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Inspector General Division Mid-Atlantic Division
Conducting the Audit: Philadelphia, PA
Program Office Involved: Air, Radiation & Toxics Division
Philadelphia, PA
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF THE INSPECTOR GENERAL
MID-ATLANTIC DIVISION
841 Chestnut Building
Philadelphia, Pennsylvania 19107-4431
(215) 566-5800
February 14, 1997
MEMORANDUM
SUBJECT: Report of Audit on Validation of Air Enforcement Data
Reported to EPA by Pennsylvania
Audit Report Number E1KAF6-03-0082-7100115
FROM: Carl A. Jannetti
Divisional Inspector General for Audit (3AIOO)
TO: W. Michael McCabe
Regional Administrator (3RAOO)
Attached is our audit report on Validation of Air Enforcement Data Reported to EPA by
Pennsylvania. The overall objectives of this audit were to determine whether the
Pennsylvania Department of Environmental Protection (PADEP): (1) identified significant
violators in accordance with EPA's Timely and Appropriate Enforcement Policy; (2)
reported significant violators to EPA; and (3) performed inspections that were sufficient
to determine if a facility violated the Clean Air Act. This report contains findings and
recommendations that are important to both EPA and PADEP.
This audit report contains findings that describe problems the Office of Inspector
General (OIG) has identified and corrective actions the OIG recommends. This audit
report represents the opinion of the OIG. Final determinations on matters in this audit
report will be made by EPA managers in accordance with established EPA audit
resolution procedures. Accordingly, the findings contained in this audit report do not
necessarily represent the final EPA position, and are not binding upon EPA in any
enforcement proceeding brought by EPA or the Department of Justice. ,
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ACTION REQUIRED
In accordance with EPA Order 2750, you as the action official are required to provide
this office a written response to the audit report within 90 days. Your response should
address all recommendations, and include milestone dates for corrective actions
planned, but not completed.
We have no objection to the release of this report to the public. Should you have any
questions about this report, please contact Patrick Milligan at 215-566-5800.
Attachment
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EXECUTIVE SUMMARY
PURPOSE
BACKGROUND
The purpose of this audit was to determine whether the
Pennsylvania Department of Environmental Protection
(PADEP):
4 Identified significant violators in accordance with
EPA's Timely and Appropriate Enforcement Policy.
4 Reported significant violators to EPA.
+ Performed inspections that were sufficient to
determine if a facility violated the Clean Air Act (CAA).
The CAA of 1990 lists 189 toxic air pollutants that must be
reduced. EPA estimates that more than 2.7 billion pounds of
toxic air pollutants are emitted annually in the United States.
The list of air toxics touches every major industry, from the
mining of base metals to the manufacture of high-tech
electronics. EPA studies also show that exposure to these air
toxics may result in up to 3,000 cancer deaths each year.
Other adverse health effects of air toxics include: respiratory
illness; lung damage; premature aging of lung tissue; as well
as retardation and brain damage, especially in children.
The CAA separately regulates six of the more serious air
pollutants — ground level ozone, particulate matter, carbon
monoxide, sulfur dioxide, lead, and nitrogen dioxide. These
six criteria pollutants are emitted in large quantities by a
variety of sources. EPA sets national standards for each of
these criteria pollutants and the states must take action to
assure facilities meet EPA standards.
PADEP conducts inspections of most major facilities each
year to ensure they meet federal and state regulations. To
Report No. E1KAF6-03-0082-7100115
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assess compliance during an inspection, the inspector should
refer to the facility's permit. The permit translates
requirements of laws such as the CAA into individualized
enforceable requirements.
When an inspector identifies a violation, PADEP should issue
the facility a Notice of Violation (NOV). An NOV specifies
the type of violation and the regulations the facility violated.
It may also require the facility to show what actions it will
take to achieve compliance. If the violation meets EPA's
definition of a significant violator, the state should report the
facility to EPA for placement on the Agency's significant
violator list. The Section 105 grant PADEP received from
EPA, required the State to identify and report significant
violators in accordance with EPA's Timely and Appropriate
Enforcement Policy, issued on February 7, 1992.
According to EPA's enforcement policy, a significant violator
is any major stationary source of air pollution, which is
violating a federally-enforceable regulation. This policy
required states to report significant violators to EPA within
one month of the violation, and to maintain the facility on
EPA's list until it achieves compliance. After the violation is
reported, the state and EPA should monitor the source until it
achieves compliance. This includes determining an
appropriate time schedule for achieving compliance and
assessing a penalty, if necessary.
EPA stresses to each state the importance of identifying and
reporting significant violators promptly. This issue is of such
importance that Region 3 allotted part of the Section 105
grant funds for identifying significant violators and reporting
them timely.
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RESULTS-IN-BRIEF EPA set priorities for its air program and awarded grants to
PADEP for more than $5 million a year to carry them out.
However, PADEP conducted its air program following an
agenda different from EPA's. Specifically, the State did not:
4 Report all significant violators to EPA.
t Take aggressive enforcement action to bring all
violating facilities into compliance.
While EPA required information about violators, the State
wanted to keep Region 3 uninformed and did not report
significant violators to EPA. From our review of NOVs or
enforcement files for 270 facilities, we identified 64
significant violators that the State did not report to EPA. The
reason EPA needed this information was to take action if the
State did not enforce federal law. Moreover, while EPA
wanted PADEP to take aggressive enforcement action to
bring violating facilities into compliance, the State wanted to
avoid what it perceived as federal meddling. PADEP
believed that it could work with the facility to achieve
compliance without labeling the facility as a significant
violator.
^.
When PADEP did not notify EPA that violations occurred,
Region 3 was unable to ensure the violator achieved
compliance timely. In effect, PADEP hindered EPA's ability
to oversee the State's enforcement program. These
differences contributed to allowing facilities that were serious
contributors of air pollution to continue harming the
environment — sometimes for many years.
In comparison to EPA, the State placed less emphasis on
reporting significant violators. Philosophical differences such
as the identifying and reporting of significant violators show
that PADEP and EPA may not be willing partners. The
absence of this willing partnership will undermine the
in
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RECOMMENDATIONS
PADEP RESPONSE
effectiveness of the Performance Partnership Grant (PPG) the
Agency intends to award to PADEP. EPA and PADEP need to
mutually resolve differences such as these before PPGs can
be most effective.
In addition, PADEP's inspection program needs
improvement. Some Level 2 inspections were not thorough
enough to determine whether a facility was complying with
state and federal regulations. Moreover, when PADEP
identified violations, it did not always ensure the facility took
corrective action.
We recommend that the Region 3 Administrator take action
to ensure'PADEP reports significant violators as required by
their Section 105 grant and by EPA's Timely and Appropriate
Enforcement Policy. We also recommend the EPA Region 3
Administrator require PADEP to conduct Level 2 inspections
to determine a facility's compliance, and perform follow-up
in order to resolve violations timely.
While we believe your draft to be generally misleading and
inaccurate, we want to, be very clear about one thing. It did
not take an audit to determine that PADEP and EPA disagreed
on the manner of identifying significant violators (SVs). A
review of Region 3's midyear reviews would show this was
an issue for the last decade. Although the report criticizes
PADEP, it did not criticize EPA for essentially agreeing to
PADEP's handling of significant violators for the last decade.
We acknowledge that PADEP does not activate the "SV flag"
in EPA's computer system. However, that does not mean the
data was not entered, or that it could not be used to easily
identify SVs. PADEP has not deliberately concealed
violations from EPA, but routinely reports more information
about violations in paper copy and electronic form than any
other state in Region 3.
IV
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EPA RESPONSE
CITIZENS
ADVISORY
COUNCIL
COMMENTS
We are unable to respond with specificity to your allegations
regarding PADEP inspections since the inspections in
question were not identified. If the final report identifies the
deficient inspections, we will take steps to make corrections.
On balance we do perform Level 2 inspections as,
contemplated by the grant. Additionally, not all inspections
we perform are intended or required to be Level 2
inspections.
We concur with the findings and recommendations
expressed in this report. EPA must rely on Pennsylvania for
most of our information concerning the compliance status of
the State's regulated community. This is the reason for
specifying in the CAA Section 105 grant agreement that the
State report and identify SVs in accordance with the Timely
and Appropriate Enforcement Policy negotiated between the
states and EPA.
Once the State began withholding this information, EPA had
no reliable and easily accessible source of data to determine
which facilities were significantly violating clean air
regulations. State input to the EPA database — the
Aerometric Information Retrieval System (AIRS) — did not
distinguish between simple violations, with little or no
impact on public health, and more egregious violations with
serious impacts. CAA Section 105 grant funds specifically
require SVs to be identified up front, not buried in a
mountain of computer data that would have to be analyzed
and verified, resulting in wasted time and taxpayer money.
The State agreed to those terms in exchange for receipt of the
clean air grant funds.
On November 12, 1996, Secretary of PADEP asked the
Citizens Advisory Council (CAC) to the Department of
Environmental Resources to convene a group to
independently review the issues raised in this report. In their
report, the CAC concluded that PADEP did not identify all
sources for potential listing as required by its grant with EPA,
Report No. E1KAF6-03-0082-7100115
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and that the SV selection process is somewhat subjective,
requiring dialogue, judgement and more information than is
available on AIRS, in an inspection report, or in an NOV.
The CAC also concluded that our report makes
generalizations about the effectiveness of the State's air
enforcement program based on a narrow group of cases. The
"Council recommended that unless the state can negotiate a
change to EPA's reporting requirements, PADEP must identify
all sources that meet the literal definition of SV.
OIG EVALUATION We do not agree with the comments provided by PADEP.
We acknowledge PADEP's affirmation that it did not report
SVs as required by the grant. However, as confirmed by the
CAC report, we disagree that Region 3 could identify SVs
from the paper NOVs, electronic information submitted by
PADEP, and Quick Look reports. We especially disagree
with PADEP's comments since the grant agreement between
EPA and PADEP requires the State to report SVs via AIRS and
telephone.
The grant agreement is, in effect, a contract. Grant recipients
cannot be allowed to disregard requirements in a negotiated
and executed agreement because they believe portions of the
grant to be "rigid," "unrealistic," or "defies any common
sense understanding." Reporting SVs in accordance with
EPA's Timely and Appropriate Enforcement Policy was a
grant or "contract" requirement that the State agreed to
perform when it accepted the grant.
I
On December 24, 1996, we provided PADEP the identity of
the facilities for which we questioned the State's inspections.
We recognized that not all of PADEP's inspections were
intended or required to be Level 2 inspections. However,
the inspections we found problematic were intended to be
Level 2 inspections. It is important to note that we reviewed
81 inspections and found that 17 percent needed
improvement. This percentage indicates that the State's
procedures need revision.
vi
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We agree with the CAC's overall conclusions concerning the
need for improved reporting of significant violators by
PADEP, and the need for better communication between EPA
and Pennsylvania. However, we do not agree with several of
their comments about selected aspects of our report. After
evaluating the CAC's comments, our position concerning the
issues identified in our report remains unchanged, except
that we made minor editorial revisions to Chapter 3.
VII
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VIII
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TABLE OF CONTENTS
EXECUTIVE SUMMARY i
CHAPTER 1 1
INTRODUCTION 1
Purpose 1
Background 1
Scope and Methodology 6
Prior Audit Coverage : 9
CHAPTER 2 11
PADEP NOT REPORTING SIGNIFICANT VIOLATORS TO EPA 1.1
Clean Air Act Was Violated in Numerous Ways 14
PADEP Not Informing EPA Allows Violations to Persist 14
Not Reporting Significant Violators Hinders EPA Oversight . 16
Facilities Constructed Without Permits and Not Reported to EPA 17
PADEP's Reasons for Not Reporting 17
EPA Was Generally Aware of PADEP Not Reporting 18
EPA is Changing to Performance Partnership Grants 20
PPGs May Not Be Effective 21
CONCLUSION 22
RECOMMENDATIONS 22
CHAPTER 3 33
INSPECTIONS OF AIR FACILITIES NEED IMPROVEMENT 33
Some PADEP Level 2 Inspections Were Inadequate 33
Corrective Action Not Always Verified 34
RECOMMENDATIONS 36
CHAPTER 4 41
OTHER MATTERS . 41
RECOMMENDATION 41
APPENDIX A — PADEP'S RESPONSE TO THE DRAFT REPORT 43
IX
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APPENDIX B - EPA'S RESPONSE TO THE DRAFT REPORT 55
APPENDIX C - CITIZENS ADVISORY COUNCIL REPORT 65
OIG EVALUATION 83
APPENDIX D - DISTRIBUTION 85
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CHAPTER 1
INTRODUCTION
Purpose
The purpose of this audit was to determine whether the
Pennsylvania Department of Environmental Protection
(PADEP):
+ Identified significant violators in accordance with
EPA's Timely and Appropriate Enforcement Policy.
+ Reported significant violators to EPA.
4 Performed inspections that were sufficient to
determine if a facility violated the Clean Air Act (CAA).
Background
Air toxics may cause 3,000
cancer deaths each year.
The CAA of 1990 lists
189 toxic air pollutants
that must be reduced.
EPA estimates that more
than 2.7 billion pounds
of toxic air pollutants are emitted annually in the United
States. The list of air toxics touches every major industry,
from the mining of base metals to the manufacture of high-
tech electronics. EPA studies also show that exposure to
these air toxics may result in up to 3,000 cancer deaths each
year. Other adverse health effects of air toxics include:
respiratory illness; lung damage; premature aging of lung
tissue; as well as retardation and brain damage, especially in
children.
The CAA separately regulates six of the more serious air
pollutants — ground level ozone, particulate matter, carbon
monoxide, sulfur dioxide, lead, and nitrogen dioxide. These
six criteria pollutants are emitted in large quantities by a
variety of sources. EPA sets national standards for each of
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these criteria pollutants and the states must take action to
assure facilities meet EPA standards.
One criteria pollutant, ground level ozone, is a major
problem in the southeast portion of Pennsylvania. When
Volatile Organic Compounds (VOCs) react with nitrogen
dioxide, it creates ground level ozone. This toxic air
pollutant should not be confused wth the "ozone layer"
which protects the earth from the sun's ultraviolet rays.
EPA Awards States Section 105 of the CAA provided the initial authority for
Grant Money for Air federal grants to help state and local agencies prevent and
Programs control air pollution. Throughout the years, the CAA
increased the responsibilities of the states, which were
matched with an increase in grant funds. Region 3 awards
Section 105 grant money so that states can operate their air
programs in accordance with their grant agreements. The
most recent amounts provided are shown below.
Fiscal
Year
1994
1995
1996
Amounts Awarded
To All States in
Region 3
$18,725,483
$19,754,725
$17,708,800
PADEP Grant
Amounts
$5,004,533
$5,036,701
$5,152,874
Before EPA awards each grant, it negotiates a work program
with the state. The program contains specific work
commitments the state agrees to perform. Region 3 uses the
work program as the basis for evaluating the state's
performance under the grant. The work program
encompasses activities such as inspections, monitoring,
permitting, and enforcement, which includes identifying and
reporting significant violators.
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Types of Inspections Pennsylvania conducts inspections of most major facilities
each year to ensure they meet federal and state regulations.
According to EPA policy, states can perform five different
levels of inspections at air pollution facilities. Level 0,
commonly called a "drive by," is the most basic inspection.
EPA does not consider this level of inspection to be an
acceptable compliance assurance method. A Level 4
inspection is the most thorough and time consuming. This
type is generally done only for activities such as developing a
legal case against the facility.
%
To adequately evaluate a facility's compliance with the CAA,
the 105 grants required each state to perform Level 2
inspections at specified major facilities. A Level 2 inspection
includes:
4 Reviewing facility records to determine compliance
with applicable regulations and permits,
f Taking and analyzing samples when required,
/
4 Recording process rates and control equipment
performance parameters, and
4 Performing visual observations of emissions.
These activities provide support for enforcement actions and
are a viable method for determining whether a facility is
violating the CAA.
Types of Permits To assess compliance during an inspection, the inspector
should refer to the facility's permit. The permit translates
requirements of laws such as the CAA into individualized
enforceable requirements. In other words, the permit defines
the parameters by which a facility must operate.
There are two types of permits. The first is a federally-
enforceable construction permit. This type allows a facility
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to install or construct new equipment and modify its existing
equipment. The construction permit issued by a state is valid
for a specified period of time and enables the facility to fine
tune or adjust its newly installed equipment. At the time the
construction permit expires, the state should inspect the
facility and issue the second type of permit called an
operating permit.
Since operating permits were not federally enforceable at the
time of our review, any violations of these permits did not
require PADEP to place the facility on EPA's significant
violator list. Therefore, EPA used the construction permit to
measure a facility's compliance. During August 1996, EPA
obtained the authority to enforce operating permits.
EPA Enforcement When an inspector identifies a violation, PADEP should issue
Procedures the facility a Notice of Violation (NOV). An NOV specifies
the type of violation and the regulations the facility violated.
It may also require the facility to show what actions it will
take to achieve compliance. If the violation meets EPA's
definition of a significant violator, the state should report the
facility to EPA for placement on the Agency's significant
violator list. The Section 105 grant required PADEP to
identify and report significant violators in accordance with
EPA's February 7, 1992, guidance entitled Timely and
Appropriate Enforcement Response to Significant Air
Pollution Violators.
