, users cannot be sure
that (1) air pollution control strategies target the right industries or products, (2) permitting programs establish
appropriate emission limits, or (3) air programs are effective in reducing air pollution.
Although EPA is shifting towards more direct, continuous emissions monitoring at major sources, increased demand
for low-cost environmental data is driving the need for more quality emissions factors. As such, EPA is implementing
a three-pronged plan to revamp its emissions factor program. First, EPA is developing an electronic reporting tool to
make it easier for State, local, and tribal agencies to accept, assess the quality, and transmit emissions test data.
Second, EPA is upgrading the emissions factors information retrieval (FIRE) system, making it the foundation for an
interactive, real-time, easy-to-expand, and enhanced Internet application re-named WebFIRE. Third, EPA is
developing a means to estimate quantitatively the uncertainty associated with using emissions factors and sharing
that information with users.
39
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EPA generally agreed with our report and provided a corrective action plan to the OIG in August 2006 that enabled
the OIG to close 9 of 13 recommendations. We followed up with the Office of Air and Radiation in March 2007 and
confirmed that the Agency issued a Quality Management Plan in October 2006 calling for data used for the
development of emissions factors to meet data quality requirements; thus, we can now close Rec. 3-2(e). We
followed up with the Office of Air and Radiation in the fall of 2007 on the development of an Emissions Factors
Strategic Plan, which the Agency provided on 2/8/08. As of 3/31/08, we were awaiting the Agency's official signed
Action Plan memorandum stating that it will implement this strategic plan to address the remaining open
recommendations. We will continue to monitor the Agency's actions regarding the findings and recommendations in
our March 2006 Emissions Factors report.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
EPA has submitted Final Strategic Plan for Emission Factors to the OIG and submitting rationale for an alternative
corrective action for Rec. 3.3 that if accepted by OIG, audit resolution will occur by 8/15/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by August 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Report No.: 2006-P-00025
Title: Mercury Hot Spots Analysis under CAMR
Date Issued: 05/15/2006
About 40 percent of U.S. man-made airborne mercury is emitted from coal-fired utilities. EPA adopted a nationwide
cap-and-trade program to reduce mercury emissions whereby utilities can buy and sell credits among one another in
a national emissions market. Utilities that cannot cost-effectively reduce emissions may buy allowances from units
that reduced emissions below established allowance limits. Several State agencies and environmental groups
objected to the cap-and-trade system. One concern was that a cap-and-trade program could result in localized areas
with unacceptably high levels of mercury, or "hotspots." Although the Agency concluded that the Clean Air Mercury
Rule (CAMR) will not result in "utility-attributable" hotspots, the OIG found in its evaluation that there were:
• gaps in available data and science for mercury emissions estimates,
• limitations with the model used for predicting mercury deposition,
• uncertainty over how mercury reacts in the atmosphere, and
• uncertainty over how mercury changes to a more toxic form in waterbodies.
Due to the uncertainties associated with the Agency's analysis of the potential for mercury hotspots, the OIG
recommended that the Acting Assistant Administrator for OAR work with the Assistant Administrator for the Office of
Research and Development to develop and implement a mercury monitoring plan, including milestones and
responsible program offices for implementing each component of the plan, to: (1) assess the impact of CAMR, if
adopted, on mercury deposition and fish tissue; and (2) evaluate and refine, as necessary, mercury estimation tools
and models.
EPA generally agreed with our report and provided a corrective action plan to the OIG in August 2006. After
assessing the Agency corrective action plan, the OIG kept the above recommendation open pending the receipt of
additional information from the Agency. The Agency responded to our request with additional information, but
indicated that it was unsure as to whether fish tissue sampling, specifically, would continue beyond 2008 due to
budget limitations. Because data from fish tissue are necessary to monitor the impact of CAMR and the potential for
mercury hotspots, the OIG replied to the Agency in January 2007 that the recommendation would remain open. We
will review the final Agency budget to determine if a fish tissue sampling plan is a part of the EPA's activities for 2008.
Thus, a resolution to this recommendation is on hold while we await final Agency budget information. This report
recommendation is also impacted by the U.S. Circuit Court of Appeals for the District of Columbia vacature of the
CAMR rule on 2/8/08. EPA appealed the Court's decision on 3/24/08. We will continue to hold the recommendations
in abeyance until the Court's ruling on EPA's appeal.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
This report remains on hold by OIG due to issue beyond agency control.
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
40
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Office of Administration and Resources Management
Report No.: 2007-P-00011
Title: Review of Interagency Contracts
Date Issued: 03/27/2007
The U.S. Government Accountability Office has designated management of interagency contracting a
govern me ntwide high-risk area since 2005. We sought to determine whether EPA effectively follows interagency
contracting requirements by ensuring products and services meet quality, cost, and timeliness requirements. We
also looked into whether opportunities exist to improve EPA's processes for managing interagency contracts. We
recommend that the Assistant Administrator for the Office of Administration and Resources Management:
1. Provide guidance to project officers for developing independent government cost estimates or other
appropriate cost information, as well as cost reasonableness assessments. These assessments should
include an analysis of the fees paid to servicing agencies.
2. Ensure that the Grants Administration Division reviews cost reasonableness assessments prepared by
program offices.
3. Provide guidance to project officers for identifying alternatives to the contracting vehicle selected. Office of
Acquisition Management's Contracts Management Manual addresses market research and should be
consulted for guidance.
4. Strengthen the existing training to include how to develop independent government cost estimates or other
appropriate cost information, conducting cost reasonableness assessments, and identifying alternatives.
5. Work with program officials to ensure that project officers' performance standards reflect their
responsibilities for managing interagency contracts.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Final corrective actions depend on the issuance of Office of Federal Procurement Policy guidance. While the
issuance of this guidance is beyond Office of Grants and Debarment's (OGD's) control, we expect resolution to take
place by July 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by July 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Financial Analysis and Rate Negotiation Service Center
Report No.: 2004-1-00099
Title: Lockheed Martin Services Group -FYE 12/31/2002 Incurred Cost
Date Issued: 08/23/2004
Defense Contract Audit Agency (DCAA) questioned indirect costs of $3,595,399, of which $2,128 is applicable to
EPA contracts. DCAA qualified the audit results pending receipt of assist audit reports. Audit on hold due to other
cognizant Federal Agency (Department of Defense (DoD)).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2005-1-00171
Title: Advanced Technologies Systems, Inc. - FY 2003 Incurred Cost
Date Issued: 09/26/2005
DCAA questioned indirect costs for Fiscal Years 2001-2003.
Applicable to Fiscal Year 2001: $13,904
Applicable to Fiscal Year 2002: $6,891
Applicable to Fiscal Year 2003: $13,928
Audit on hold due to other cognizant Federal Agency (Department of Energy).
41
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EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2006-4-00120
Title: National Academy of Sciences - FY 2006 Info Tech System
Date Issued: 07/20/2006
DCAA determined that the contractor's Information Technology system general internal controls are inadequate in
part. Audit on hold due to other cognizant Federal Agency (Office of Naval Research).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on Hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2006-4-00165
Title: National Academy of Sciences - FY 2006 Indirect/ODC System
Date Issued: 09/27/2006
In DCAA's opinion, the contractor service centers cost system and related internal control policies and procedures are
inadequate in part. DCAA's examination noted certain significant deficiencies in the design or operation of the
Indirect/Other Direct Costs system process. Audit on hold due to other cognizant Federal Agency
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on Hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2006-4-00169
Title: National Academy of Sciences - FY 2006 Labor System
Date Issued: 09/29/2006
In DCAA's opinion, the contractor's labor system and related internal control policies and procedures are inadequate
in part. DCAA's examination noted certain significant deficiencies in the design or operation of the internal control
structure. The assignment is on hold due to other cognizant federal agency.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on Hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-4-00011
Title: National Academy of Sciences - FY 2006 Electronic Timekeeping System
Date Issued: 10/24/2006
DCAA determined that the contractor's Electronic Timekeeping System internal controls are inadequate in part.
