United States
Environmental Protection
Agency
EPA-350-R-96-005
February 1997
4»EPA Office of the
Inspector General
Report to Congress
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IG
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Fiscal 1996
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Office of Inspector General
The Inspector General Act of 1978, as amended, created Offices of
Inspector General (OIG) to consolidate existing investigative and audit
resources in independent organizations headed by Inspectors General.
For fiscal 1996, the EPA OIG received $40 million (including about
$4.5 million in Agency support costs) and a funded staffing level of
388 full-time equivalent positions. The Inspector General (IG) is
appointed by, and can be removed only by, the President. The
mission of the OIG, as stated in the IG Act, is to:
• Conduct and supervise independent and objective audits and
investigations relating to agency programs and operations.
• Promote economy, effectiveness, and efficiency in EPA.
• Prevent and detect fraud, waste, and abuse in agency
programs.
• Review and make recommendations regarding existing and
proposed legislation and regulations relating to agency
programs and operations.
• Keep the agency head and the Congress fully and currently
informed of problems in agency programs.
To ensure objectivity, the IG Act provides the IGs:
• Independence to determine what reviews to perform.
• Access to all information necessary for the reviews.
• Authority to publish findings and recommendations.
Who's Who
Inspector General
Nikki L. Tinsley (Acting)
Deputy Inspector General
Nikki L. Tinsley
Office of Audit
Kenneth A. Konz
Assistant IG
James O. Rauch
Principal Deputy
Elissa R. Karpf
Deputy for External Audits
Michael D. Simmons
Deputy for Internal Audits
Office of Management
John C. Jones
Assistant IG
Kenneth D. Hockman
Policy & Resources Mgmt
Office of Investigations
Allen P. Fallin
Assistant IG
Emmett D. Dashiell, Jr.
Deputy Assistant IG
John T. Walsh
Program Management Division
Asa R. Frost
Information Resources Management Division
Michael J. Binder
Budget & Reports Staff
Robert F. Eagen
Engineering & Scientific Assistance
Patricia H. Hill
AOP Audits and Assistance
Divisional Inspectors General are listed on the back page.
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/as of Significant DIG Concern
Financial Management
The OIG has reported in several audits that EPA's accounting
systems do not provide complete, consistent, reliable, and timely
data. Although the Agency has made a number of significant
improvements in financial management, additional actions are needed
to ensure that EPA has trained staff, policies, procedures, and
systems to carry out these responsibilities effectively.
Management of Extramural Resources
EPA relies extensively.on contractors and others to assist in cleaning
up pollution, setting the environmental agenda for the future, and
providing goods and services. While we commend and support the
Agency's initiatives, management problems continue in this area.
We proposed grants administration as a material weakness candidate
for fiscal 1996.
Superfund
For three Superfund sites examined, the prolonged time spent
studying sites and designing remedies continues to result in higher
cleanup costs and ongoing risks to public health and the
environment. We are also concerned with inadequate oversight of
interagency agreements resulting in cost overruns and inefficient
cleanup implementation. Further, improvement is needed in
evaluating the quality of laboratory data used for making public
health risk assessments, developing alternatives, and designing
remedies for potentially responsible party and Federal facility cleanup.
Air Programs
The majority of published emission factors, used to estimate
emissions from a source when more reliable emissions data are not
available, were rated low for reliability and many had not been
updated since 1988. EPA's use of industry partnerships to assist in
the development of emission factors increased the risk that non-
representative or inaccurate factors would be developed.
Accordingly, we nominated emissions factor development as a
material weakness candidate for fiscal 1996. Also, state
enforcement programs have a limited deterrent effect because they
are not well-publicized and often do not assess the economic benefit
of violations.
Information Resources Management (IRM)
EPA's IRM program is critical to the success of all program activities.
The Agency's IRM program has been hampered by serious problems
for years. In 1996, we reported that the Year 2000 problem could
cause failure of major EPA systems because computers store years
in two-digit numeric fields, and the "00" entry could result in
incorrect computations. Although the Office of Information
Resources Management (OIRM) has raised Agency awareness of data
processing problems associated with the Year 2000 problem, OIRM
needs to accelerate its actions to reduce the imminent threat of
major systems failure.