According to EPA's Timely and Appropriate Enforcement
Policy, a significant violator is any major stationary source of
air pollution, which is violating a federally-enforceable
regulation. This policy required states to report significant
violators to EPA within one month of the violation, and to
maintain the facility on EPA's list until it achieves
compliance. After the violation is reported, the state and EPA
should monitor the source until it achieves compliance. This
includes determining an appropriate time schedule for
achieving compliance and assessing a penalty, if necessary.
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State Reporting
Requirements
To resolve violations expeditiously, EPA stresses to each state
the importance of identifying and reporting significant
violators promptly. This issue is of such importance that
Region 3 allotted part of the Section 105 grant funds for
identifying significant violators and reporting them timely.
Each month EPA and the states,are responsible for updating
the air enforcement data on the Agency's database known as
the Aerometric Information and Retrieval System (AIRS). The
105 grant PADEP received from EPA also required the State
to report new significant violators within 30 days of
identifying the violation. The new violators are to be
reported to EPA via telephone and AIRS. EPA and the states
conduct quarterly teleconferences to discuss new and
existing significant violators. EPA uses this communication to
promote a greater degree of teamwork between themselves
and the states. However, if EPA is dissatisfied with a state's
enforcement action, the Agency has the authority to override
the state and assume the lead in resolving the violation.
During Fiscal Year 1995, PADEP's regional offices reported
six significant violators to EPA Region 3.
Regional Office
Conshohocken/
Wilkes-Barre/
Harrisburg/
Williamsport
Pittsburgh
Meadville
Total
Violators
Reported
0
0
2
0
1
3
6
^Offices Visited by the DIG
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Scope and We performed this audit according to the Government
Methodology Auditing Standards (1994 Revision) issued by the
Comptroller General of the United States as they apply to
economy and efficiency program audits. Our review
included tests of the program records and other auditing
procedures we considered necessary.
To accomplish our objectives we performed reviews at
PADEP regional and district offices, and at their central office
in Harrisburg. We visited three of PADEP's six regional
offices and two district offices within those regions. While at
the PADEP offices, we had discussions with air inspectors,
compliance specialists, permit chiefs and air quality program
directors. We also interviewed managers, engineers, and
inspectors from EPA Regions 3 and 5.
We reviewed the CAA, the Code of Federal Regulations,
EPA's Timely and Appropriate Enforcement Policy, the CAA
Compliance/Enforcement Guidance Manual, EPA's
Compliance Monitoring Strategy, and Title 25 of the
Pennsylvania Code. We also reviewed Section 105 grants
awarded to Pennsylvania under the CAA, EPA's midyear
reviews of the State's performance, and the NOVs PADEP
submitted to Region 3. During this audit, we used various
printouts from the EPA's AIRS to obtain information about the
inspections performed.
To evaluate PADEP's enforcement of the CAA requirements,
we reviewed the air quality files maintained at PADEP
offices. These files contained items such as inspection
reports, NOVs, permits, permit applications, test results,
emission monitoring records, and correspondence. Due to
the complexity of air enforcement files, we received
technical assistance from EPA personnel in Regions 3 and 5.
/
We performed two analyses to accomplish our objectives.
First, we reviewed the 556 NOVs that the six PADEP offices
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submitted to EPA Region 3 during Fiscal Year 1995. During
our second analysis, we judgementally sampled enforcement
files, and the associated Fiscal Year 1995 PADEP inspection
reports, for 45 major stationary sources of air pollution in
Pennsylvania. These inspections did not result in the State
submitting an NOV to EPA, or reporting the facility as a
significant violator. We selected facilities that were sources
of various pollutants and of varying size. During both
analyses, it was sometimes necessary to review documents
prior to Fiscal Year 1995. This was done to obtain historical
information, such as how long problems persisted and the
results of previous inspections.
Our audit disclosed several areas needing improvement that
are discussed in Chapters 2 through 4. We provided
recommendations to ensure PADEP identifies and reports
significant violators to EPA. Our recommendations also
addressed the need to improve the quality of inspections, and
EPA's use of monitoring data.
We reviewed management controls and procedures
specifically related to our objectives. However, we did not
review the internal controls associated with the input and
processing of information into AIRS or any other automated
records system.
As part of this audit we also reviewed the Region 3 Air,
Radiation and Toxics Division's Annual Report on Internal
Controls for Fiscal Years 1993 through 1995. These reports
were prepared to comply with the Federal Manager's
Financial Integrity Act. We found that none of the
weaknesses cited during our audit were disclosed in Region
3's annual reports.
Our survey began on November 2, 1995, and ended on April
15, 1996. As a result of the survey, we initiated an in-depth
review on April 16, 1996. We completed fieldwork for the
audit on September 15, 1996. To obtain a preliminary
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response to the issues in this report, we issued position
papers to EPA Region 3 on October 10, 1996. We received
their response on October 18, 1996.
We issued a draft report on November 15, 1996. PADEP
submitted its response to us on December 13, 1996. EPA
Region 3 provided comments on December 18, 1996. After
evaluating these responses, we made minor modifications to
our report. However, our position remains unchanged on
the major issues discussed in this report.
In his response, the Secretary of PADEP requested that we
provide the names of the facilities we reviewed so that he
could respond with specificity. On December 24, 1996, we
provided this information to PADEP. However, PADEP did
not provide any additional comments during the seven-week
interim between December 24 and the date of this report.
In his response, the Secretary also indicated that he asked the
Citizens Advisory Council (CAC) to the Department of
Environmental Resources to undertake an independent
review of the State's violation reporting system and the
allegations in the draft report. On December 20, 1996, the
CAC asked that we not finalize our report until they
completed their review at the end of January 1997. Because
of this request, we did not finalize our report until we
received the CAC's report.
PADEP's and Region 3's responses to our findings are
summarized at the end of each chapter. We also provide our
evaluation of these responses at the end of each chapter.
PADEP's complete response is included in Appendix A, and
Region 3's complete response is included in Appendix B.
On February 11, 1997, the CAC issued their report on the
issues we identified. Their complete report is included in
Appendix C. Our evaluation of the CAC's report is also
included in this Appendix. ,
8
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Prior Audit An EPA Office of the Inspector General audit report (E1KAE5-
Coverage 24-0015-5100510) issued on September 29, 1995 discussed
Section 105 grants awarded to Pennsylvania and other states.
This report also addressed the need for states to complete the
work plan commitments of these grants, and EPA's reluctance
to withhold funds from states that do not complete grant
commitments.
Other OIG audit reports addressed topics similar to those
discussed in this report. For example, past reports disclosed
that data submitted by the states through AIRS was
incomplete, inconsistent, and untimely. AIRS data was not
reliable, and EPA relied on supplementary information and
manual reports from other databases.
Past audit reports have also identified concerns with other
aspects of EPA's oversight of state air enforcement programs
such as inadequate penalty calculations, untimely
completion of enforcement actions, and inadequate publicity
of enforcement actions. EPA Office of Inspector General
reports discussing these topics include:
+ Region 5's Air Enforcement and Compliance
Assistance Program (E1GAF5-05-0045-6100284,
September 13, 1996)
4 Region 6 's Enforcement and Compliance
Assurance Program (E1GAF5-06-0056-6100309,
September 26, 1996)
4 Review of Region 5's Stationary Source of Air
Pollution Compliance and Enforcement Program
(E1K67-05-0449-80743, March 11, 1988)
+ Capping Report on the Computation, Negotiation,
Mitigation, and Assessment of Penalties Under EPA
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Programs (E1G8E9-05-0087-9100485, September 27,
1989)
+ Follow-up Review on EPA's Mitigation of Penalties
(E1GMG4-05-6009-4400107, September 15, 1994).
10
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CHAPTER 2
PADEP NOT REPORTING SIGNIFICANT VIOLATORS TO EPA
EPA set priorities for its air program and awarded grants to
PADEP for more than $5 million a year to carry them out.
However, PADEP conducted its air program following an
agenda different from EPA's. Specifically, the State did not:
4 Report all significant violators to EPA.
4 Take aggressive enforcement action to bring all
violating facilities into compliance.
While EPA required information about violators, the State
wanted to keep Region 3 uninformed and did not report
significant violators to EPA. The reason EPA needed this
information was to take action if the State did not enforce
federal law. Moreover, while EPA wanted PADEP to take
aggressive enforcement action to bring violating facilities into
compliance, the State wanted to avoid what it perceived as
federal meddling. PADEP believed that it could work with
the facility to achieve compliance without labeling the
facility as a significant violator.
When PADEP did not notify EPA that violations occurred,
Region 3 was unable to ensure the violator achieved
compliance timely. In effect, PADEP hindered EPA's ability
to oversee the State's enforcement program. These
differences contributed to allowing facilities that were serious
contributors of air pollution to continue harming the
environment — sometimes for many years.
At the time of our review, there were 2,053 major facilities in
Pennsylvania and PADEP inspects most major facilities each
11
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year. For example, PADEP performed 2,000 inspections
during Fiscal Year 1995, and reported only six significant
violators to EPA Region 3.
To identify significant violators, we first reviewed the 556
NOVs that the six PADEP offices submitted to Region 3
during Fiscal Year 1995. We determined that 331 of these
NOVs were either issued to minor facilities ineligible for
placement on EPA's list of significant violators, or for
violations that were not federally enforceable. The remaining
225 NOVs were issued to major facilities that violated state
or federal regulations. These were analyzed further to
identify any that met EPA's definition of a significant violator.
We also reviewed a sample of 45 PADEP enforcement files
and associated inspection reports. These were for facilities
that PADEP inspected, and did not submit an NOV to EPA
during Fiscal Year 1995, or report the facility as a significant
violator. This sample was used to review facilities for which
the State did not provide information indicating that the
facility was a violator.
In total, we reviewed NOVs or enforcement files for 270
major facilities (225 + 45). This represents 13 percent of the
2,053 major facilities in Pennsylvania. From these 270
facilities, we identified 64 significant violators that the State
did not report to EPA. One of these was a Continuous
Emissions Monitoring (CEM) facility, for which the State
submitted monitoring data to EPA that indicated the facility
was a "potential" significant violator. This is discussed in
Chapter 4 under Other Matters.
It is noteworthy that both our review of NOVs and our
sample of enforcement files and associated inspections
disclosed similar percentages of significant violators. Our
review of 225 NOVs, and PADEP files when additional
information was necessary, showed that 56, or 25 percent
were significant violators that the State did not report.
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Report No. E1KAF6-03-0082-7100115
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Further, our analysis of the 45 enforcement files disclosed 8
violators or 1.8 percent, which the State did not report. This
second percentage is important because it indicates a review
of all 2,053 facilities would have likely yielded more
violators over and above the 64 we identified.
We understand that the NOVs PADEP provided EPA
contained some information about violators. However, it
was a laborious task to review all 556 NOVs to sort out
minor facilities not eligible for significant violator status,
major facilities with minor violations, and finally the
significant violators. Moreover, for a number of the NOVs,
we could not determine if the facility was a significant
violator from the NOV alone. In many of these cases, we
reviewed PADEP's enforcement files including the State's
Fiscal Year 1995 inspection reports. For these reasons, we
did not consider the NOVs submitted by the State as an
adequate alternative to the reporting requirements for
Jv
significant violators mandated in the 105 grant. Specifically,
the State should tell EPA who the significant violators are,
and not expect EPA to review almost 600 NOVs that contain
a relatively small number of significant violators. The
significant violators reported by PADEP offices in Fiscal Year
1995 and those identified by our audit are shown next.
Significant Violators Identified
Regional Office
Conshohocken
Wilkes-Barre
Harrisburg
Williamsport
Pittsburgh
Meadville
Total
PADEP
0
0
2
0
1
3
6
QIC
14
13
22
12
1
2
64
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Report No. E1KAF6-03-0082-7100115
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Clean Air Act Was
Violated in
Numerous Ways
PADEP Not
Informing EPA
Allows Violations to
Persist
While the severity of these violations varied, many were
threats to the quality of our air. Furthermore, some of these
facilities violated the Clean Air Act for years without the State
reporting them to EPA. The violations included:
4 34 facilities that emitted excessive pollution;
t 22 facilities that violated their construction permit; and
4 8 facilities that installed machinery without receiving a
construction permit from PADEP. These permits were
critical because the new machinery produced
pollution.
According to EPA's Timely and Appropriate Enforcement
Policy, and the grant agreement between EPA and the State,
PADEP should have reported to EPA the 64 significant
violators we identified. However, PADEP did not believe the
violations warranted reporting these facilities to EPA. This
practice allowed the State to function without EPA oversight,
and to deal with violators as the State saw fit — not how EPA
required., This condition was one reason why many
violations persisted for long periods.
One facility had seven
violations in sixteen
months.
For example, PADEP
inspections at a facility that
manufactures concrete
structures identified seven
violations during the sixteen
months starting May 1993
through September 1994. All of the violations were for
fugitive emissions, which are excessive dust particles
released into the air. These fugitive emissions were from the
following three sources:
+ loading trucks with concrete,
4 traffic in and out of the plant, and
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Report No. E1KAF6-03-0082-7100115
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+ a broken fabric collector that was supposed to capture
the fugitive emissions.
These violations took a long time to resolve. The first
violation occurred in May 1993 and the final violation
occurred in September 1994. Although the facility took
corrective action on individual violations, it was not until
October 1995, almost two and one half years later, that a
PADEP inspection verified that the last violation was
resolved. Based on the number of violations and their
severity, this was a situation where PAOEP should have
reported the facility as a significant violator.
Another facility that
PADEP allowed a facility to I manufactured automotive
"pay to pollute" for over I carpet and interior trim
one year. I had a history of opacity
- ™ violations during the past
four years. Opacity
violations occur when the plume of smoke from a stack
exceeds an allowable density, indicating that the facility is
emitting excess pollution. Here, the source was a boiler.
In August 1995, PADEP assessed this manufacturer a civil
penalty of $4,000, but decided not to place the facility on
EPA's list of significant violators. Despite the penalty, PADEP
allowed the facility to continue operating the faulty boiler
and pay a penalty of $500 per month. According to PADEP
officials, they allowed this "pay to pollute" arrangement to
persist for 14 months, from June 1995 until August 1996,
'When the facility installed a new boiler.
This example shows there are occasions when PADEP
recognizes that a facility is a violator and has taken
enforcement action against the facility. However, despite
assessing a penalty, PADEP did not consider these violations
severe enough to report the facility to EPA as a significant
violator.
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Report No. E1KAF6-03-0082-7100115
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Not Reporting
Significant Violators
Hinders EPA
Oversight
Others allowed to pollute
without penalties.
Since the early 1980's, a
facility that manufactured
adhesive tape constructed
and operated three coating
lines without obtaining a
permit from PADEP. These coating lines applied VOC
solvents that were hot air dried to evaporate excess solvents.
Both the coating and drying processes emit VOCs that
contribute to'ground level ozone, a harmful pollutant.
Operating without a permit was not this facility's only
violation qualifying it as a significant violator. One coating
line exceeded PADEP's limit for VOC content and had been
operating in violation for 13 years, since 1983. A PADEP
inspection performed four years ago discussed this violation.
However, at the time of our review in April 1996, the
violations were not resolved, and the State did not put the
facility on the list of significant violators.
Facility "too busy" to correct
violation.
The sprayer at a facility
that manufactures metal
containers was releasing
harmful VOCs. These
VOCs were released
because the facility's incinerator was broken. Operating the
sprayer, without the incinerator to remove the VOCs, was a
significant violation that the State should have reported to
EPA. This situation occurred twice and the State did not
notify EPA either time.
PADEP first became aware of the violation in August of 1995,
when a citizen complained about offensive odors coming
from the facility. PADEP's inspection that month revealed
that the facility vented excess pollution directly into the
atmosphere. At that time, the owner indicated that the
incinerator was malfunctioning for a couple of months and
had been turned off. He also indicated the facility did not
stop operation because the production line was "too busy."
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Report No. E1KAF6-03-0082-7100115
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Facilities
Constructed
Without Permits
and Not Reported to
EPA
PADEP's Reasons
for Not Reporting
The State's file indicated that in October 1995, the
incinerator was repaired and operating. However, test results
showed that its performance was "questionable." In May
1996, a fire damaged the incinerator, and the facility again
operated the spray booth without the incinerator for one
week. Again, the State should have placed this facility on
EPA's significant violator list.
Before a facility installs or modifies equipment, the owner
must obtain a construction permit from PADEP. At facilities
regulated by the Clean Air Act, two types of equipment
require permits. The first and most important permit is for
equipment that is a source of air pollution. The second type
is for equipment designed to control air pollution.
Eight of the 64 violators we identified, were significant
violators because they installed or modified "pollution-
creating" equipment without a permit, a more serious
offense. These were violations of both state and federal laws
that PADEP believed should not be reported to EPA. For
example, one facility installed and operated a large boiler
without a permit. The bpiler emitted nitrogen dioxide that
when combined with VOCs, creates harmful ground level
ozone. However, PADEP officials said they did not report
this facility as a significant violator because they did not
believe boilers were environmentally hazardous. State
personnel also indicated that as a rule they did not report
situations such as these to EPA.
In most cases, PADEP personnel did not agree that the
facilities we identified were significant violators. State
personnel contend:
4 Having EPA remove violators from its list of significant
violators is difficult. The facilities remain on EPA's list
for an excessive amount of time, until the facility has
taken corrective action and paid all penalties.
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Report No. E1KAF6-03-0082-7100115
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i EPA places too much emphasis on the number of
significant violators and PADEP considers this
"unnecessary bean counting."
4 They can bring the facility into compliance timely,
without EPA's involvement. The State personnel also
contend they will request EPA's assistance whenever it
is necessary .