This audit is on hold awaiting resolution by DoD, the cognizant agency.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on Hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
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Report No.: 2007-1-00016
Title: URS Corporation (c/o URS Greiner, Inc.) - FY 2001 Incurred Cost
Date Issued: 11/13/2006
DCAA questioned a total of $188,772,784 in direct and indirect costs. Of these, $5,585,929 are claimed direct costs,
of which $1,328,189 are from EPA Contract No. 68-W9-8225. The questioned indirect expenses impacted all eight
fringe, overhead, and General and Administrative rates. Of the questioned indirect costs, EPA's share is $401,412,
for a total of $1,729,601 in questioned direct and indirect costs. We note that the contractor did not agree with the
questioned costs, so the Allowable Cost Worksheet files provided by the contractor are not adjusted for the
questioned costs. This audit is on hold awaiting resolution of the questioned costs by DoD, the cognizant agency.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on Hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-4-00038
Title: Weston Solutions - FY 2006 Floor Checks
Date Issued: 01/08/2007
DCAA expressed no opinion on the adequacy of the contractor's labor accounting system taken as a whole, as it had
determined that certain labor practices required corrective action to improve the reliability of the labor accounting
system. The conditions are detailed in the "Statement of Conditions and Recommendations" section of the report.
This audit will be held open pending the results of the followup audit in 6 months.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on Hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-1-00059
Title: National Academy of Sciences - FY 12/31/2004 Incurred
Date Issued: 04/05/2007
In DCAA's opinion the claimed direct costs are acceptable, however there are $787,774 in questioned indirect costs
of which $70,900 are applicable to EPA contracts. This audit is on hold awaiting information on the resolution of the
questioned costs by the cognizant Federal Agency (Office of Naval Research).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-1-00061
Title: Lockheed Martin Services Group - FY 12/31/2004 I/C
Date Issued: 04/10/2007
DCAA questioned $34,708,911 in claimed direct costs and proposed indirect costs. Further, DCAA unresolved
$338,864,655 in claimed direct and indirect costs for assist audits not yet received or for received assist audit reports
whose impact on the contractor's cost objectives has not yet been calculated. Additionally, DCAA upwardly adjusted
($48,224,805) in claimed base costs.
Questioned Costs - Direct $21,581,464
Questioned Costs - Indirect 13.127.447
Total Questioned Costs $34,708,911
EPA ADV Percentage .02
EPA Share of Questioned Costs $694,178
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DCAA did not provide any Cumulative Allowable Cost Worksheets or Schedule of Allowable Costs by Cost Element
by Contract because the most current year with negotiated indirect rates is CY 1998. DCAA will issue a
supplemental audit report upon completion of their analysis of the assist audit results, and as the outstanding fiscal
years indirect rates are negotiated, the requested CACWS and Schedule of Allowable Costs by Cost Element by
Contract will be provided. This audit is on hold awaiting information on the resolution of the questioned costs by the
cognizant Federal Agency (DoD).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-4-00054
Title: Metcalf & Eddy, Inc. - FY 2007 Labor Floorcheck
Date Issued: 04/19/2007
DCAA determined that certain contractor labor practices require corrective action to improve the reliability of the
contractor's labor accounting system. This report is limited to the cited deficiency. Accordingly, DCAA expressed no
opinion on the adequacy of the contractor's labor accounting system taken as a whole. This audit is on hold awaiting
information on the resoution of the cited deficiencies by the cognizant Federal Agency (DoD).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-4-00058
Title: Science Applications Intl. Corporation (SAIC) - Companies 1, 6 & 9 - FY 2006 Floorchecks
Date Issued: 04/30/2007
We are closing two audits under this ACN, A/N 4171-2005B13500001, dated 09/25/2006, and A/N 4171-
2006B13500001, dated 02/27/2007. This corrects a mixup in the ACNs assigned to requested DCAA audits. In A/N
4171-2005B13500001, dated 09/25/2006, DCAA determined that the floor checks disclosed no significant
deficiencies in the contractor's timekeeping or labor system in FY 2005. DCAA did not express an opinion on the
adequacy of the contractor's labor accounting system taken as a whole. In A/N 4171-2006B13500001, dated
02/27/2007, DCAA determined that certain labor practices require corrective action to improve the reliability of the
contractor's labor accounting system. DCAA did not express an opinion on the adequacy of the contractor's labor
accounting system taken as a whole. This audit is on hold waiting on the resolution of the identified deficiency by the
cognizant Federal Agency (Defense Contract Management Agency).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-1-00079
Title: SAIC - FYE 1/31/2005 I/C
Date Issued: 07/18/2007
DCAA submitted three audit reports under this assignment. SAIC Corporate Home Office (Company 9) Report #
2005A101001, SAIC Research & Development (Company 1) Report #2005610100001, and SAIC Pacific
Technology Service (Company 6) Report #2005C10100001. DCAA accepted the claimed direct costs at Companies
1 & 6, (there are no claimed direct costs at Company 9), and questioned proposed indirect costs and rates at
Companies 1, 6, and 9. DCAA questioned a total of $17,224,585 of Company 9 claimed indirect expenses
($9,938,874) and Fringe Benefits costs and rates ($7,285,711), of which $7,762,651 was allocated to other
companies which do not perform Government work. Questioned indirect costs of $3,525,230 and $4,552,250 were
allocated to and questioned in the claimed General and Administrative costs and rates of Companies 1 & 6,
respectively. The questioned Fringe Benefits rates in Company 9 resulted in questioned fringe benefits costs of
$865,365 and $519,089 for Companies 1 & 6, respectively. DCAA questioned an additional $1,995,869 of Company
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1 claimed indirect expenses, and an additional $511,822 of Company 6 claimed indirect expenses. Total questioned
costs in Companies 1 & 6 are $11,969,625, of which $119,696 are applicable to EPA contracts. This audit is on hold
awaiting information on the resolution of the questioned costs by the cognizant Federal Agency (Defense Contract
Management Agency).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-1-00080
Title: Lockheed Martin Services, Inc. - FY 2005 Incurred Cost
Date Issued: 08/06/2007
DCAA questioned $595,792,539 in claimed direct costs and $10,982,460 in proposed indirect costs and rates. None
of the questioned direct costs are chargeable to any of the EPA contracts. A number of the EPA contracts have
indirect ceiling rates which are lower than the contractor's proposed indirect rates, and are not impacted by the
questioned indirect expenses and rates. However, there are EPA contract/subcontracts which do not have indirect
ceiling rates and are impacted by the questioned indirect rates.
