.
\ Office of Inspector General
Report of Review
ASSESSMENT OF FINANCIAL
MANAGEMENT IN THE
ENVIRONMENTAL PROTECTION AGENCY
VOLUME II OF II
E1SFG3-11-0026-4400042
March 31, 1994
r; Printed on Recycled Paper
-------
Inspector General Division
Conducting the Review: Headquarters Audit Division
Arlington, Virginia
Regions Covered: Agencywide
Program Offices Involved: Agencywide
-------
TABLE OF CONTENTS
(VOLUME 2)
EXHIBITS
EXHIBIT A — JOINT OIG/FMD REVIEW TEAM MEMBERS
AND INDEPENDENT FOCUS GROUP
FACILITATORS A-l
EXHIBIT B — SENATE REQUEST LETTERS B-l
EXHIBIT C — EPA OFFICES REPRESENTED BY THE
FIVE FOCUS GROUPS C-l
EXHIBIT D — EPA LOCATIONS AND OFFICES REPRESENTED
BY THE KEY INTERVIEWS D-l
EXHIBIT E — LISTING OF EPA OIG FINANCIAL MANAGEMENT
AND SUPERFUND RELATED REPORTS E-l
EXHIBIT F — LISTING OF GAO AUDIT REPORTS AND OTHER
FINANCIAL MANAGEMENT DOCUMENTS F-l
EXHIBIT G — STATUS OF PRIOR OIG RECOMMENDATIONS
IN MATS G-l
EXHIBIT H — OIG REPORTS AND FINDINGS BY ISSUE AREA . . H-l
EXHIBIT I — GAO REPORT HIGHLIGHTS 1-1
EXHIBIT J — OIG/FMD TEAM INITIAL ISSUES PRESENTED
TO THE FOCUS GROUPS . . . J-l
EXHIBIT K — PROCEDURES USED FOR THE OIG/FMD FOCUS
GROUP MEETINGS K-l
EXHIBIT L — FOCUS GROUP SUMMARY OF MAJOR ISSUES . . . . L-l
EXHIBIT M — INTERVIEW QUESTIONS USED FOR KEY
INTERVIEWS M-l
EXHIBIT N — SUMMARY OF EPA KEY INTERVIEWS N-l
EXHIBIT O — ORGANIZATION CHARTS (EPA & OARM) .... O-l
EXHIBIT P — ANALYSIS OF MILESTONE DATES P-l
-------
[THIS PAGE INTENTIONALLY LEFT BLANK]
-------
EXHIBIT A
Page 1 of 1
JOINT OIG/FMD REVIEW TEAM MEMBERS
AND INDEPENDENT FOCUS GROUP FACILITATORS
OFFICE OF INSPECTOR GENERAL
HEADQUARTERS AUDIT DIVISION
Edward Gekosky, Divisional Inspector General
Mike Prater, Audit Manager
Jess Plonka, Team Leader
Pamela Winchester, Auditor-In-Charge
Denise Darasaw, Senior Auditor
Sheila A. Hines, Auditor
TECHNICAL AUDIT DIVISION
Robert Batta, Auditor
OFFICE OF ADMINISTRATION AND RESOURCES MANAGEMENT
FINANCIAL MANAGEMENT DIVISION
Jack Shipley, Director
Carl Dolinka, Chief, Financial Reports and Analysis Branch
Bill Cooke, Acting Chief, Superfund Accounting Branch
German Guajardo, Chief, Financial Compliance and Quality
Assurance Staff
Jim Wood, Director, Cincinnati Finance Center
INDEPENDENT FOCUS GROUP FACILITATORS
Jon Longtin, Information Center Manager
Information Branch, Information Resource
Management Division, EPA OARM (Cincinnati, OH)
Peter Brandt, Congressional and Intergovernmental
Relations Branch, EPA Region 1 (New York, NY)
Dan Stotsky, Supervisory General Attorney, Toxics and
Hazardous Waste Section EPA Region 8 (Denver, CO)
A-l
-------
EXHIBIT B
Page 1 of 3
1uuiit8n>uiti«wTM(
jo** tt OWH. woe* auu«
Mum wa. MVAM
•04 CJUJVUt fiCfc&l
jewr» i uotftuM. caMCncur
KCMMC U. UCWKVUM OHO
Mm w. wtMo. VUMU
*OU«T tWTTM, MfW HUtftJUW
uw lumen. m*ni CAMUM
OIK UMnMOWA DWtt
States
ceMurrru OM INVWONMINT AMO iviuc wom
WAIMMOTOM. oc tanaum
Septenbar 27, 1993
Ka. Carol Browner
Adainiatrator
XJ.Q,' Environmental Protection Ag«ncy
401 K Street
Washington, DC 20540
D«ar Ka. Browner:
As you era aware/ the Subcommittee ha« had eerioua concerns
about the Agency's management of fiical and information systems. We
have requested that the Office of tha Inspector General (016)
(letter attached) perform a comprehensive management review of
EPA'8 fiscal and information ey*tero» with as much specific
attention on the Suparfund area as is possible.
Given the pace of Superfund raauthorization, it is critical
that these issues are addressed over the next f«w months. He have
consequently asked that the Inspector G«n«r*l (JO) provid* any
suggestions for legislative reform by November 1, 1993, and
complete his overall review of fiscal and information* management
systems no later than January 1934.
In order for this to occur, it is important that the staff of
the OIQ racvive full cooperation and participation from fiscal and
information system as well as program officials during the course
of the studies. This cooperation should include aeeiatance in
identifying problems and their causes as well solutions either of
a management or legislative nature.
The OIG will periodically brief staff of tha Subcommittee
during the conduct of this work. We appreciate your staff's full
invoiv«a«nt in a»ei»ting the IG in reviewing these critical Agency
support systems.
Sincerely,
Frank r_|_
Chairman, Subconraittee on Superfund,
Recycling, and Solid Waste Management
United States Senate
avTrr DuzSTtSsrger
.nking Minority Member
B-l
-------
EXHIBIT B
2 of 3
.
tot OXMWM. notai
jotfx ww»lV<»»*»
(Sun iumcMWiujiu>ixni
gtfitC* /Senate
Mm L to** rr/»» >»iirm
eoMurrru ON IMVMONWMT AMD PWIIW wwai
September 27, 1393
Honorable John C. Martin
Inspector General
United States Environmental Protection Agency
Washington, DC 20460
Dear Kr. Martini
Thank you for presenting such compelling testimony lit our
hearing on June 10/ 19S3. Unfortunately, your efforts have raised
serious new questions about the Agency*s management of the fiscal
and information systems programs, compounding the previously
identifiad problems with EPA'a contract management.
Based on information you presented at our recent hearing and
th« body of acciuaula't«d evidenca on thia issue, w» »ro requesting
that your office perform a comprehensive management review of the
EPA's fiscal and information systems programs with as much as
specific attention on the Superfund area as is possible,
WQ recognize that EPA has taken come important steps in the
past year to address its contract management problems.• However,
there haa been no comparable no holde-barred, eyetemic management
review of tho fiical and information systems programs of the
Agency.
The apparent lacJc of credible basic management Information
about where Agency funds, including Superfund money, are being
spent and how, and the questions raised about what the resulting
accomplishments may -be, go to the heart of all Agency programs
including the Suparfund program.
It is critical that these issues/ to the extent they pertain
to the Superfund program, are addressed as part of the Superfund
raauthoritation process over the next year. Therefore, wa request
that you carry out the global management reviews and 'report the
results to us as soon as possible but no later than January 1994.
We would ask that any legislative recommendations are provided to
the Subcommittee no later than November 1, 1993. The subcommittee
und«r«tand» that to acooreplioh your 'work in this timefram*, you
have asked end Agency has agreed to be a participant in your
reviews.
B-2
-------
EXHIBIT B
Page 3 of 3
Wa truly appreciate all your efforts in identifying and
remedying the serious management problems at the Agency, and look
forward to receiving copies of the two reports requested by this
letter.
eincer»ly,
Frank
Chairman/.Subcommittee on Sup«rfund,
Recycling, and Solid West* Management
B-3
-------
EXHIBIT C
Page 1 of 2
EPA LOCATIONS AND OFFICES REPRESENTED
IN THE FOCUS GROUPS
REGION 2 - NEW YORK
Policy and Management Office
Comptrollers Branch
Finance Office
Budget Office
Grants Administration Branch
Policy and Evaluation Branch
Policy and Program Integration Branch
Regional Counsel
Water Management Division
Air and Waste Management Division
REGION 8 - DENVER
Policy and Management Office
Comptrollers Branch
Finance Office
Budget Office
Environmental Services Division
Air, Radiation, and Toxics Division
Hazardous Waste Management Division
Montana Operations Office
Regional Counsel
CINCINNATI FINANCE CENTER - CINCINNATI
Office of Research and Development
Risk Reduction Engineering Laboratory
Environmental Monitoring Systems Laboratory
Environmental Criteria and Assessment Office
Center for Environmental Research Information
Office of Administration and Resources Management
Contracts Management Division
Facilities'Management and Services Division
Office of Management and Administration
C-l
-------
EXHIBIT C
Page 2 of 2
SUPERFUND FOCUS GROUP - WASHINGTON, DC
Office of Solid Waste and Emergency Response
Office of Emergency and Remedial Response
Office of Waste Programs Enforcement
Resource Management and Information Staff
Office of Administration and Resources Management
Office of Enforcement
SENIOR BUDGET OFFICERS FOCUS GROUP - WASHINGTON, DC
Office of the Administrator
Office of Administration and Resources Management
Budget Division
Financial Management Division
Office of Inspector General
Office of Solid Waste and Emergency Response
C-2
-------
EXHIBIT D
Page 1 of 2
EPA LOCATIONS AND OFFICES REPRESENTED
BY KEY INTERVIEWS
REGION 1 - BOSTON
Assistant Regional Administrator for Planning
and Management
Superfund Finance Section
Waste Management Division
Office of the Comptroller
Finance Division
Budget Division
REGION 3 - PHILADELPHIA
Assistant Regional Administrator for Policy and Management
Superfund Programs Branch
CERCLA Cost Recovery Section
Office of the Comptroller
Office of Superfund Programs
Facilities Management and Services Branch
REGION 5 - CHICAGO
Superfund Accounting Section
Remedial Response Branch
Comptroller Branch
Finance and Accounting Branch
REGION 9 - SAN FRANCISCO
Assistant Regional Administrator for Policy and Management
Superfund Cost Accounting Branch
Hazardous Waste Management Division
Property Section
Office of the Comptroller
Finance Division
Budget Division
D-l
-------
EXHIBIT D
Page 2 of 2
HEADQUARTERS
Office of Inspector General
Office of the Comptroller
Financial Management Division
Budget Division
Office of Research Program Management
D-2
-------
EXHIBIT E
Page 1 of 9
LISTING OF EPA OIG FINANCIAL MANAGEMENT AND
SUPERFUND RELATED AUDIT REPORTS
REPORT NUMBER
P5EH5-11-0026-60438
P5EH5-11-0032-60471
P5EH5-11-0028-60470
P5EH5-11-0024-60481
P5EH5-11-0025-60581
P5EH5-11-0030-60580
P5EH5-11-0027-60363
E1ZM5-05-0175-60697
P5EH5-11-0031-60719
E1A25-11-0048-60728
P5EH5-11-0023-60786
P5EH5-11-0019-60942
DATE REPORT TITLE
01/15/86 Consolidated Report of
Obligations and Disbursements
Under CERCLA for Fiscal Years
Ended September 30, 1984
and 1983 - Region 6
01/27/86 FY 83 & FY 84 Trust Fund
Region 10
01/27/86 Consolidated Report of
Obligations and Disbursements
Under CERCLA for Fiscal Years
Ended September 30, 1984
and 1983 - Region 8
01/29/86 Consolidated Report of
Obligations and Disbursements
Under CERCLA for Fiscal Years
Ended September 30, 1984 and
11983 - Region 5
02/18/86 FY 83 & FY 84 Trust Fund
Cincinnati
02/18/86 FY 83 & FY 84 Trust Fund
Region 9
02/26/86 FY 83 & FY 84 Trust Fund
Region 7
03/10/86 Consolidated Property
Management
03/14/86 FY 83 & FY 84 Trust Fund
Las Vegas
03/18/86 Review of EPA Travel Funds
03/31/86 EPA Needs to Improve Control
of Superfund Contract
Disbursements
05/08/86 EPA Program Offices Need to
Improve Payroll Charges to the
Superfund (Trust Fund Audits)
FY83 & FY84 Region 1
E-l
-------
E1LM4-01-0106-60967 05/15/86
E1BH6-08-0040-60984 05/16/86
E1LM6-02-0029-60987 05/19/86
E1A16-05-0086-61025 05/30/86
P5EH5-11-0022-61094 06/19/86
P5EH5-11-0020-61131 06/27/86
E1ZM5-03-0197-61393 08/26/86
E1BM6-03-0071-61432 09/02/86
E5EH4-11-0066-61534 09/24/86
P5EH5-11-0033-61553 09/26/86
EIBM6-08-0032-61559 09/26/86
E1A56-09-0126-70434 12/19/86
E1L47-11-0020-70458 12/24/86
P5EH5-11-0021-70474 12/31/86
E1AM7-02-0057-70603 01/27/87
E1A861-11-0048-70619 01/28/87
E1GA6-11-0018-70655 02/03/87
P5EH16-11-0020-70901 03/18/87
EXHIBIT E
Page 2 of 9
Letter of Credit - Region 1
Imprest Fund - Region 8
Letter of Credit - Region 2
Letter of Credit - Region 5
EPA Program Offices Need to
Improve Payroll Charges to the
Superfund (Trust Fund Audits)
FY83 & FY84 Region 4
EPA Program Offices Need to
Improve Payroll Charges to the
Superfund (Trust Fund Audits)
FY83 & FY84 Region 2
Three EPA Locations Are Not
Properly Managing $9 Million
of Property
Review of EPA's Region 3
Property Management System
October 1, 1984-September 30,
1985
EPA is Not Collecting Millions
of Dollars Due From Polluters
EPA Program Offices Need to
Improve Payroll Charges to the
Superfund (Trust Fund Audits)
FY83 & FY84 Headquarters
Audit of EPA Region 8
Procurement Management
Penalty Collections Region 9
EPA's 1986 FMFIA Activity
FY83 & FY84 Trust Fund
Region 3
Imprest Fund Region 2
Delinquent,Debts Semiannual
Review
OMS - Lead Banking
Audit of Superfund
Indirect Cost Rates
E-2
-------
E1A16-09-0043-70934