4 EPA's involvement results in interference, and delays
resolution of the violation.
* PADEP and EPA differ on what is considered a
significant violator, and the length of time that a
violation must exist before it should appear on EPA's
list. For example, if a facility tells PADEP it intends to
rectify a violation in the future, the State will avoid
listing the facility.
These reasons have one recurring theme — a difference of
approach between EPA and PADEP on how to enforce the
CAA. EPA's Timely and Appropriate Policy requires PADEP
to be much more aggressive regarding issues such as: what is
considered a significant violator, when the facility should be
put on the list, and how long the facility should remain on
the list.
We disagree with PADEP that it does not need to report
significant violators to EPA. We found that EPA involvement
can be beneficial because the State does not always resolve
the violations timely. Moreover, EPA personnel believe they
can be more objective because they are further removed
from the pressures of industry. In any event, the State agreed
to report significant violators when it accepted the 105 grant.
EPA Was Generally EPA Region 3 officials stated that in the past, they used NOVs
Aware of PADEP to help identify the more serious violators not reported by
Not Reporting PADEP. However, to verify the violation, EPA said they often
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Report No. E1KAF6-03-0082-7100115
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needed to review PADEP's enforcement file. EPA personnel
found this was not always an efficient use of their resources,
because these reviews took too much time. Therefore, the
Agency has recently focused its enforcement resources on
doing inspections to emphasize a "federal presence in the
field."
EPA officials said that whenever a state is obviously not
reporting significant violators, the Agency still reviews NOVs
in selected cases. For example, EPA recognized that PADEP
only reported six significant violators in Fiscal Year 1995,
although the State performed 2,000 inspections of major
facilities. As a result, EPA did a limited review of PADEP's
NOVs during the fall of 1995, and found several significant
violators that the State did not report.
••••^^^^•^^^••^i^B For example, one NOV
EPA discovers blatant I reviewed by EPA was for a
violator not reported by I facility that manufactures
PADEP. I packaging materials. Part of
' the manufacturing process
involved printing labels on
the package. This is done by printing presses that are a
source of VOC contamination. To control the pollution from
these presses, PADEP required the facility to install
incinerators designed to capture and destroy the pollutants.
The State also required that the incinerators operate above a
predetermined temperature to be effective. PADEP is
supposed to enforce these requirements that are in the
facility's permit.
From early 1993 to mid 1994, the facility operated an
incinerator below the required temperature on many
occasions. This caused the facility to emit excess pollution
into the atmosphere. It is also noteworthy that the facility
saved money by operating the incinerator at lower
temperatures. According to the inspection report that we
reviewed, PADEP planned to issue an NOV for this violation.
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Report No. E1KAF6-03-0082-7100115
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However, we did not find an NOV in the file for operating
the incinerator below the specified temperature.
In the summer of 1994, the incinerator exploded, and the
facility requested permission from PADEP to operate the
printing press without the incinerator. PADEP denied the
request and warned the facility of possible penalties
associated with this type of violation. In July 1995, PADEP
again inspected the facility, and found that the company had
been operating the press without the incinerator since
November 1994.
The facility's permit allowed a maximum of 4.3 tons of VQCs
per year. PADEP reviewed the company's records and found
that the facility emitted 33.8 tons of VOC emissions during
1995, more than seven times their allowable amount. In
August 1995, PADEP issued an NOV for giving off excess
VOCs, and operating the press without the incinerator.
Despite receiving the NOV, the facility continued operations
without the incinerator until January 1996 when the
company moved its plant operations.
This facility violated many permit requirements between
1993 and 1996, which made it apparent that PADEP should
have reported this significant violator to EPA. However,
PADEP did not report this facility to EPA, even though VOC
emissions were seven times the allowable amount.
EPA is Changing to Because the Section 105 grants awarded to the states in the
Performance past were administered categorically, EPA could hold states
Partnership Grants accountable for specific performance measures. That is, EPA
targeted grant dollars to some of the individual activities
recipients agreed to complete. When activities were not
completed, EPA could penalize recipients. However, an
audit we issued in September 1995 (Audit Report Number
E1KAE5-24-0015-5100510) reported that recipients often did
not complete required activities under the 105 grants. The
audit also showed that EPA rarely withheld grant dollars
20
Report No. E1KAF6-03-0082-7100115
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when activities were not performed. The conditions shown
in the prior audit were again illustrated in this report by
PADEP's refusal to report significant violators, and EPA's
failure to apply sanctions such as withholding grant funds.
In place of categorical grants, EPA plans to award
Performance Partnership Grants (PPGs) to the states. These
grants will use results-oriented performance measures to
avoid excessive "bean counting." EPA will hold states less
accountable for specific accomplishments. Instead, the
Agency plans to evaluate the grantee on the "bottom line
results" of their air program. More emphasis will be placed
on environmental outcomes such as how much air quality
improved, instead of measuring accomplishments through
the number of inspections completed or significant violators
reported.
PPGs are intended to develop a partnership between EPA
and the states where both parties share the same
environmental and program goals. This new working
relationship between EPA and the states is intended to focus
state and federal efforts on working cooperatively. PPGs are
also designed to give states the flexibility to address their
most pressing environmental priorities.
PPGs May Not Be In comparison to EPA, the State placed less emphasis on
Effective reporting significant violators. Philosophical differences such
as identifying and reporting significant violators show that
PADEP and EPA may not be willing partners. They need to
mutually resolve differences such as these before PPGs can
be effective. The absence of this willing partnership could
undermine the effectiveness of PPGs.
EPA considers reporting significant violators important and
PADEP needs to fulfill its grant commitment to report them.
For these reasons, both parties should consider negotiating to
resolve their philosophical differences concerning the
reporting of significant violators. This is especially critical if
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Report No. E1KAF6-03-0082-7100115
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CONCLUSION
RECOMMENDATIONS
PADEP and EPA are to develop a working relationship and
become "performance partners." Until the State and EPA
develop the working partnership intended by PPGs, one of
the most important performance measures of the air
enforcement program should be whether the State is
identifying and reporting significant violators.
While PADEP identified six significant violators, we
identified 64 other facilities that should have been on EPA's
list of significant violators during Fiscal Year 1995. This is a
considerable difference because we conducted our review at
only half of PADEP's regional offices, and reviewed
documentation for only 270 of the more than 2,000 major
facilities in Pennsylvania.
It appears certain that a more thorough review by us, would
have likely identified many more significant violators that the
State should have reported. Even the results of our limited
review left no doubt that PADEP did not report many
significant violators. Moreover, State personnel expressed
their intentions not to report significant violators to EPA.
The present arrangement for identifying and reporting
significant violators needs improvement. Under the current
conditions, EPA cannot help PADEP bring significant
violators into compliance, since EPA is often unaware of the
violations. Also, EPA cannot adequately perform its oversight
role of evaluating the effectiveness of PADEP's enforcement
program. Under PPGs, EPA will need to rely more heavily
on the completeness and accuracy of the significant violator
information provided by PADEP. For PPGs to be effective,
PADEP must report significant violators to EPA.
We recommend that the Region 3 Administrator take action
to ensure PADEP reports significant violators as required by
22
Report No. ETKAF6-03-0082-7100115
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their Section 105 grant and by EPA's Timely and Appropriate
Enforcement Policy. Region 3 could accomplish this by:
1) Using a performance measure in future PPGs that
evaluates whether the State is identifying and reporting
significant violators. This practice will require EPA
Region 3 to verify the accuracy of information
submitted by the State.
i
2) Withholding some of Pennsylvania's grant funds in
order to achieve the desired results.
3) Negotiating with PADEP to resolve philosophical
differences concerning the reporting of significant
violators.
4) Requiring PADEP to certify it has reported all
significant violators to EPA, as defined by EPA's Timely
and Appropriate Enforcement Policy.
PADEP RESPONSE
While we believe your draft to be generally misleading and inaccurate, we want
to be very clear about one thing. It did not take an audit to determine that PADEP and
EPA disagreed on the manner of identifying significant violators (SVs). A review of
Region 3's midyear reviews would show this was an issue for the last decade. Although
the report criticizes PADEP, it did not criticize EPA for essentially agreeing to PADEP's
handling of significant violators for the last decade. At our most recent midyear grant
review, in May 1996, EPA Region 3 officials stated that they thought that our
enforcement program was very good. They stated that they had no problem with the
actions taken or penalties collected.
While EPA does provide a $5 million grant, the amount needs to be put in
perspective. It is a small part of the $30 million that Pennsylvania spends on its air
program. It is misleading to suggest that the entire $5 million grant is in any material
way related to the identification of SVs.
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Report No. E1KAF6-03-0082-7100115
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We acknowledge that PADEP does not activate the "SV flag" on the AIRS system.
However, that does not mean the data was not entered, or that it could not be used to
easily identify SVs. Our personnel can readily identify major sources having violations
(the essence of an SV) [emphasis added by OIG] by a search of the EPA database. We
assume EPA could do so as well if it chose to. PADEP has not deliberately concealed
violations from EPA, but routinely reports more information about violations in paper
copy and electronic form than any other state in Region 3. In contrast, EPA has so far
withheld the names of the cases involved in this report so that PADEP could not
properly evaluate this report.
Selective use of the facts from case files gives readers a distorted, almost
preordained view of enforcement actions leading to the conclusion that the report was
either done by staff completely unfamiliar with the federal air quality program, or that
the report was motivated by something other than a sincere desire to improve the
enforcement system. With respect to individual case examples we can identify, the
report contains numerous errors, which misidentify major sources that are really minor
sources, criticizes PADEP for putting sources on compliance schedules after
recommending them, identifies violations where none existed, and stated there were
inspection problems with at least one facility that PADEP inspectors actually observed
every day. AIRS data also shows that one facility, the report labeled an SV, was
inspected by EPA in August 1995 and found to be in compliance. Allegations that
PADEP should have reported SVs by telephone are also incorrect. The grant documents
seek reporting via AIRS and no other way [emphasis added by OIG].
The disagreement between EPA and PADEP is a dispute over which "flag" is
activated in a computer program, not a public health issue. The reason for this decade
old disagreement regarding SVs is also obvious without an audit. The reason is EPA's
unrealistic definition of an SV and the rigid procedures mandated upon reporting. We
do not apologize for disagreeing with a policy, which defines SVs in a manner that
defies any common sense understanding of the word "significant."
The definition of a significant violator and the procedures for EPA involvement in
SV cases are not derived from the statute or regulations, but rather from EPA guidance.
Using its grant money, EPA then seeks to impose its guidance on Pennsylvania. If one
followed EPA's guidance, any violation at a major source would make it a significant
violator, regardless of its real significance. Once reported to EPA, an SV becomes
subject to extensive EPA micro-management.
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Report No. E1KAF6-03-0082-7100115
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We do not object to oversight or criticism if warranted. We do object to the
second guessing and interference that inevitably follow SV designation. Based on
information available to us, it appears that most other states do not identify any more
SVs than Pennsylvania. Perhaps this suggests that the place to look for the problems is
with the EPA policy, not with the states' reporting.
We find it distressing that the report attempts to undermine the PPG process.
PADEP sees PPGs as an opportunity for both agencies to discuss the SV issue openly and
constructively. PPGs represent a chance to construct a sensible way of dealing with SVs
that will give EPA necessary oversight yet allow the states flexibility.
EPA RESPONSE
We concur with the findings and recommendations expressed in this chapter.
Without consistent, timely, and reliable information on violators, and open
communication between state and federal officials regarding appropriate enforcement
action, determinations cannot be made on the best course of action to bring violators
into compliance. EPA must rely on Pennsylvania for most of our information concerning
the compliance status of the State's regulated community. This is the reason for
specifying in the Clean Air Act (CAA) Section 105 grant agreement that the State report
and identify SVs in accordance with the Timely and Appropriate Enforcement Policy
negotiated between the states and EPA.
Despite disagreement over terminology during the past 10 years, the information,
when provided was in an easily accessible and plainly identifiable form which promoted
prompt review and discussion of the appropriate action to take. Once the State began
withholding misinformation, EPA had no reliable and easily accessible source of data to
determine which facilities were significantly violating clean air regulations. State reports
to the EPA database — the Aerometric Information Retrieval System (AIRS) — did not
distinguish between simple violations, with little or no impact on public health, and
more egregious violations with serious impacts. CAA Section 105 grant funds
-specifically require SVs to be identified up front, not buried in a mountain of computer
data that would have to be analyzed and verified, resulting in wasted time and taxpayer
money. The State agreed to those terms in the contract for receipt of clean air grant
funds.
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Report No. E1KAF6-03-0082-7100115
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EPA provided a list of the 64 identified violators to the State in an effort to engage
officials in a discussion of the status of transactions and future actions. While we have
had productive discussions with the State on better data sharing, open communication,
and improved understanding of each other's interests in compliance and enforcement
policies, the listing of violators and future actions has not been resolved in our
discussions.
However, as we have stated repeatedly, State NOVs themselves contain
insufficient information to place a facility on the list of national violators. More
importantly, they cannot replace the dialogue required and necessary under the Timely
and Appropriate Policy and the Section 105 air grant commitments to determine what
action to take, and which agency should take the lead.
Regarding Recommendation Number 1, the Office of Enforcement and
Compliance Assurance is currently developing national guidance to confirm that even
after we have successfully negotiated a PPG agreement, EPA will continue to have a
strong need for complete and accurate state supplied compliance data. Region 3 will
withhold a portion of Fiscal Year 1997 CAA grant funds until EPA is convinced that
Pennsylvania is reporting all known SVs in accordance with the Timely and Appropriate
Policy.
Concerning Recommendation Number 3, the fundamental principles of shared
responsibilities for enforcement of the CAA are clearly defined in the Agency's Timely
and Appropriate Enforcement Policy. This policy is a product of recommendations by a
state/federal workgroup. An important aspect of the policy is to ensure that there is
consistency among the states and expeditious compliance. We believe that to
renegotiate these fundamental principles would create serious discrepancies among the
state enforcement programs and undermine the goal of nationwide consistency and
protection of the public health and environment. Lastly, we are prepared to work with
Pennsylvania to ensure that the implementation of the policy brings definite benefits to
the Pennsylvania enforcement program.
OIG EVALUATION
We do not agree with the comments provided by PADEP, and will clarify two
portions of EPA's response.
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Report No. E1KAF6-03-0082-7100115
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PADtEP's comments are contrary to documentation we reviewed and discussions
we conducted with State personnel. For example, we did not withhold the names of the
facilities we reviewed to hinder PADEP's evaluation of the report. Because EPA
Region 3 is responsible to make final determinations concerning the issues in this report,
we did not include the names of the facilities reviewed. This was done to protect the
privacy of facilities until they were listed by Region 3 as an SV. Moreover, we discussed
many of these cases with PADEP personnel during the audit, and they were provided a
complete list of violators one working day after we issued the draft report. In any event,
PADEP could have obtained this information by calling the contact person provided in
the draft report.
We do not agree that our draft report misled the reader by suggesting that the $5
million grant was only for the identification of SVs. In our opinion, the report was clear,
the $5 million grant was for the total air program. Our draft report stated that:
Region 3 awards Section 105 grant money so that states can operate their
air programs in accordance with their grant agreements.
This issue [reporting SVs] is of such importance that Region 3 allotted part
of the Section 105 grant funds for identifying significant violators and
reporting them timely.
PADEP's interpretation of EPA's May 1996 midyear grant review was incorrect.
Discussions with EPA personnel disclosed that their verbal comments were intended to
provide PADEP with some "positives" concerning the enforcement actions taken and
penalties collected. However, the PADEP response did not mention the voluminous
negative comments and concerns that EPA documented in this midyear review about the
State's air enforcement program. EPA's chief concerns were:
} ... over the last couple of years, there has been a decrease in the number
of NOVs and penalty actions taken.
. . . Pennsylvania has one of the lowest significant violator reporting rates in
Region 3. In fact, during this Fiscal Year PADEP has only voluntarily
reported one significant violator.
We also disagree that we did not criticize EPA for inaction when states did not
complete grant commitments. In this current report and in the past, we have criticized
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Report No. E1KAF6-03-0082-7100115
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EPA for not withholding grant funds from PADEP and other state agencies that did not
fulfill grant commitments. We believed then and still believe now that grant funds
should be withheld when a grantee — be it a state, non-profit entity, or as, educational
institution — does not complete commitments contained in a grant agreement. Page 20
of our report discusses one such past audit that recently criticized EPA for not
withholding funds. Additionally, OIG audits have evaluated other aspects of both EPA
and state air enforcement programs. Several of these are discussed in the Prior Audit
Coverage section of this report.
The grant agreement is in effect a contract. Once the contract is negotiated and
executed, the parties are bound contractually, and the contract terms must be fulfilled.
When contract terms are not fulfilled, the party that is remiss should be penalized.
Grant recipients cannot be allowed to disregard requirements in an executed agreement
because they believe portions of the grant to be "rigid," "unrealistic," or "defies any
common sense understanding." Reporting SVs in accordance with EPA's Timely and
Appropriate Enforcement Policy was a grant or "contract" requirement that the State
agreed to perform when it accepted the grant. If the grant requirements were
objectionable, PADEP should have refused the grant. Furthermore, EPA paid the State to
complete commitments, and should have withheld funds when these were not
completed. In our opinion, EPA has been too patient and cooperative.