Questioned Costs EPA's Share
Indirect Costs $17,623,213 1.21% $213,531
Adjustment to G&G Base Costs ( 6.640.753) 1.21% ( 80.462)
Total Questioned Indirect Costs $10,982,460 $133,069
This audit is on hold pending receipt of information on the resolution of the questioned costs by the cognizant Federal
Agency (Defense Contract Management Agency).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-1-00090
Title: ABT Associates Inc. - FY 2002 Incurred Cost
Date Issued: 08/29/2007
DCAA questioned a total of $2,206,870 in questioned costs, $5,363 of proposed direct costs, and $2,201,507 of
proposed indirect costs and rates. EPA's share of the questioned indirect costs is $123,686. None of the questioned
direct costs impact an EPA contract. This audit is on hold awaiting information on the resolution of the questioned
indirect costs and rates by the cognizant Federal Agency (U.S. Agency for International Development).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-1-00097
Title: National Academy of Sciences FYE 12/31/2003 Incurred Cost
Date Issued: 09/20/2007
In DCAA's opinion, the contractor's questioned costs increased to $300,645, of which EPA's portion is $27,058 (9%)
This supplemental report supersedes the report 6171-2003G10110001-S1 dated 3/24/3006 in its entirety. On hold
due to other Federal Agency.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
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Report No.: 2007-4-00079
Title: Weston Solutions, Inc. - FY 2006 Billing System
Date Issued: 09/25/2007
In DCAA's opinion, the contractor's billing system and related internal control policies and procedures were
inadequate in part. This audit is on hold awaiting additional information from the cognizant Federal Agency (DoD).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Report No.: 2007-4-00080
Title: National Academy of Sciences - FY 2006 Budget System
Date Issued: 09/26/2007
In DCAA's opinion, the budget and planning system and related internal control policies and procedures are
inadequate in part. This audit is on hold awaiting information on the resolution of the inadequacies cited, by the
cognizant Federal Agency (Office of Naval Research).
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Resolution on hold
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
Grants Interagency Agreements Management Division (GIAMD) - formerly Grants Administration Division
Report No.: 2002-2-00008
Title: MBI International Assistance Agreement
Date Issued: 01/29/2002
MBI did not have adequate justification to support the award of sole source contracts. Also, MBI's procurement
practices did not meet Federal requirements. As a result, $1,301,365, consisting of $1,201,857 in contract costs and
$99,508 in consultant costs, is not eligible for Federal reimbursement. Further, there were apparent conflicts of
interest between MBI, its subsidiary (CRT), and companies created by CRT.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD has reviewed the audit and considered the OIG findings and responses from MBI. GIAMD is in agreement
with the OIG and will send a letter disallowing all of the questioned costs. The letter will also inform MBI of its
disputes rights.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expected resolution by May 30, 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Report Reactivated/Awaiting Response
Report No.: 2003-S-00001
Title: Region 7 Grants Proactive
Date Issued: 05/29/2002
We questioned over $2 million because the Coordinating Committee on Automotive Repair (CCAR) did not account
for the funds in accordance with Federal rules, regulations, and terms of the agreement.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
OIG questioned all costs claimed ($2,026,837) on three projects between 1995-2001. CCAR has submitted the
required indirect cost rate information for the audit period and has provided documentation that its financial
management system and time distribution system meet the requirements of EPA's assistance regulations and OMB
Circular A-122. However, reconstructed accounting records CCAR submitted in December 2005 for Fiscal Years
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1996 and 1997 do not substantiate the costs they charged to the project. EPA requested additional information to
substantiate the costs, but CCAR has not responded. EPA will follow up with CCAR and issue the final determination
disallowing costs by November 2008
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expected resolution by November 2008.
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Report No.: 2003-3-00113
Title: American Indian Science & Engineering Society 1999-2001
Date Issued: 04/23/2003
Costs were not approved or were not supported. Questioned costs totaled $104,760.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
There are three reports under review for the years 1999-2000. The reports include findings of inadequate internal
controls and questioned costs totaling $163,125. These reports have been reviewed and the recipient has submitted
responses to the findings indicating that procedures have been implemented and the conditions no longer exist.
However, GIAMD has received a subsequently issued audit report for audit period 2002. Although the most this
latest report does not question any costs, it contains findings that some of the pre-existing internal control issues still
exist. GIAMD is working on a combined resolution addressing the findings in all of the audit reports.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expected resolution October 31, 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Report Reactivated/Awaiting Response
Report No.: 2003-3-00114
Title: American Indian Science & Engineering Society 1999-2001
Date Issued: 04/23/2003
Cost were not approved and not properly supported. Questioned costs totaled $58,365.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
There are 3 reports under review for the years 1999-2000. The reports include findings of inadequate internal
controls and questioned costs totaling $163,125. These reports have been reviewed and the recipient has submitted
responses to the findings indicating that procedures have been implemented and the conditions no longer exist.
However, GIAMD has received a subsequently issued audit report for audit period 2002. Although this latest report
does not question any costs, it contains findings that some of the pre-existing internal control issues still exist.
GIAMD is working on a combined resolution addressing the findings in all of the audit reports.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expected resolution by October 31, 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Report Reactivated/Awaiting Response
Report No.: 2003-3-00121
Title: Association of State & Interstate Water Pollution Control Administrators (ASIWPCA) FY 2001
Date Issued: 05/07/2003
Grantee drew down $93,986 in excess of expenditures for three EPA programs.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD developed a universal method to resolve all of the pending Audit Resolutions for ASIWPCA. There are a total
of four audits. An on-site review was conducted in April 2007 to perform transaction testing to confirm if the policies
and procedures were being implemented in response to the findings in all of the audits. All additional actions and
requested information have been received. A draft Final Determination Letter (FDL) has been completed and
comments on the draft have been provided. Resolution is pending the completion of the final FDL draft and ultimate
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approval. Due to the complexity of combining issues from all of the audits and volume of the additional
documentation, GIAMD expects to issue the FDL by April 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expected resolution by April 2008.
IG FOLLOWUP STATUS AS OF 03/31/2008: Report Reactivated/Awaiting Response
Report No.: 2003-4-00120
Title: Geothermal Heat Pump Consortium, Inc. - Costs Claimed
Date Issued: 09/30/2003
Questioned $1,153,472 due to material financial management deficiencies. The Consortium's financial management
system was inadequate in that the Consortium did not: (1) separately identify and accumulate costs for all direct
activities, such as membership support and lobbying; (2) account for program income generated by the activities
funded by the EPA agreements; (3) prepare or negotiate indirect cost rates; (4) prepare written procedures for
allocating costs to final cost objectives; (5) maintain an adequate labor distribution system; and (6) provide adequate
support for direct cost allocations. The Consortium also did not (1) competitively procure contractual services or
perform any of the required cost and price analyses; and (2) comply with all report requirements.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
OGD reviewing the financial statements and the lobbying disclosure statements to identify allowable cost. Grants
Specialist and new Branch Chief are working to resolve the issues of this audit.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by January 2009.
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2004-4-00014
Title: Consumer Federation of America Foundation - Costs Claimed
Date Issued: 03/01/2004
EPA awarded the cooperative agreements to the Consumer Federation of America Foundation based on applications
that showed labor and other operating costs. The Foundation did not have any employees, space, or overhead
expenses. Instead, the Consumer Federation of America, an ineligible lobbying organization, performed the work. Also,
the recipient did not manage the funds according to Federal regulations. As a result, the OIG questioned over $4 million.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The FDL was sent to the OIG in July 2007. The OIG sent it back requesting that other minor recipients be added to
the FDL. GIAMD received revised information from the recipient regarding some contracts. All of this information
has been incorporated into the draft FDL package. Also, the Office of General Counsel added more legal wording
and returned their comments in February 2008. At present, a deviation is also being drafted for some of the costs.
A deviation will reduce the amount from $4.7 million to $1.8 million, which will cover the less-than-arms-length
procurement issue. The FDL will be signed by April 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008.
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Report No.: 2005-3-00036
Title: National Indian Health Board (NIHB), FY 2002
Date Issued: 12/30/2004
The Board was allocating salary costs to grants based on pre-determined formulas. No support, in the form of time
sheets, was located for those allocations. Also, amounts charged to various grants were not always supported by
original documentation. Therefore, the OIG questioned $31,960 as unsupported.