E1Z26-11-0041-70964
E1A96-11-0047-70965
E1A16-09-0073-70973
E1Z27-11-0027-71572
E1AM7-04-0063-71976
P5EH7-11-0021-71997
P5EH5-11-0034-71911
E5E361-11-0022-71991
P5EH7-11-0022-80028
E1L48-11-0021-80373
P5EH8-11-0035-80608
P5EH7-11-0034-80612
P5EH8-11-0036-80611
P5EH8-11-0034-80633
E1A67-11-0029-80779
E16G7-09-0221-81880
EXHIBIT E
Page 3 of 9
03/24/87 Letter of Credit - Region 9
03/30/87 Control of Property Purchased
by Contractors - RTP
03/30/87 EPA Procedures Failed to
Identify $3.4 Million of
Invalid Obligations
03/31/87 Letter of Credit - Las Vegas
07/23/87 Review of Controls Over EPA
Property in Contractors'
Possession
09/29/87 Region 4 Abuses Letter of
Credit System
09/30/87 Indirect Cost Rates FY86 & 85
09/30/87 Better Planning Needed for
Modification of CERCLIS
09/30/87 Superfund Management
Information Systems
10/07/87 Consolidated Report of
Obligations and
Disbursements Under CERCLA for
Fiscal Year Ending
September 30, 1986
12/23/87 EPA'S 1987 FMFIA Activity
02/16/88 Region 3 Adjusted Superfund
PC&B Cost
02/16/88 Region 4 Adjusted Superfund
PC&B Cost
02/16/88 Region 3 Superfund Indirect
Cost Rate
02/17/88 Region 4 Superfund Indirect
Cost Rate
03/17/88 Accounts Receivable
09/19/88 RCRA Financial Penalties
Insufficient to Enforce
Compliance in Region 9
E-3
-------
P5EH8-11-0030-81917 09/21/88
E5EH7-04-0293-89019 09/30/88
E1XMF8-05-0617-9100123 12/22/88
E1LMF9-11-0014-9100124 12/23/88
E1K68-11-0045-9100210 03/13/89
E6AMP9-05-0138-9400017 03/13/89
P1SF7-11-0037-9100236 04/06/89
E1EPG9-11-0026-9400027 04/13/89
E6AMG9-1100025-9400029 04/19/89
E1G68-09-0188-9100479 09/18/89
E1E18-03-0161-9100486 09/20/89
P1SFF8-11-0048-9100488 09/22/89
E1G8E9-05-0087-9100485 09/27/89
E1GMG9-05-0469-9400045 09/29/89
E1AMG9-13-0022-9400048 09/29/89
E1AMG9-09-6000-9400047 09/29/89
E1SJF9-05-0274-0100126 01/25/90
EXHIBIT E
Page 4 of 9
Obligations and Disbursements
of the Hazardous Substance
Superfund for the Fiscal Year
Ended September 30, 1987
Department of Environmental
Resources
Imprest Fund - Region 5
FMFIA 88
Slow Processing of State Plans
Adversely Affects Enforcement
Wasteful Spending
Agency's Superfund
Annual Report
FIFRA Revolving Funds
COM- FPC
RCRA Fines Consolidated
Schools with More Serious
Asbestos Hazards Could Have
Received EPA Funding
Obligations and Disbursements
of the Hazardous Substance
Superfund for the Fiscal Year
Ended September 30, 1988
Improved Controls Are Needed
to Ensure Adequate Penalties
for Effective Enforcement
Penalty Information to IRS-
Followup
Accounts Receivable
Established for Audit Report's
Sustained Cost to be Recovered
Letter of Credit Followup
Superfund Cost Recovery
Accounts Receivable
Establishment and Collection -
Region 5
E-4
-------
E1SJF9-05-0274-0100152 02/14/90
E1SJF9-05-0274-0100172 03/06/90
E1SFF9-15-0023-0100187 03/12/90
E1BMF9-11-0040-0100202 03/20/90
E1HWF9-05-0251-0100206 03/28/90
E1SJF9-05-5003-0400011 03/28/90
E1SJF9-05-0274-0100207 03/28/90
E1SFF9-11-0015-0100227 03/28/90
E1SKF9-11-0031-0100228 03/28/90
E1SFF9-03-0144-0100222 03/28/90
E1SJC9-02-0055-0100230 03/29/90
E1AME9-11-0041-0100239 3/30/90
S5BG8-09-0202-0300037 03/30/90
E1AME9-11-0041-0100239 03/30/90
E1LMFO-11-0012-0100357 06/22/90
E2CW*7-08-0024-0300090 07/31/90
E1MMF9-11-0039-0100419 08/01/90
EXHIBIT E
Page 5 of 9
Superfund Cost Recovery
Accounts Receivable
Establishment and Collection -
Region 4
Superfund Cost Recovery
Accounts Receivable
Establishment and Collection -
Region 3
Reliability of Superfund
Reporting System in Question
Controls Over Small Purchases
Region 5 User Charge System
SF Accounts Receivable -
Consolidated
Superfund Cost Recovery
Accounts Receivable
Establishment and Collection
Superfund Annual Report FY88
Superfund SITE Program
Superfund Contract Award Fees
Region 2's Oversight of Post
Settlement Activities
Obligations Overstated by $7.6
Million
Poor Financial Management of
California Clean Up Site
Continue to Increase Costs
Unliquidated Obligations in
"M" Accounts
EPA Did Not Test Internal
Controls
Procurement and Accounting
Weaknesses Result in $16
Million Questioned Cost
EPA Headquarters Frequently
Misused Overtime
E-5
-------
E1MMF9-11-0039-0400027
E1SJDO-03-0185-0100485
P1SFF9-11-0032-0100492
E1SJGO-11-0022-0400036
E1SGG9-14-0013-0400041
E1SGG8-14-0003-0400040
E1SGG8-14-0002-0400039
E1SGG8-14-0004-0400038
E1AME9-11-0041-0100523
S5BKN9-09-0267-0300098
EIAMG9-09-6000-9400047
E1LMG1-11-0014-1400003
E1XMGO-03-0317-140004
08/07/90
09/19/90
09/24/90
09/24/90
09/27/90
09/27/90
09/27/90
09/27/90
09/27/90
09/28/90
09/29/90
12/21/90
01/14/91
EXHIBIT E
Page 6 of 9
Superfund Accounting
Edison, NJ
Superfund Post - Settlement
Activities - Region 3
Obligations and Disbursements
of the Hazardous Substance
Superfund for the Fiscal Year
Ended September 30, 1989
Follow-up Review of EPA's Cost
Recovery Actions Against
Potential Responsible Parties
Remedial
Investigation/Feasibility
Study - Selma Treating
Company, CA
Remedial
Investigation/Feasibility
Study - Baird and McGuire,
MA
Remedial
Investigation/Feasibility
Study - Iron Horse Park, MA
Remedial
Investigation/Feasibility
Study - Nyanza, MA
Management of Unliquidated
Obligations in
Administratively
Completed Construction Grants
California Multi-Site
Agreement Lacks Effective
Controls
Review of EPA's Region 9
Corrective Actions Taken in
Response to Review of EPA's
Region 9 Office of Policy
and Management Letter-of-
Credit Procedures
EPA 1990 FMFIA Activity
EPA Not Obtaining
Certifications that Funds Were
Not Improperly Used for
Lobbying
E-6
-------
E1SJDO-01-0145-1100133 02/28/91
E1FMGO-11-0033-1400013 03/25/91
E2AWP1-09-0059-1400018 03/28/91
E1LMG1-01-0100-1400017 03/28/91
E1SJDO-05-0195-1100149 03/29/91
E1AMFO-11-0029-1100153 03/29/91
E1AMG1-04-0388-1400023 06/07/91
E1SGG1-01-0184-1400025 06/18/91
P1SFFO-11-0032-1100385 09/16/91
E1HTG1-09-0156-1400051 09/26/91
E1RMG1-15-0041-1400061 09/30/91
E1AME9-11-0041-1100426 09/30/91
EIAMG1-11-6000-1100433 09/30/91
E1SHCO-11-0261-21000164 01/02/92
ElRMGl^-11-0031-2400013 01/10/92
E1SFG1-11-0015-2100237 02/11/92
EXHIBIT E
Page 7 of 9
Audit of Region 1 Superfund
Post-Settlement Activities
Single Audit Process Needs
Major Improvements
EPA Improperly Awarded $5.5
Million Grant
Control of Cash Advances
Audit of Region 5 Superfund
Post-Settlement Activities
Integrated Financial
Management System: Managing
Implementation of the New
Accounting System
Imprest Fund - Region 4
Deobligations of Superfund
Cooperative Agreement Funds-
Region 1
Obligations and Disbursements
of the Hazardous Substance
Superfund for the Fiscal Year
Ended September 30, 1990
Region 9 Implementation of
State Revolving Fund
Review of EPA's Major
Information Systems
Management of Unliquidated
Obligations in Construction
Grants That Have Not Been
Administratively Completed
Follow-up Review of Accounts
Receivable
EPA's Efforts to Recover PRP
EPA Implementation of FMFIA
During Fiscal 1991
FY90 Superfund Annual Report
Accuracy and Reasonableness of
Agency Report
E-7
-------
E1SJCO-02-0303-2100268 03/17/92
E1SFG1-15-5001-2400027 03/27/92
E1SJF1-07-0047-2100301 03/31/92
E1SFG1-11-0015-2400031 03/31/92
E1SFG1-11-0015-2400033 03/31/92
E1SFG1-11-0015-2400030 03/31/92
E1SJC1-02-0113-2100501 07/27/92
E1AMG2-05-6007-2400060 07/29/92
E1BNF1-15-0055-2100591 09/22/92
E1NMF1-15-0032-2100641 09/28/92
E1SGG2-14-0017-2400019 09/29/92
E9HHF2-11-0031-2100662 09/30/92
P1SFF11-11-0026-2100660 09/30/92
E1SJG2-02-5000-3400005 11/24/92
EXHIBIT E
Page 8 of 9
Responsible Party Searches
Region 2
Follow-Up of CERCLIS Reporting
and Post-Implementation
Responsible Party Searches
Region 7
Fiscal 90 Superfund Annual
Report Region 5
Accomplishments
Delinquent Superfund Reports
to Congress Have Limited
Usefulness
Fiscal 90 Superfund Annual
Report Region 4
Accomplishments
Cost Recovery Negotiations
Imprest Fund Follow Up Review
Access to EPA Computer Systems
Not Adequately Controlled
Computer Systems Integrity—
EPA Must Fully Address
Longstanding Information
Resources Management Problems
Superfund RI/FS Review at
Koppers, TX
Response Claims Against the
Superfund for Fiscal Year 1991
Obligations and Disbursements
of the Hazardous Substance
Superfund For the Fiscal Year
Ended September 30, 1991
Follow-up Review of EPA
Region 2's Corrective Actions
Taken in Response to Audit
Report on Oversight of
Superfund Post-Settlement
Activities
E-8
-------
P1SFF1-11-0027-3100058 12/29/92
E1SFF2-11-0019-3100095 02/02/93
E1RMG2-11-0052-3400023 02/19/93
P1SFFO-11-0041-3100114 02/22/93
E1XMG3-24-0024-340024 02/22/93
E1MXG2-13-0046-3400033 03/24/93
E1RMF2-11-0134-3100148 03/30/93
E1AMP2-20-0019-3400039
E1EPP2-15-7001-3400043
E1SJE2-02-0063-3100152
EIEPL2-20-7001-3100265
P1SFL2-20-8001-3100264
03/31/93
03/31/93
03/31/93
06/30/93
06/30/93
E1SFF2-11-0051-3100266
E1AMF2-11-0040-3100391
07/02/93
09/29/93
EXHIBIT E
Page 9 of 9
Decade of Auditing Superfund
Obligations and Disbursements:
Fiscal Years 1981-1990 Audit
Report
Superfund Report to Congress
EPA 1992 FMFIA Activities
Financial Audit of Superfund
Indirect Cost Rates for Fiscal
1988 and 1987
EPA's Energy Management and
Conservation Program
EPA's Administration of the
Federal Employees's
Compensation Act
Improvements Needed in Region
7's Efforts to Identify and
Report Internal Control
Weaknesses
EPA's Use of the Oil Spill
Liability Trust Fund
Review of EDP Internal
Controls for Selected
Pesticide Revolving Funds'
Information Systems
Whether EPA Has Maximized the
Use of PRPs To Effect
Superfund Site Cleanups
Fiscal 1992 Financial
Statement Audit of the
Pesticides Revolving Funds
Fiscal 1992 Financial
Statement Audit of the
Superfund Trust Fund,
Leaking Underground Storage
Tank Trust Fund and Asbestos
Loan Program
Superfund "ZZ" Accounts :
Reconciling Cash
E-9
-------
EXHIBIT F
Page l of 7
LISTING OF GAO AUDIT REPORTS AND OTHER
FINANCIAL MANAGEMENT DOCUMENTS
REPORT NUMBER
AFMD-85-35
AFMD-86-14
T-AFMD-87-1
T-AFMD-87-17
T-AFMD-87-18
AFMD-88-10
AFMD-88-30
AFMD-88-35BR
AFMD-88-52
AFMD-88-63BR
AFMD-88-55
DATE REPORT TITLE
02/85 Managing The Cost of Government—
Building an Effective Financial
Management Structure
12/85 Financial Integrity Act: The
Government Faces Serious Internal
Control and Accounting System
Problems
02/87 Improving Government Management and
Accountability
07/87 Cash Management Improvement Act of
1987
07/87 Federal Financial Management Reform
Act of 1987
12/87 Financial Integrity: Continuing
Efforts Needed to Improve Internal
Controls and Accounting Systems
01/88 Fund Accountability Procedures Used
for Selected Benefit Mandatory
Spending Programs are Adequate
02/88 Financial Management: Examples of
Weaknesses
06/88 Financial Management: Progress of
OMB's Chief Financial Officer
06/88 Financial Management: Response to
17 Questions
09/88 Budget Issues: Trust Funds and
Their Relationship to the Federal
Budget
F-l
-------
EXHIBIT F
Page 2 of 7
T-AFMD-88-17
T-AFMD-88-18
OGC-89-20
OGC-89-7TR
GAO-93-16TR
T-GGD-89-2S
AFMD-89-24
AFMD-89-67
AFMD^90-31FS
AFMD-90-11
RCED-90-22
OCG-90-1
AFMD-90-23
FMD-90-20
09/88 The Federal Savings and Loan
Insurance Corporation's Use of
Notes and Assistance Guarantees
09/88 Federal Financial Management Reform
11/88 Environmental Protection Agency
Issues
11/88 Financial Management Issues
12/88 Environmental Protection Issues
01/89 Transition Issues: Overview of
GAO's Transition Series Reports
02/89 Financial Audit: Examination of
EPA's Financial Statements for
Fiscal Year 1987
05/89 Financial Audit: Audit of GSA's
General Supply Fund for Fiscal
Year 1988
10/89 Inspectors General Status of the
Department of Justice's Office of
Inspector General
11/89 Federal Credit and Insurance
Programs May Require Increased
Federal Assistance in the Future
12/89 Superfund: A More Vigorous and
Better Managed Enforcement Program
is Needed
01/90 Government Financial Vulnerability:
Fourteen Areas Needing Special
Review
02/90 Financial Audit: Air Force Does
Not Effectively Account for
Billions of Dollars of Resources
03/90 Financial Audit: EPA's Financial
Statement for Fiscal Years 1988 and
1987
F-2
-------
EXHIBIT F
Page 3 of 7
AFMD-90-12
T-AFMD-90-14
T-AFMD-90-21
T-AFMD-90-26
T-AFMD-90-27
T-AFMD-90-31
AFMD-91-6
AFMD-91-7
T-RCED-91-5
AFMD-91-19
AFMD-91-55
T-AFMD-91-7
AFMD-91-65
04/90 Credit Management Deteriorating
Credit Picture Emphasizes