We disagree with PADEP's contention that this audit was not needed to find out
that SV reporting was an issue. Even though past Region 3 reviews discussed the need
to report SVs, this audit was necessary to provide conclusive proof that SVs were not
being reported, and to learn the extent of the State's non-reporting. Moreover, past EPA
practices have been to work cooperatively with the states and to apply sanctions to solve
only ". . . persistent, significant performance problems." This provides some reasoning
for Region 3's inaction, but does not justify it.
We acknowledge PADEP's affirmation that they do not report SVs as required by
the grant. The disagreement between EPA and the PADEP is not about activating a
"flag" in a computer program. Region 3 cannot identify SVs from the paper NOVs,
electronic information submitted by PADEP, and Quick Look reports. In addition to the
reasons already discussed in the report, EPA also could not identify SVs because of
inaccuracies in the AIRS. We are not saying this to assess the reasons for the
inaccuracies, but only to indicate an additional reason why we disagree with PADEP's
contention that EPA can easily identify SVs from AIRS. Additionally, it is unreasonable
for EPA personnel — with other oversight responsibilities — to continually review the
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status and inspection results for thousands of facilities in Pennsylvania and the other four
states in Region 3. This is especially unreasonable since the grant agreement between
EPA and PADEP requires the State to report SVs via AIRS and telephone.
It is also noteworthy that PADEP's response explains that EPA can obtain the
essence of an SV. EPA's policy requires more than the essence of an SV. It requires the
reporting of an SV.
We disagree with PADEP's response that our report contains many errors and
distorted facts. Contrary to the PADEP response, our auditors were knowledgeable
about the air program, and our report was not "... motivated by something other than
a sincere desire to improve the enforcement system." For example, the PADEP response
explains that one of our examples was a minor source, not eligible for SV status, that we
misidentified as a major source. During our review, we found two inspection reports for
this facility — signed by the PADEP inspector and his supervisor — that contained the
following heading, Semi-annual Inspection Verification Report for Major Facilities.
Additionally, PADEP is responsible for determining if a facility is a major or minor
source, and had labeled this facility as a major in the AIRS. Also, our determinations
concerning when a facility should be labeled an SV were scrutinized by the EPA
personnel who make these same determinations in EPA Regions 3 and 5.
Another facility we reviewed had been coded in AIRS by PADEP as a major
source during Fiscal Year 1995. Similar to the example above, the inspection report
indicated it was a major. During Fiscal Year 1996, the State changed the designation for
this facility to a minor. If justified, this change is acceptable, but shows that codings can
be changed after the period of our review. In any event, PADEP was responsible for
reporting this facility as an SV in Fiscal Year 1995, when it was coded as a major.
We also disagree with PADEP's contention that we reported violations where
none existed. We compared the circumstances reported in PADEP inspection reports to
EPA's Timely and Appropriate Enforcement Policy and EPA's definition of an SV.
PADEP's disagreement with this Policy and the definition of an SV, does not negate the
fact that violations occurred. For example, the EPA Policy considers facilities that install
equipment without a permit as an SV. Our report disclosed that PADEP does not
believe installing boilers without a permit is a reportable violation.
We also do not agree that it is an error to report problems at a facility even though
PADEP inspectors observed it every day. Observing a facility without performing an
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on-site visit is not considered an acceptable compliance assurance method. EPA defines
this type of inspection as a Level 0. Additionally, we did not criticize PADEP for putting
a facility on a compliance schedule. We reported that PADEP placed the facility on a
compliance schedule and assessed penalties for violations, yet did not report these
violations to EPA. Additionally, we do not agree that an August 1995 EPA inspection, at
a facility we labeled as an SV, found the facility to be in compliance. EPA personnel
disclosed that they initiated an unannounced inspection at this facility in August 1995.
However, they aborted this inspection because the facility was not in operation, and in
the process of moving.
We must also disagree with the PADEP response where it alleges that we erred by
indicating that SVs should be reported by telephone. The PADEP response states, "the
grant documents seek reporting [of SVs] via AIRS and no other way." This statement is
inaccurate because the EPA grant awarded to PADEP required the reporting of SVs in
two ways. First, PADEP was required to identify significant violators to EPA via the
AIRS. Second, the grant required PADEP to comply with EPA's Timely and Appropriate
Enforcement Policy which provides that:
EPA and States should conduct frequent (at least monthly)* informal
consultations to discuss compliance efforts. During these discussions,
information exchange relative to obtaining compliance and penalties
should occur. This exchange should include at least the following items:
1. The State and EPA would each identify any newly-found
violators subject to this guidance. . . .
* subsequent grants changed this requirement to quarterly.
What we find most confusing in PADEP's response is its description of EPA's
oversight. The response asserts that:
4 EPA's definition of an SV is unrealistic and defies common sense;
4 The Agency employs rigid reporting procedures;
4 SVs are subject to extensive micro-management by EPA; and
+ Second guessing and interference follow SV designation.
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Despite these comments; the response criticizes our report for undermining the PPG
process, which relies on cooperative working relationships between EPA and the states.
The PADEP response raises some questions as to whether Pennsylvania is going to be a
cooperative partner with EPA under the new Performance Partnership Grants.
Two portions of EPA's response need clarification. EPA's Timely and Appropriate
Enforcement Policy and the procedures for identifying SVs were a product of
negotiations between the states and EPA. Secondly, we generally agree that NOVs
should not be used alone to identify SVs. We agree because there were a number of
NOVs we reviewed that indicated the facility was a potential SV. However, because of
time constraints we did not review the PADEP files for all of these facilities. Had this
been done, it appears likely that we would have identified additional SVs. In any event,
regardless of the number of SVs we identified, PADEP should have reported SVs in
accordance with the grant agreement.
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CHAPTER 3
1
INSPECTIONS OF AIR FACILITIES NEED IMPROVEMENT
PADEP's inspection program needs improvement. Some
Level 2 inspections that PADEP performed were not thorough
enough to determine whether a facility was complying with
state and federal regulations. Moreover, when PADEP
identified violations, it did not always ensure the facility took
corrective action. Because of these conditions, violations
sometimes persisted longer than necessary.
To evaluate the effectiveness of the State's inspection
program, we reviewed PADET* inspections performed during
Fiscal Year 1995. In total, we reviewed 81 enforcement files
and associated inspection reports. This review showed that
six Level 2 inspections were not thorough enough. Another
eight inspections identified violations or questions about
permits, but the State did not ensure the facility took
corrective action to resolve the questions or violations. In
total, 17 percent of the inspections we reviewed needed
improvement.
Some PADEP
Level 2 Inspections
Were Inadequate
Inspections Not Thorough
Enough To Identify
Violations.
For six of the inspections we
reviewed, there was no
evidence in the State's files to
indicate that the inspector
performed the evaluations
required for a Level 2
inspection. In accordance with the Fiscal Year 1995 grant,
PADEP scheduled and committed to perform Level 2
inspections at these facilities. Without documentation, there
was no proof that the inspector ensured that the facility
complied with its permit.
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For example, one facility we reviewed used surface coatings
that contain VOCs, The PADEP inspector should have
ensured that the VOCs emitted by this source did not exceed
the allowable limits specified in the facility's permit. The
PADEP inspector could have done that by reviewing the
Manufacturer's Safety Data Sheet or analyzing a sample of
the coating. EPA prefers the second method because it is
more accurate. However, the PADEP inspector did not
conduct either method, and therefore could not determine if
a violation existed.
Corrective Action Eight of the inspection reports we reviewed showed that
Not Always Verified PADEP had identified violations. However, there was no
evidence in the State's enforcement files to indicate that these
violations were corrected.
We found four instances where PADEP did not follow up on
problems identified during an inspection. For example, in
December 1994, PADEP issued an NOV to a facility for an
opacity violation that occurred when the plume of smoke
from its stack exceeded the allowable density. According to
PADEP's file, the facility claimed that the violation was a
one-time occurrence and that there would be no future
opacity violations. PADEP accepted this response and did
not perform any follow-up inspections during the 16 months
that elapsed between PADEP's initial inspection and our
review.
During a July 1995 inspection at another facility, PADEP
identified broken gauges on the facility's equipment. These
gauges were to be ,used to ensure that pollution was being
captured. The facility's permit requires that the gauges
operate properly. It also requires that the facility take
periodic readings from the gauges and record these readings.
Because the gauges were broken, the facility's records were
incomplete, and PADEP could not tell if the facility's
emissions complied with the CAA. As of April 1996, more
than eight months after the inspection, PADEP had not
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determined if the gauges had been repaired. PADEP officials
informed us that the facility was conscientious and did not
believe a second visit was necessary.
At a third facility, the 1995 inspection report showed
violations. To determine if these violations were pre-existing,
we reviewed prior inspection reports and found 1982. test
results showing the facility's emissions were almost five times
the allowable limit. Further examination of the State's
records showed there was no follow-up performed to
determine if these violations were corrected. We identified a
similar situation at another facility where the 1982 test results
showed emissions were almost seven times the allowable
limit. Again, the State's file did not indicate that any follow-
up was performed to determine if these emission violations
were corrected.
l™—'—1BI™™l—^••l—l^| We also found four
Violations Were Not Always I instances when PADEP
Corrected Timely. I identified questions about
T the facility's permits, but
did not resolve these
matters timely. For example, PADEP's February 1995
inspection at one facility showed that the equipment being
used did not agree with the permit. One month later, PADEP
conducted a follow-up inspection and informed the facility
that it had permitting deficiencies. At that time, PADEP told
the facility to submit the documentation needed to resolve
the permitting deficiencies. It was not until June 1996, that
PADEP personnel met with facility representatives to discuss
the permitting issues. This first meeting took place 16
months after the initial inspection.
According to PADEP officials, their inspectors may have
performed some follow-up sooner than the file indicated.
However, PADEP personnel could not provide evidence to
support their position.
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RECOMMENDATIONS We recommend that the Region 3 Administrator:
1) More aggressively enforce the requirements of the
Section 105 grant awarded to PADEP by ensuring the
State;
4 Conducts Level 2 inspections that are thorough
enough to determine a facility's compliance.
4 Performs follow-up in order to resolve violations
timely.
4 Documents their follow-up activities.
2) Withhold a portion of Pennsylvania's Section 105
grant funds until the State complies with the inspection
requirements of the grant.
PADEP RESPONSE
We would agree that we and EPA should continuously strive to improve
inspections. If the final report identifies specific inspections that are deficient we will
take appropriate steps to make corrections.
We are unable to respond with specificity to your allegations regarding PADEP
inspections since the inspections in question were not identified. On balance PADEP
does perform Level 2 inspections as contemplated by the grant. As noted, PADEP
performed over 2,000 inspections at major sources in FY 1995.
We request that you identify the eight inspections the report contends were not
thorough enough. Additionally, we would call to your attention that not all inspections
we conduct are intended or required to be Level 2 inspections. Therefore, it is necessary
to determine whether the particular inspection in question was intended to be a Level 2
inspection.
We also request that you identify to us each of the facilities and inspections used
as examples in Chapter 3 of the report. Specifically, identify the inspections for which
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the report indicated that corrective actions were not verified. We have had limited
success in trying to identify the examples used in Chapter 3. However, to the extent that
we have guessed correctly, we believe your summaries again present an incomplete or
inaccurate picture.
4 The example regarding the incinerator is incomplete. We believe our four
inspectors were able to determine whether the incinerator was capturing
the required amount of pollutants. We disagree that a stack test was
required. In addition, our records show this to be a 1990 inspection, well
before the Fiscal Year audited.
4 The facility in Conshohocken gave a reasonable explanation that the
opacity violation was a one-time event. Numerous PADEP personnel,
including the facility inspector, drive by the facility on the way to work
each day, no further emissions were observed and therefore we did not feel
an additional inspection was needed.
t The summary of the broken gauge example highlights the real issue. Our
inspectors determined, based on their experience with the source and the
circumstances of the case, that no follow up was necessary. After the fact,
EPA now is second-guessing that decision based on looking at a file.
We do not claim to be perfect. If out of these thousands of inspections only eight
were not complete enough, we feel we did well. However, we will continue to seek
improvement.
EPA RESPONSE
We concur with the main themes and recommendations expressed in this chapter
that not all inspections PADEP performed were Level 2 inspections, and that violations
were not always corrected timely. Anything less than a Level 2 inspection is largely
inadequate to determine compliance with many of the sources that PADEP inspects.
The problems detected in this chapter, in part, may have resulted when the 1990 CAA
changed the definition of a major source in a way that caused a significant increase in
the universe of sources requiring state inspections. This greater universe poses a
significant challenge to both EPA and the states in providing proper balance to field
activities while maintaining high standards for quality inspections.
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Concerning the recommendation to ensure PADEP performed the Level 2
inspections, Region 3 will work with EPA Headquarters in reviewing current national
policies in an attempt to bring consistency to all state inspections. This may mean that
fewer inspections will need to be conducted to ensure greater quality. Appropriate
documentation will become a significant issue during any negotiations for an effective
PPG with Pennsylvania. We also concur with the recommendations to perform and
document follow-up inspections.
OIG EVALUATION
On December 24, 1996, we provided PADEP the identity of all facilities
discussed in Chapter 3. However, PADEP did not provide any additional comments
during the seven-week interim between December 24 and the date of this report.
Moreover, we discussed all of our concerns about the State's inspections with PADEP
personnel during the audit. As a result, we believed that PADEP staff knew which
facilities we reviewed.
We recognized that not all of PADEP's inspections were intended or required to
be Level 2 inspections. However, the six inadequate inspections discussed in this
chapter were committed by the State to be Level 2 inspections.
Regarding the three specific comments in PADEP's response, we provide the
following. According to EPA's Timely and Appropriate Policy, a "drive by," or Level 0
inspection is not acceptable for determining compliance. Without performing a follow-
up inspection, PADEP had no assurance that the violation was corrected. Similarly,
without performing a follow-up inspection to ensure the gauges were repaired, the State
cannot be assured that the facility was in compliance. We believe that relying on a
facility's verbal commitment to take corrective action is not prudent.
We recognized that it was a 1990 inspection that highlighted the need for a stack
test. However, similar to the 1990 inspection/the 1995 inspection report also raised
concerns about the incinerator. Because a stack test is not required as part of a Level 2
inspection, we reclassified this inspection as one that did not verify that corrective action
was taken.
It is important to note that we reviewed 81 inspections and found that 14, or 17
percent, needed improvement. This percentage shows that the State's procedures need
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revision. For the inspections with inadequate follow-up, PADEP personnel often stated
that they performed the follow-up, but did not document it. Without documentation, we
cannot verify that PADEP inspectors performed follow-up.
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CHAPTER 4
OTHER MATTERS
Each quarter, PADEP received Continuous Emissions
Monitoring (CEM) data from about 100 facilities in
Pennsylvania. In essence, CEM data is around-the-clock
surveillance of a facility's emissions. PADEP in turn
submitted this monitoring data to EPA. As a result, both
PADEP and EPA had detailed information about the
emissions from these facilities.
One of the significant violators we identified was a CEM
facility. Because of the CEM data, EPA had more information
about this facility than the other significant violators we
identified. We believe that EPA should have used the CEM
data as the reason for requesting more information from
PADEP about this source. With this additional information
EPA could have listed this facility as an SV. However, it is
noteworthy that PADEP also was responsible for identifying
and reporting it as a significant violator.
EPA personnel indicated that about a year ago they adopted a
more aggressive approach for the use of CEM data. This
more aggressive approach by EPA is a step in the right
direction.
RECOMMENDATION We recommend the Region 3 Administrator ensure that his
staff determines if a facility should be placed on EPA's list of
significant violators, when CEM data identifies "potential"
significant violators.
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PADEP RESPONSE
We must note that your endorsement of EPA's "more aggressive" approach to
CEM data is a step in the wrong direction. CEM data can be very useful in identifying
violations that really are significant. However, to list a source as a significant violator for
every minimal and transient exceedence serves no useful purpose. To suggest that a
facility should be considered a significant violator when a CEM identifies "potential
violators" is outrageous.
EPA RESPONSE
The Air, Radiation and Toxics Division will continue with its aggressive approach
in the use of CEM data and discuss with EPA Headquarters the establishment of national
policy with defined action levels.
QIC EVALUATION
EPA's response is noted, and should correct the conditions we cited, if Region 3
uses the CEM information to identify potential significant violators. Once they identify
these potential violators, Region 3 needs to confirm the significant violator status with
the State.
PADEP's comments are also noted; however, this recommendation was not
addressed to the State. We revised this chapter to clarify our position that it was EPA
that should have reacted more aggressively to the information it had about the source.
This chapter was directed toward EPA because it had CEM data indicating that the
source reviewed was a potential significant violator. Because of this information, EPA
should have researched further, i.e., reviewed PADEP's NOV issued to this facility and
requested additional information from the State, to determine if this facility was a
significant violator. Contrary to the State's contention, this source had violations that
were far above minimal and transient exceedences. We did not recommend labeling
every facility with minimal exceedences as an SV. If that were so, we would have
recommended listing many more than one facility.
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APPENDIX A — PADEP'S RESPONSE TO THE DRAFT REPORT
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Pennsylvania Department of Environmental Protection
Rachel Carson State Office Building
P.O. Box 2063
Harrisburg, PA 17105-2063
December 13, 1996
The Secretary 717-787-2814
Mr. P. Ronald Gandolfo
Divisional Inspector General For Audit
Office of the Inspector General
Mid-Atlantic Division
U.S. Environmental Protection Agency
841 Chestnut Building
Philadelphia, PA 19107-4431
Dear Ron:
The Pennsylvania Department of Environmental Protection (DEP) welcomes this opportunity to
comment upon the "Draft Report of Audit on EPA Region Ill's Oversight of Pennsylvania's Air
Enforcement Data" (Report) dated November 15,1996.