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EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The recipient, NIHB, provided information. However the information provided was not enough to address the audit
findings. NIHB claims to have revised its policies to address the time sheet and original document issues, but the
policy remains very broad and general. GIAMD continues to work with the recipient to obtain more specific evidence
documenting effective corrective actions. FDL is expected to be completed by May 2, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2005-3-00217
Title: American Indian Science and Engineering Society, FY 2002
Date Issued: 08/30/2005
The Society held $19,289 in deferred revenue for EPA grant, Surveys, Studies, Investigations, and Special Purpose.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
There are three reports under review for the years 1999-2000. The reports include findings of inadequate internal
controls and questioned costs totaling $163,125. These reports have been reviewed and the recipient has submitted
responses to the findings indicating that procedures have been implemented and the conditions no longer exist.
However, GIAMD received this subsequently issued audit report for audit period 2002. Although this latest report
does not question any costs, it contains findings that some of the pre-existing internal control issues are still present.
GIAMD is working on a combined resolution addressing the findings in all of the audit reports. Final determination is
expected October 31, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by October 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2005-3-00226
Title: ASIWPCA, FY 2002
Date Issued: 09/12/2005
Recording of grant expenditures was not done accurately or on a timely basis during the year. The recording of
fringe benefits related to direct grant salaries and wages and the recording of indirect costs associated with total
direct grant costs were not done monthly. In addition, direct salaries and wages were incorrectly recorded to the NPS
grant after the grant period expired. An adjustment was made to properly record these costs to the integrated grant.
Because the grants have expired, costs totaling $11,276 are being questioned due to over-requesting funds in excess
of supported costs.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD developed a universal method to resolve all of the pending Audit Resolutions for ASIWPCA. There are a total
of four audits. An on-site review was conducted in April 2007 to perform transaction testing to confirm if the policies
and procedures were being implemented in response to the findings in all of the audits. All additional actions and
requested information have been received. An FDL has been completed and comments on the draft have been
provided. Resolution is pending the completion of the final FDL draft and ultimate approval. Due to the complexity of
combining issues from all of the audits and volume of the additional documentation, GIAMD expects to issue the FDL
by April 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Report Reactivated/Awaiting Response
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Report No.: 2006-3-00006
Title: Alfred University, FY 2004
Date Issued: 10/13/2005
The University's accounting system provided certified payroll information on an individual grant basis. However, the
payroll distribution system did not provide a proportionate breakdown of each employee's total time between each
sponsored program he/she may be working on and other non-sponsored activities. The auditor questioned costs of
$649,506, but could not determine the direct impact upon EPA's program.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
We received a second Alfred University audit with precisely the same type of findings and decided to combine the two
audits. We had received requested information for the first and are now requesting more information to document
support needed for the additional findings. This support requires recreating documentation, which includes finding and
contacting professors to obtain certification of time and work performed by students who no longer work there, student
identification numbers, account numbers used, etc. Documentation received to date has been sufficient to substantiate
the support needed in response to the first audit. Based upon previous documentation submitted and sameness of
findings, we anticipate all documentation, when received, will be sufficient to support payments made to the students
and that costs questioned will be supported through such documentation. An FDL is anticipated by October 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution October 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2006-4-00122
Title: ASIWPCA
Date Issued: 07/31/2006
ASIWPCA did not comply with the financial and program management standards and the procurement standards
promulgated in Title 40 Code of Federal Regulations, Subchapter B, Part 30. ASIWPCA (1) could not provide
support for any of its general journal entries; (2) included duplicate recorded costs in its accounting system; (3) could
not always trace grant draws to the accounting records; (4) could not always support labor charged to the EPA
grants; (5) could not support the recorded indirect costs; (6) did not record all of its program income; (7) did not have
adequate written procedures for determining reasonable, allocable, and allowable costs; (8) drew EPA grant funds in
excess of the funds needed; and (9) did not complete the required single audits for fiscal years ended June 30, 2004,
and June 30, 2005. As a result, we questioned as unsupported a total of $1,883,590 in EPA grant payments for
seven grants.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD developed a universal method to resolve all of the pending Audit Resolutions for ASIWPCA. There are a total
of four audits. An on-site review was conducted in April 2007 to perform transaction testing to confirm if the policies
and procedures were being implemented in response to the findings in all of the audits. All additional actions and
requested information have been received. A followup on-site review was also performed to confirm the corrective
actions taken by the recipient. A draft FDL has been completed and comments on the draft have been provided.
Resolution is pending the completion of the final FDL draft and ultimate approval. Due to the complexity of combining
issues from all of the audits and volume of the additional documentation, GIAMD expects to issue the FDL by
April 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Report No.: 2006-3-00199
Title: Howard University, FY 2005
Date Issued: 09/07/2006
The University had numerous program noncompliances related to timekeeping, funds matching, sub-recipient
monitoring, financial reporting, and equipment disposal.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD has requested additional documentation. Staff changes at Howard University have presented some
challenges in obtaining complete responsive documentation needed to resolve the findings. GIAMD expects issuing
a signed FDL by August 15, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by August 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2006-3-00201
Title: American Water Works Association FY 2004
Date Issued: 09/13/2006
The Association did not comply with its existing procurement policies and procedures. There were two instances
where the Association could not produce adequate procurement records in accordance with OMB Circular A-110.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD has reassigned audit resolution due to staff departure. GIAMD is working with the recipient to resolve the
procurement procedures.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-4-00026
Title: International City County Management Association (ICMA)
Date Issued: 11/28/2006
Questioned costs due to (a) lack of competition for contracts, (b) lack of oversight for sub-awards, (c) lack of
documentation on sub-grants, and (d) illegal indirect costs.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The FDL draft from last November required revision and more detailed conversation with ICMA regarding the indirect
costs. ICMA has submitted all of the requested information as of February 4, 2008. As a separate action to be
included with OGD's Management response, the GIAMD will be preparing and seeking a deviation for one of the
questioned contracts. OGD expects to be able to present an acceptable FDL/management response by May 8, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-4-00027
Title: National Rural Water Association (NRWA) - Congressional
Date Issued: 11/30/2006
NRWA's method of allocating indirect costs over total direct costs is contrary to the requirements of OMB Circular
A-122. Currently, NRWA does not exclude subcontracts or subawards from its indirect cost allocation base. As a
result, the EPA grants are bearing a disproportionate amount of indirect costs. For the period from March 1, 1999, to
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February 29, 2004, EPA grants may have been over-allocated by $2,021,821 in indirect costs. The exact amount of
the indirect over-allocation will be determined during negotiation of the indirect cost rate.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD staff is working with NRWA regarding indirect cost rates and how the NRWA allocated the costs. The NRWA
provided insufficient support and GIAMD is following up. The FDL is expected to be completed by June 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by June 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-3-00035
Title: National Environmental Health Association - FY 2004
Date Issued: 12/05/2006
The Association did not establish procedures to ensure that indirect costs were charged to grants in accordance with
the indirect cost plan and applicable regulations. Specifically, the Association accumulated "overhead costs" and
allocated these costs to the functions of the organizations including Federal grants, and also charged indirect costs to
grants based on the indirect cost rate. This could result in a duplication of overhead charges to certain programs. In
addition, the Association did not appear to follow a consistent methodology to allocate these costs. The Association
had several grant awards that did not coincide directly with the Association's fiscal year-end. Therefore, the grants
covered multiple fiscal years. The Association had not established procedures to ensure that grant accounting
provided information necessary to report results for the grant period, as well as the Association's fiscal year. In
addition, grant reports were not typically prepared from accounting records.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
GIAMD is working with the recipient to resolve all indirect cost issues, including having the recipient (1) allocate indirect
costs according to the indirect cost plan, (2) establish procedures for indirect cost allocation and overhead to ensure
against duplication, (3) establish procedures for ensuring consistency with grant reporting and fiscal year-end reporting,
and (4) ensure grant reports are prepared from accounting records. The FDL is anticipated by May 31, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-3-00037
Title: Alfred University - FY 2005
Date Issued: 12/11/2006
The University's current system provided certified payroll information on an individual grant basis. However, the
payroll distribution system did not provide a proportionate breakdown of each employee's total time between each
sponsored program he or she may be working on and other non-sponsored activities. The auditor's questioned costs
of $856,419, but could not determine the direct impact upon EPA's program.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
This is the second Alfred University audit with precisely the same type of findings as the first audit for FY 2004.