Importance of OMB's Nine-Point
Program
04/90 Federal Internal Control and
Financial Management Systems:
Major Reform Efforts Are Needed
05/90 Cash Management Improvement Act of
1990
08/90 The Government's use of "M" and
Merged Surplus Accounts
08/90 Prevention, Detection, and
Reporting of Financial
Irregularities
09/90 Financial Management Reform
11/90 Financial Audit: Department of
Veterans Affairs Financial
Statements for Fiscal Years 1989
and 1988
11/90 Credit Management Widespread Loan
Origination Problems Reported
12/90 EPA's Contract Management
03/91 Financial Reporting Framework for
Analyzing Federal Agency Financial
Statements
05/91 Financial Audit Status: Air Force
Actions to Correct Deficiencies in
Financial Management Systems
06/91 Qualifications for and Role of
Agency Chief Financial Officers
08/91 Financial Audit: Department of
Agriculture's Financial Statements
for Fiscal Year 1988
F-3
-------
AFMD-12-19-4
T-RCED-92-15
NSIAD-92-105
AFMD-92-12
AFMD-92-38
T-RCED-92-56
AFMD-92-40
T-RCED-92-78
AFMD-92-30
AFMD-92-82
AFMD-92-83
HRD-92-81
EXHIBIT F
Page 4 of 7
09/91 The Chief Financial Officers Act:
A Mandate for Federal Financial
Management Reform
10/91 Superfund: Issues That Need To Be
Addressed Before the Programs's
Next Authorization
02/92 Organization Culture Techniques
Companies Use to Perpetuate or
Change Beliefs and Values
02/92 Financial Audit: Aggressive
Actions Needed for Air Force to
Meet Objectives of the CFO Act
06/92 Financial Management: BIA Has Made
Limited Progress in Reconciling
Trust Accounts and Developing a
Strategic Plan
06/92 Superfund: Current Progress and
Issues Needing Further Attention
07/92 EPA Cost Estimates Are not Reliable
or Timely
07/92 Superfund: Actions Needed to
Correct Long-standing Contract
Management Problems
08/92 Financial Management: Customs
Needs to Establish Adequate
Accountability and Control Over Its
Resources
08/92 Financial Management: Immediate
Actions Needed to Improve Army
Financial Operations and Controls
08/92 Financial Audit: Examination of
the Army's Financial Statements for
Fiscal Year 1991
09/92 Social Security/Reconciliation
Improved SSA Earnings Records, but
Efforts Were Incomplete
F-4
-------
EXHIBIT F
Page 5 of 7
AFMD-92-4
AFMD-93-3
AFMD-93-9
HR-93-10
OGC-93-5TR
OGC-93-4TR
OGC-93-3TR
AFMD-93-17
GGD-93-37
T-RCED-93-15
T-GGD-93-9
T-IMTEC-93-4
T-RCED-93-27
AIMD-93-3
10/92 Obligations Limitation Resolution
Trust Corporation's Compliance as
of December 31, 1990
10/92 Financial Management: NASA's
Financial Reports Are Based on
Unreliable Data
11/92 Financial Management: Serious
Deficiencies in State's Financial
Systems Require Sustained Attention
12/92 Superfund Program Management
12/92 Information Management and
Technology Issues
12/92 Financial Management Issues
12/92 Government Management Issues
01/93 Federal Credit Programs: Agencies
Had Serious Problems Meeting Credit
Reform Accounting Requirements
02/93 Securities Regulation: SEC's
Oversight of Privately Placed
Transactions Among Large Investors
03/93 Air Traffic Control Advanced
Automation System Problems Need to
Be Addressed
03/93 Improving Government: Need to
Reexamine Organization and
Performance
03/93 EPA's Actions to Improve
Longstanding Information Management
Weaknesses
04/93 Superfund: Progress, Problems, and
Reauthorization
08/93 Financial Management: First
Financial Audits of IRS and Customs
Revealed Serious Problems
F-5
-------
AIMD-93-50
AIMD-93-29
09/93
09/93
EXHIBIT F
Page 6 of 7
Financial Audit: Resolution Trust
Corporation's Internal Controls—
December 31, 1992
Financial Management: Energy's
Material Financial Management
Weaknesses Require Corrective
Action
F-6
-------
EXHIBIT F
Page 7 of 7
OTHER FINANCIAL DOCUMENTS
JOINT FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM REPORTS
DATE
01/88
12/90
08/91
03/92
06/92
REPORT TITLE
Federal Financial Management
Systems Core Financial System
Requirements
Continuing Professional Education:
Federal GS-510 Accountant's Report
Financial Handbook for Federal
Executives and Managers
The Proceedings of the 21st Annual
Financial Management Conference:
Facing the Facts of the CFO Act
1991 Report on Financial Management
Improvements
OTHER REPORTS
DATE
05/92
08/93
TITLE
Department of Energy -
Financial Management
Development Program
Financial Review of the
National Institute of
Environmental Health Sciences'
Use of Superfund Monies
F-7
-------
EXHIBIT 6
Page 1 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
ACCOUNTS RECEIVABLE AND COLLECTIONS
SeporFNumber;: H : is SB: ; Report Date Recommendations Actibns Taken ;;:::;s:;::;:;:Status
|isjpg_05-0274-0100126
r
E1SFF9 -05-0274-01001 52
'
E1SJF9-05-0274-0100172
E1SJF9-05 -0274-0100207
1/25/90 Perform internal review
procedures related to A/R
2/1 4/90 RA take appropriate action to ensure
judicial settlement documents are
forwarded to FMU
FMD monthly request printouts from
CERCLJS and docket system and
reconcile to system
Reconcile records to ensure cost
recovery costs have been collected
and ensure receivable is recorded
RA ensure that the planned
corrective actions are completed
3/6/90 Establish procedures to ensure
settlement documents are
reconciled in a timely manner
Conduct an Internal Control Review
on the recording of receivables
Completed the planned corrective
actions
3/28/90 A/R needs to be recorded
Reconcile their records to ensure
Yes
No
No
No
No
Yes
No
Yes
Yes
Yes
Completed
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Completed
Not Applicable
Completed
Completed
Completed
cost recovery amounts due in the
past have been collected and
appropriate actions taken
Provide guidance on when amount
under appeal should be recorded
as A/R
DA ensure that appropriate offices
work together to correct planned
actions
Yes
Yes
Completed
Completed
Information in the "Actions Taken" and "Status" columns are based on information provided in MATS. We did not
'"dependency verify the accuracy of the information in MATS, or confirm that corrective actions were actually taken.
G-l
-------
EXHIBIT G
Page 2 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
ACCOUNTS RECEIVABLE AND COLLECTIONS
Report Number
Report Date Recommendations
Actions Taken
Status
E1AMG1-11-6000-1100433 9/30/91
E9HHF2-11-0031-2100662 9/20/92
Direct FMD to complete the
agency-wide A/R reconciliation
and make all the corrections
Direct FMD to revise chapter 9 of
RMDS 2540 to include documen-
tation of monthly reconciliations
Direct FCQAS to include in their
QARs an assessment of the FMO's
compliance with the requirement in
RMDS 2540 Chapter 9
Ensure that FMD continues to pro-
vide FMO staff with training in
A/R policies and procedures
Direct FCQAS to develop specific
follow-up and resolution
procedures identified during the A/R
Task Force's on-site review
Direct FCQAS to include in its QARs
an evaluation of the FMO's
successor lack of success in the
prompt recording of new receivables
Modify mixed funding guidance to
require that ORC verify EPA is
within the consent decrees for
collected costs
P1SFF1 -11 -0027-3100058
12/29/92 Send a memo to POH about
persistent weaknesses identified in
audit report
Alert Sr Council on Mgt Controls
on problems identified in report
Yes
Yes
No
No
No
No
Yes
Yes
Yes
Completed
Completed
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Pending
Pending
Pending
G-2
-------
EXHIBIT G
Page 3 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
ACCOUNTS RECEIVABLE AND COLLECTIONS
art Number
Report- Datei RSboftmienclatidns
Actions Taken
Status
P1SFL2-20-8001-3100264 6/30/93
E1AMF2-11-OO40-310O391 9/29/93
EPA must: dedicate adequate
resources to resolving financial
system and reporting issues;
improve accounting for receivables;
improve acctg for properly, plant
equipment; resolve errors in acctg
for state cost share revenue;
improve controls over reporting
liabilities; and determine if grant
expenses are being properly
recorded
CFO dedicate sufficient resources to
resolve the unreconciled differences
in 1989 and 1990 Year-End Prepaid
Adjustment Accounts; resolve FY '91
FY '92 unreconciled differences
before FY '94; modify present cash
reconciliation procedures and
require acctg offices to follow
procedures; require FMD to perform
quality reviews of the reconciliation
process and provide assistance to
acctg offices as needed; include
specific cash reconciliation training
in financial management training
initiatives; require the acctg offices
to establish desk procedures and
train responsible personnel
No
Not Applicable
No
Not Applicable
G-3
-------
EXHIBIT G
Page 4 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
INTERNAL CONTROLS AND RECORD KEEPING
Report Number
Report Date Recommendations
Actions Taken
Status
E1AMG9-09-6000-9400047 9/29/90
P1SFFO-11-0032-1100385 9/16/91
P1SFF1-11-0026-2100660 9/30/92
E9HHF2-11-0031-2100662 9/30/92
E1AMP2-20-0019-3400039 3/31/93
E1EPP2-15-7001-3400043 3/31/93
E1EPL2-20-7001-3100265 6/30/93
Improve Internal operations Yes
Upgrade the software program Yes
used to transfer data from the
contract payment system to IFMS
Update users guide Yes
Establish a policy to ensure that Yes
RPIOand Allowance Holder
certify to FMD that prior year
unliquidated obligations have
been reviewed
OSWER issue guidance requiring Yes
the RPM and ORC provide written
reports to the decision officials
Develop and implement RMDS Yes
chapter for response claims
CFO establish policies and No
procedures to ensure that the
Agency's annual appropriations is
reviewed
Correct the bi-weekly processing No
procedures in TAIS
Dir.OPP work with FMD officials to No
determine if IFMS can track and
account for fees
CFO emphasize current guidance No
on preparing adequate documenta-
tion to support financial transactions;
revise capitalization policy; correct
errors in acctg transaction code; and
revise methods for computing
accounts payable and accrued
liabilities
Completed
Completed
Pending
Pending
Pending
Pending
Not Applicable
Not Applicable
Not Applicable
Not Applicable
G-4
-------
EXHIBIT 6
Page 5 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
ERA'S FINANCIAL STATEMENTS
Report Number
Report Date Recommendations
Actions Taken
Status;
P1SFL2-20-8001-3100264 6/30/93
EPA must: dedicate adequate
resources to resolving financial
system and reporting issues;
improve accounting for receivables;
improve acctg for property, plant
equipment; resolve errors in acctg
for state cost share revenue;
improve controls over reporting
liabilities; and determine if grant
expenses are being properly
recorded
No
Not Applicable
FMS/IFMS
Report Number
Report Date Recommendations
Actions :;Taken
Status
P1SFF9-11 -0032-0100492 9/24/90 Ensure reporting system for IFMS
is developed and implemented
in FY1990
E1AMFO-11-0029-1100153 3/29/91 Formally establish the proposed
IFMS project mgt staff
Require the updating of the
needs statement, feasibility
study, and the cost-benefit
analysis
E1NMF1-15-0032-2100641 9/28/92 Establish: top mgt controls and
attention over IRM; IRM
policies, standards and
procedures; QA program in info
systems; internal control review
program; computer systems
_^ security program
Yes
Yes
Yes
No
Completed
Pending
Completed
Not Applicable
G-5
-------
EXHIBIT G
Page 6 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
OBLIGATIONS AND DISBURSEMENTS
Report Number
P1SFF9-1 1-0032-0100492
Rep6rt;Date;s:Recbmmendations
9/24/90 Require the appropriate FMO to
review and resolve the
questioned obligation transaction
E1SGG1-01-0184-1400025 6/18/91 Establish and implement an
internal control system to
track SF site completion dates
P1SFFO-1 1-0032-1 100385
E1AME9-1 1 -0041 -1 100426
P1SFF1 -1 1 -0026-2100660
Identify and deobligate in a timely
manner any excess SF
unliquidated cooperative
agreement funds
9/1 6/91 Complete the investigation of
understatement of personnel
compensation costs in the
schedule of disbursements, make
appropriate adjustments and
institute controls to detect errors
Resolve the questioned
obligation transactions
9/26/91 Request RA direct their staff to
follow guidance memo reissued
to accelerate administrative
completions
9/30/92 Instruct the appropriate FMO's
to review and resolve the
questioned obligation transactions
Instruct commitment clerks that
all SF commitments must have a
valid and reasonable justification