Let me first say that DEP is committed to administering our air quality program in a professional
manner that protects the health and rights of our citizens. We have taken the public charges EPA
made based on this draft Report seriously and have asked our Citizens Advisory Council to
undertake an independent review of our violation reporting system and of the allegations in the
draft Report. If legitimate problems are identified in the final audit we will take the steps
necessary to correct them.
The unprofessional handling of a preliminary draft version of the Report, however, is still of
great concern to us. It is extremely unfortunate that we did not have the opportunity to review
and comment on the preliminary Report before it was leaked to the press and commented upon
extensively and provocatively by EPA officials. We find it extremely ironic that the draft copy
provided to us for review contains two warnings not to distribute or disclose its contents.
To our knowledge no one in your office, or elsewhere at EPA, has made any effort to locate the
source of the leak or otherwise deal with the highly irregular way this document has been used.
The failure of EPA Regional officials or the Inspector General to investigate simply reinforces
the overall impression that this is not a professionally conducted audit, but a thinly disguised
attempt to further a personal or political agenda of the agency or its officials.
45
A" Equal Opportunity/Affirmative Action Employer http://www.dep.slate.pa.uf nmieu on Recycled Paper
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On the draft Report itself, we have five major areas of comment:
1. No audit was needed to find out that significant violators reporting is an issue, but it
has been an issue between Pennsylvania and EPA for the last ten years. This is not a public
health issue; it is about whether a "flag" is raised in a computer system. Although the Report
liberally criticizes DEP, we note the Report does not criticize EPA Region III for essentially
agreeing to DEP's handling of significant violators for the last decade.
2. DEP has not deliberately concealed violations from EPA, but in fact routinely reports
more information about more violations in paper copy and electronic form than any other state in
Region III. DEP staff would be happy to show the EPA staff conducting the audit how EPA's
electronic database works so they can retrieve this information in the future. In contrast, EPA
has so far withheld the names of the cases involved in this audit so that DEP could not do a
proper evaluation of this report.
3. EPA has been fully aware of Pennsylvania's significant and insignificant enforcement
cases for the last ten years and could have, at any time, requested DEP or EPA actions to handle
cases differently. Ironically, many cases have in fact been handled this way in the past —
successfully.
4. Selective use of facts from case files gives readers a distorted, almost preordained
view of enforcement actions leading to the conclusion that the Report was either done by staff
completely unfamiliar with the federal air quality program or that the Report was motivated by
something other than a sincere desire to improve the enforcement system.
5. With respect to individual case examples we were able to identify, the Report
contains numerous errors which misidentify major sources that are really minor sources,
criticizes DEP for putting sources on compliance schedules after recommending them, identifies
violations where none existed and stated there were inspection problems with at least one facility
that DEP inspectors actually observed every day.
General Comments
Identifying significant violators is not a new issue. While we believe your draft Report to be
generally misleading and inaccurate, we want to be very clear about one thing. It did not take an
audit to determine that Pennsylvania and EPA have disagreed on the manner of identifying
significant violators (S Vs). A simple review of Region Ill's mid-year grant review documents
would show this to have been an issue for the last decade.
Contrary to EPA's attempts to do otherwise, this is not a problem which can be laid at the feet of
the Ridge administration. It has existed unchanged through several administrations. For
example, in the fiscal year 1992 mid-year review, EPA stated "DER has acknowledged their
previous track record of not identifying Significant Violators to EPA." This is not a new issue.
46
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PEP does not deliberately conceal violations from EPA. We want to be equally clear on a
second point. DEP has not intentionally concealed any violations from EPA and has routinely
reported violations. The draft Report is simply wrong when it states, in several places, that a
violation was not reported to EPA. The Report all but ignores the Aerometric Information
Management System (AIRS) database which is maintained by EPA and on which DEP reports
violations. We acknowledge that DEP does not and has not activated the "SV flag" on the AIRS
system. However, that does not mean the data was not entered or that it could not be used to
easily identify SVs.
Our personnel can readily identify major sources having violations (the essence of an SV) by a
search of the EPA database. We assume EPA could do so as well if it chose to. Allegations that
EPA must search through Notices of Violations (NOVs) provided in Monthly Reports to find
SVs is disingenuous at best. DEP provides the monthly reports as extra information which can
be checked against the AIRS data. If EPA officials are searching through paper copies of NOVs
rather than using EPA's own database they are wasting a lot of taxpayer money maintaining the
AIRS database.
EPA's SV guidance is unrealistic. The reason for this decade old disagreement regarding
significant violators is also obvious without an audit. That reason, as stated repeatedly by the
former DER, is EPA's unrealistic definition of a significant violator and the rigid procedures
mandated upon reporting. We do not apologize for continuing to disagree with a policy which
defines SVs in a manner which defies any commonsense understanding of the word "significant."
The definition of a significant violator and the procedures for EPA involvement in SV cases are
not derived from the statute or regulations, but rather from EPA guidance. Using its grant
money, EPA then seeks to impose its guidance on Pennsylvania.
If one followed EPA's guidance, any violation at a major source would make it a significant
violator, regardless of its real significance. Once reported to EPA, an SV case becomes subject
to extensive EPA micro-management.
We do not object to oversight or criticism if warranted. We do object to the second guessing and
interference which inevitably follows SV designation. Based on information available to us, it
appears that most other states do not identify any more SVs than Pennsylvania. Perhaps this
suggests that the place to look for problems is with the EPA policy, not with the states' reporting.
We find it curious that your Report is entitled "Draft Report of Audit on EPA Region Ill's
Oversight of Pennsylvania's Air Enforcement Data" because there is no mention of EPA's
decade of acquiescence in Pennsylvania's handling of significant violations. We say this not to
criticize'Region III, which we feel handled the matter correctly in the past, but to point out the
alternate agenda behind your Report. The revisionist history in the Report suggested EPA has
"stressed" this issue over the years. Actually, EPA has raised the issue each year and DER/DEP
has stated it opposition to the process. The parties then moved forward to work cooperatively.
i
47
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For example, in documents prepared by EPA for the fiscal year 1991 mid-year review EPA stated
"DER does not identify sources as Significant Violators; however, it does submit the necessary
information for EPA to determine Significant Violators/1 DEP reports the same information
today as it did then and actually makes better use of AIRS than it did in 1991. It was not until
fiscal year 1996, after it was widely known at Region III that your Report raised this issue that
Region III officials became strident about it.
Specific Comments
\
' We turn now to some of the specific statements in the Report.
The "Background" section (page 1) attempts to sensationalize this issue by citing largely
irrelevant statistics about air toxics and incorrectly suggesting that ozone is an air toxic. This is a
dispute over which "flag" is activated in a computer program, not a real public health issue; an
assertion that is backed up by examples given in the audit.
While EPA does provide a $5 million grant (page 2), that amount needs to be put in perspective.
It is a small part of the $30 million Pennsylvania spends on its air program. As you note, EPA's
grant is for all aspects of the program, not just enforcement. Identifying SVs has never had a
specific dollar amount attached to it by EPA. In the past, when EPA did suggest that
Pennsylvania could receive money from a "bonus pool" if SVs were handled EPA's way, the
amounts suggested were less than $50,000. It is misleading to suggest that the entire $5 million
grant is in any material way related to the identification of SVs.
Allegations that SVs were to be reported by telephone is a new addition since the leaked version
of the Report (page 5). However, it is incorrect. The grant documents seek reporting "... via the
AIRS Facility Subsystem" and no other way. While DEP and EPA do conduct periodic
conference calls regarding cases and new developments, reporting is specifically required via
AIRS. The Report neglects to mention that after Region III complained it was too much trouble
to contact each of DEP's six regional offices to get first-hand enforcement information, DEP
re-centralized the conference call process in 1995 to help EPA. Prior to this change, calls from
EPA to some DEP regional offices were infrequent. To assist EPA, DEP centra! office initiated
regular quarterly calls with EPA and ensured the appropriate regional staff were also on the call.
DEP made this effort even though the grant documents put this responsibility on EPA.
We reject your unsupported assertion that DEP hindered EPA's ability to oversee enforcement
(page 9). Violations at major sources are reported to EPA via AIRS and the monthly reports. By
a simple search of its own database EPA has the ability to oversee enforcement and seek more
information about any case. Data entered into AIRS is coded using codes devised by EPA to
identify major sources. These codes also show the type of activity performed, such as an
inspection conducted or an NOV issued, and the results of the activity. By using the system's
"Quick Look" report and setting simple search parameters. EPA can easily locate all major
sources with violations or enforcement actions for any time period.
48
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Thus, using AIRS, EPA Region III could on a quarterly, monthly, or even daily basis produce a
list of major sources with violations. To assert that merely because DEP does not activate the SV
flag, EPA is hindered in its oversight role is absurd. In fact, EPA discussed numerous cases with
DEP in the past based on information gathered from DEP reports, including many of the cases
used as examples in the Report.
Information regarding violations is on the AIRS system and is reported to EPA. There is simply
no evidence that activating the SV flag on the system will lead to any different enforcement
result, or even any quicker resolution.
Perhaps realizing that Region III was, for a decade, a willing participant in DEP's method of
dealing with SVs without adverse consequences, the Report suggests that not activating the SV
"flag" somehow leads to less aggressive enforcement. However, at our most recent mid-year
grant review, in May 1996, EPA Region III officials stated that they thought that our enforcement
program was very good. They stated that they had no problem with the actions taken or penalties
collected.
The examples used are inaccurate. While the Report does not identify the sources used as
examples, and that information has still not been provided by EPA, we can make some educated
guesses at the sources in question. Assuming we have made the correct guesses, DEP believes
that almost every example presents incomplete information or slants the facts to serve other
motives. We specifically request that you provide us with the identity of all sources used as
examples. Here are examples of the incomplete information included in the Report —
The example at the bottom of page 12 relates to a facility which is not a
major source and thus not subject to SV reporting to EPA. Information
about this source was in AIRS. Moreover, the suggestion that there were
continuous violations from May 1993, until October 1995 is inaccurate. In
fact, the road dust violations occurred three times in 1993. NOVs were
issued and the problem did not recurr. A separate problem at a cement silo
was found in November 1993, and confirmed corrected in a February
1994, inspection. Lastly, at the loading area various attempts to correct the
problem were finally successful in January 1995. Thereafter the control
device was damaged, but repaired by October 1995. Penalties were
resolved in September 1995. It is inaccurate to lump these separate
violations together to suggest a continuous state of violation which was
unaddressed.
On page 13 you characterize the handling of a matter as "pay to pollute."
This shows a bias or lack of understanding of the work required to replace
a boiler. This case involved periodic and minor opacity violations. On
numerous occasions inspections were conducted and no violations were
found. The company made several adjustments to its operations to attempt
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to prevent a recurrence. DEP required the company to replace the boiler
(a major undertaking) and established a compliance schedule. We also
required the company to pay a penalty for past violations and to pay a
penalty monthly until replacement was complete. To call this "pay to
pollute" or "willingness to accommodate the facility" is unfounded and
unwarranted. EPA uses similar techniques to resolve similar matters. In
fact on page ii, you endorse compliance schedules as appropriate. Finally.
this matter was fully reported to EPA via AIRS and the monthly NOV
report.
The case discussed at the top of page 14 is one where we agree that
resolution has taken too long, but this issue has nothing to do with the lack
of reporting to EPA. This matter was first discovered in 1992, and
reported to EPA via the monthly report, which was what the grant
narrative required for fiscal year 1992. EPA was involved in discussions
regarding the facility's request for a "bubble" permit and was aware of this
case. We are not happy that this matter took as long as it has, but we reject
any allegation that EPA was not informed. Data concerning this source
was also entered in AIRS. AIRS data also shows this facility was
inspected by EPA in August 1995 and was found to be in compliance.
The case discussed on page 14 and 15 is incorrect. This facility did not
have a violation in August 1995. The facility operated under an EPA
approved "bubble" permit which allowed volatile organic compound
(VOC) emissions from the subject spray booth without using the
incinerator. The incinerator was added to deal with malodor complaints
and resulted in VOC controls in excess of regulator requirements. When it
malfunctioned, the facility still was in compliance with its EPA approved
permit. DEP did, however, report all the activity to EPA via AIRS. The
second incident, operating the facility without the incinerator in May 1996,
did violate the Pennsylvania permit and in October 1996, a civil penalty
was assessed for this violation. This was also reported on AIRS.
The case discussed on page 15 is greatly exaggerated. The facility did
construct the boiler without a plan approval, but after receiving an NOV
an application was made and approval was granted. More importantly,
this is not the serious pollution problem your summary would suggest.
The fact is that facilities are allowed to emit NOX if the emissions meet the
regulatory requirements. The boiler's emissions meet the regulatory
requirements even before the plan approval was granted. This is a prime
example of an insignificant matter which EPA's guidance would label a
significant violation.
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The case discussed on pages 17 and 18 also contains numerous omissions.
Chief among them is any mention that DEP collected a civil penalty in
excess of $100.000 for the violations. Also omitted is any mention that
this facility was not a major source subject to SV reporting prior to the
summer of 1994. While EPA may not have discovered it, the file does
contain an NOV for the temperature violations and a correction plan by the
company. Temperature records show the plan had been successful up to
the time of the explosion at the incinerator, which occurred for reasons
unrelated to environmental issues. After the explosion EPA was aware of
the case and discussed it several times with DEP. This information was
also noted in the AIRS data. This is a case which illustrates how the
significant violator process should work. When DEP discovered the
source was operating without the incinerator in July 1995, an NOV was
sent and EPA was notified via AIRS and the monthly report. The matter
was discussed with EPA as a result of our reporting and in November
1995, the facility was identified as a SV since it truly was significant.
Thus, it is incorrect to state that DEP did not report this facility to EPA.
Performance Partnership should not be discouraged. Given the ten-year history of this dispute
and the inaccuracies in your report, we find it distressing that you attempt to undermine the
Performance Partnership Grant (PPG) process (pages 19 and 20). DEP sees the PPG process as
an opportunity for both agencies to discuss the SV issue openly and constructively, without
dogmatic demands. The PPG represents a chance to construct a sensible way of dealing with
SVs which will give EPA necessary oversight yet allow the states flexibility in dealing with
individual circumstances.
We find your conclusions and recommendations to be considerably off the mark. As noted
repeatedly above. EPA is not and never was unaware of violations at major sources. That
information is readily available in AIRS. EPA receives adequate information to oversee DEP's
enforcement activity if EPA chooses to use it. Instead of recommending that EPA force its
unrealistic SV guidance into the PPG process, a more constructive suggestion would have been
for EPA to re-evaluate its SV guidance and adopt it for the PPG process. We believe a process
can be established for open communication between the states and EPA by which violations thai
really are significant are identified and dealt with.
Inspections
We would agree that we, and EPA, should continuously strive to improve inspections. If the
final Report identifies specific inspections which are deficient we will take appropriate'steps to
make corrections.
We are unable to respond with specificity to your allegations regarding DEP inspections since the
inspections in question were not identified. On balance DEP does perform Level 2 inspections as
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contemplated by the grant. As you notec' DEP performed over 2000 inspections at major
sources in fiscal year 1995, not to mention a large number of inspections at non-major source
facilities.
We request that you identify the eight inspections the Report contends were not thorough
enough. Additionally, we would call to your attention that not all inspections we conduct are
intended or required to be Level 2 inspections. Therefore, it is necessary to determine whether
the particular inspection in question was intended to be the Level 2 inspection.
We also request that you identify to us each of the facilities and inspections used as examples in
Chapter 3 of the Report and specifically the seven inspections mentioned on page 24. We have
had limited success in trying to identify the examples used in Chapter 3. However, to the extent
we have guessed correctly, we believe your summaries again present an incomplete or inaccurate
picture.
• The example on page 24 regarding the incinerator is incomplete. The
problem in question involved discoloration around an access door. We
believe that our four inspectors were able to determine whether there was
leakage at the door and thus whether the incinerator was capturing the
required amount of pollutants. We disagree that a stack test was required.
In addition, our records show this to be a 1990 inspection, well before the
fiscal year audited.
• The December 1994 NOV for opacity violation mentioned on page 24
was, we believe, at a facility in Conshohocken where DEP's regional office
is located. The company gave a reasonable explanation that this was a one
time event. Numerous DEP personnel, including the facility inspector,
drive by this facility on the way to work each day, no further emissions
were observed and therefore we did not feel an additional inspection was
needed.
The broken gauge example discussed at the bottom of page 24 could be
one of a couple of cases of broken gauges, but we cannot identify the
specific case. However, your summary highlights the real issue. Our
inspectors determined based on their experience with the source and the
circumstances of the case that no follow up was necessary. After the fact,
EPA now is second-guessing that decision based on looking at a file.
We do not claim to be perfect. If out of these thousands of inspections only eight were not
complete enough, we feel we did well. However, we will continue to seek improvement.
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Other Matters
We must note that your endorsement of EPA's "more aggressive" approach to continuous
emission monitoring (CEM) data is a step in the wrong direction. While CEM data can be very
useful in identifying violations which really are significant, to list a source as a significant
violator for every minimal and transient exceedence serves no useful purpose. To suggest, as you
do on page 27, that a facility should be considered a significant violator when a CEM identifies
"potential violators" is outrageous.
The advent of Title V air permits, the more widespread use of CEMs and the Performance
Partnership program all serve to reinforce the conclusion that EPA's Significant Violator
guidance has become outdated and needs to be revised.