Resolution of both audits will be done at the same time. The Agency had received requested information for the first
audit and is now requesting more information to document support needed to respond to the additional findings. This
support requires recreating documentation which includes finding and contacting professors to obtain certification of
time and work performed by students who no longer work there, student identification numbers, account numbers
used, etc. An FDL is anticipated by October 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by October 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Report No.: 2007-3-00103
Title: American Society of Civil Engineers (ASCE) and Affiliates - FY 2005
Date Issued: 05/18/2007
As part of the year-end financial reporting process, ASCE had ineffective controls over the compilation and
presentation of its consolidated financial statements in accordance with U.S. generally accepted accounting
principles. In order to present the consolidated financial statements in accordance with the generally accepted
accounting principles, 37 audit adjustments/reclassifications were proposed to properly reflect current year amounts
and 14 audit adjustments were proposed to properly restate prior year amounts previously reported.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Initial contacts by telephone and email were made in fall 2007 to (1) confirm their audit contact, (2) informally discuss
ASCE's and Affiliates' reaction to the audit, and (3) obtain information on actions taken to address the audit findings.
Followup is needed. By April 8, 2008, GIAMD staff will send a more formal letter requiring action. Audit resolution or
final action is anticipated to be complete by September 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-3-00133
Title: National Caucus and Center on Black Aged, Inc. (NCCBA) - FY 2005
Date Issued: 07/24/2007
The NCCBA Federal Cash Transaction Reports did not reconcile to its general ledger.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The OIG found that NCCBA's Federal Cash Transaction Reports did not reconcile to its general ledger. Also, Note 2
of the Notes to the Financial Statement (Concentration of Credit Risk) states that on December 31, 2005, the cash
balance in the bank was $546,291 which exceeded the insured limit by approximately $446,291. The OIG is
reviewing the file on this and will meet with GIAMD on April 9, 2008, to determine next steps. A resolution is
anticipated by August 29, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by August 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-3-00136
Title: National Association of Development Organizations & NADO Rsch Found-FY 2005
Date Issued: 07/26/2007
The Federal Cash Transaction Reports (SF 272) required for this grant for both semiannual periods ended June 30,
2005, and December 31, 2005, were not submitted within 15 working days.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE:
The recipient has satisfactorily submitted the required reports reported as findings in the audits. The final
determination has been drafted and should be signed by April 21, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Office of Enforcement and Compliance Assurance
Report No.: 2007-P-00025
Title: Followup on Actions in Response to OIG Water Reports
Date Issue: 05/24/2007
We found that EPA is generally undertaking actions for the two water-related Office of Enforcement and Compliance
Assurance (OECA) reports in our review. However, several actions in response to individual recommendations were
delayed past milestone dates agreed to by the OIG. The following two items were still unresolved. OECA had
agreed to develop standard operating procedures (SOP) to fully address audit followup coordinator responsibilities. It
was also recommended that OECA obtain approval for any significant changes to corrective action plans involving
the deferral of milestone dates for 6 or more months.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
OECA has been implementing changes to its audit management and tracking procedures. These changes have been
memorialized in an SOP agreed to with the OIG. The SOP is currently under management review. The
implementation of the SOP will satisfy all corrective actions included in this plan. OECA anticipates the SOP will be
approved and fully implemented no later May 31, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Office of Prevention, Pesticides, and Toxic Substances
Report No.: 2007-P-00040
Title: Strategic Agricultural Initiative
Date Issued: 09/25/2007
We evaluated EPA's Strategic Agricultural Initiative (SAI) uses performance measures to demonstrate results. We
specifically sought to determine if SAI uses performance measurement tools and efficiency measures that provide for
continuous program improvement. The SAI is a program that helps growers of minor crops replace high-risk
pesticides phased out or restricted because of the Agency's pesticide reevaluations. Since 2001, the program has
given out about $4 million in grants. According to Agency staff, SAI fills a role within EPA's regulatory framework by
helping minor crop growers transition to reduced risk and alternative methods of pest management.
We found that the SAI program has not demonstrated how it fulfills its unique role of helping growers transition away
from high-risk pesticides as identified by the Food Quality Protection Act. Specifically, the program does not have a
strategic plan or similar documents that link project mission and associated goals, logic model, performance
measures, and data the program collected. Headquarters and the regions have inconsistent priorities for
implementing the program. This lack of structure makes it difficult to measure and validate results. Also, program
databases, used to gather data on project performance, lack definitions and structure and thus contain incomplete
and extraneous information. We recommended that EPA develop a needs assessment for the SAI program to
demonstrate how it fulfills its role in meeting Food Quality Protection Act requirements. If the need is demonstrated,
EPA should create a strategic plan that sets clear priorities for program direction. EPA agreed to reassess the need
for the program and develop a strategic plan if determined to be needed. These recommendations should result in
approximately $1.5 million in annual grant funds put to better use because either the grants will no longer be needed
or their effectiveness will be enhanced.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE:
On hold by OIG
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Pending Receipt of Additional Information
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Office of Solid Waste and Emergency Response
Report No.: 2007-P-00029
Title: Resource Conservation and Recovery Act Referrals to Superfund
Date Issued: 08/01/2007
In April 2004, EPA released a study Superfund: Building on the Past, Looking to the Future (the 120 Day Study).
It was requested by the then Acting Deputy EPA Administrator. The final report made 102 recommendations for
improving the Superfund program. In response, the Acting Deputy EPA Administrator created a Superfund Board of
Directors (the Board). Its role was to prepare, coordinate, and execute action plans to address the report's
recommendations. We evaluated EPA's progress in responding to three recommendations from the 120 Day Study.
Specifically, the Study made several recommendations to determine if Resource Conservation and Recovery Act
(RCRA) facilities were causing a burden on the Superfund program. We also evaluated EPA's progress in
responding to an OIG recommendation on RCRA financial assurance. We found that EPA completed its work to
determine the financial impact of RCRA-regulated facilities on the Superfund program. EPA also responded to OIG
recommendations on RCRA financial assurance. However, we found that some of EPA's planned actions to address
its Study recommendations were different than the actions recommended. We recommend that the Board review a
sample of the implemented Study recommendations to confirm that the actions taken were complete and responsive
to the original Study recommendation(s). In October 2007, EPA proposed actions to address this recommendation.
However, these actions were not responsive to the OIG's recommendation. In March 2008, OIG requested a meeting
with EPA to discuss our recommendation and work to reach agreement on Agency actions to address it.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The Office of Solid Waste and Emergency response to the final audit report is being evaluated by the OIG.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by June 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Proposed Response Received Awaiting Final Determination
Office of Water
Report No.: 2007-P-00012
Title: State Revolving Fund Policy Review
Date Issued: 03/28/2007
EPA regulations and policies allowing States to use bonds repaid from State Revolving Fund (SRF) interest to meet
SRF match requirements are resulting in fewer dollars being available for water projects. Twenty States have used
the Clean Water SRF to repay bonds issued to meet the required fund match, and 16 of those States also did so for
the Drinking Water SRF. Current practices have resulted in an estimated $937 million less available for loans since
the inception of the SRF programs.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Office of Water remains in disagreement with OIG's recommendation relating to the SRF State bond issue, and as of
August 18, 2007, Office of Water has been waiting on OIG's formal decision as to whether this matter will be referred
to the Audit Resolution Board to be resolved.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Unable to determine at this time
IG FOLLOWUP STATUS AS OF 03/31/2008: Resolution Under Negotiation in Headquarters
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Region 1 - Regional Administrator
Report No.: 2007-1-00037
Title: SRF-New Hampshire 2005 Clean Water Audits
Date Issued: 02/05/2007
We issued an unqualified opinion on the financial statements but identified significant weaknesses in internal controls.