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Profile of Activities and Results
Fiscal 1996
(dollars in millions)
Audit Operations
• Questioned Costs (Ineligible, Unsupported, and
Unnecessary/Unreasonable)
-Total' $291.4
- Federal Share $209.1
• Recommended Efficiencies
(Funds be Put to Better Use)
Total' $62.2
- Federal Share $ 62.2
• Costs Disallowed to be Recovered
- Federal Share $ 59.1
(costs which EPA management
agrees are unallowable and
is committed to recover or
offset against future payments)
• Costs Disallowed as Cost Efficiency
- Federal Share $20.0
(funds made available by EPA
management's commitment to
implement OIG recommendations)
• Recoveries from Audit $48.9
Resolutions of Current and Prior
Periods (cash collections or offsets
to future payments) * *
• Total Reports Issued by OIG 498
Investigative Operations
• Fines and Recoveries (including civil) $5.6
• Investigations Opened 116
• Investigations Closed 142
• Indictments of Persons or Firms 11
• Convictions of Persons or Firms 11
• Administrative Actions Taken Against
EPA Employees 23
• Civil Judgements 6
Fraud Detection and Prevention Operations
• Debarments, Suspensions, and
Compliance Agreements 17
(actions to deny persons or firms from
participating in EPA activities
because of misconduct or poor
performance)
• Hotline Cases Opened 21
• Hotline Cases Processed and Closed 30
• Legislative and Regulatory Items Reviewed 83
• Personnel Security Investigations Adjudicated 602
* Questioned Costs and Recommended Efficiencies are subject to
change in the audit resolution process.
• * Information on recoveries is provided by the EPA Financial
Management Division and is unaudited.
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idit Activities
During this fiscal year, our audit efforts resulted in more than $60
million in recommended efficiencies, nearly $300 million in
questioned costs, and approximately $50 million in Agency
recoveries from audit resolutions. The following represents some of
our most significant findings which resulted from the 498 reports
issued by the OIG.
Inadequate Oversight of Drinking Water Programs Puts
Children at Risk
Region 3 did not require states to provide information about their
lead and copper monitoring of small public water systems (PWS)
delaying enforcement actions for removal of excessive lead from
drinking water consumed by children and infants. In total, 40
percent of the small schools and day care centers we reviewed did
not comply with various aspects of the Lead and Copper Rule (LCR)
of the Safe Drinking Water Act, yet the states did not inform EPA
until almost two years later. The Agency also could not evaluate
whether PWSs were reducing lead in their drinking water. One
school provided more than 500 children, teachers, and others with
drinking water that had more than four times the lead allowed by the
LCR. States also did not inform EPA that several PWSs had
excessive copper in drinking water. Further, there were several
adverse conditions that EPA should have addressed during its
reviews of state drinking water programs. The Agency generally
agreed to take appropriate actions to resolve the audit issues.
However, Region 3 did not agree that states were required to provide
information concerning small PWSs.
Establishment of Supercomputing Center Violated Laws and
Potentially Wasted Millions
EPA circumvented the General Services Administration (GSA),
violated several laws, and acted without legislative authority by using
a contractor to acquire a building for the National Environmental
Supercomputing Center (NESC) independent of GSA for an additional
$3.8 million over the five-year lease. The Agency pre-selected a
supercomputer site which was twice as large as needed, and
manipulated the procurement process to have its contractor lease the
building which required significant renovation. In effect, the Agency
gave government property to the developer by approving permanent
improvements to the NESC building as part of lease costs charged to
the contract. EPA also exceeded its authority and violated Federal
law by obligating the government to reimburse its contractor $3.7
million for a lease that ran four and one-half years longer than the
Agency's available appropriation. EPA's administration of the NESC
subcontract further violated Federal laws and regulations, and
documentation of significant decisions and activities related to the
establishment of the NESC was not preserved to protect the interests
of the government. The Agency disputed many of the findings but
agreed to implement the majority of recommendations.