attached before entering commit-
ments into the ADCR or IFMS
Issue memo to program officials of
the importance of forwarding
obligating documents to FMO
on a timely basis in accordance
with agency policies
Actions Taken
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Status
Completed
Not Applicable
Not Applicable
Completed
Completed
Completed
Completed
Pending
Completed
G-6
-------
EXHIBIT 6
Page 7 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
OBLIGATIONS AND DISBURSEMENTS
Report Number
Report Date Recommendations
Actions Taken
Status
Require the appropriate FMO to
review and resolve the questioned
disbursement transactions and
make necessary accounting
entries
Instruct program officials about
the importance of charging the
object class codes when
preparing procurement requests
Yes
Yes
Completed
Completed
COST RECOVERY
Report Number;
Report Date Recommendations
Actions Taken
Status:
E1SJC9-02-0055-0100230 3/29/90 Develop and implement guide-
lines which set specific
timeframes for regional review
and approval of PRP submissions
Develop and implement an
automated tracking system
to monitor specific post
settlement milestone dates
Establish and implement an
effective system for the timely
recovery of oversite costs
E1SJGO-11-0022-0400036 9/24/90 Aggressively pursue cost
recovery actions
E1SJDO-01-0145-1100133
2/28/91 Develop and implement guide-
lines for reviewing and respond-
ing to PRP deliverables
E1SJDO-05-0195-1100149 3/29/91
1SFF1-11-0026-2100660
Use the enforcement provisions
on settlement documents
9/30/92 Obtain a written opinion from
OGC on the legal bias for charg-
ing SF administrative expenses
to the salaries and expense
appropriation
Yes
Yes
Yes
Yes
No
Yes
Yes
Pending
Pending
Pending
Pending
Not Applicable
Completed
Pending"
G-7
-------
EXHIBIT 6
Page 8 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
COST RECOVERY
Report Number
Report Date Recommendations
Actions Taken
E1SFG2-02-5000-3400005
11/24/92 Improve review process
for settlements
No
Not Applicable
PROPERTY AND EQUIPMENT
Report Number:
; Repbrt Date Recommendations
Actions Taken
Status
P1SFF9-11-0032-0100492 9/24/90
P1SFFO-11 -00323-110038J
Obtain certifications from the
appropriate RA and AA that
corrective actions have been
taken to record the omitted
property and locate missing items
Emphasize to the appropriate
RA and AA the importance of
complying with agency policies
for conducting physical inventories
Require the Dir. FSSD to correct
deficiency causing the loss of
data between the national PPAS
and local PPAS listings
9/16/91 Obtain certifications that
corrective actions have been
taken to record the property
items
Yes
Completed
Yes
Yes
Yes
Completed
Completed
Completed
G-8
-------
EXHIBIT 6
Page 9 of 9
STATUS OF PRIOR OIG
RECOMMENDATIONS IN MATS*
PROPERTY AND EQUIPMENT
Report Number
Report Date Recommendations
Actions Taken
Status
P1SFF1 -11-0026-2100660 9/30/92
P1SFF1-11-0027-3100058
Ensure that all procurement
requisition for property and
equipment are forwarded to
FMSO personnel property
Instruct the Dir. FMSO to consider
issuing a policy requiring all
property to be received at a
central receiving point
Certify that annual physical
inventories and walk through
inspection of labs were performed
and the physical inventories are
reconciled to the official PPAS
records with fiscal year
12/29/92 Send a memo to other POH
about persistent weaknesses
identified in report
Alert the Senior Council on Mgt
Controls on Continuing Problems
Yes
Yes
Yes
Pending
Pending
Pending
Yes
Yes
Pending
Pending
G-9
-------
OIG REPORT FINDINGS BY ISSUE AREA
HIM
o
H H
H «
HP*
ACCOUNTS RECEIVABLE AND COLLECTIONS
REPORTNUMBER
El A67 - 1 1 - 0029 - 80779
E1SJF9 -05-0274-01001 26
E1 SJF9 -05-0274 -01 001 52
E1SJF9 -05-0274-0100172
E1SJF9 -05-0274-0100207
E1AMG1 -11 -6000-1100433
P5EH7-1 1 -0022-80028
P1 SFF9 - 1 1 -0032 -01 00492
REPORT TITLE
Accounts Receivable
•*
Superfund Cost Recovery Accounts
Receivable Establishment and
Collection - Region 5
Superfund Cost Recovery Accounts
Receivable Establishment and
Collection - Region 4
Superfund Cost Recovery Accounts
Receivable Establishment and
Collection - Region 3
Superfund Cost Recovery Accounts
Receivable Establishment and
Collection - Consolidated Report
Followup Review Of Accounts Receivable
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Year Ending September 30, 1986
Obligations and Disbursements of the
Hazardous Substance Superfund
For the Fiscal Year Ended
September 30, 1989
REPORT
DATE
3/17/88
1/25/90
3/14/90
3/6/90
3/28/90
9/30/91
10/7/87
9/24/90
REPORT
FINDINGS
Many Debts In The Accounting Records Were
Understated Or Overstated
More Aggressive Collection Is Needed
All Debts Owed Should Be Recorded As Accounts Receivable
Accounts Receivable Need to be Recorded
Prompt Action Needed to Collect Amounts Owed
Accounts Receivable Need to be Recorded
Prompt Action Needed to Collect Amounts Owed
FMS Needs to Accurately Reflect Transaction Dates
Accounts Receivable Need to be Consistently Recorded
Prompt Action Needed to Collect Amounts Owed
Accounts Receivable Need to be Recorded
Prompt Action Needed to Collect Amounts Owed
Almost 40% Of The Debts In The Accounting Records
Were Understated Or Overstated
Aggressive Collection Action Is Needed To Ensure That
Debtors Pay The Agency In A Timely Manner
All Debts Owed To The Agency Should Be Recorded
As Accounts Receivable
CERCLA Trust Fund Receivables Should be Recorded Timely
Improvements are Needed in Recording and Managing Accounts
Receivable and Collections
I
as
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
H
O
H CM
H O
ri
WPU
ACCOUNTS RECEIVABLE AND COLLECTIONS
REPORT NUMBER
PI SFFO - 1 1 -0032 - 1 1 00385
P 1 SFF1 - 1 1 - 0026 - 21 00660
P1SFF1-1 1-0027-3100058
E9HHF2-1 1 -0031 -2100662
P5EH8-11 -0030-81917
P1SFL2-20-8001 -3100264
REPORT TITLE
Obligations and Disbursements of
the Hazardous Substance Superfund
for the Fiscal Year Ended
September 30, 1990
Obligations and Disbursements
of the Hazardous Substance
Superfund For the Fiscal Year
Ended September 30, 1991
Decade of Auditing Superfund
Obligations and Disbursements:
Fiscal Years 1981-1990
Audit Report
Response Claims Against the
Superfund for Fiscal Year 1991
Obligations and Disbursements
of the Hazardous Substance Superfund
for the Fiscal Year Ended
September 30, 1987
Fiscal 1992 Financial Statement
Audit of the Superfund Trust Fund,
Leaking Underground Storage Tank
Trust Fund and Asbestos Loan Program
REPORT
DATE
9/16/91
9/30/92
12/29/92
9/30/92
9/21/88
6/30/93
REPORT
FINDINGS
Improvements are Needed In Recording and Managing Accounts
Receivable and Collections
Reporting and Recording Accounts Receivable and Collections
Need to be Improved
Improvements are needed In Recording and Managing
Accounts Receivable and Collections
Cost Collection Efforts for the MOTCO Site
EPA Needs to Make Improvements in Recording and Managing
Accounts Receivable
Improvements Are Needed In Recording Accounts Receivable
OJ
I
X
-------
OIG REPORT FINDINGS BY ISSUE AREA
W«H
o
H V
HS1
MA
INTERNAL CONTROLS AND RECORD KEEPING
REPORT NUMBER
P 1 SFFO - 1 1 -0032 - 1 1 00385
P 1 SFF1 - 1 1 - 0026 - 21 00660
PI SFF1 - 1 1 -0027 -31 00058
E9HHF2-1 1 -0031 -2100662
E1AMG9-09-6000-9400047
E1EPG9-11 -0026-9400027
P1 SFFO- 11 -0041 -31 001 14
REPORT TITLE
Obligations and Disbursements of
the Hazardous Substance Superfund
for the Fiscal Year Ended
September 30, 1990
Obligations and Disbursements of
the Hazardous Substance Superfund
For the Fiscal Year Ended
September 30, 1991
Decade of Auditing Superfund
Obligations and Disbursements:
Fiscal Years 1981 -1990
Response Claims Against the Superfund
for Fiscal Year 1991
Review of EPA's Region 9 Corrective
Actions Taken In Response to Review
of EPA's Regbn 9 Office of Policy
and Management Letter-of-Credit
Procedures
Pesticide Financial Activity Related
to Implementing the 1988 FIFRA
Amendments
Financial Audit of Superfund Indirect
Cost Rates for Fiscal 1988 and 1987
REPOR1
DATE
9/16/91
9/30/92
12/29/92
9/30/92
9/29/90
4/13/89
2/22/93
REPORT
FINDINGS
Internal Control Weaknesses Existed
In Financial Management
Internal Control Weaknesses Existed
in Program and Financial Management
Improvements Are Needed In the
Cost Recovery Process
Improvements are Needed In the Response
Claims Review Process
Region 9's LOG Accounting Records
Need Improvement
Monitoring Use of the FIFRA Revolving Fund by
Other Offices
Setting Annual Maintenance Fees
Assessing Additional Charges for Delinquent
Payment of Fees
An Internal Control Weakness And Procedural
Errors Were Found
r>
I
ac
-------
OIG REPORT FINDINGS BY ISSUE AREA
INTERNAL CONTROLS AND RECORD KEEPING
: REPORT NUMBER
E1AMP2-20-001 9-3400039
E1EPP2-15-7001 -3400043
P5EH8-11 -0030-81917
E1EPL2-20-7001 -3100265
P1 SFL2-20-8001 -31 00264
E1AMF2-1 1-0040-3100391
REPORT TITLE
EPA's Use of the Oil Spill
Liability Trust Fund
Review of EDP Internal Controls
for Selected Pesticide Revolving
Funds' Information Systems
Obligations and Disbursements
of the Hazardous Substance Superfund
for the Fiscal Year Ended
September 30, 1987
Fiscal 1992 Financial Statement
Audit Of The Pesticides Revolving
Funds
Fiscal 1992 Financial Statement
Audit of the Superfund Trust Fund,
Leaking Underground Storage Tank
Trust Fund and Asbestos Loan Program
Reconciling Cash
REPORT
DATE
3/31/93
3/31/93
9/21/88
6/30/93
6/30/93
9/29/93
REPORT
FINDINGS
Funds Appropriated for EPA's Use were not
Transferred In a Timely Manner
EPA did not have In Place Adequate Accounting Controls
to Track EPA's Use of OIL Spill Liability Trust Fund Monies
Internal Control Improvements Needed Within Pesticide
Revolving Funds' Information Systems
Duplicate Financial Systems Developed and
Maintained by Program Offices
EPA Needs to Strengthen Procedures for
Monitoring Letters of Credit
FIFRA year-end accounts payable and accrued
liability adjustments were materially misstated and
lacked supporting documentation
Property and Equipment Records Need to Be
Integrated with the General Ledger
State Cost Share Revenue Is Not Properly Recognized and
Accounts Payable/Accrued Llabilltes Are Not
Properly Recorded
Accounting for Grant Drawdowns Does Not
Provide Required Account Information
General EDP Controls Need to Be Strenghthened
Capital Leases Have Not Been Recorded
Cash differences were not always resolved and were
inaccurately Included in monthly SF 224
Treasury Reports
EPA's general ledger did not provide accurate year
end cash balances
Training and procedures need to be Improved
in
H
o
H
H *
»
H V
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
H
H in
n
H 0)
WPt
ERA'S FINANCIAL STATEMENTS
REPORT NUMBER
E1EPL2-20-7001 -31 00265
P1 SFL2-20-8001 -31 00264
REPORT TITLE
Fiscal 1992 Financial Statement Audit
of the Pesticide Revolving Funds
Fiscal 1992 Financial Statement Audit
of the Superfund Trust Fund. Leaking
Underground Storage Tank Trust
Fund and Asbestos Loan Program
REPORT
DATE
6/30/93
6/30/93
REPORT
FINDINGS
Audit opinion not rendered because material unsupported
adjustments were made to the general ledger
Financial Reporting System Improvements Are Needed
If)
I
-------
OIG REPORT FINDINGS BY ISSUE AREA
H VO
«
H Q>
HP4
FMS/IFMS
.REPORT NUMBER
P1SFF9-11 -0032-0100492
P1SFF1 -1 1 -0027-3100058
El AMFO-1 1-0029-1 100153
E1RMG1-1 1-0031 -2400013
REPORT TITLE
Obligations and Disbursements
of the Hazardous Substance
Supertund For the Fiscal Ywv Ended
September 30, 1989
Decade of Auditing Superfund
Obligations and Disbursements:
Fiscal Years 1981 - 1 990 Audit Report
Integrated Financial Management
System: Managing Implementation
of the New Accounting System
EPA Implementation of FMFIA
During Fiscal 1991
REPOR1
DATE
9/24/90
12/29/92
3/29/91
1/10/92
REPORT
FINDINGS
Internal Control Weaknesses Were Noted In the IFMS
Control Weaknesses Existed In Financial
Management Systems
A High Priority Must be Placed on Implementing IFMS
EPA has not Adequately Documented the
Decision -making Process
Software Testing was not Performed In Accordance
With Requirements
Other Key Requirements for a Successful Project Were Not Met
Component System Managers Need to Document Decision
to Forego Detailed Evaluation of IFMS Required by OMB
vo
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
H
H t-
n
H «
BS?