We qualified our opinion on compliance with applicable laws and regulations because the State did not comply with
the subrecipient monitoring requirements for foliowup on subrecipient Single Audits.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Region 1 continues to work with New Hampshire Department of Environmental Services. Target resolution April 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Report No.: 2007-1-00044
Title: SRF-New Hampshire 2005 Drinking Water Audit
Date Issued: 02/26/2007
We rendered an unqualified opinion on the New Hampshire Drinking Water SRF program financial statements for the
year ended June 30, 2005. We noted various reportable conditions that we considered material weaknesses in
internal controls. We qualified our opinion on compliance with applicable laws and regulations because the required
State match was underfunded by $228,436, set-aside costs were not separated and identifiable by the actual costs,
and the State did not follow up on subrecipient Single Audits.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Region 1 continues to work with New Hampshire Department of Environmental Services. Target resolution April 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: Incomplete Response Received
Region 2 - Regional Administrator
Report No.: 2007-2-00039
Title: Special Appropriations Act Project: Middletown, New York
Date Issued: 09/25/2007
The City of Middletown (grantee) claimed costs that were incurred prior to the timeframes provided for in OMB
Circular A-87, the Special Appropriations Act Projects guidance, and the grant terms and conditions. These
guidelines indicate that costs are eligible as of the beginning of the fiscal year when funds are appropriated. The
grant funds were appropriated in FY 2003; therefore, preaward costs incurred after October 1, 2002, were eligible for
reimbursement. However, the grantee incurred the entire $853,002 in total project costs prior to October 1, 2002.
Also, the grant conditions only approved preaward costs 90 days prior to the grant award. The costs claimed by the
grantee were incurred approximately 15 months prior to the grant award date. As a result, all costs claimed under the
EPA grant are ineligible for Federal reimbursement and grants funds of $433,700 must be repaid.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Region 2 has received draft approval from the Office of Wastewater Management to amend the grant to allow
pre-award costs for this grant. As soon as approval is final, Region 2 will begin the process to amend the grant.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Region 2 - Office of Policy and Management
Report No.: 2005-3-00157
Title: Puerto Rico Environmental Quality Board - FY 2000
Date Issued: 05/05/2005
Due to the costs questioned in specific findings and lack of accounting records, we questioned all costs, totaling
$4,239,228. Region 2 has designated the grantee - the Puerto Rico Environmental Quality Board (PREQB) - as
"high risk" and implemented a corrective action plan to get the grantee into compliance.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
PREQB is under a new workplan which has replaced the Corrective Action Plan. CPA review and certification of
costs from FY 1999-2001 is complete and Region 2 has received the CPA report.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2005-3-00158
Title: Puerto Rico Environmental Quality Board - FY 2001
Date Issued: 05/05/2005
Due to costs questioned in specific findings and lack of accounting records, we questioned all costs, totaling
$4,631,636. Region 2 has designated the grantee as "high risk" and implemented a corrective action plan to get the
grantee into compliance.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
PREQB is under a new workplan which has replaced the Corrective Action Plan. CPA review and certification of
costs from FY 1999-2001 is complete and Region 2 has received the CPA report.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2005-3-00159
Title: Puerto Rico Environmental Quality Board - FY 2002
Date Issued: 05/05/2005
Due to costs questioned in specific findings and lack of accounting records, we questioned all costs, totaling
$2,987,768. Region 2 has designated the grantee as "high risk" and implemented a corrective action plan to get the
grantee into compliance.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
PREQB is under a new workplan which has replaced the Corrective Action Plan. Among the items directly impacting
resolution of the audits are the indirect cost rates. PREQB has received final rates through FY 2005 and will use
those rates to request reimbursement of indirect costs for affected years, and will prepare Financial Status Reports
for affected grants. There has been corrective action with many of the non-cost findings in these audits, and for those
costs from 2002 forward that have been CPA reviewed and certified, the disallowed costs are minimal. The overall
workplan, however, seems far from complete. We expect to issue resolution letters on these audits by 9/30/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Report No.: 2005-3-00156
Title: Puerto Rico Environmental Quality Board - FY 1999
Date Issued: 05/05/2005
Due to costs questioned in specific findings and lack of accounting records, we are questioning all costs, totaling
$5,503,986. Region 2 has designated the grantee as "high risk" and implemented a corrective action plan to get the
grantee into compliance.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
PREQB is under a new workplan which has replaced the Corrective Action Plan. CPA review and certification of
costs from FY 1999-2001 is complete and Region 2 has received the CPA report.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2005-3-00168
Title: Puerto Rico Environmental Quality Board - FY 2003
Date Issued: 05/05/2005
Because Puerto Rico's accounting records were inadequate, we questioned all expenditures, totaling $3,313,010.
Region 2 has designated the grantee as "high risk" and implemented a corrective action plan to get the grantee into
compliance.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
PREQB is under a new workplan which has replaced the Corrective Action Plan. Among the items directly impacting
resolution of the audits are the indirect cost rates. PREQB has received final rates through FY 2005 and will use
those rates to request reimbursement of indirect costs for affected years, and will prepare Financial Status Reports
for affected grants. There has been corrective action with many of the non-cost findings in these audits, and for those
costs from 2002 forward that have been CPA reviewed and certified, the disallowed costs are minimal. The overall
workplan, however, seems far from complete. We expect to issue resolution letters on these audits by
September 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2005-3-00199
Title: Puerto Rico Water Pollution Control Revolving Fund
Date Issued: 06/27/2005
The Fund's administrative expenses of $184,646 were not reviewed and certified by an independent public
accounting firm recognized by EPA. Region 2 has implemented a corrective action plan to get the grantee into
compliance.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE:
CPA review of grantee costs has been completed and grantee is awaiting the report. This audit is estimated to be
resolved by September 30, 2008.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Report No.: 2006-3-00068
Title: Caribbean Environmental & Development Institute FY 1999
Date Issued: 02/22/2006
Accounting records did not comply with EPA regulations, property and equipment lists were not updated, financial
information did not agree with general ledgers, left-over cash from prior grants was used to fund current grants, and
monies received from EPA exceeded amount claimed as expenditures by $152,027.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The CPA review of documentation is complete. Region 2 is currently drafting an audit resolution, which is expected
to be completed by 5/31/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2006-3-00069
Title: Caribbean Environment & Development Institute FY 2000
Date Issued: 02/22/2006
Accounting records did not provide information in compliance with EPA regulations, property and equipment lists
were not updated, Financial Status Reports could not be reconciled to general ledgers, cash from expired grants was
used to pay current expenditures, and the Institute received $68,467 in monies from EPA in excess of their claimed
expenditures.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
The CPA review of documentation is complete. Region 2 is currently drafting an audit resolution, which is expected
to be completed by 5/31/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2006-3-00164
Title: Puerto Rico, Commonwealth of, PREQB - FY 2004
Date Issued: 07/20/2006
The grantee's fiscal control and accounting procedures were not adequate to provide the financial information
necessary for the efficient administration of the entity's operation. The grantee did not: (1) complete the physical