Major Delays in Super-fund Cleanups Increased Costs and
Potential Health Risks
Despite identification between 12 and 15 years ago, the three
Superfund sites we reviewed were still not cleaned up. The
prolonged time spent studying sites and designing remedies resulted
in higher cleanup costs and continued risks to public health and the
environment. First, the Whitmoyer Laboratories site in Pennsylvania
entered the Superfund cleanup pipeline in 1984, but is still without
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completed actions. In 1988, an on-site vault containing
pounds of hazardous waste targeted for removal at a
million, was not removed and the vault cleanup is being handled by
the remedial program at an estimated cost of $18 million. Second,
the Wasatch Chemical site in Utah was discovered in 1980, but is
not yet fully cleaned up. In 1985, EPA proposed further
investigation and possible removal of an evaporation pond suspected
of contaminating ground water, but neither occurred. For the next
ten years, EPA conducted enforcement negotiations and two removal
actions, completed site studies, and began the remedial action. In
1994, EPA began cleanup using innovative technology .at nearly
twice the original estimated $3.3 million cost. TJiird, the Southern
Maryland Wood Treating site was discovered in 1981, and although
$30 million has been spent on removal and remedial actions, the site
still is not cleaned up. The Agency was not required to respond to
our report since the case studies were designed to "support a long-
range audit plan.
Over $100 Million in Government Property, Including
Vehicles, Improperly Provided to Contractors
EPA has acquired hundreds of passenger vehicles in violation of
statutory restrictions. In February 1996, the Agency reported
$138.3 million in government property held by contractors, despite
regulations requiring contractors to furnish all necessary property.
Included in the property are EPA-owned vehicles, buses, and vans
leased from the General Services Administration for the Agency's
shuttle bus service, and scientific equipment used at EPA
laboratories. The Office of Acquisition Management acknowledged
that it has become Agency-wide routine practice to provide property
(including vehicles) to contractors even though prohibited by the
Federal Acquisition Regulation (FAR). In addition, EPA has incurred
expenses for over ten years by maintaining property inventories
despite a FAR provision specifying that the contractor's property
control records are sufficient. The Agency generally agree'd with our
recommendations and committed to issuing a policy to clarify
circumstances in which EPA may furnish property to contractors.
State LUST Programs Need to Focus on Most Hazardous Sites
Despite states' progress cleaning up Leaking Underground Storage
Tanks (LUST), enforcement and oversight of corrective action to
protect human health and the environment was not adequate at 126
of the 249 high risk sites reviewed, including those with petroleum-
cohtaminated ground water. Most states had procedures focusing
corrective action on high risk sites, but did not always follow them.
For example, one state was aware of a leaking underground tank but
took no action for 12 years, and then discovered that the site was
near a public water supply and posed a significant threat. Another
state did not identify some sites that were the most environmentally
threatening to ground water. In addition, there were major
differences in results among state cost recovery programs. Of the
states reviewed, two recovered significant amounts from owners
and operators, three achieved partial recoveries, and two did not
have cost recovery programs. Also, state activity reports were
generally unreliable and usually overstated program results, including
one state that overstated cleanups by 47 percent. The Agency
generally disagreed with our findings, but agreed with the
recommendations or presented alternative actions to meet their
intent.
Air Program Goals Impaired by Limited Emission Factor
Development
The Agency increased emission factors (used to estimate a source's
air pollutant emissions when more reliable data are not available) for
stationary and area sources from 2,073 in 1985 to over 16,000 in
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owever, 7,840 factors were not rated, the vast majority
published, and 4,865 published factors were rated below
average or poor for reliability, thereby reducing the effectiveness of
government and industry efforts to control air pollution. Further, EPA
had not published emission factors for specific activities in the wood
products, food processing, agricultural related, and chemical
processes industries. Significant funding reductions to the emission
factor development program materially affected EPA's ability to meet
the increased demand for quality emission factors, and the majority
of states did not use the funds EPA allocated for factor development
because Agency grant guidance was not timely or specific enough to
implement thfc program. In addition, EPA initiated partnerships with
industries to obtain assistance in emission factor development even
though biased or unrepresentative emission factors may be
developed because industries have a financial motive to use emission
factors that produce low emission estimates to avoid obtaining a
permit or to pay lower annual fees. The Agency concluded that
weaknesses in their emission factor development program did not
represent a material weakness in the FMFIA process, but agreed to
improve the program.
EPA Needs More Reliable Budgeting and Accounting
A pattern of errors in EPA's budgeting and accounting practices for
personnel resources made financial management information
unreliable for ensuring compliance with congressional intent.