HP«
FMS/IFMS
REPORT NUMBER
EINMFt-15-0032-2100641
E1SFG1 -15-5001 - 2400027
REPORT TITLE
Computer Systems Integrity—EPA
Must Fully Address Longstanding
Information Resources Management
Problems
Review On Follow-Up of CERCLIS
Reporting and Post-Implementation
REPOR1
DATE
9/28/92
OS/27/92
REPORT
FINDNGS
Top Management Involvement In IRM Is Needed
Comprehensive IRM Policies, Standards, and Procedures
Are Needed
An Agencywlde IRM Planning Process Which Ties Into
the Budget has not been Established
The Quality Assurance Program for Information Systems Needs
Improvement
Internal Control Reviews of Some Sensitive Information
Systems Have not been Performed
EPA has not Established a Comprehensive Computer
Systems Security Program
O ARM'S FMFIA Process Does Not Sufficiently
Address the Risks Associated With Critical IRM Processes
FINC-4 Reporting Deficiencies Document the Need to Reinstate
the Download of Official Agency Financial Data to CERCLIS
Quality of Overall CERCLIS Reporting Still Needs Improvement
Overall CERCLIS Program Documentation Still Needs
Significant Improvement
Superfund Program Management Requires More Flexibility
than Available with CERCLIS
r-
l
X
-------
OIG REPORT FINDINGS BY ISSUE AREA
O
EH
HGO
«
H «
%%
WPi
OBLIGATIONS AND DISBURSEMENTS
REPORT NUMBER
P5EH5-11 -0028-60470
P5EH5-11-0024-60481
P5EH7-11 -0022-80028
P1SFF8-11-0048-9100488
REPORT TITLE
Consolidated Report of Obligations
and Disbursements Under
CERCLA for Fiscal Years -
Ended September 30, 1984
and 1983- Regions
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Years Ended September 30,
1984 and 1983 - Region 5
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Year Ending September 30,
1986
Obligations and Disbursements of the
Hazardous Substance Superfund For
the Fiscal Year Ended September 30,
1988
REPORT
DATE
1/27/86
1/29/86
10/7/87
9/22/89
REPORT
FINDINGS
Letter of Credit Recipients Should Properly Submit
Required Reports
Payroll Procedures Need Improvement
Procedures Needed for Maintaining Document
Control Registers
Letter of Credit Recipients Should Properly Submit
Required Reports
Invalid or Expired Obligations Should be Deobligajed
Payroll Procedures Need Improvement
Results of Statistical Analysis of Nonpayroll
Obligation Transactions
Results of Statistical Analysis of Nonpayroll
Disbursement Transactions
Results of Statistical Analysis of Personnel
Compensation Transactions
Obligations Were Questioned Due to Recording
Errors and Lack of Documentation
Disbursements Were Questioned Due to Recording Errors
and Lack of Documentation or Approval
Personnel Compensation Costs Were Questioned Due to
Recording Errors and Lack of Documentation
CO
I
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
H
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
W 0
HH
m
H 0)
W tr>
W id
NP4
OBLIGATIONS AND DISBURSEMENTS
**—
. REPORT NUMBER
P1SFF1 -1 1 -0027-3100058
E1AME9-11 -0041 -0100239
E1AME9-1 1 -0041 -0100523
E1AME9-1 1 -0041 -1 100426
E9HHF2- 1 1 -0031 -21 00662
E1SGG1 -01 -0184-1400025
REPORT TITLE
Decade of Auditing Superfund
Obligations and Disbursements:
Fiscal Years 1 981 - 1 990 X.jdH Report
Unliquidated Obligations In "M"
Accounts
Management of Unliquidated
Obligations in Administratively
Complete Consfruction Grants
•
Management of Unliquidated
Obligations In Construction Grants
That Have Not Been Administratively
Completed
Response Claims Against the
Superfund for Fiscal Year 1991
Deobllgations of Superfund
Cooperative Agreement Funds -
Region 1
REPORT
DATE
12/29/92
3/30/90
9/27/90
9/30/91
9/30/92
6/18/91
REPORT
FINDINGS
Weaknesses In Control of Disbursements
Weaknesses In Recording Obligations
Weaknesses In Recording Transactions and Maintaining
Documentation for Personnel Compensation
Invalid Grant Obligations Need To Be Deobligated
Grant Closures Were Not Timely
Semiannual Review Needs Strengthening
EPA Needs To Improve Its Timeliness In Deobllgating
Consfruction Grant Funds From Administratively
Complete Projects
EPA Needs To Improve Its Timeliness In Deobligating
Excess Funds From Consfruction Grants That Have
Not Been Administratively Completed
Improvements Needed for the Commitment and
Obligation of Funds
Regional Office Needs to Improve Its Management of
Unliquidated Obligations for Superfund Cooperative
Agreements
I
EC
-------
OIG REPORT FINDINGS BY ISSUE AREA
OBLIGATIONS AND DISBURSEMENTS
REPORT NUMBER
E1AMG9-09-6000-9400047
P5EH8-11 -0030-81917
El EPL2- 20-7001 -3100265
E1A96-1 1-0047 -70965
El Z27-1 1-0027-71 572
REPORT TITLE
Review of EPA's Region 9 Corrective
Actions Taken In Response to Review
Of EPA's Region 9 Office of Policy
and Management Letter -of- Credit
Procedures
Obligations and Disbursements of the
Hazardous Substance Superfund for
the Fiscal Year Ended September 30,
1987
Fiscal 1992 Financial Statement Audit
Of The Pesticides Revolving Funds
EPA's Interagency Agreement
Payment Policies and Procedures
Review of Controls Over EPA Property
In Contactors' Possession
REPORT
DATE
9/29/90
9/21/88
6/30/93
3/30/87
7/23/87
REPORT
FINDINGS
Region 9 Needs to Fully Implement Its Procedures to
Detect and Recover Overdraws
Other Matters - Region 9 Needs to Assure that CSWRCB
Overcharges to EPA Grants are Recovered
Obligations were Questioned Due to Recording Errors
Disbursements Were Questioned Due to Recording Errors
Results of Statistical Analysis of Personnel Compensation
and Benefits Transactions
The Office of Pesticide Programs did not perform a
complete review of unliquidated obligations
Invalid IAG Obligations Need To Be Deobligated
Timeliness of IAG Payments Needs Improvement
EPA may be unnecessarily paying State sales taxes
in
H
U 0
H H
ffl
H 0)
WP<
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
W O
H H
n
H 0)
HPi
PROPERTY AND EQUIPMENT
REPORT NUMBER
P5EH5-1 1 -0026-60438
P5EH5-1 1-0028-60470
P5EH5-1 1 -0024-60481
P5EH7-1 1 -0022-80028
PI SFF8- 1 1 -0048 -91 00488
P1SFF9-11 -0032 -01 00492
PI SFFO-1 1-0032- 11 00385
P1SFF1 -11-0026-2100660
REPORT. TITLE
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Years Ended September 30,
1 984 and 1 983 - Region 6
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Years Ended September 30,
1984 and 1983 - Regbn 8
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Years Ended September 30,
1984 and 1983 - Regbn 5
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Year Ending September 30, 1 986
Obligations and Disbursements of the
Hazardous Substance Superfund For
the Fiscal Year Ended September 30, 1 988
Obligations and Disbursements of the
Hazardous Substance Superfund For
the Fiscal Year Ended September 30, 1989
Obligations and Disbursements of the
Hazardous Substance Superfund for
the Fiscal Year Ended September 30, 1 990
Obligations and Disbursement! of the
Hazardous Substance Superfund For
the Fiscal Year Ended September 30, 1991
REPORT
DATE
1/15/86
1/27/86
1/29/86
10/7/87
9/22/89
9/24/90
9/16/91
9/30/92
REPORT
FINDINGS
Personal Property Listing Needs to be Updated
Personal Property Management Procedures
Need Improvement
Personal Property Management Procedures
Need Improvement
Personal Property Management Procedures
Should be Strengthened
Improvements are Needed In Accounting for
and Controlling Personal Property
Improvements are Needed In Accounting for
and Controlling Personal Property
Improvements are Needed in Accounting for
and Controlling Personal Property
Improvements are Needed In Accounting for and
Controlling Personal Property
CM
H
I
-------
OIG REPORT FINDINGS BY ISSUE AREA
tn
H
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
H
H O
HH
m
H 0
10
pq pj
LOW COST RECOVERY
REPORT"NOMBEH7
REPORT
DATE
REPORT
FINDINGS
REPORT TlTLg
P5EH7-11-0022-80028
Consolidated Report of Obligations
and Disbursements Under CERCLA
for Fiscal Year Ending Sep^mber 30,
1986
10/7/87
Procedures for Allocation of Support Services Costs
to Superfund Need Improvemet
P1SFF8-11-0048-9100488
Obligations and Disbursements of the
Hazardous Substance Superfund For
the Fiscal Year Ended September 30.
1988
9/22/89
Weaknesses Were Noted In the Allocation of General
Support Costs to Superfund
P1SFF1-11-0026-2100660
Obligations and Disbursements of the
Hazardous Substance Superfund For
the Fiscal Year Ended September 30,
1991
9/30/92
Certain Allocoble Costs Were not Allocated to Superfund
P1SFFO-11-0041-3100114
Financial Audit of Superfund Indirect
Cost Rates for Fiscal 1988 and 1987
2/22/93
Significant Costs Were Excluded From Indrect Cost Pools
Delays In Establishing Indirect Cost Rates Result
In Underrecoveries
E1SJGO -11 - 0022 - 0400036
Followup Review of EPA's Cost
Recovery Actions Against Potential
Responsible Parties
9/24/90
EPA Needs to Actively Pursue Sites Under $200,000
Bankrupt PRPs Impact on EPA's Ability to Recover
Cleanup Costs Under CERCLA & SARA
EPA Needs to Complete Negotiations With Responsible
Parties in a More Timely Manner
EPA Needs to Identify and Track Statute of Limitations Dates
EPA Needs to Implement a Comprehensive Management
Information System to Track Enforcement Activities
E1SJC9-02-0055-0100230
Region 2's Oversight of Superfund
Post-Settlement Activities
3/29/90
Length of Regional Reviews Delay SF Cleanups
Region Needs to be More Aggressive In Assessing
Stipulated Penalities
Oversight of Technical Enforcement Support (TES)
Contractors Needs Improvement
Oversight Costs were not Billed and Collected In a Timely Manner
-------
OIG REPORT FINDINGS BY ISSUE AREA
in
H
-------
GAO REPORT HIGHLIGHTS
H
H«H
H°
HH
«
H O
S0»
rf
WP4
REPORTOR TESTIMONY TITLE
Financial Management Reform
EPA's Contract Management
Government Financial
Vulnerability: Fourteen Areas
Needing Special Review
EPA's Actions to Improve
Longstanding Information
Management Weaknesses
REPORT OR
TESTIMONY NUMBER
T-AFMD-90-31
T-RCED-91 -5
OCG-90-1
T-IMTEC-93-4
09/90
12/90
01/90
03/93
REPORT OR TESTIMONY CONCERNS
Inadequate Financial Management Systems.
Qualified CFO in both education and experience.
CFO needs adequate personnel and other resources.
Agency CFOs should be career positions.
Establishment of an Advisory Audit Committee for each agency.
Backlogged contract audits, some at least 4 years.
DCAA Audit backlogs cause delayed contract close-outs
and missing FAR requirements.
PCMD had timeliness problems with closing out contracts
leading to funds not being deobligated.
EPA does not expend enough resources for contract audits.
Ineffective and incomplete audit follow-up system.
EPA needs to:
Ensure that parties who contaminate sites pay their fair
share of the clean-up costs.
Effectively manage clean-up contractors who get over
75% of SF outlays.
The numerous information systems impairs EPA's ability
to easily share mutually beneficial information across
program boundaries, fosters data duplication, and precludes
comprehensive, cross-media assessments of environmental
risks and solutions.
IRM deficiencies seriously impair EPA's ability to effectively
carryout its program responsibilities.
I
H
-------
GAO REPORT HIGHLIGHTS
HIM
O
H CM
m
H «
81?
WP<
REPORT OR TESTIMONY TITLE
Cash Management Improvement
Act of 1990
Superfund: Current Progress
and Issues Needing Further
Attention
REPORT OR
TESTIMONY NUMBER
T-AFMD-90-21
T-RCED-92-56
DATE
05/90
06/92
REPORT OR TESTIMONY CONCERNS
Deficiencies in developing informatbn systems to integrate
data on regulated facilities' noncompliance with
environmental regulation are impeding EPA's ability to
enforce environmental laws and regulations.
Pesticide reregistration lacks integrated databases.
There are as many as nine systems used.
A decentralized IRM environment lacks oversight and controls.
Each major office independently controls how it plans and
spends its information resources and is responsible for
designing its own systems.
EPA uses outdated and vague IRM standards, policies,
and procedures.
EPA lacks an agencywide data management program to .
ensure the Integrity of the organization's information.
Help ensure that neither the Federal or State government incur
unnecessary interest costs. Some states were drawing down
federal funds sooner than necessary and profiting from the
interest earned. Also, some states were not receiving federal
funds soon enough and had to use their own money, but
could not collect interest from the federal government.
Secretary of Treasury is to prescribe methods of paying
interest between states and federal government and
ensuring equitable treatment.
(N
l
H
As clean-up costs mount, contract mismanagement and
high administrative costs may be wasting trust fund resources.
EPA expects that more sites will enter the cleanup process
than will leave it.
Operational changes included efforts to test new procedures
called SF Accelerated Cleanup Model (SACM). The model calls
for standardizing remedies and investigation procedures to help
accelerate the initial assessments.
-------
GAO REPORT HIGHLIGHTS
o
H
H <•>
«
H 0
REPORT OR TESTIMONY TITLE
The Government's use of
"M" and Merged Surplus
Accounts
Qualifications for and Role
of Agency Chief Financial
Officers
REPORT OR
TESTIMONY NUMBER
T-AFMD-90-26
T-AFMD-91-7
DATE
08/90
06/91
REPORT OR TESTIMONY CONCERNS
Approximately 48% of $9.1 billion total SF appropriations went
to cleanup operations. Approximately 1 1 % went to enforcement
and 41% went to support.
EPA has not adequately checked contractor's spending plans
before approving them, checked bills for allowable charges before
paying them, and verified charges later by auditing records.
Excessive SF contractor idemnification.
Some SF cases have become difficult or tine consuming to collect
because of hundreds of responsible parties drawn into the litigations.
EPA should use de minimis settlements more often.
Slow Superfund cleanup from long process.
Effectiveness of cleanups are uncertain.
Unsure if sites are actually severe threats to health and environment.
Poor documentation of "M" account obligations and continued
retention of excessive balances in these accounts.
Balances of reported "M" account obligations are not reliable.
GAO recommended that legislation include a new requirement
for an annual certification from the head of each agency that
obligated balances in the account are accurate. Also, that IGs
review the reasonableness of the accounts each year.
CFOs should have impeccable credentials, proven track records
in financial management, and qualifications commensurate
with the positions.
The Deputy CFO should have experience in accounting, budget
execution, financial and management analysis, and systems
development, and not less than 6 years of practical experience in
FM at large government entities.
n
I
-------
GAO REPORT HIGHLIGHTS
H
-------
GAO REPORT HIGHLIGHTS
HH-I
O
H
HU>
«
H «
%%
HP«
REPORT OR TESTIMONY TITLE
Superfund: Issues That Need
To Be Addressed Before
the Program's Next
Reauthorizatlon
REPORT OR
TESTIMONY NUMBER
T-RCED-92-15
DATE
10/91
REPORT OR TESTIMONY CONCERNS
Another underlying cause of failure to correct deficiencies is
Headquarters delegation of management responsibility to
the regions w/o sufficient oversight and accountability.
Regions had not received enough advice or training from
headquarters on estimating contractor costs, reviewing
claimed costs, and dealing with contractors' potential
conflicts of interest.
The regions had not fully adhered to headquarters policy on
invoice review, idemnification, and conflict of Interest controls.
Slow cleanup and lengthy study and evaluation process.
High administrative costs.
Superfund's contract management controls and oversight
need to be improved.
EPA doesn't review spending plans, check bills, or verify charges.
Contractors charged excessive administration charges because
of hiring more cleanup contractors than needed.
Excessive contractor indemnification- EPA was giving unlimited
indemnificaiton w/o proof of uninsurabilrty. Because EPA has not
set a limit on indemnification, each indemnification agreement is
backed by the entire unobligated balance of Superfund.