Conclusion
We believe DEP operates a quality air program which protects the environment and the people of
Pennsylvania. Pennsylvania has never hidden its disagreement with EPA Region III over the
significant violator issue. However, we do not and never have deliberately concealed
information from EPA. We believed we had a workable relationship with Region III staff which
allowed for oversight and provided for discussion of cases and, at times, joint enforcement
actions. That relationship has been seriously damaged by the leak of this Report and the unfair
and inaccurate nature of its allegations. We can only speculate at the real motives for this course
of events. It is a shame that so much damage has been done over whether a "flag" was activated
in a computer database.
DEP is committed to working cooperatively with Region III to ensure that a proper and sensible
enforcement program exists to protect the health and rights of Pennsylvania's citizens.
Sincerely,
1 James M. Seif
Secretary
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APPENDIX B — EPA'S RESPONSE TO THE DRAFT REPORT
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGJON III
841 Chestnut Building
Philadelphia, Pennsylvania 19107
SUBJECT: Draft Report of Audit on DATE: 12/18/96
Region Ill's Oversight of
Pennsylvania's Air Enforcement Data-
Region Ill's Comments
FROM: W. Michael McCabe^V
Regional Administrator (3RAOO)
I
TO: P. Ronald Gandolfo
Divisional'Inspector General for Audit (3AIOO)
GENERAL COMMENTS
Thank you for the opportunity to comment on the draft report
on Pennsylvania's Air Enforcement Data (number E1KAF6-03-0082).
The issues raised by the report are serious and worthy of the
examination provided by the Inspector General. Both the
Environmental Protection Agency (EPA) and the Pennsylvania
Department of Environmental Protection (PADEP) have
responsibilities under various laws to ensure that public health
and the environment are protected. EPA has delegated substantial
portions of the 1990 Clean Air Act (CAA) to the Commonwealth of
Pennsylvania for implementation and enforcement. Indeed PADEP
has significantly more resources devoted to the implementation
and enforcement of the CAA in Pennsylvania than does EPA. As a
result, we rely on PADEP to carry out inspections of their major
air pollution sources to ensure they meet federal regulations.
The basis of our partnership with Pennsylvania, as with
other States, is the exchange of consistent, timely, and reliable
information on violators and regular communications between State
and federal officials regarding appropriate enforcement action.
Without reliable information and open communication,
determinations cannot be made on the best course of action to
bring violators into compliance. PADEP is closer to the
regulated community and better able to learn about its compliance
prqblems. EPA must rely on Pennsylvania to be the source of most
of our information concerning the compliance status of the
regulated community in Pennsylvania. That is the reason for
specifying in the CAA Section 105 grant agreement that the State
report and identify significant violators (SVs) in accordance
with the Timely and Appropriate (T&A) Enforcement Policy
negotiated between the States and EPA.
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Our agreement to provide reports of SVs has worked well in
the past. Disputes have arisen over what to call SVs - -the State
preferring not to attach the potential stigma of the designations
to industrial, State, pr municipal sources in violation.
However, despite disagreement over terminology during the past 10
years, the information, when provided, was in an easily
accessible and plainly identifiable form which promoted prompt
review and discussion of the appropriate action to take. The
process, while somewhat cumbersome, clearly identified major
sources requiring immediate attention. If further action was
required, a determination was made as to which Agency should
conduct the appropriate follow-up. In the majority of cases, no
action beyond the State's initial response was necessary.
Once the State began withholding this information, EPA had
no reliable and easily accessible source of data to determine
which facilities were significantly violating clean air
regulations. State reports to the EPA database - the Aerometric
Information Retrieval System (AIRS) - did not distinguish between
simple violations, with little or no impact on public health, and
more egregious violations with serious impacts. CAA Section 105
grant funds specifically require SVs to be identified up front,
not buried in a mountain of computer data which would have to be
analyze^ and verified; resulting in wasted time and taxpayer
money. The State agreed to those terms in the contract for
receipt of clean air grant funds.
In addition, as your report states, a review of 45 randomly
selected State files revealed eight SVs that had not been entered
into the AIRS database. Even if EPA were to analyze AIRS data
for SVs, data from these files would not have been found. To
date, EPA has not received any State issued enforcement documents
for these violators.
EPA has provided a list of the 64 identified violators tc
the State in an effort to engage officials in a discussion of the
status ,of transactions and future actions. While we have had
productive discussions with tne State on better data sharing,
open communication, and improved understanding of each other's
interests in compliance and enforcement policies, the list of
violators and future actions has not been resolved in our
discussions. We hope to deal with the violations soon, so that
appropriate steps can be taken to correct them.
EPA, under the leadership of Administrator Carol M. Browner,
has aggressively promoted improved partnerships with the States
and greater appreciation of State priorities in protecting public
health and natural resources. Critical to these relations is an
environment of openness, shared information, and trust. The
Inspector General's report has provided us with an opportunity to
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examine aspects of these relationships that aren't working as
intended and to reach an understanding that ultimately will
strengthen out partnership. EPA Region III is committed to
working cooperatively with the Mid-Atlantic States to ensure
strong and effective environmental protection for the area's
citizens.
Chapter 2
We concur with the findings expressed in this chapter and
agree with the proposed recommendations. In our review of the
State notices of violations (NOVs) for 56 of the 64 identified
SVs, we determined they all appear to meet the definition of an
SV as indicated in EPA's T&A Policy. However, as we have stated
repeatedly. State NOVs themselves contain insufficient
information to place a facility on the national violators list.
More importantly, they cannot replace the dialogue that is
required and necessary under the T&A policy and the Section 105
air grant commitments to determine what action to take, and which
Agency should take the lead. Considerable effort is now underway
to review each of the associated State files, discuss the
compliance history with State officials, and make a determination
whether or not to list the facility on the national violators
list. We have also verified that Region III has not received any
State-issued enforcement documents for the remaining eight 3Vs
identified in your report.
Regarding Pennsylvania's data entry into the national
database, the data is neither timely nor complete, nor does it
identify a source to be a significant violator^
The term "significant violator" was introduced into the
Agency's compliance program in 1982. The significant violator
program was designed to identify the Agency's highest non-
emergency violating sources both for purposes of prioritization
of Agency efforts and for reporting in the Agency's Management
Accountability System. Subsequent federal policies were
developed, in concert with representatives of State and local
agencies, to establish procedural and substantive requirements
for EPA in resolving such violations, and in evaluating the
adequacy of State efforts to resolve such violations.
The definition of significant violator was added to the
first "Timely and Appropriate" EPA/State Enforcement Response
Pclicy for major violations under the Clean Air Act signed en
June 28, 1984. The policy was later revised on February 7, 1992,
tc encourage a greater degree of team-building and cooperative
resolution of SVs by all responsible agencies, and to permit an
increased degree of agency flexibility in identifying and
resolving SVs. Further, the Policy was revised to more
accurately reflect the time and resources necessary to bring
sources into a state of continuous compliance. To that
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end, the time line for addressing an SV was extended an
additional 30 days from the original policy. Each policy was
developed, in conjunction with other federal policies, to
establish a strong framework for clarifying the relative-'roles
and responsibilities of EPA and the States and the mutual
expectations of the various enforcement agencies.
PADEP has been critical of EPA for placing too much emphasis
on the number of SVs and considers. this as unnecessary "bean
counting". Region III disagrees ^with this statement. The T&A
Policy was created to foster the development of a more complete
and accurate compliance picture by setting up a process which
ensures regular communication between EPA and States concerning
the compliance status of regulated sources and discussion of
appropriate action for both EPA and the State in each particular
case. Through this process, a State and EPA will be more likely
to ad'dress the most environmentally important violators first and
be assured of protecting public health. The process also ensures
that expeditious compliance will be. achieved in every case.
Audit Recommendation: "Using a performance measure in future
Performance Partnership Grants (PPG) that evaluates whether the
State is identifying and reporting significant violators. This
practice will, require EPA Region III to verify the accuracy of
information submitted by the State."
Regional Response: The Office of Enforcement and Compliance
Assurance (OECA) at EPA in Washington, DC, is currently
developing national reporting requirements foi- the enforcement
component of a Performance Partnership Agreement (PPA). This
national guidance will confirm that, even after we have
successfully negotiated a PPA/PPG agreement, EPA will continue to
have a strong need for complete and accurate State supplied
compliance data. While we understand that it is the intent of
the PPA/PpG to give greater latitude to the State and decrease
federal oversight, we do not believe that a reduction in
oversight means that EPA should receive less data. In fact,
incomplete data hinders effective oversight. Complete and
accurate data is necessary to support federal enforcement.
The responsibility of federal enforcement is to ensure that
there is consistency among the State enforcement programs so as
to ensure that no economic advantage is being gained by people
who fail to comply with environmental requirements. These
concepts are embodied in the T&A process. Given the essential
role of federal enforcement and the fundamental principles
contained in the T&A process, we believe that the core
enforcement requirements in any PPA/PPG will be a continuation of
the requirements under the T&A process. This must involve the
reporting of SVs, entering into a dialogue with EPA with respect
to coordination and resolution, and resolving the violations
according to requirements of the policy. We believe that any
PPA/PPG must capture this process through verifiable performance
measures.
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Audit Recommendation- "Withholding some of Pennsylvania's
grant funds in order to achieve the desired results."
Regional Response Region III will withhold a portion of
Fiscal Year 1997 CAA grant funds until EPA is convinced that
Pennsylvania, is reporting all known SVs in accordance with the
T&A policy. After Pennsylvania has demonstrated to EPA's
satisfaction that there is complete, accurate and timely
reporting of all enforcement information, EPA will then
reevaluate all its grant options.
Audit Recommendation: "Negotiating with PADEP to resolve
philosophical differences concerning enforcement of the CAA."
Regional Response: Up through 1990, EPA and DEP had been
conducting monthly meetings, which from our perspective, were
very successful - in satisfying the intent of the T&A policy. EPA
received monthly reports from DEP that provided us with a list,
complete with case chronology, of every source DEP considered
subject to the T&A policy. That summary report served as a basis
for informal consultation to discuss compliance efforts both
within PADEP and EPA. This process was revamped by PADEP after
the Department was reorganized in July 1991 and enforcement
coordination was transferred from Harrisburg to the State
Regional Offices. We are now working very diligently to
reestablish that line of open communication that is so vital to
the success of the T&A process.
Further, the fundamental principles of shared
responsibilities for enforcement of the CAA are clearly defined
in the Agency's T&A Policy. This policy is a product of
recommendations by a State/Federal Workgroup with representatives
from STAPPA/ALAPCO and EPA Headquarters and the Regions. The
final policy was also concurred in by the STAPPA and ALAPCO
organizations. An important aspect of federal enforcement
recognized by this policy is to ensure that there is consistency
among the States and expeditious compliance. We believe that to
renegotiate .these fundamental principles would create serious
discrepancies among the State enforcement programs and undermine
the goal of nationwide consistency and protection of the public
health and environment. If there is continued confusion by the
Commonwealth as to the requirements of national policy, we will
initiate new attempts to explain to Pennsylvania what is intended
by the national policy. We are also prepared to discuss with
Pennsylvania what mechanisms can be employed to efficiently
implement the policy. Lastly, we are prepared to work with
Pennsylvania to ensure that the implementation of the policy
brings definite benefits to the Pennsylvania enforcement program.
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Audit Recommendation: "Requiring PADEP to certify it has
reported all significant violators to EPA, as defined by.-EPA's
Timely and Appropriate Policy."
i
Regional Response: We concur and believe the above
proposals will bring about positive change. It is also our
intent to develop a mechanism to verify the accuracy of the
information if and. when it is reported by the State.
Chapter 3
We concur with the main themes and recommendations expressed
in this chapter that not all inspections PADEP performed were
Level 2 inspections, and that violations were not always
corrected timely. A Level 2 inspection is considered a selective
type of inspection in which the control device and process
operating conditions are recorded as part of the source
evaluation in addition to visible emission observations. In a
typical application, the inspector would record such process
items as feed rates, temperatures, raw material compositions.
process rates, and such control equipment performance parameters
as water flow rates, water pressure, static pressure drop, and
electrostatic precipitator power levels. The inspector would
then use these values to determine any significant change since
the last inspection or any process operations outside normal or
permitted conditions. Anything less than a Level 2 inspection is
largely inadequate to determine compliance with many of the
sources that DEP inspects. The problems detected in this
Chapter, in part, may have resulted when the 1990 CAA changed the
definition of "major" source in a way that caused a significant
increase in the universe of sources requiring State inspections.
This greater universe poses a significant challenge to both EPA
and the States in providing proper balance to field activities
while maintaining high standards for quality inspections.
Audit Recommendation: "More aggressively enforce the
requirements of the Section 105 grant awarded to PADEP by
ensuring the State conducts Level 2 inspections to determine a
facility's compliance."
Regional Response: Region III will work with OECA in
reviewing current national policies in an attempt to bring
consistency to all State inspections. This may mean that fewer
inspections will need to be conducted to ensure greater quality.
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Audit Recommendation: "Performs follow-up in order to
resolve violations timely."
Regional Response^ ,We concur and will attempt to
incorporate this aspect into the construction of any new national
inspection policy.
Audit RecommendatJOQ: "Documents their follow-up
activities."
Regional Response: Again, we concur. Appropriate
documentation will become a significant issue during any
negotiations for an effective PPA/PPG with Pennsylvania.
Audit Recommendation: "Withhold a portion of Pennsylvania's
Section 105 grant funds until the State complies with the
inspection requirements of the grant."
Regional Response: See above discussion on withholding grant
funds.
Chapter 4
This brief, but significant, mention of the importance of
reviewing continuous emission monitoring (CEM) data is an area
that Region III has been concerned about for some time. CEMs
include the total equipment needed to sample, analyze, measure,
and provide a permanent record of emissions. A CEM provides
direct measurement of a particular pollutant exiting the stack on
a continuous basis. It was believed that the 1990 CAA would
bring about a greater reliance on continuous emission monitoring
This has met with great resistance from the regulated community.
As such, the Region developed its own enforcement policy in the
use cf CEM data. The Air, Radiation and Toxics Division has
since adopted a more aggressive approach for using CEM data wnich
the Inspector General recognized as a "step in the rignc
direction."
Audit Recommendat ion: "We recommend the Region III
Administrator ensure that his staff reviews the necessary
information to determine if a facility should be placed on EPA's
list of significant violators, when CEM data identifies
"potential" violators."
Regional Response: The Air, Radiation and Toxics Division
will continue with its aggressive approach in the use of CEM data
and discuss with OECA the establishment of national policy with
defined action levels.
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APPENDIX C - CITIZENS ADVISORY COUNCIL REPORT
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_iITIZENS
ADVISORY
OUNCIL to the Department of Environmental Resources
5th Floor • Market Street State Office Building • P.O. fior A;.w • //„,,.,,,,„,,,. PA ,r/,/:;.x.,.w . ?
February II, 1997
Mr. P. Ronald Gandolfo
Divisional Inspector General for Audit
Office of the Inspector General (3AIOO)
Mid-Atlantic Division
841 Chestnut Building
Philadelphia, PA 19107-4431
Dear Mr. Gandolfo:
This letter conveys the Report of Inspector General Audit Workgroup convened by the
Citizens Advisory Council to the Pennsylvania Department of Environmental Protection.
DEP Secretary Jim Seif requested the CAC to convene a Workgroup to investigate the
circumstances generating the IG Audit, the timing of its inappropriate and inflammatory
release and, most importantly, the validity and impact of the IG's findings.
The Workgroup participants exhibited a remarkable esprit de corps in tackling the
predicament begun when an unofficial preliminary draft of the EPA Inspector General's
"Draft Report of Audit on EPA Region 3's Oversight of Pennsylvania's Air Enforcement
Data" became public, in conflict with standard procedures that should have been
followed, allowing DEP and EPA to comment on the official draft IG report before its
public release.
Unquestionably, we accepted a formidable challenge. The IG Audit, on its face, shook
public confidence in DEP's Air Program, and compromised the credibility of that
program. It did bring to light internal and long-standing problems troubling DEP's and
EPA's partnership to protect Pennsylvania's air quality.
The Workgroup conducted its affairs fairly, openly, with diligence, and kept a firm focus
on developing recommendations to heal and strengthen that vitally essential partnership
and its ultimate responsibility to the public's expectation of DEP/EPA cooperative
environmental protection.
To reflect the sentiments of several Council members in the discussion to approve the
Workgroup report, we must acknowledge continuing disapproval over the motivation for
and manner of releasing the preliminary draft of the IG Audit. The Council recommends
that Resion 3 EPA investigate how and why this occurred and revisit the ramifications of
such sensationalizing techniques so that similar incidents will not occur in the future.
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As co-chairs of the IG Audit Workgoup we remain impressed with the thoughtfiilness and
labor intensity of the Workgroup's members. This report is submitted with hope that it
will be given full and due consideration. Council is available to discuss our findings and
mediate implementation of our recommendations, and will in any event, revisit this issue
within two years.
Sincerel
Brian Hill ^ Gail Rockwood
Workgroup Co-chair Workgroup Co-chair
Enclosure
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Report of the
Inspector General Audit Workgroup
Introduction
In late October 1996, a "preliminary draft" of an audit report by EPA Region Ill's Inspector
General ("IG") of the Region's oversight of Pennsylvania's air enforcement data was obtained
by newspapers in Pittsburgh and Philadelphia. The preliminary draft reported that, among other
things, DEP had deliberately withheld information from EPA.