Outdated workload models were used to allocate personnel resources
resulting in regions not receiving resources where they planned to
use them. However, the regions did not reprogram the reallocation
of personnel costs and they were inaccurately accumulated and
reported. Thus, significant errors existed in two (of five regions
reviewed) regions' charging of personnel costs used to develop
subsequent program budgets. EPA's budget was not consistently
executed in the regions the way it was requested by Headquarters
and appropriated by Congress. Therefore, many reprogrammings
were required to try to reconcile the differences. The Agency's ad
hoc creation of program elements over time reduced the consistency
and comparability of budget and financial data for internal
management purposes. The current budget structure cannot
efficiently capture the information required to implement the
Government Performance and Results Act because the activities do
not always align with existing program elements. The Agency
agreed with most recommendations and has taken action to correct
some of the problems.
Inadequate Management of Contractors Led to Ineffective
and Costly Programs
Ineffective planning and inadequate oversight of a major contractor's
performance resulted in some of the products and services procured
being untimely and/or of questionable value. The Green Lights
program was more costly than necessary because EPA authorized the
contractor to perform questionable work without analyzing its
benefit or necessity. Also, one of the measures of the program was
misleading because the Agency emphasized the number and
prominence of its participants while omitting that many had made
little or no progress. EPA did not adequately plan individual projects
under the Indoor Air Quality program resulting in unnecessary delays,
modifications, and increased costs. Three of the projects continued
for as many as six years, over several contract periods, exceeding
the original budgets by more than $1 million. In addition, the
administrative costs to promote EPA's Local Government
Reimbursement program were unreasonable in relation to the low
response. During fiscal 1995, the Agency reimbursed approximately
$95,000 to four local governments, yet paid over $300,000 for
contracts to administer the program. The Agency disagreed with
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some specific issues, but agreed with most of the recomme
and has taken many actions to improve the Green Lights p'A
Improvements Needed in EPA and State Air Enforcement
Programs
Although Regions 5 and 6 and the states we reviewed had effective
aspects of their air enforcement programs, penalties often lacked an
economic benefit component, enforcement actions were seldom
publicized, and air enforcement data were incomplete, inconsistent,
and untimely. Region 5 and Michigan assessed the economic benefit
violators gained from noncompliance with air pollution regulations
when assessing fines, but Indiana, Illinois, Wisconsin, Texas, and
Louisiana usually did not. Penalties lacking an economic benefit
component are not effective, since it may be less expensive to
violate the law than to comply with it. Regions 5 and 6 and the
states reviewed did not adequately publish the results of
enforcement actions resulting-in companies having less incentive to
achieve or maintain compliance with regulations without the pressure
of public opinion generated by publicity. Region 5 had conducted
some compliance assistance activities but had not developed a core
program infrastructure of clear direction, priorities, or performance
measures, and was unable to communicate a consistent compliance
assistance approach. Region 6 worked with states to develop and
maintain active compliance assistance programs, but did not
complete timely enforcement actions against violators. The Agency
agreed with our findings and recommendations.
Hazardous Waste Risks Reduced, but Inadequate Oversight
Resulted in Cost Overruns and Inefficient Cleanup
Region 8 responded to the Summitville, CO, Superfund site
emergency by reducing hazardous waste risks. However, the Region
did not adequately oversee Interagency Agreements (IAG) with the
Department of Interior's Bureau of Reclamation (Reclamation)
resulting in seven cost overruns totaling nearly $7.3 million and an
inefficient cleanup. The Region did not enforce IAG terms and
conditions requiring Reclamation to submit current monthly progress
and cost reports. Payment requests were routinely approved without
reviewing required supporting documentation. In addition, the
Agency did not ensure that Reclamation used contracting methods
which would keep cleanup costs down, and created an unnecessary
layer of general and administrative expenses, and profit, by allowing
Reclamation's contractor to procure subcontractors for cleanup. The
Agency also created a new contract vulnerability by permitting
Reclamation to award both a fixed-price construction contract and a
related site-support time-and-materials delivery order to the same
contractor thereby providing an opportunity to avoid losses and/or
maximize profits by mischarging costs. The Agency issued new
guidance to improve IAG oversight and was preparing a workplan to
address the recommendations.