Transaction or liability costs leading to litigation and delays in
resolving responsibility.
De minimus settlement authority not used often. If used
it would reduce some of the more controversial litigation
surrounding SF.
Effectiveness of cleanup is difficult to access. Some signs of
problems already exist.
i
H
-------
GAO REPORT HIGHLIGHTS
Improving Government: Need
to Reexamine Organization
and Performance
mmFKPOmORmm
TESTiMONY?NUMBER;
T-GGD-93-9
9f
03/93
Lack of information on health and environmental effects of SF sites.
New concepts of government emphasize flattening hierarchies,
decentralizing authority, creating a customer focus, encouraging
competition, and achieving results.
Most programs are budgeted according to historical funding levels
rather than according to their results. This concentrates on inputs
rather than outputs.
GAO believes federal management can be improved by action in
(l)establishing accountability for program results, (2) emphasizing
a long-term focus, (3) realigning the machinery of government.
Pending legislation S. 20 "Government Performance and
Results Act of 1993" will require all agencies to develop strategic
plans, set agreed -upon goals and objectives, and measure
their progress towards these goals.
S. 20 also provides for a series of pilots on performance budgeting
beginning in late 1997.
Some states and other countries suggest that providing
greater flexibility and incentives for managers to act is critical
to fundamentally improving agencies' performance.
These governments granted managers greater freedom by
(1) reforming civil service systems making it easier to hire,
provide different compensation, Incentive, and promotion,
(2) allowing multiyear budget allocation and reduced number
of line items, (S)devolving more responsibility away from central
management where managers are held responsible for actions, and
(4) streamlining acquisition processes.
Top positions filled by political appointees who have little
incentive to focus on long-term management issues.
<£>
I
-------
GAO REPORT HIGHLIGHTS
Hi
H fs
ffl
H 0)
REPORT OR TESTIMONY TITLE
EPA Cost Estrnates Are Not
Reliable or Timely
REPORT OR
TESTIMONY NUMBER
AFMD-92-40
DATE
07/92
REPORT OR TESTIMONY CONCERNS
Improvements should include reducing turnover of political
appointees, impact of growth in number of political appointees,
senior management training needs, senior executive performance
agreement on results, and development of standards.
Lack of sufficient investment in agency staffing and training, coupled
with failure to modernize federal employment practices to stay
competitive has undermined federal workforce's ability to
manage programs.
Top levels of government fail to provide accounting, reporting,
and systems standards to agencies that will help them to meet
the information needs of users. Central agencies also do not
provide models of information systems.
Recommend creating a commission with a clear focus and
timeframe for products to address all the above problems.
EPA is usually a year late in issuing its legislatively required
annual cost est'mate for the SF program.
EPA's estimates for fiscal 89 and 90 did not include billions of
dollars for cleaning up sites which would be placed on the NPL
or reflect realistic costs associated with completing ongoing cleanups.
The CFO has not been given a strong role in ensuring the annual
forecast of SF costs is realiable.
The IG has not analyzed the reasonableness of those estimates
as part of the IG's statutorily required reviews.
EPA uses a cost growth rate which is unsupported and may
be far too low for estimates of costs to complete SF.
I
H
-------
GAO REPORT HIGHLIGHTS
r»
H
Hi
HCO
m
H O
Wft
|lE|^RT|§Ril§TjMONY|iTLEj:;;:
Financial Management: Responses
to 17 Questions
TESTIMONYNUMBER:
tf
AFMD-88-63-BR
iRATEf
06/88
illiifli^^^ •
illiilliilS^ . :/
The estimates are prepared w/o using certain forecast
management techniques.
EPA did not include future sites expected on the NPL because
they believed CERCLA meant current sites.
EPA's cost growth factor in preparing remedial action cost
estimates may be far too low. EPA does not maintain financial
information that compared budgeted and actual cleanup costs.
EPA's basis was adopted in 1987 as 25% factor, yet analysis
show that cost growth can range from 39% to 79%.
Without close monitoring of SF cost estimates by the CFO
and the IG, the reliability of these estimates and full accountability
for SF operations is uncertain.
The CFO Act requires the CFO to prepare an annual report to
the Administrator and OMB to describe and analyze EPA's
Financial Management. Therefo're the CFO should have a
direct interest in ensuring cleanup cost estrnates are
reliable and timely. EPA's CFO plan does not assign the
CFO responsibility for reviewing the annual estimate.
The IG has a role to ensure the reliability of SF cost estimates.
The IG's 1989 report's scope included work to verify the accuracy
of selected information presented, but not the estimated costs
to clean up NPL sites.
GAO believed that Treasury should have headed up the CFO.
Financial systems are the cornerstone of good internal control
and critical to ensuring accountability.
Good reporting from systems would provide a mechanism to
hold managers accountable for resources entrusted to them.
Off-the-shelf software is an alternative to the historical
approach of developing agency-specific software.
CO
I
-------
GAO REPORT HIGHLIGHTS
HIM
o
H
H 0»
a
H a>
HP<
REPORT OR TESTIMONY TITLE
Financial Integrity Act: The
Government Faces Serious
Internal Control and
Accounting Systems Problems
REPORT OR
TESTIMONY NUMBER
GAO-AFMD-86-14
DATE
12/85
REPORT OR TESTIMONY CONCERNS
GAO believes that receipt and outlay information should be
supplemented by accounting data which reflects the government's
assets and liabilities.
GAO believes that accrual based accounting will provide the
President with accurate and concise data.
Weaknesses and breakdowns in agency systems of internal
control frequently result in wasteful spending, poor management,
and losses totalling billions of dollars. Serious I/C problems include
properly management and ADP.
Internal control and accounting system weaknesses impair
its ability to meet the objectives of good management
and accountability.
Weaknesses in agencies reported included: 1) financial
management and accounting systems, 2) procurement,
3) property management, 4) cash management,
5) grant, loan, and debt collection management, 6) ADP,
7) personnel and organizational management, and
8) eligibility and entitlement determinations.
Data integrity and incompleteness are major weaknesses
in government accounting systems, and billions of dollars
are not being adequately accounted for, managed, and
controlled.
Specifically, EPA reported: 1) contract costs had not been
recorded and charged to proper appropriation accounts,
2) grant money had not been deobligated as required, and
3) documentation and data controls had not been
established in the payroll system.
In 1984, EPA reported that material internal control
weaknesses in the SF program had been corrected and
cited 17 completed corrective actions. However, GAO's
March 1985 report documented several uncorrected
control problems.
CTi
I
H
-------
GAO REPORT HIGHLIGHTS
H
-------
GAO REPORT HIGHLIGHTS
EXHIBIT I
Page 11 of 17
REPORT OR TESTIMONY TITLE
Prevention, Detection, and
Reporting of Financial
Irregularities
Cash Management Improvement
Act of 1987
REPORT OR
TESTIMONY NUMBER
T-AFMD-90-27
T-AFMD-87-17
DATE
08/90
07/87
REPORT OR TESTIMONY CONCERNS
Current financial management systems do not provide either
timely and reliable program and financial information or
accountability over the government's resources and their use.
The budget structure and content needs improvement.
The budget should distinguish between capital and
operating amounts and between trust and nontrust fund amounts.
Financial statements and audits of the statements are needed.
A new financial management structure should encompass:
1) strengthened federal accounting, auditing, and reporting,
2) improved planning and programming, 3) a streamlined
budget process, 4) comprehensive use of cost based reporting,
5) systematic measurement of performance, and 6) improved and
strengthened internal controls.
Frequent turnover in leadership hampers efforts to resolve
long-standing problems.
Auditors should review reports on internal controls for
private companies.
Public companies and insured depository institutions
should have audit committees.
To prevent unnecessary interest costs charged to the
government or states, the State/Federal Cash Management
Reform Task Force amended the Intergovernmental
Cooperation Act.
Federal disbursements present significant cash management
concerns. GAO believes the management principles in the
Deficit Reduction Act should be applied to federal disbursements.
The Prompt Payment Act was passed only agencies would be
more responsible bill payers. However, only 1/4 of government
payments were made early in 1986 costing the federal government
millions In interest income.
H
I
-------
GAO REPORT HIGHLIGHTS
REPORT OR TESTIMONY TITLE
REPORT OR
TESTIMONY NUMBER
DATE
REPORT OR TESTIMONY CONCERNS
H 0
HH
m
H O
GAO supports the use of lockboxes.
Financial Audit: Examination of
EPA's Financial Statements for
Fiscal Year 1987
AFMD-89-24
02/89
Agency did not routinely reconcile its general ledger accounts
with available external sources and subsidiary records.
Inadequate use of reconciliation as an internal control
contributed to material misstatements in EPA unaudited
financial statements.
EPA also did not reconcile its general ledger balances for
imprest funds and accounts receivable with available
supporting records.
Property management weaknesses include: 1) the
inability of property management records to provide financial
information needed to account for personal property assets
in accordance w/GAAP or federal agencies, 2) the ineffective
control over EPA's personal property assets, and 3) the lack of
supporting documentation for EPA's land and buildings.
Property records were not always reconciled or recorded
and physical Inventories were not performed.
Financial Audit: EPA's
Financial Statements for
Fiscal Years 1988 and 1987
AFMD-90-20
03/90
EPA estimates for the cost to clean up the NPL sites as of
09/30/88 is low. It does not include potential impact of inflation
or future sites that will be added.
Internal control problems reported in FY 1987 had not
been corrected. Weaknesses include 1) the inability of the
property management records to provide financial information
needed to account for personal property in accordance with
GAAP, 2) ineffective control over EPA's personal property
assets, and 3) the lack of supporting documentation for
EPA's libraries and buildings.
Delays in recording property and ineffective controls over
the recording of the property.
Property not capitalized but recorded as an operating expense.
Other weaknesses identified include problems with 1) overtime
and leave usage, 2) payroll control and procedures, 3) invoice
payments, 4) controls over cash and checks, 5) accounts receivable,
and 6) financial reporting.
-------
GAO REPORT HIGHLIGHTS
H
-------
GAO REPORT HIGHLIGHTS
H
>W
H 0
H*
H H
«
H «U
WP«
TESTIMONY TITLE
Environmental Protection
Agency Issues
REPORJpR
TESTlMONlNUMBER
OCG-89-20
DATE
11/88
REPORT OR TESTIMONY CONCERNS
EPA also missed the opportunity to recover millions in
Interest because 1) CERCLA limits the interest that EPA
can charge, and 2) agency personnel have not always tried to
claim interest
Failure to consistently seek recovery of interest costs has
limited EPA's collection of interest.
EPA does not effectively oversee its cost-reimbursable
contracts to prevent contractors from overcharging. EPA
doesn't prepare cost estimates, do invoice reviews, or audits.
Over liberal indemnification policies and practices are a threat.
EPA needs to manage for environmental results by emphasizing
environmental monitoring to develop better information on
current and future environmental conditions and undertake
research to deteimine the environmental dangers
and health risks posed by various sources of pollution.
EPA's planning function is not well linked to its budgeting
process, therefore, there is no assurance that resources
will be allocated in a manner consistent with program priorities.
A new EPA-state partnership is needed for carrying out the
nation's pollution abatement efforts.
EPA's progress for assessing pollution and designing
cleanup remedies at sites is too time-consuming.
Federal funds are being spent unneccessarily because EPA has
not aggressively pursued responsible parties.
EPA has not sufficiently controlled the costs of contractors.
EPA's Superfund workforce is inexperienced and
employee turnover high.
i
H
-------
GAO REPORT HIGHLIGHTS
-------
GAO REPORT HIGHLIGHTS
-------
GAO REPORT HIGHLIGHTS
•w
H o
H H
H V
HS1
WCM
REPORT OR TESTIMONY TITLE
Government Management Issues
REPORT OR
TESTIMONY NUMBER
OCQ-93-3TR
DATE
12/92
REPORT OR TESTIMONY CONCERNS
Other governments found similar federal management problems:
Management lacked control over savings so had few incentives
to be efficient, constraints rather than missions drove management
behavior, etc. These governments employed several strategies that
1) recast budget focus from accounting for inputs to emphasizing
programs, outputs and results, 2) separated policy making
functions from program administration w/in depts, used written
individual and organizational performance agreements,
3) broke out agencies' operating budgets separately and
created 3-year rolling budget, 4) gave top management
performance agreements up to 5 years, and 5) simplified and steamlined
appropriation accounts and budget execution procedures.
Effectively implementing the CFO act will improve accuracy of
data and internal controls; expand financial auditing; strenghten
qualifications of financial management personnel; reengineer
government financial management processes to integrate
accounting, budgeting and program activites and
information; and develop useful and relevant financial reports.
r-
H
I
-------
EXHIBIT J
Page 1 of 2
INITIAL ISSUES PRESENTED FOR
FOCUS GROUP REVIEW
Strategic Planning
Financial/Accounting Policies and Procedures
Travel
ATM machine
Non-Superfund timekeeping
- Access to data information base
Total quality management
Practices
Recordkeeping
Program Financial Management
Awareness of financial management
Budget execution
- Unliquidated obligations
Linkages with financial management
Producing good management reports
Finance and Reporting Systems
IFMS/FMS
SPUR/MARS
CERCLIS
EPA's financial statements
Internal Controls and Recordkeeping
FMFIA concerns
J-l
-------
EXHIBIT J
Page 2 of 2
Financial Aspects of Superfund Recovery
Level of cost recoveries
- Timesheet recording
Massive cost projected for Superfund site clean-ups
Accounts receivable - Superfund oversight billings
Accounts Receivable and Collections
- Accounts receivable module
Recording and servicing
Property and Equipment
Financial Staff Qualifications and Training
- Resource level
Qualifications
Training
Organization and Structure
Centralized vs. decentralized financial organization
FMD organization
EPA finance organization
J-2
-------
EXHIBIT K
Page i of 3
PROCEDURES USED FOR THE OIG/FMD
FOCUS GROUP MEETINGS
A. Roles and Responsibilities
The following are the different roles and responsibilities
for the focus group meetings.
Facilitator
Keeps meeting on the subject sessions and on time
track. Establishes ground rules for the group. Stays
neutral and makes sure that participation is good from
the group members. Uses TQM tools and methods as
appropriate to conduct the sessions and promote
participation and to generate ideas and discussions.
Remains neutral during the discussions.
Recorder
'
Is a group member and records the group results and
ideas on a flipchart without interpretation. Records
basic ideas without names to present a group identify
only. Listens for keywords and abbreviates when it is
appropriate. Asks for assistance when needed. Asks
group to ensure that the entries are accurate.
Group Members
Focus on the session and task at hand. Listen and
respect others and don't interrupt others when they are
speaking. Seek solutions that work for everybody such
as the region, headquarters, and other programs.
Contribute ideas and participate actively in the
sessions.