This preliminary report was an unofficial, early draft that would normally have gone through
further internal review by the IG with a revised draft released only to DEP and EPA for
comment. The final report incorporating those comments would then have been released
publicly. Instead, the unofficial preliminary draft became public, without any opportunity for
either DEP or EPA to comment on the validity of the findings contained in the report.
In mid-November, the IG issued its official Draft Report of Audit on EPA Region 3 's Oversight
of Pennsylvania's Air Enforcement Data. The allegations contained in both the preliminary and
official draft raised public concerns about the effectiveness of DEP's air quality program, and
added to an already growing rift between DEP and EPA. On November 12, 1996, DEP Secretary
Seif asked the Citizens Advisory Council (CAC) to convene a group to independently review the
issues raised by the IG. The CAC agreed to accept this request and organized an IG Audit
Workgroup consisting of the following:
CAC Members:
Brian Hill, Workgroup Co-chair Walter Heine
Gail Rockwood, Workgroup Co-chair Pat Lupo
Jolene Chinchilli Maurice Sampson
John Ford Dave Strong
Paul Hess
Non CAC-members:
• Douglas Blazey, Esq., Elliott Reihner Siedzikowski and Egan, PC
• Phil Coleman, Chair, Sierra Club Pennsylvania Chapter
• John Dernbach, Esq., Associate Professor, Widener University
• William M. George, President, AFL-CIO
• Caren E. Glotfelty, Goddard Professor of Forestry and Environmental Resource
Conservation, Penn State University
• Walter Goldburg, Group Against Smog and Pollution (GASP) (Pittsburgh)
• Joseph M. Manko, Esq. and Timothy F. Malloy, Esq., Manko, Gold and Katcher
• Joe Minott, Esq. and Jason Rash, Esq., Clean Air Council (Philadelphia)
• Ed Shoenen National Institute for Environmental Renewal
• Keith Welks, Esq., Phoenix Land Recycling Co.
• Roger Westman, Air Quality Program, Allegheny County Health Department
All members of the Workgroup served as volunteers and were compensated only for travel-
related expenses.
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Background
Protection of air quality in Pennsylvania is a collaborative mission carried out by both EPA and
DEP. As the federal agency, EPA is responsible for setting national air standards and
requirements designed to protect health and the environment, for providing oversight on many
aspects of state programs, and ultimately, for initiating such enforcement actions as it believes
are appropriate. DEP is responsible for developing a State Implementation Plan and other
programs which will ensure that the air in Pennsylvania meets the applicable national standards.
Most importantly for the subject of this report, DEP is also responsible for carrying out the vast
majority of the permitting, inspections and enforcement under the relevant laws and regulations.
EPA has a substantially more limited operational role, focusing on oversight of DEP regulatory
efforts and direct participation in a select number of individual cases.
EPA awards grants under Section 105 of the Clean Air Act to state and local agencies to carry
out their responsibilities for preventing and controlling air pollution. These grants are one of.the
mechanisms which EPA uses to maintain oversight of each state's air program. Before EPA
awards each grant, it negotiates a work program with the state, containing specific work
commitments the state agrees to perform. The work program encompasses activities such as
inspections, monitoring, permitting and enforcement.
One of EPA's enforcement priorities in implementing the Clean Air Act has been to identify and
focus on "Significant Violators." This term has been defined through various versions of the
national Timely and Appropriate Enforcement Guidance ("T&A Guidance"). The current
version of the T&A Guidance defines a "Significant Violator" (sometimes herein referred to as
"SV") as any major stationary source of air pollution (with some technical exceptions2) which is
violating a federally-enforceable regulation or permit. The T&A Guidance prescribes
timeframes for reporting and enforcement and delineates the relevant factors to be considered in
appropriate penalty actions.
Pennsylvania's Section 105 grant agreement3 specifies that DEP will identify and report
Significant Violators to EPA pursuant to the T&A Guidance. While the grant agreement actually
cites an earlier version of the policy (1986), the grant application4 clearly states that DEP is to
identify and report significant violators to EPA on the AIRS computer data base5. Therefore the
grant agreement obligates DEP to report Significant Violators to EPA pursuant to the T&A
Guidance .
1 February 7, 1992, clarified by the June 14, 1994 clarification.
Pages 6-7, 2/7/92 T&A Guidance Package.
Transmitted by letter dated 1/19/96.
" Transmitted by letter dated 7/31/95.
s AIRS is the Aerometric Information Retrieval System, a computer based
repository of information about airborne pollution in the US and various
World Health Organization member countries. The system is administered
by the EPA. Any organization or individual with access to the EPA
computer system may use AIRS to retrieve air pollution data. AIRS
contains air quality, emissions, compliance and enforcement information
that EPA and state agencies compile to carry out their respective
programs for improving and maintaining air quality. It eliminates the
need for individual states to maintain their own databases of air
pollution information and to reformat or reorganize data for submission
to the EPA database-
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Pennsylvania has long disagreed with EPA over when a facility should be considered a
significant violator , and has not officially reported ail Significant Violators meeting EPA's
literal definition for many years. Up until last year, DEP and EPA have managed to'work
through their disagreements. However, in November 1995, EPA requested that the IG conduct a
review of SV reporting by Region III states. Pennsylvania was selected for the initial review
because of its size, number of inspections, and number of violators.
As previously indicated, the IG Report was released to DEP and EPA in mid-November, several
weeks after the preliminary draft became public. The IG Report claimed that, while EPA set
priorities for implementation of the Clean Air Act and awarded grants to DEP to carry them out,
DEP did not:
• report Significant Violators to EPA;
• carry out adequate inspections in all cases; or
• take aggressive enforcement action to bring violating facilities into compliance.
The IG determined that DEP's failure to notify EPA of all violations as SVs hindered EPA's
ability to oversee Pennsylvania's enforcement program. The audit also concluded that DEP's
inspection program needed to be improved, since not all inspections were detailed enough to
determine whether a facility was complying with state and federal regulations.
As a result of the reporting problems identified by the audit of Pennsylvania's program, EPA is
evaluating whether similar problems exist in other states. Clearly, the premature release of the
preliminary draft report has further contributed to a deteriorating relationship between DEP and
EPA, but it has also opened the issue to a wider scrutiny than likely would have occurred
otherwise.
Methodology
Based on the organization of the IG Report, the Workgroup agreed to form three task forces to
review the issues identified in the audit report:
• Reporting Compliance Task Force
• Inspection Compliance Task Force
• Enforcement Compliance Task Force
Extensive data was collected through interviews and written reports from DEP, EPA and the IG.
Each task force held two conference calls in addition to the three meetings and final conference
call of the full Workgroup (12/16/96, 1/13/97, 1/30/97,2/10/97). The intensive review was
necessary to expeditfously address the seriousness of the issues raised by the report. The
findings of each of the task forces and the full Workgroup's recommendations follow.
6 The technical definition of a Significant Violator is contained in
the 1992 T&A Guidance. The dispute is not over the technical definition
so much as the application, i.e., whether every source which meets the
definition should be treated as "significant" in the everyday sense of
the word.
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Task Force Findings
1. Reporting Compliance Task Force
As stated earlier, a significant violator is essentially any major stationary source of air pollution
which violates a federally-enforceable regulation or permit. EPA's T&A Guidance requires
states to report an SV to EPA within one month of the violation and to maintain the facility on
EPA's list until it is returned to compliance or is under an enforcement order.
DEP and EPA differ on what should be considered an SV and when it should appear on EPA's
list. For many years, DEP has resisted routinely listing SVs as such because it believes that the
very broad definition of SVs causes many violations that are not truly "significant" to be entered
into the AIRS computer database7, thus becoming subject to EPA oversight.
Before 1991. DEP's Central Office collected inspection and violation information from the
regional offices which it used to generate a list known to both DEP and EPA as "sources subject
to the T&A policy." Although the sources on this list were not automatically entered by EPA
into its system as SVs. the list formed the basis for monthly discussions between the agencies
about roles and responsibilities. EPA also brought to the discussion information about air
sources which its own investigations identified as potentially subject to the T&A policy. In
general, the agencies' working relationship explicitly presumed that the agency which initially
identified a source with violations would assume enforcement responsibility. As a result of the
monthly discussion, however, EPA voluntarily turned over many of the sources which it initially
identified in violation to DEP for the enforcement lead. The agencies also used this dialogue to
determine which sources should be entered by EPA on the SV list, a process which EPA agrees
is somewhat subjective and calls for a dialogue to identify cases requiring ongoing management
while the source is returned to compliance.
In 1991, DEP decentralized it operations, making its regional offices more autonomous, which
made coordination of reporting more difficult. Instead of one Central Office contact, EPA had to
communicate with all 6 DEP regional offices (as well as Allegheny and Philadelphia counties,
quasi-independent programs). Simultaneously, DEP continued to move toward the view that
reporting SVs to EPA was not helpful in achieving compliance. Finally, the individual who had
been the Central Office contact for the monthly discussions took a position outside of the Bureau
of Air Quality, essentially ending the previous communication arrangement.
In 1994. at EPA's request, DEP recentralized the enforcement dialogue, using a conference call
among EPA, DEP Central Office and all 6 regional offices. This approach did not work well, so
EPA again communicated with each regional office directly. Finally, in May 1996, DEP'
indicated that it would only report as SVs those violations for which it desired EPA enforcement
help. DEP contends that:
• DEP provides hard copies of Notices of Violations (NOVs) to EPA as well as entering the
data in the AIRS svstem.
7 The AIRS database is reportedly archaic by today's standards. EPA is
considering revamping this system. We recommend that EPA work with the
states and state air organizations to outline refinements to the system
and to the data entry process that would improve its effectiveness and
usability by all.
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• Listing all violators that meet the literal definition of SV trivializes the truly significant
violators and extends the time needed to bring them into compliance.
• EPA s involvement can delay resolution of the violation:
• EPA retains facilities on its list for an excessive amount of time.
• EPA places too much emphasis on the number rather than the nature of SVs, which DEP
considers unnecessary bean counting.
• DEP can often bring the facility into compliance without EPA involvement. DEP will
request EPA assistance when needed.
EPA contends that without DEP's identification of all SVs as such, it is unable to ensure that
timely compliance is achieved, and EPA's ability to oversee the state's enforcement program is
hindered.
a. Significant Violators—According to the IG report, Pennsylvania has 2.053 major facilities;
DEP performed 2,000 inspections during FY 1995, issued 556 NOVs statewide (including 225 to
major facilities that violated state or federal regulations) but only reported 6 SVs to EPA. The
IG also reviewed 45 inspection reports (from selected regions) for facilities for which no NOV
was issued: In total, the IG reviewed NOVs or inspection reports for 270 major facilities (225
+45); from these 270 facilities, the IG identified 64 SVs that PA did not report as SVs to EPA.
The Section 105 grant for 1996 requires DEP to report SVs on the AIRS system.
DEP and EPA agree that the 64 SVs identified by the IG meet the literal SV definition, but,
according to EPA, this does not necessarily mean that each and every facility today would be
placed on the SV list. This is particularly true if most of these violations have now been
addressed. It is EPA's position that it must be advised of "every" significant violator. The
dialogue envisioned by the T&A Guidance will help determine which sources need to be
elevated to the SV list. The selection process is somewhat subjective, requiring dialogue,
judgment and more information than is available on AIRS, in an inspection report or in an NOV.
b. Decentralization—DEP's 1991 decentralization coupled a few years later with a new
administration with a different philosophical approach to environmental protection strained the
DEP/EPA relationship. EPA raised concerns in the early 1990's that DEP's decentralization
would result in decreased responsiveness to reporting requirements, making it more difficult for
EPA to oversee programs. Reporting problems associated with decentralization have been
alleged in programs other than the air program. A centralized coordination amd reporting role is
critical to the monthly dialogue and will also enhance regional consistency.
c. Data Entry— Until 1992, EPA performed all data entry into its AIRS database based on
information reported by DEP. Thereafter, DEP entered the information directly. EPA is almost
totally reliant on the quantity and quality of information in the database and has stated that it
does not have full confidence in the information it is receiving from DEP.
The timing of information being sent to EPA is also critical. Depending on when an NOV is
issued, there can be a significant backlog of information input on the database. This can also
occur because the hard copies are sent from the district offices to the regional offices which are
then sent to central office for compilation and transmission to EPA.
d. Compliance assistance -EPA asserts that any program that places strong emphasis on
compliance assistance, and little on enforcement, will see a decline in compliance rates. On the
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other hand, EPA talks about voluntary compliance initiatives but is constrained by a lack of
federal laws which foster voluntary compliance. The task force is uncertain whether lower
compliance has in fact resulted but is concerned that if industry perceives government to be less
willing to enforce, then incentives for voluntary compliance may be weakened.
Confusion exists in both agencies over the roles of compliance assistance and enforcement. Both
EPA and DEP need to develop performance criteria capable of measuring the effectiveness of
compliance assistance vs. enforcement. Although environmental indicators are one possibility,
the criteria must be sensitive enough to quickly identify adverse changes.
2. Inspection Compliance Task Force
According to EPA policy, states can perform 5 different levels of inspection at air pollution
facilities. Level 0, a "drive by," is the most basic inspection and is not considered an acceptable
compliance assurance method. To adequately evaluate a facility's compliance with the Clean
Air Act, the EPA grant agreements require each state to perform annually at least one Level 2
inspection8 at major facilities. The relatively new Compliance Monitoring Strategy allows states
the flexibility to focus on priority inspections rather than simply requiring a specific inspection
frequency for all facilities.
a. Adequacy of Inspection Program—The IG Report stated that DEP's inspection program
needs improvement because not all DEP inspections that the IG reviewed were Level 2 as
required by the grant. IG staff interpreted the Section 105 grant agreement to require that all
inspections be at least Level 2, even follow up inspections intended to check on a specific
violation. DEP's interpretation of the grant agreement is that it must perform at least one Level
2 inspection on all major sources each year and may carry out less detailed inspections in
response to a complaint, to follow-up a violation, or to review a specific source that may not
operate at all times. It appears that the IG's criticism of DEP's inspection program may be based
on differing interpretations of the Section 105 grant agreement and the Compliance Monitoring
Strategy.
The IG report states that in 1995, DEP carried out 2,000 inspections of the 2,053 major facilities
in Pennsylvania. Assuming that each of these 2,000 was on a different facility, this is a 97%
inspection rate, reportedly one of the highest in the region. The inspection rate for FY 1996 was
94% (1,964 out of 2,090 scheduled for inspection), also a very high completion rate.
Some DEP regions are reportedly completing two Level 2 inspections each year on some
facilities, and at least one is beginning to do Level 3 inspections9 on certain categories of
sources. Several regions also indicated that they carry out all inspections unannounced (they
only announce an inspection if there is some reason that the facility needs to know, such as to be
sure a specific source is operating.)
The Level 2 inspection is a comprehensive inspection of the facility
that is centered around a plant walk-through. Control devices and
sources are inspected for permitted operating parameters, compliance
samples are taken, comprehensive records review is performed, etc. A
field report describing what was seen and done is signed by both parties
and a copy given to the company.
9 Level 3 includes all elements of a Level 2 and adds analytical
testing on stack emissions.
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b. Training and Guidance-Although not required by EPA, DEP requires air inspectors to take
core courses offered by EPA. The required training focuses on inspection techniques and
procedures for specific sources and types of emissions but does not highlight SVs.
The inspectors themselves do not determine SVs; this is done through consultation between the
region's compliance specialist and air program manager. DEP does not provide written guidance
to field staff on issuing NOVs or determining SVs. DEP says that since air sources varygreatly,
generic guidance would be difficult. Therefore, it is up to the regional managers to determine
whether to issue an NOV; some regions issue one whenever there is a violation while others
might not document a violation, if they believe it will be addressed immediately.
3. Enforcement Compliance Task Force
a. Adequacy of DEP Enforcement—The IG Report alleges that when DEP identified violations,
it did not always ensure that the facility took corrective action and therefore violations may have
persisted longer than necessary. Given the time and resource limitations of the task force, we
were not able to comprehensively review DEP's enforcement program although the task force
did review a variety of information including DEP's case studies of the 64 SVs identified by the
IG. Because we could not conduct a detailed statistical assessment of either DEP or EPA
performance, we cannot draw firm conclusions about actual enforcement performance.
However, it does appear from the DEP supplied data that DEP did apply relatively continuous
enforcement or compliance efforts to those sources found in violation.
The summaries of data made available to the committee do not permit us to compare regions or
examine individual trends; however, a review of the aggregate data indicates that inspections
during FY95 and 96 increased while both the number of NOVs and the ratio of NOVs to
inspections have declined. We cannot determine with certainty whether this is due to improved
compliance by sources or a change in field policy towards the issuance of NOVs. The penalty
data are less clear, although the number of penalty actions initiated in the last two years has
declined. Although DEP has inspected regularly, its enforcement and penalty practices are
apparently not guided by the T&A Guidance. Neither the IG nor DEP has supplied enough
information to date to reach further conclusions about compliance effectiveness.
Further, based on information received from EPA and discussions with EPA staff, there is no
evidence to date that EPA would have handled specific cases differently than DEP did. EPA
may not always meet the enforcement requirements of the T&A Guidance either, but probably
documents its actions more thoroughly.
b. Compliance Assistance vs. Penalty Forgiveness-EPA argues that it views compliance
assistance and penalty forgiveness as two separate activities. EPA would be open to providing
compliance assistance to a company in violation, even though regulations have been on the
books for years, while still seeking a penalty for the economic advantage it enjoyed. EPA
believes that DEP does not draw a clear distinction between compliance assistance and penalty
forgiveness.