inventory of the property and equipment, (2) maintain an adequate numerical sequence in the subsidiary of property
and equipment, and (3) include certain additions of property and equipment in the property and equipment listing
which were acquired with the Air Pollution Control program funds. The grantee did not submit numerous financial
and performance reports under various EPA grants in a timely manner. The auditors noted significant differences
between the amounts reported in the Schedule of Expenditures of Federal Awards, the grantee's internal accounting
records, and the transactions recorded in the reports issued by the Puerto Rico Treasury Department.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
PREQB is under a new workplan which has replaced the Corrective Action Plan. Among the items directly impacting
resolution of the audits are the indirect cost rates. PREQB has received final rates through FY 2005 and will use those
rates to request reimbursement of indirect costs for affected years, and will prepare Financial Status Reports for affected
grants. There has been corrective action with many of the non-cost findings in these audits, and for those costs from
2002 forward that have been CPA reviewed and certified, the disallowed costs are minimal. Many tasks still need to be
completed in the overall workplan. We expect to issue resolution letters on these audits by 9/30/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by September 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
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Report No.: 2006-3-00139
Title: New York, State of - FY 2006
Date Issued: 07/26/2007
(1) The auditors noted that the Department of Health had 191 audit reports with findings that were required to have
management decisions rendered within 6 months. Of these, only 72 had been completed in a timely manner,
73 required more than 6 months to complete, and 46 had no decision rendered. (2) The Department of Health did not
have policies and procedures that adequately recorded, tracked, and provided for the safeguarding of program assets
in order to reduce the risk of loss, damage, or misappropriation of assets; have any evidence of a physical inventory
of assets taken by the Department, at least once every 2 years; consistently tag and track assets by type and
physical location; record items on the asset listing and/or could not locate items appearing on the asset listings; and
have any evidence of a policy or procedures in place to insure proceeds from the sale or disposal of the assets could
be identified and returned to the Federal program, if necessary. (3) The Department of Environmental Conservation
did not issue a formal management decision on the audit finding contained in the single audit report for the New York
Environmental Facilities Corporation within the required 6-month time frame.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Corrective action on two of three findings is complete. The grantee needs to address one minor issue on the plan for
the third finding. Once that issue is addressed, the audit resolution will be issued, estimated to be by 5/31/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by May 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Region 8 - Regional Administrator
Report No.: 2007-3-00003
Title: Blackfeet Tribe of the Blackfeet Indian Reservation, FY2004
Date Issued: 10/02/2006
The fixed asset records did not support the amounts reported on the financial statements. The auditor noted that
salary advances were increasing substantially each year, and the Tribe was not enforcing the policies and
procedures on the use of advances and repayments of advances, and was not approving all advances before
payment was made. There was a severe deficiency noted during internal control testing. Time cards were being
accepted without employee signatures or the supervisor's signature for authorization of work done during the time
period, W-4's were missing, and current pay rates did not agree with the personnel file. A physical inventory of the
Tribe's assets had not been taken and reconciled with underlying property records and the general ledger. The Tribe
did not have the resources available to fund the deferred revenue amount reported on the statement of net assets.
Six purchases did not have supporting documentation. The total amount of transactions not in compliance was
$6,596. The Tribe loaned and expended a portion of the Tribal Worker's Compensation Program reserves.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Due to problems noted by Project Officers and a recent Single Audit, we have decided to do an onsite review in
May 2008, and provide compliance assistance to develop and work through issues identified on the Corrective Action
Plan and other issues identified during the on-site visit.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by August 2008.
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-2-00030
Title: City of Huron, South Dakota - Special Appropriation Act Project Grant
Date Issued: 07/30/2007
The City of Huron, South Dakota, (grantee) did not reduce the costs claimed under grant number XP98838901
(grant) for credits it received from other entities that contributed funds when those credits reduced project costs.
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EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Given the specific reference in Title 40 Code of Federal Regulations Part 31.24 that match may be satisfied by cash
donations from non-Federal third parties, it appears Huron has provided the proper amount of match (they actually
over-matched the project costs) and received the proper amount of Federal funds and, therefore, there is no
overpayment of Federal funds. Provided correspondence to OIG on 9/13/07.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Report No.: 2007-2-00078
Title: Cheyenne River Sioux Tribe
Date Issued: 09/24/2007
The Tribe did not comply with the financial and program management standards under Title 40 Code of Federal
Regulations Parts 31 and 35, and OMB Circular A-87. We questioned $3,101,827 of the $3,736,560 outlays
reported. The Tribe's internal controls were not sufficient to ensure that outlays reported complied with Federal cost
principles, regulations, and grant conditions. In some instances, the Tribe also was not able to demonstrate that it
has completed all work under the agreements and has achieved the intended results of the agreements.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
We are actively working with Tribe to correct issues identified by the OIG. While the cost standards were not fully
met, we believe most of the costs questioned are fair and reasonable charges to the grants and were used to support
work completed. We are working with the Tribe to help them implement improved administrative systems and related
controls. We plan on providing the OIG a proposed response by 04/30/08.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by April 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Region 8 - Office of Technical and Management Services
Report No.: 2007-3-00028
Title: Three Affiliated Tribes - FY 2004
Date Issued: 11/20/2006
Several general ledger accounts, including bank accounts, were not reconciled to the supporting documentation until
significantly after year-end. The Tribes did not have a system in place to identify those individuals whose personnel
costs were allocated to more than one award or cost activity and to ensure that the documentation requirements were
satisfied. The Tribes did not update and submit revised financial reports to the awarding agencies. Significant
variances were noted between the submitted reports and the information per the Tribe's general ledger. Employees
were using General Services Administration vehicles and charged a flat mileage rate for reimbursement under its
grants; however, fuel purchases were already charged through various programs, resulting in duplicate charging of
fuel costs.
EXPLANATION OF THE REASONS MANAGEMENT DECISION HAS NOT BEEN MADE
Three letters have been sent to Tribes requesting written resolutions to audit findings. A verbal request has recently
been made with the Tribes to get a written resolution to audit findings.
DESIRED TIMETABLE FOR ACHIEVING A MANAGEMENT DECISION
Expect resolution by June 2008
IG FOLLOWUP STATUS AS OF 03/31/2008: No Response
Total reports issued before reporting period for which
no management decision has been made as of 03/31/08: 65
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Appendix 3 - Reports with Corrective Action Not Completed
The Inspector General Act, section 5(a)(3), requires identification of each significant recommendation
described in previous semiannual reports on which corrective action has not been completed. Below is a
listing of OIG reports, limited to the immediate prior 10-year period, containing such recommendations.
The report fiscal year is denoted by the beginning of the report number.
Report No.