OIG/FMD Team
Focus on the discussions and especially on the group
consensus. Take notes that do not identify the
individuals but only the ideas and group results. Do
not participate in the sessions and remain neutral
doing all group sessions.
K-l
-------
EXHIBIT K
Page 2 of 3
B. Orientation for the Focus Group Meetings
1. Brief introduction that explains why the participants
are there and what outcome is expected from the
sessions. Presented by OIG/FMD team. (5 min.)
2. Brief overview of the issues, causes and solutions
presented by the OIG/FMD team. (30 min.)
3. Introduce facilitator and review group agenda and
roles. (5 min.)
4. Establish ground rules for the meeting to ensure that
the sessions are conducted smoothly. (15 min.)
Example of around rules
— One person talks at a time.
— Participants are colleagues and respect each other.
— No criticism of ideas.
— No retribution based on the discussions.
— Any idea is acceptable.
— Its OK to disagree.
— Listen as an ally.
— All members participate in the discussions. '
— Be on time and present for all sessions.
— Any other rules as needed.
C. First Session
Discuss financial management issues presented by the
OIG/FMD team. Agree on and add to the list.
Prioritize the list of issues. Brainstorm on the
issues, have an open discussion of the issues, and then
prioritize and vote on the 6 major issues that the
group believes have the most impact for EPA financial
management. (2-3 hrs.)
K-2
-------
EXHIBIT K
Page 3 of 3
D. Second Session
For the financial management issues agreed on in the
first session, determine the overall causes and
specific root causes for the issues. Brainstorm and
develop a list of causes. Have an open discussion of
the causes and then prioritize and vote on the causes
that are responsible for the 6 major issues agreed on
from session one. (2-3 hrs.)
E. Third Session
For the 6 major issues and related causes developed
from the previous two sessions, determine the overall
general solutions and specific recommendations to
correct the situation. Brainstorm and develop a list
of solutions and related recommendations. Have an open
discussion of the solutions and the recommendations and
then prioritize and vote on the solutions and
recommendations that would address and correct the 6
major issues and related causes identified from
sessions one and two. (2-3 hrs.)
F. Closure
1. Briefly discuss what happened during the focus group
sessions and the results. (15 min.)
2. Close the meeting and thank both the facilitator and
the group members for their time and efforts. (5 min.)
K-3
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
o
H H
0)
H
-------
FOCUS GROUP SUMMARY
... OF MAJOR ISSUES
HIM
m
H 0)
^^^••~~ -" —
Staff Ouelltaatkwa
•ndTraMng
PROBLEMS
Not enough FM training
ROOT CAUSES
Courses not offered In
some areas such is grants,
budget lorcastlng
SOLUTIONS
Need training on emerging
Issues
Need to train program
people on FM
responsibilities
Pl-NVEH
SUGGESTED
80UUT1ONS
^
Training In new laws would
be beneficial lor FMttafl
Do not want core courses,
only budgit to Uki
oourwf
CINCINNATI
PROBLEMS
Natd b«n*r training
•ptcHto to EPA FM area
Not*nough baok-up
paopl* (or dltlarant
lunotlont
ROOT CAUSES
La ckol Gaining available
In the (laid
SOLUTIONS
Provlda t lining In llsld locatloni
Update pollciat and manual*
alackonlcally. Joint arlort
Oacantrallza (ystam axportB to
llald looatlont
HEADQUARTERS
8UPERFUND FOCUS GROUP
NOT
DISCUSSED
HEADQUARTERS
8BO FOCUS GROUP
PflOBLEMS
Lack of talnlng and
raqulramanU
ROOT CAUSES
People promoted Into
management |obi
without training and
understanding
Little formal training or
requirements
SOLUTIONS
Certification requirements
(N
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
o
EH
H f)
H 9
W tn
M
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
CINCINNATI
FhUUtoa) aimf
0»portng Syetewie
Financial tystems not
UMtuI to progratnt
Dupllcata systems and
elf ort
System doesn't produca
what It needed
Too many Incompatible systems
A/R Module doesn't aooapt SF
Reluctant to gat rid of FMS
Reports ara not usable on
manager level-budget, tavel,
fund Information, ale
All data li antarad but
not ratrlavabla
IFM8 la not linked to several
systems
Reporta not uaerlrlendly
Poor communication ol
system changes
Untimely reporting ol
obligations and late
recording o( contract
dollars
Too many new Initiatives
- system oan't keep up
Financial systems not
Integrated
eck ol reaouroea to Improve
FMS not customized to
program needs
Noncomputer people running
and managing aystams
SOLUTION^
None given
FMS set up lor high levels
In Agency
Agency dependent on AMS
IFMS Is budget driven
No ownership of IFMS
No one will take responsibility
lor IFMS-no one Is
accountable
SOLUTIONS
Scrap the IFMS-Do a
cost/benefit analysis of
starting over
Buy ownership ol system
Hire EPA employees to
run IFMS
Revisit or rewrite AMS contract
FjOOT CAUSpS
Uaers not Involved with design
No follow through on
Implementation
No standard procedures
lor data Input
Recording contract obligations
Is too centralized
Too many systems are confusing
SOLUTIONS
Meke IFMS Implementation
a lop priority - allocate
resources
Do Joint effort with finance and
program offices to work on
problems-standardize the
overall results
Decentralize contact recording
HEADQUARTERS
:$UPERFUND FOCUS OROUP
PROBLEMS
Can't pull useful data from
IFMS at the management
level on costs and obs.
Financial conflicts w/IFMS
and CERCLIS
>oor links between systems
FMS problems need
top level attention
Limited access to systems
-can'tview data, barriers,
no data dictionary,
process Is difficult
FMS doesn't Identify costs
by operating unit
Have to reconcile IFMS
w/CERCLIS
ROOT CAUSES
'otal conversion never
completed
o commitment to change
system
o emphasis to regions on
Importance of entering data
4ARS Is Inadequate
hould not support two
systems
Hferent data bases In
systems
SOLUTIONS
Need one overall system and
Improved data quality
Higher level of Involvement
and commitment
Integrate systems -
IFMS/CERCLIS
FMD/OSWER should
work together
Need more accurate
data In systems
Held e«pt^» |O contractors
HEADQUARTERS
8BOFOCU8 GROUP
MARS \t Inadequate- not
flexible, high error rate,
Information not useful
Too many systems to
do Job
IFMS doesn't meet user's
needs
During continuing resolution,
systems are not usable
due lolkne lag
Can't link data from different
systems
ROOT CAUSES
No manual for IFMS/MARS
Inadequate training and
documentation to program
IFMS Software Is too technical
8_OLUTION3
Need contingency system
Set up ADCRS on Oct. t,
do not Just upload
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
H w
(0
H «
•^^•^^•T HtWVOHK
Program FhionoW:
Management
!
Organization
Structure)
PROBLEM
Mlcromanagement of
regions from HQ
Need FM culture - no
awareness of Impact of
CFOAot
Program* use own
databases - Instead of
IFM8
Gap between budget planning
and axaoutlon
Mlftlon vi. Management
competing agendas
Too many OMB Control! and
Congressional legislation
ROOT CAUSES
Ineffective planning - do not
follow through on plant
No resources given-hard
to support OMB
& Congrats mandate!
SOLUTIONS
Develop FM culture
Performance measures
Need to communicate
plan for long—term
actions
CENTRALIZATION
Less assistance to client
community
Would have to re -tool
the system
Could Improve fralnlng
Would destroy RA's Influence
DENVER
PROBLEM
Too much HQ lnvotvem>*it
-changes to budget must
be approved
OMB & Congress are
mlcromanaglng
All SF reprogrammlng must
go through HQs, It Is
thie consuming
Too many program elements
ROOT CAUSES
Lack of budget flexibility
Mlcromanagement by OMB
& Congress
Lack of flexibility In
reprogrammlng
Budget Is too complex
SOLUTIONS
Let regions control own budget
Sfreamllna government
no mlcromagement
Establish a threshold amount
for reprogrammlng approval
Sknpllfy program elements
CENTRALIZATION
No comments
CINCINNATI
PROBLEM
Program offices have separate
systems and reports
Inconsistency of object class
codes Is a concern
Unliquidated obligations are
hard to pay or complete
Management decision making
Is affected by lack of
good reports
ROOT CAUSES
Lack of Interpretation and
confusion of object
classes/costs
Reports not usuable to
managers
MARS capability limited to
customize reports
SOLUTIONS
Interpretation between HQs
and field on object classes
Redesign Input features to
make It easier for generating
management reports
Need Held assistance to set
up MARS reports better
CENTRALIZATION
No comments
'• HEADQUARTERS m
8UPERFU NO FOCU8 GROUP
PROBLEM
Financial management
Information usually comas
second hand
Can't gat good Information
from MARS.
Can't get obligation* and
cost levels right now from
system.
ROOT CAUSES
Can't maintain good
FM Information
Large number of people
doing budget differently
Need better systems
SOLUTIONS
Higher level of Involvement
from management
Need belter system to Improve
decision-making process
Do not believe structure matters
much.
;>:::: HEADQUARTERS
? 8BO FOCCfS GROUP
pRQBLEM
Lack of Interest by program
people
Are SBO's accountable
they lack Velnlng, dontmake
•pending decisions
No formal delegation of
authority - Is It needed?
Budget execution has no direct
link to planning
ROOT CAUSES
No penalty for poor FM
— only give more funds
Break In linkage between
authority accountability
between HQ & field
SOLUTIONS
Performance agreements
Including FM responsibilities
now underway
Awareness through policy
CENTRALIZATION
Need a link between
responsibility, accountability,
and authorization
LO
I
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
01
0
H 0
itf
HP*
••JHMHMr ' NEWVORK
Strategic Pfenning;
Audit law**
Dacantrallzallon
Allowa lor more quality
decision making In financial
management
Regional capability to
address Issues with
better locus
NOT
DISCUSSED
(Region 2 was basically
unaware ol Frve-Year Plan)
PROBLEM
Not enough time to respond to
draft reports
Do not respond to position
pepers-R2 Is not quality
confrol tor OIO
If finding addressed In
draft, S/B changed In final
ROOT CAUSES
Report on small Issues
DENVER
Decentralization
HQ should give regions
own budget and let the..
region control It.
Accountability will not be lost,
but flexibility gained
NOT
DISCUSSED
PROBLEM
13 people are not experts
Minute findings
Need to provide Internal
assistance
ROOT CAUSES
No trust In IQ personnel
Adversarial relationship
a NO NN ATI
Decentralization
Leave the agency
decentralized
Lack of consistency overall
In EPA- can be fixed by
determining best practices
at each location and
Implementing them
agencywlde
NOT
DISCUSSED
NOT
DISCUSSED
HEADQUARTERS
SUPERFUND FOCUS GROUP!
PROBLEM
Most planning deals with
process not the outcome
Financial outcomes need to be
budgeted
Nonmonetary goals need
planning
Conflicting goals— must resolve
ROOT CAUSES
Planning and budgeting
not linked
Lacking overall coordination
Regions plan Independently
SOLUTIONS
Need top management attention.
Better communication
with Congress
Let plan drive budget
NOT
DISCUSSED
HEADQUARTERS
8BO FOOJ6 GROUP
Decentralization
Its a problem - it causes
Inconsistency between
HQs and field.
And between all the field
offices.
PROBLEM
Not effective
ROOT CAUSES
Lack of consistent approach
each year
Systems do not give sufficient
Information for budget
projections
SOLUTIONS
Data base to update on
real time - lor projecting
cost benefits
Need projection capability
NOT
DISCUSSED
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
01
O
H r»
H Q>
WP<
^ HEW YORK
Aooounto
ReoelraWe
SOLUTIONS
More balanced reporting
Give more recommendations
rather than suoh negative
findings
Agency thould be more
Involved In audit planning
NOT
DISCUSSED
DENVER
SOLUTIONS
Use IQ In consulting fashion
Have IQ on compliance ..
assurance teams
PROBLEM
Different policies exist for A/R
Office Is often required to
set up an A/R before It
actually It an A/R
Receivables are not always
timely -not enough FTEs
DOJ procedures are time
consuming
ROOT CAUSES
IFMS adds much manual work
Lack of resources
When A/R deoentallzed
no FTEs given for Increased
workload
SOLUTIONS
Need policy lor recording
contingent receivables
DOJ thould work directly
with regions
Seek assistance from PCIE
for DOJ problems
CINCINNATI
NOT
DISCUSSED
HEADQUARTERS
8UPERFUND FOCUS GROUP
PROBLEM
Supertund A/R Is Impacted
because of different
Information and accuracy ol
Information
ROOT CAUSES
Different systems with
different Information
SOLUTIONS
Better A/R Information Is
needed.
Need one system overall
HEADQUARTERS
8BO FOCUS GROUP
SUGGESTED
SOLUTIONS
Factoring
Private collection agency
Tax refund offset
-------
HOD
n
H 9
NFU
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
•HHHl^ reW ,^
FMRA.ConcHwrM
_.
PROBLEM
FMFIA It confuting
It doesn't make sense tor
regional program!
It may not serve problems,
only report them
Too many Internal oonlroli
SOLUTIONS
A good control system
does not have to be large
Should Include all resources
Make FMFIA meaningful
or get rid of the process
OENVEH
PROBLEM
Objectives are unknown -
Difficult to understand.
confusing, Ineffective,
and burdensome
Ouestlonalrre doesn't make
sense
Only brings negative feedback
Lack of explanation provided
byHOs
Process Is overemphasized
ROOT CAUSES
Lack of explanation provided
by headquarters
SOLUTIONS
Event cycles should be
performed to systems
le. A/R, etc.
Recognize weaknesses are
uncovered and not
report so negatively on how
found
QNCINNATI
PROBLEM
Need better separation of
duties
All employees should see
the Five -Year Plan
Award guidance Is needed
ROOT CAUSES
Discussed under other Issues
SOLUTIONS
Discussed under other Issues
HEADQUARTERS
8UPERFUND FOCUS GROUP
NOT
DISCUSSED
HEADQUARTERS
8BO FOCUS GROUP ;
PROBLEM
No adequate » alnlng
It Is not com prehenstve
It Is not taken seriously
CO
I
-------
FOCUS GROUP SUMMARY
OF MAJOR ISSUES
Ot
H Ot
ffl
H O
BS1
WP4
•|^ NEW YORK
Property and
Equipment
NOT
DISCUSSED
DENVER
NOT
DISCUSSED
CINCINNATI
PROBLEM
Equipment purchases are
oocurlng with bank card* and
hard to account lor
No tla between IFMS and
PPAS
Problem galling aquipmant
back from contractors when
complete work
ROOT CAUSES
No follow through on
Implementation of Pha»e
2&3otlFMS
SOLUTIONS
Need Interface lor IFMS
and PPAS
Need training
User problem solving teams
HEADQUARTERS
8UPERFUNO FOCUS GROUP
NOT
DISCUSSED
HEADQUARTERS :
8BO FOCUS GROUP
PROBLEM
Inconsistencies between
procurement and property
Lack ol Interest In property
confrol
Inconsistent guard control
ROOT CAUSES
Lack of training
SOLUTIONS
Do audits using maintenance
agreements
(give reason to fix property)
CTi
I
-------
EXHIBIT M
Page 1 of 3
INTERVIEW QUESTIONS USED FOR
THE KEY INTERVIEWS
BEST PRACTICES
What were some of your region's/office's most noteworthy and
significant financial management accomplishments in FY 93?