DEP defines compliance assistance as:
•'providing information and educational opportunities to help individuals and businesses
understand and comply with their environmental obligations. It may also involve
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providing powerful incentives like more efficient permitting systems, market-based
programs or recognition opportunities that perhaps give regulated communities more
incentive and flexibility to meet all existing requirements and maintain good compliance
records. Compliance assistance does not mean lessening environmental standards so it is
easier to meet them."10
Both EPA and DEP use penalty forgiveness, but how they apply it varies depending on their
individual policies.
c. Interagencv Communication— Communication, which is a shared responsibility, has clearly
broken down. The relationship has been increasingly strained over time, especially with the
diverging philosophical approaches to environmental protection. DEP's main focus is on
compliance assistance; it would be useful to review the effectiveness of DEP's approach vs. the
EPA approach. There- is a need for continual feedback about how the two philosophies/programs
interact so neither is undermined nor undermines the other. A resolution of this issue is also
necessary to allow better citizen understanding of and access to information regarding the overall
enforcement and compliance programs of both DEP and EPA, thus engendering greater public
confidence.
Responses to Initial Questions
In initiating this effort, the CAC posed several questions to the Workgroup. We were not able to
answer all of the questions due to insufficient or inconclusive data, and due to the time
constraints under which we operated. The following is a summary of the conclusions we were
able to reach.
• Was there information EPA did not get that they should have? If so, was that information
deliberately withheld by DEP?
Yes. While DEP provided a significant amount of information to EPA through both
AIRS and written monthly reports of NOVs, consent orders and consent
assessments, DEP did not identify all sources for potential listing as required by its
Section 105 grant. For years, EPA and DEP worked through this disagreement, but
now must resolve this issue and have an agreed-upon reporting protocol.
• Do DEP and EPA define significant violations differently and, if so, why?
The term "Significant Violator" is formally defined in EPA's T&A Guidance. Use
of this formal definition is imposed upon DEP through the annual grant agreement,
which obligates DEP to carry out certain reporting, inspection and enforcement
activities in compliance with the T&A Guidance. DEP, however, has believed for
many years that the EPA definition is mechanical and overly broad. In DEP's view,
the T&A Guidance calls for the inappropriate designation of many sources as
"Significant Violators" even though violations at the sources may in fact be
insignificant in the commonly understood meaning of the word, posing little
substantive threat to air quality or the environment. As a result of its dissatisfaction
with the definition imposed by the policy, DEP has resisted routinely offering
sources for listing by EPA as Significant Violators where the violations meet the
technical definition of the policy but are not likely to have a major adverse impact on
air quality.
10 Source: DEP world wide web site.
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There is continuing ambiguity and disagreement between the agencies about certain
aspects of the T&A Guidance. Both DEP and EPA agree that meaningful dialogue is
crucial in evaluating whether sources which initially appear to meet the criteria for
listing as SVs actually do satisfy the criteria upon closer examination. Sources may
not meet the threshold criteria for listing at the time of discussion between the
agencies for any number of reasons, including a prompt return to compliance which
obviates further management by either agency, an initial error about the kind or
magnitude of a source's emissions, or a different judgment about the about the
applicability of subjective criteria in the T&A Guidance defining SVs.
In practice, DEP and EPA differ on what should be considered an SV, when it
should appear on EPA's list, and the value of the process itself. For many years,
EPA accepted DEP's resistance to routinely listing SVs because the very broad
definition of SVs results in reporting and listing violations which are not serious
enough to warrant national tracking and management.
Placing facilities on the SV list is a complicated matter, requiring dialogue and
judgment.
What proportion of violations were paperwork violations vs. actual pollution with potential
health and/or environmental impacts?
We don't know. The IG did not audit the program at this level, and we did not
obtain sufficient information to reach a conclusion on this question.
Did DEP handle the violations effectively? Is there any indication that EPA would have
handled these violations differently than DEP did? Did these differences have any material
impact on the effectiveness of EPA's oversight function?
Based on the information we obtained, it was very difficult to identify whether
Pennsylvania's enforcement efforts are better or worse than in the past. DEP does
not prepare closure documents to track what happened with violators, as EPA does.
There is also a lack of clarity among field staff about when to issue NOVs, how to
deal with significant violators and about the T&A policy, generally. DEP should
develop and implement a consistent policy for the issuance of NOVs to major
sources.
The IG Report does not document a definitive problem with enforcement by
Pennsylvania, and no other external evidence gathered by the Workgroup (i.e., the
mid-year reviews, EPA's overfiling or assumption of enforcement lead activity)
supports the view that air enforcement effectiveness in Pennsylvania has actually
declined. There is also no evidence that EPA would have handled these violations
differently. In addition, it is not clear if penalties are consistent with T&A, but any
inadequacies are not documented by the IG.
The IG Report's format emphasizes selective conclusions, not all of which are
supported in the analysis in the report. In particular, the report makes
generalizations about the effectiveness of the state air enforcement program based on
a narrow group of cases. It is not clear from the report whether its authors obtained
sufficient'data from the cases which they did examine to support their conclusions.
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Moreover, the limited enforcement data obtained by the IG is given disproportionate
prominence in a report which is primarily directed at examining reporting practices
by DEP. The report's enforcement conclusions may unfairly alarm Pennsylvanians,
who may now fear that the entire air regulatory program is broken and fails to
protect them. In fact, the report provides insufficient information to draw any
conclusions about the adequacy of the current state enforcement program.
• What is the status of and compliance schedule for significant violators identified by DEP or
EPA in Pennsylvania?
While we obtained a significant amount of information on the significant violators
identified in Pennsylvania, much of the information was obtained too late in our
review to allow us to reach any conclusions. DEP does not prepare closure
documents to record what happened with violators and accordingly had to assemble
a paper trail on the 64 facilities identified in the IG report in order to document
progress made at those sites. EPA also apparently had problems generating the
necessary information, and was unable to respond in time for us to review it.
• Has decentralization of DEP made it more difficult for EPA to get information on significant
violators?
Yes. Decentralization and other factors have combined to decrease DEP's
responsiveness to EPA reporting requirements. For some time, although DEP air
program staff had objected to reporting requirements which they felt were
counterproductive, DEP's Central Office staff did make attempts to satisfy EPA's
desire for information on SVs. However, DEP's 1991 decentralization to more
autonomous regional offices, combined a few years later with a new administration
with a different philosophical approach to environmental protection led to a
deteriorating relationship between DEP and EPA. Reporting problems associated
with the regional offices have also been alleged to occur in programs other than the
air program.
• How can communication between DEP and EPA be improved so that this kind of controversy
doesn 't occur again?
Regular discussion is one of the most critical components of the DEP/EPA
relationship. Getting effective communication back on track should allow issues to
be resolved as they arise. A regular, centralized reporting role is critical to the
monthly dialogue and will also enhance regional consistency in enforcement.
Recommendations
For the sake of air quality in Pennsylvania, DEP and EPA must work together. The manner in
which the Preliminary Draft Report of Audit of Pennsylvania's Air Enforcement Data was
released is indicative of and contributed to a deteriorating relationship between DEP and EPA.
Regardless of how the information was distributed, some of the problems identified in the audit
report require resolution.
Reporting: We offer the following actions as a means to address the reporting issue, which
underlies the other problems identified in the report. We recommend that DEP and EPA use a
mediator to resolve these differences, and the CAC and Workgroup offer to provide members to
serve as mediators in negotiating the details of implementation.
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1) Although DEP has begun to re-centralize the reporting function at EPA's request, the
effort needs to go further in order for it to work well. Monthly conferences between
EPA and Bureau of Air Quality Central Office with appropriate regional office
participation should be held so that EPA does not have to carry on 8 calls each month
with Pennsylvania regions and counties.
2) DEP should develop and implement a consistent policy for the issuance of NOVs to
major sources to be used by all of its regional offices.
3) Unless DEP and EPA are able to negotiate a change to the T&A Guidance, DEP must
identify all sources which meet the literal definition of SV. If it is not willing to call
them Significant Violators, it should call them "companies with potential to be included
on the SV list" ( or "companies subject to the T&A policy")"
4) DEP should then use a mutually agreed-upon set of criteria to select those sources which
will, be the subject of further discussion with EPA. We suggest the following criteria be
used as a starting point1" :
• Any violation that has produced or appears to have produced a significant
environmental/human health threat, including but not limited to any situation
involving an imminent and substantial endangerment
• Sources causing a "National Ambient Air Quality Standards" (NAAQS)
violation
• Any violation that involves a significant or long-term release of pollutants in
excess of permitted limits
• Inspections/violations targeted for attention to address an identified
regional/national priority
• Any discharge or operation without a permit
• Violations that result in significant economic benefit to the violator, particularly
where the violations are serious, long standing or appear to be willful
• Ongoing violations of state or federal enforcement agreements or orders.
• Continuing or significant failures to monitor or report, where circumstantial
evidence indicates a likelihood of emission/standards violations
5) DEP and EPA will determine at the time of notification or during subsequent T&A
discussion whether a source included on the "companies with potential to be included on
the SV list" should be designated as a Significant Violator Requiring Special
Emphasis13.
6) DEP's ability to draw down the full amount of awarded grant money for FY1997 should
be conditioned on reaching resolution of the significant violator reporting issue by
September 30, 1997, the end of EPA's fiscal year.
11 In 1996, DEP issued NOVs to approximately 225 major sources, which
made those'sources technically subject to the T&A policy, yet reported
only 6 such violators with which it requested EPA's help.
12 The suggested criteria are taken from the draft "Interim Air
Guidance" proposed by EPA Region III to identify those to be classified
as "Special Emphasis Significant Violator". We have made a few changes
to improve the criteria as a screening tool and suggest these as a
starting point for discussion.
13 If the above criteria do not reduce the number from 225 literal SVs
to a lesser number that is manageable from a resource standpoint, then
the criteria need to be revisited jointly by DEP and Region III.
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7) The next EP.A/DEP grant agreement (FY1998) should embody the agreed upon criteria
for determining which SVs require "special emphasis". A centralized reporting role is
critical and should also be incorporated into the next grant agreement. EPA Region III
should work towards having the interim guidance (with changes to the criteria as
negotiated with DEP) adopted.
8) This dialogue-based approach should be explored for use in other programs where
similar communication and coordination breakdowns are apparent.
9) EPA should work with the states and state air organizations to outline refinements to the
AIRS system and to the data entry process that would improve its effectiveness and
usability by all.
Whether or not DEP and EPA accept any or all of our recommendations, the CAC will revisit
this issue in no more than two years in order to determine whether the air enforcement program
is operating effectively. As indicated earlier, we also offer to mediate resolution of the details of
any of the above recommendations.
Inspections: It appears that the IG's criticism of DEP's inspection program may be based on
differing interpretations of the Section 105 grant agreement and the Compliance Monitoring
Strategy. In any case, DEP must determine if certain regions are not performing Level 2
inspections on all facilities and if they are not, take action to ensure that Level 2 inspections
occur.
There is a lack of clarity among field staff as to how to deal with significant violators and the
T&A policy generally. Training and guidance to regional offices should focus more specifically
on these areas.
Enforcement: DEP needs to develop a better method to systematically track violations and
subsequent enforcement activities and compliance results. This will assist in evaluating the
performance and efficiency of compliance and enforcement efforts and will support a reasoned
dialogue regarding the relative merits of DEP's Thoughtful & Thorough enforcement policy vs.
EPA's Timely & Appropriate Guidance.
Both agencies need to continuously assess and refine the respective roles of compliance
assistance and enforcement. This should be accomplished through an ongoing discussion to
maintain the credibility of enforcement and compliance and to provide feedback about how the
two philosophies interact so neither is undermined by or undermines the other.
DEP should prepare closure documents to record how and when a violator was brought into
compliance. This will clarify and validate final decisions.
DEP needs to continue to clarify any internal misunderstandings regarding enforcement policies,
including inspection protocols, issuance of NOVs, the circumstances justifying penalties and the
circumstances to be considered in setting a compliance schedule. This will reaffirm its
commitment to enforcement, increase the dialog among staff on enforcement principles, and
increase the level of consistency of enforcement performance across the regions. In addition.
DEP and EPA need to establish compliance and performance measures of the effectiveness of
compliance assistance: indicators and measures should quickly identify any adverse changes
that mav occur.
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Conclusion
Our review of the issues raised in the IG Report found that they reflect a basic philosophical
difference between the two agencies about which violations at air sources represent such serious
threats to air quality that they warrant application of the prescribed enforcement responses
pursuant to the T&A Guidance. The issues also reflect a profound disagreement about whether
these enforcement responses are effective at any sources, regardless of the seriousness of the
violation. These philosophical differences, in combination with major organizational changes at
DEP (1991), have led to a breakdown in communications between the agencies about identifying
and responding to the sources in violation. However, regardless of any philosophical
differences, the two agencies must work together not only in protecting air quality, but in all
aspects of environmental protection.
Given the timeframe and resource constraints of the Workgroup, we were unable to identify
whether Pennsylvania's enforcement efforts are better or worse than in the past, or whether the
philosophical differences between the agencies have resulted in delayed achievement of
compliance by violators or significant pollution with health and environmental impacts. DEP
must develop a better method to systematically track violations and subsequent compliance
results.
The Workgroup did not review the compliance assistance programs of both agencies nor the
application of penalty forgiveness by DEP, but it is concerned that if industry perceives
government to be less willing to enforce, then incentives for voluntary compliance may be
weakened.
Since we understand that the debate about state/federal partnerships extends beyond
Pennsylvania, we hope that our recommendations might serve as a model for other programs and
states where similar communication and coordination issues exist. We are available to discuss
with DEP, EPA and the IG our findings and recommendations.
Approved by the Citizens Advisory Council
February 11, 1997
Brian Hill ^ Gail Rockwood
CAC Chair CAC Vice-Chair
Workgroup Co-chair Workgroup Co-Chair
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OIG EVALUATION
The recommendations in the CAC report are similar to those in our draft report.
As a result, we have not changed our original position or recommendations concerning
the reporting of SVs. However, we did make minor revisions to Chapter Three regarding
the number of Level 2 inspections required.
We do not agree with the CAC's recommendation to renegotiate EPA's T&A
policy with Pennsylvania. This would result in an inconsistent application of a national
policy. We believe the CAC's suggestion that PADEP identify all sources which meet
the literal definition of an SV, followed by discussions between EPA and PADEP to
determine those violators that will be formally identified as Significant Violators is a
reasonable approach and meets the intent of our recommendation.
In rebuttal to the CAC's comments that our report makes generalizations about the
effectiveness of the State's air enforcement program based on a narrow group of cases,
we offer the following:
We disagree that the scope of our review was too narrow to substantiate this
finding. Reviewing 270 or 13 percent of the 2,000 facilities in Pennsylvania, is in our
opinion more than a narrow review.
While we agree with the CAC that our report did not evaluate the State's entire
enforcement program, we believe that PADEP's non-reporting of SVs is indicative of
serious deficiencies in the State's air enforcement program. An enforcement program
that is aggressive and effective is largely based on publicizing actions (which begins with
reporting SVs) to deter future violators. Reporting violations puts more pressure On the
violators from EPA and the public.
4 As citizens learn about violators, they may pressure companies to come
into compliance or risk losing customers. The public also may pressure
government to enforce regulations and penalize violators.
4 According to EPA's Five Year Strategic Plan, publication of enforcement
actions deters violations by increasing the regulated community's
awareness of regulations and the consequences of noncompliance.
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In addition, we reported that PADEP did not always perform adequate inspections and
follow-up. After violations are initially identified by inspections, follow-up reviews are
critical to ensure that violators have returned to compliance. Inspection and follow-up
are an integral part of an aggressive enforcement program.
In response to the CAC report, we reexamined the eight inspections we originally
reported as inadequate Level 2 inspections. We agree that one of the inspections did
not need to be a Level 2. We also agree that a stack test is not required as part of a
Level 2 inspection. For these reasons, we revised our report to show that six Level 2
inspections were inadequate instead of the original eight. We also revised our report to
clarify that not all inspections need to be Level 2, only those that the State commits and
schedules as a Level 2.
Finally, we strongly agree with the CAC that the premature release of the OIG
preliminary draft report was inappropriate. We would have much preferred that our
report had been finalized using our normal procedures, which provide an opportunity
for audited parties to comment.
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APPENDIX D - DISTRIBUTION
Headquarters
Office of Inspector General - Headquarters (2410)
Agency Audit Followup Coordinator (3304)
Agency Audit Followup Official (3101)
Assistant Administrator for Enforcement and Compliance Assurance (2201A)
Assistant Administrator for Air & Radiation (6101)
Associate Administrator for Congressional & Legislative Affairs (1301)
Associate Administrator for Communications, Education & Public Affairs (1701)
Associate Administrator for Regional Operations & State/Local Relations (1501)
EPA Library (3404)
EPA Region 3
Regional Administrator (3RAOO)
Director, Air, Radiation & Toxics Division (3ATOO)
Director, Office of External Affairs (3EAOO)
Chief, Grants & Audit Management Branch (3PM70)
Regional Library (3PM52)
Other
Secretary, Department of Environmental Protection
Commonwealth of Pennsylvania
Chair, Citizens Advisory Council
to the Department of Environmental Resources
Vice-Chair, Citizens Advisory Council
to the Department of Environmental Resources
Office of Inspector General — Divisional Offices
General Accounting Office
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