1998
1999
2000
2001-P-00006
2001-1-00073*
2001-1-00203*
2001-P 00013
2002-P-00012
2003-P-00010
2003-P-00012
2004-P-00005
2004-P-00021
2004-P-00030
2005-P-00010
2005-P-00019
2005-P-00024
2005-P-00025
2005-P-00026
2005-4-00129*
2006-P-00001
2006-P-00007
2006-P-00013
2006-P-00016
2006-P-00017
2006-P-00022
2006-P-00027
2006-P-00034
2006-P-00036
2006-P-00038
2007-P-00002
Report Title
none
none
none
Compliance with Enforcement Instruments
Napoleon School District
National Association of Minority Contractors
State Enforcement of Clean Water Act Dischargers Can Be More Effective
Controlling and Abating Combined Sewer Overflows
Implementation, Information, and Statutory Obstacles Impede Achievement of Environmental
Results from EPA's National Hardrock Mining Framework
EPA's Response to the World Trade Center Collapse
Nationwide Identification of Hardrock Mining Sites
EPA Needs to Improve Tracking of National Petroleum Refinery Compliance Program
Progress and Impacts
EPA Needs to Reinforce Its National Pretreatment Program
Substantial Changes Needed in Implementation and Oversight of Title V Permits If Program
Goals Are to Be Fully Realized
PeoplePlus Security Controls Need Improvement
Limited Knowledge of the Universe of Regulated Entities Impedes EPA's Ability to Demonstrate
Changes in Regulatory Compliance
Sustained Commitment Needed to Further Advance Watershed Approach
Continued EPA Leadership Will Support State Needs for Information and Guidance on
RCRA Financial Assurance
Oregon Department of Environmental Quality Reported
Outlays under Cooperative Agreement V99060103
Rulemaking on Solvent-Contaminated Industrial Wipes
More Information Is Needed on Toxaphene Degradation Products
EPA Can Better Manage Superfund Resources
EPA Can Better Implement Its Strategy for Managing Contaminated Sediments
EPA Can Improve Emissions Factors Development and Management
EPA Needs to Better Implement Plan for Protecting Critical Infrastructure and Key Resources
Used to Respond to Terrorist Attacks and Disasters
EPA Could Improve Its Redistribution of Superfund Payments to Specific Sites
EPA Needs to Conduct Environmental Justice Reviews of Its Programs, Policies, and Activities
Promising Techniques Identified to Improve Drinking Water Laboratory Integrity and Reduce
Public Health Risks
Existing Contracts Enabled EPA to Quickly Respond to Hurricane Katrina; Future Improvement
Opportunities Exist
EPA Needs to Plan and Complete a Toxicity Assessment for the Libby Asbestos Cleanup
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Report No.
2007-S-00002
2007-2-00003
2007-P-00004
2007-P-00005
2007-P-00007
2007-P-00008
2007-P-00012
2007-P-00013
2007-P-00016
2007-P-00018
2007-P-00021
2007-P-00022
2007-P-00023
2007-P-00025
2007-P-00026
2007-P-00027
2007-P-00028
2007-P-00030
2007-P-00031
2007-P-00033
2007-P-00035
2007-P-00036
2007-P-00037
2007-P-00041
2007-4-00065
2007-4-00068
Report Title
Making Better Use of Superfund Special Account Funds for Thermo Chem
Information Concerning Superfund Cooperative Agreements with New York and New Jersey
Saving the Chesapeake Bay Watershed Requires Better Coordination of Environmental and
Agricultural Resources
EPA's Management of Interim Status Permitting Needs Improvement to Ensure Continued
Progress
EPA Could Improve Processes for Managing Contractor Systems and Reporting Incidents
EPA Could Improve Controls Over Mainframe System Software
EPA's Allowing States to Use Bonds to Meet Revolving Fund Match Requirements Reduces
Funds Available for Water Projects
Performance Track Could Improve Program Design and Management to Ensure Value
Environmental Justice Concerns and Communication Problems Complicated Cleaning Up
Ringwood Mines/Landfill Site
EPA Did Not Properly Process a Hospital Disinfectant and Sanitizer Registration
EPA Can Improve Its Managing of Superfund Interagency Agreements with U.S. Army Corps
of Engineers
Promoting Tribal Success in EPA Programs
Better Enforcement Oversight Needed for Major Facilities with Water Discharge Permits in
Long-Term Significant Noncompliance
EPA Can Improve Its Oversight of Audit Followup
EPA Needs to Take More Action in Implementing Alternative Approaches to Superfund
Cleanups
Overcoming Obstacles to Measuring Compliance: Practices in Selected Federal Agencies
ENERGY STAR Program Can Strengthen Controls Protecting the Integrity of the Label
Improved Management Practices Needed to Increase Use of Exchange Network
Development Growth Outpacing Progress in Watershed Efforts to Restore the Chesapeake
Bay
Using the Program Assessment Rating Tool as a Management Control Process
EPA Needs to Strengthen Its Privacy Program Management Controls
Total Maximum Daily Load Program Needs Better Data and Measures to Demonstrate
Environmental Results
Progress Made in Improving Use of Federal Supply Schedule Orders, but More Action Needed
Voluntary Programs Could Benefit from Internal Policy Controls and a Systematic Management
Approach
The Environmental Careers Organization Reported Outlays for Five EPA Cooperative
Agreements
Ozone Transport Commission Incurred Costs Under EPA Assistance Agreements
XA98379901, OT83098301, XA97318101, and OT83264901
* In Administrative Appeal
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OIG Mailing Addresses and Telephone Numbers
Headquarters
U.S. Environmental Protection Agency
Office of Inspector General
1200 Pennsylvania Ave., NW (2410T)
Washington, DC 20460
(202) 566-0847
Atlanta
U.S. Environmental Protection Agency
Office of Inspector General
61 Forsyth Street, SW
Atlanta, GA 30303
Audit: (404) 562-9830
Investigations: (404) 562-9857
Boston
U.S. Environmental Protection Agency
Office of Inspector General
One Congress Street, Suite 1100
Boston, MA 02114-2023
Audit: (617) 918-1470
Investigations: (617) 918-1468
Chicago
U.S. Environmental Protection Agency
Office of Inspector General
77 West Jackson Boulevard
13th Floor (IA-13 J)
Chicago, IL 60604
Audit: (312) 353-2486
Investigations: (312) 353-2507
Cincinnati
U.S. Environmental Protection Agency
Office of Inspector General
26 West Martin Luther King Drive
Cincinnati, OH 45268-7001
Audit: (513) 487-2360
Investigations: (513)487-2364
Dallas
U.S. Environmental Protection Agency
Office of Inspector General (6OIG)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-2733
Audit: (214) 665-6621
Investigations: (214)665-2790
Offices
Denver
U.S. Environmental Protection Agency
Office of Inspector General
1595 Wynkoop Street - 4th Floor
Denver, CO 80202
Audit: (303) 312-6969
Investigations: (303) 312-6868
Kansas City
U.S. Environmental Protection Agency
Office of Inspector General
901 N. 5th Street
Kansas City, KS 66101
Audit: (913) 551-7878
Investigations: (913) 551-7875
New York
U.S. Environmental Protection Agency
Office of Inspector General
290 Broadway, Room 1520
New York, NY 10007
Audit: (212) 637-3080
Investigations: (212)637-3041
Philadelphia
U.S. Environmental Protection Agency
Office of Inspector General
1650 Arch Street, 3rd Floor
Philadelphia, PA 19103-2029
Audit: (215) 814-5800
Investigations: (215) 814-5820
Research Triangle Park
U.S. Environmental Protection Agency
Office of Inspector General
Mail Drop N283-01
Research Triangle Park, NC 27711
Audit: (919) 541-2204
Investigations: (919) 541-1027
San Francisco
U.S. Environmental Protection Agency
Office of Inspector General
75 Hawthorne St. (IGA-1)
7th Floor
San Francisco, CA 94105
Audit: (415) 947-4521
Investigations: (415) 947-4500
Seattle
U.S. Environmental Protection Agency
Office of Inspector General
1200 6th Avenue, 19th Floor
Suite 1920, M/SOIG-195
Seattle, WA 98101
Audit: (206) 553-4033
Investigations: (206) 553-1273
Winchester
U.S. Environmental Protection Agency
Office of Inspector General
200 S. Jefferson Street, Room 314
P.O. Box 497
Winchester, TN 37398
Investigations: (423) 240-7735
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It's your money
It's your environment
V
Report fraud, waste or abuse
e-mail: OIG_Hotline@epa.gov
write: EPA Inspector General Hotline 2491T
1200 Pennsylvania Avenue NW
Washington DC 20460
fax: 202-566-2549
phone: 1-888-546-8740
www.epa.gov/oig/ombudsman-hotline/how2file.htm
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