Are there any current initiatives for further improvement in
financial management within the region/office?
QUALIFI CAT IONS
• What qualifications do you believe are necessary for CFOs.
(i.e. educational background, work experience, and
training)?
• In designating ARAs as CFOs in regional offices, are
qualified people always chosen?
• Do you believe that you have the necessary qualifications to
be an effective FMO, Comptroller, SF Financial Manager (i.e.
educational background, work experience, and training)?
• What qualifications do you believe are necessary for
Regional FMOs, Comptrollers, and other financial managers
(i.e. education, work experience, and training)?
• Do you believe that people in your region with financial
management responsibilities have the necessary
qualifications to effectively carry out financial management
expectations?
• What changes, if any, are necessary to improve the
qualifications of people in financial management positions?
• Should more training be used to help train and certify
financial managers?
M-l
-------
EXHIBIT M
Page 2 of 3
ORGANIZATIONAL STRUCTURE
• What impact do you believe EPA's decentralized
organizational structure has on the effectiveness of
financial management in your Region?
• What differences, if any, are there between headquarters and
regional financial management policies and procedures?
• Are headquarters and regional financial management
procedures compatible, and implemented effectively in your
Region?
• In your opinion, would more or less centralization improve
the effectiveness of financial management within EPA?
AGENCY ACCOUNTING SYSTEM (FMS/IFMS AND COMPONENT SYSTEMS)
• Do you use FMS/IFMS and component systems in your financial
management activities? If so, which ones and what for?
• Are the systems effective in helping you meet your financial
management responsibilities? Can you provide examples of
how?
• Are your operating systems, such as CERCLIS compatible and
usable with IFMS?
• What reports do these systems generate? And do you find them
useful and easy to use?
• Have you or anyone on your staff had any training on how to
use these systems for financial management purposes?
M-2
-------
EXHIBIT M
Page 3 of 3
OTHER ISSUES
Listed below are some additional issues that may present
challenges to financial management. Which of these issues if
any, do you believe need to be improved to strengthen financial
management?
o Financial/Accounting Policies and Procedures
o Internal Controls and Record Keeping
o LOW Cost Recovery for EPA's Superfund Program
o Massive Costs Projected for Superfund Site Clean-ups
o Accounts Receivables and Collections
o Property and Equipment
o Obligations and Disbursements
o FMFIA Concerns
o Awareness of Financial Management Responsibilities by
Program Office Personnel
o Finance and Reporting Systems
• Are there any other issues that you would include?
• What do you see as the main or root causes of issues that
you consider problems?
• What suggestions do you have for improving these issues
and/or financial management overall?
M-3
-------
EXHIBIT N
Page 1 of 4
SUMMARY OF EPA KEY INTERVIEWS
QUESTION* ISSUE AREA
SUMMARYSQF INTERVIEW ANSWERS
MAJOR ACCOMPLISHMENTS
Improvements in cost recovery. Increased amounts recovered.
Increased use of MARS reporting. Report development in MARS.
Development of SCORES, SCRIPTS, and Accounts Receivable
subsystem.
Improvements made in contract management, travel, unliquidated
obligations, accounting in the States, and time card usage.
Drafting the Five-Year Plan
Budget execution well planned and followed.
Provided good service to customers.
First year audited financial statements.
Redefined salaries and expense accounts. Improved travel
related items.
CURRENT INITIATIVES
Better time accounting for Superfund.
Updating procedures in financial management
Improving Superfund accounts receivable, travel, oversight billings
site specific charging, and communication.
Working on pursuing PRPs first, meeting statute of limitations,
improving the operating budget, improving accounts payable.
Working with LAN based imaging in SCRIPS.
Developing compliance tracking for CERCLIS
Process of developing a core training curicullum.
QUALIFICATIONS OF FINANCIAL STAFF
The CFO and regional CFOs should have a financial or accounting
background. Experience, communication skills, and leadership
qualities are also important However, it is more important for the
CFO's staff to be well qualified. Most people believed that the
comptroller and the finanacial management officers should have
accounting or finance degrees. The majority believed that financial
management staff should be 501, 510, or 511 series.
In addition, budget experience is very important for financial
managers in the program and finance offices.
N-l
-------
EXHIBIT N
Page 2 of 4
SUMMARY OF EPA KEY INTERVIEWS
QUESTION /ISSUE AREA
SUMMARY OF INTERVIEW ANSWERS
CHANGES NEEDED TO IMPROVE
FINANCIAL MANAGEMENT POSITIONS
Standard hiring criteria should be met. Some believed that a
test should be passed.
National curicullum for new hires laying out training and
development
Core training courses.
Ongoing training to keep abreast of changes in profession.
Financial management should be given same stature as contract
management in the Agency.
TRAINING FOR FINANCIAL
MANAGEMENT STAFF
Most interviews indicated that the Agency's financial management
staff is well qualified. Many offices are moving toward hiring well
qualified personnel that meet suggested standards.
Most would like to see more training made available, especially in
the field offices.
Many would like to see Continuing Professional Education hours
required to assist in assuring that training would be given.
Certification of financial staff might work. Would like to see
it government wide.
ORGANIZATIONAL
STRUCTURE
Most believed that the decentralized financial management
structure in the Agency is working well. However, there is a need
for better communication between the regions and headquarters.
There are also many inconsistancies between the regions.
Most agree that more standardization is needed for policies and
procedures, training, and position descriptions. Decentralization is
good for customer service. The present financial system would not
be capable of handling a centralized financial management structure
'OLICIES AND PROCEDURES
Headquarters needs to update the policies and procedures. They
need to be standardized. The regions should write desk procedures
that work with headquarters policies. Headquarters need.s to provide
a better understanding of what is wanted from their procedures.
Because of the lack of understanding, there is little consistency
between the regions.
N-2
-------
EXHIBIT N
Page 3 of 4
SUMMARY OF EPA KEY INTERVIEWS
QUESTION /ISSUE AREA
SUMMARYsOri INTERVIEWIANSWERS
AGENCY ACCOUNTING
SYSTEMS
Too much reliance on contractor for 1FMS changes or work.
Too many incompatible systems.
IFMS does not provide useful information to managers. The system
does not break down costs to a level that is applicable to the
manager's use. Many users believe the system was set up more
for the Headquarters level because many of the reports show a
regional amount but do not break expenditures down any further.
Difficult to program the MARS reports to useful formats. The reports
need to be redesigned. Many offices must put the information in
an easier to read format for managers.
Many regions create their own systems or data bases to compensate
for the IFMS deficiencies.
The IFMS is not compatible with many of the Agency's operating
systems. For example, CERCUS is not compatible with IFMS.
Many offices still rely on the predessor financial system, FMS. Many
users believe that only the IFMS should be used agencywide. Yet,
FMS is still needed for cost recovery cases because IFMS does not
contain any historical information prior to the conversion.
SCORES and SCRIPS must be used to determine site costs. These
systems are helpful, but do not contain all the needed information.
IFMS is not capable of calculating Superfund accounts receivable.
Systems do not separate payroll and non-payroll costs
OTHER AREAS OF CONCERN
The accounts receivable module is ineffective for Superfund.
Also, IFMS does not calculate interest rates, installment payments,
produce aging reports, or back date interest
Cost recovery work with Department of Justice is time consuming
and burdensome. There is better coordination needed from DOJ.
DO J does not bill oversight costs or credit the Agency for
receivables in a timely manner. DOJ does not seem to track costs
well. Also, DOJ is not charging for their services.
Cost recovery goals are not defined. Recovery is not a high priority.
Site specific charging needs improvement. Too many accounts
and funds to charge to sites. Need to remove costs from ZZ
accounts. There is a lack of training in charging costs.
Resource allocation in financial management should be in line
with other organization components.
N-3
-------
EXHIBIT N
Page 4 of 4
SUMMARY OF EPA KEY INTERVIEWS
QUESTION/ISSUE AREA
SUMMARY OF INTER VIEW ANSWERS
OTHER AREAS OF CONCERN
(Continued)
Superfund charging of cost allocation needs improvement. System
does not track annual allocation costs, historical costs, or lab costs.
Grants lack accountability and are not getting closed.
Program personnel not knowledgeable or lack awareness of financial
management importance.
Financial management division and property division have different
capitalization procedures.
Congress implements changes which change the planning process.
FINANCIAL MANAGEMENT
SUGGESTIONS
Define and set cost recovery goals. Raise cost recovery importance.
Need headquarters visibility in regions. Increase communication.
Combine timesheets and timecards. Should be electronic.
Increase communication to Agency on importance of financial mgmt.
Educate users on how financial management ties in with their jobs.
Update FMFIA. Ensure uniformity among offices. Streamline FMFIA.
Implement performance measures.
Work with users to determine financial management solutions.
Allocate resources to integrate all systems to work with IFMS.
Set up a two-year budget process.
Determine the cost effectiveness of functions/requirements done in
Agency such as FOIA bills, travel vouchers, etc..
Need flexibility in cost recovery cases.
Better communication with Congress and the Public.
N-4
-------
EXHIBIT O
Page 1 of 2
ORGANIZATION CHARTS
U.S. Environmental Protection Agency
Associate Admrisnw lor
Regional Operations &
Slale/Locai Relafens
AnuiNts
PoluHon
TRATOR
^vfeirri Prevention DEPUTY ADMINISTRATOR
Environmental
Appeals
Board
1 1
Admnstraior Asasort Admiistralof
nisniionand lor
s Management Enforcement
1 1
(Administrator
lor hspeoor General
onal Aojvifcs
1 1
t Adnurtswtor AMisart AdmrtsuaKx tor
indRsiafon Prevention,
PesabdM, and Tone
1 1 1
onl Region 11 Reooniil 1
on New York Prttadtfpru ]
^•••a
Assooue Admrismor lor
Commincations, Eduealbn
JPutfcAfairs
Aisxa* Admrismor lor
Congressional i (
Legislative AHairs
1 1
Asssan Admlnsu
General Coirsel fer Pofc». Punning
Eyaluabon
1
Assisanl Admrtstfator
lor Research and
Development
1 1
Assistant Administrator Assistant Mr
lor lor Solid W
Water Emergency
1 1
RegonlV
Atlanta
ReoionV Regb
Chiugo Daft
0-1
-------
EXHIBIT O
Page 2 of 2
Office of Administration and Resources Management
Assistant Administrator (or
Administration and
Resources Management
and Chief Financial Officer
Deputy Auistant
Administrator
for Management
& Administration
Deputy Assistant
Administrator
for Finance It
Acquisition
Program and Policy
Coordination Office
Office of
Information
Resources
Management
Office of
Human Resources
Management
Office of
Administration
Policy, Trainin
& Oversight
Coil Advisory and
Financial Anal; sis
Division
Executive Resources
Administrative
Systems
Division
HQ Procuremtm
Operations
Division
4 Special Programs
Information
Management &
Services Division
Superfund Kcsourc
Conservation
Recovery Act
Procurement
Operations
Division
Program
Systems Division
Operations & Client
Division, Cincm«jt
Office of Grants
& Debarment
Human Resources
O-2
-------
EXHIBIT P
Page 1 of 2
EPA's Financial Management Status
Report and Five-Year Plan
(Analysis of Milestones with expected completion dates prior to December 1993)
- MILESTONES
ACCOUNTING STANDARDS
Issue payroll Directive. RMDS 2550A, Part II (Pg. 17)
PERFORMANCE MEASURES
Implement OMB Government-wide Measures (Pg. 18)
Develop internal measures for core operations (Pg. 18)
IMPROVED QUALITY ASSURANCE
Develop internal core financial measures (Pg. 19)
FMS/RMIS ELIMINATION
Conduct requirements analysis for historical data and payroll data (Pg. 32)
EXPAND SYSTEMS CAPACITY
Complete ADP impact analysis (Pg. 34)
ADD MARS PAYROLL DATA AND TECHNICAL IMPROVEMENTS
Design systems changes (Pg. 35)
IMPLEMENTING EDI
Begin EDI implementation (Pg. 36)
ACCOUNTS RECSVABLE
Implement OMB financial management performance standards (Pg. 57)
DEBT COLLECTION
Implement Credit Bureau Reporting Program (Pg. 58)
Expected
Completion
Date
9/93
10/93
10/93
10/93
10/93
9/93
9/93
8/93
9/93
9/93
Actual
Completion
Date
1/94
10/93
10/93
10/93
9/93
8/93
10/93
9/93
Revised
Completion
Date
7/94
2/94
'
P-l
-------
EXHIBIT F
Page 2 of 2
EPA's Financial Management Status
Report and Five-Year Plan
(Analysis of Milestones with expected completion dates prior to December 1993)
MILESTONES
STATE COST SHARE REVENUE
Establish State cost share revenue task force (Pg. 59)
Begin Phase 1 test (Pg. 61)
PROMPT PAYMENT IMPROVEMENTS
Obtain contractor support to establish a statistical sampling process (Pg. 62)
SALARY/PAYROLL RELATED PAYMENTS
Survey State/city governments and courts to determine feasibility of making
DD/EFT payments (Pg. 63)
Target non-DD employees for DD/EFT campaign (Pg. 63)
Convert feasible government and court payments to DD/EFT (Pg. 63)
TRAVEL/VENDOR PAYMENTS
Implement ATM program for travel advances (Pg. 63)
SMALL PURCHASE BANKCARD PROGRAM
Develop D-base program to track cardholder transactions for payment (Pg. 64)
Develop D-base program to track disputes of prompt payment data (Pg. 64)
PROPERTY MANAGEMENT
Determine decision on OAT recommendations (Pg. 65)
ADMINISTRATION OF GRANTS PROGRAMS
Develop a training program for project officers of grants, cooperative
agreements and interagency agreements (Pg. 78)
Expected
Completion
Date
9/93
10/93
9/93
10/93
11/93
11/93
9/93
9/93
10/93
11/93
10/93
Actual
Completion
Date
9/93
9/93
11/93
9/93
9/93
10/93
Revised
Completion
Date
2/94
3/94
10/94
2/94
5/94
P-2
------- |