FACA Committees' Costs Nearly Doubled Since 1993
EPA's cost to operate Federal Advispry Committee Act (FACA)
committees has increased from $4.9 million for 31 committees in
1993 to over $9 million for 22 committees in 1995. The number of
Agency personnel involved in FACA committee operations has grown
from 38 staff at a cost of $2.2 million in fiscal 1993, to 65 staff at
a cost of $3.6 million in fiscal 1995. EPA's decentralized operations
appeared to contribute to a duplication of similar administrative
functions resulting in the involvement of more and higher paid
personnel than necessary. Although a central Agency office
administers FACA and consolidates cost data, it has no control over
individual FACA committee funds, costs, or priorities since each
program office funds the FACA committees it establishes. The
Agency agreed to review FACA administration functions.
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Million Questioned on San Francisco Projects
rded nine construction grants totaling $414,711,579 for the
design and construction of wastewater treatment facilities for the
Southwest Ocean Outfall Project, the Southeast Water Pollution
Control Plant, the Oceanside Water Pollution Control Plant, and
Bayside pump stations, force mains, and outfall consolidation
projects. The City and County of San Francisco claimed $19.9
million of ineligible architectural engineering costs and other project
costs allocable to other Federal facilities, and costs outside the scope
of the approved project. We also questioned as unreasonable
$164,198,771 of project costs related to underused facilities.
Although the Southwest Ocean Outfall Project and the Oceanside
Water Pollution Control Plant were designed with a 450 million
gallons per day capacity, only five percent of the capacity was being
used. In another audit, we found the City and County of San
Francisco also claimed $2,812,732 of ineligible costs from EPA
grants for wastewater treatment facilities.
Over $18 Million Questioned on WSSC Claims
EPA awarded two construction grants totaling $45,053,170 to the
Washington Suburban Sanitary Commission (WSSC) for the
construction of modifications to an existing facility to provide an
advanced wastewater treatment plant, and additions to the Western
Branch wastewater treatment plant for additional solids and liquid
handling facilities. WSSC claimed $7,481,336 of ineligible
construction, engineering, and administrative costs. We also
questioned as unsupported $8,897, 656 of construction change
orders that had not received an eligibility determination, delay costs
that could not be verified, and miscellaneous costs for which the
grantee could not provide documentation. Additionally, we
questioned $1,826,158 as unreasonable costs related to facility
segments and equipment that had been abandoned.
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Investigative Activities
During this fiscal year, our investigative efforts resulted in 11
indictments, 11 convictions, and $5.6 million of fines and recoveries
from persons or firms who defrauded the Agency.
Former California Lab Manager and Director Sentenced
Eureka Laboratories, Inc. (Eureka), of Sacramento, California, was
sentenced in December 1995 to 60 months probation, fined $1.5
million, and ordered to pay restitution of $322,422. Kuen Lee, a
former Eureka laboratory manager, was sentenced in December 1995
to 5 months incarceration followed by 36 months probation and 250
hours of community service. Chung Li, former Eureka Director of
Laboratory Services, was sentenced in November 1995 to 24 months
incarceration followed by 36 months probation and 250 hours of
community service. The defendants conspired to falsify analytical
test results and calibration of laboratory equipment compromising the
accuracy and reliability of the test results vital to the successful
identification of hazardous substances and the remediation of
hazardous waste sites. Eureka is an analytical services laboratory
contracted by several government agencies to test water, soil, and
air samples for pollutants and toxins. The case was investigated by
the EPA DIG, the U.S. Army Criminal Investigation Command, the
U.S. Air Force Office of Special Investigations, and'the California
Environmental Protection Agency.
Florida Export Company and Official Sentenced
Marman USA, Inc. (Marman), a Florida pesticide export company,
and its vice-president, Robert T. Renes, were sentenced in July 1996
after each pleaded guilty to forging a government seal. The
corporation was sentenced to two years probation and fined
$350,000. Renes was sentenced to three years probation and fined
$150,000. Marman falsified documentation included in a package
submitted for a pesticide product registration in Ecuador, along with
notarized documents signed by EPA employees under the official seal
of EPA. The case was investigated by the EPA DIG with the
assistance of the EPA Criminal Investigations Division and the U.S.
Customs Service.
Former Employee Sentenced in AM EX Scam
Jean Safford, a former EPA secretary, was sentenced in December
1995 to 24 months in prison to be followed by three years
probation, fined $120,000, and ordered to pay restitution of $7,200.
Stafford pleaded guilty in August 1995 after an investigation
disclosed a scheme to use at least eight fraudulently obtained
American Express government credit cards. The case was initiated
based on information that an unknown EPA employee had obtained
an American Express government credit card by using false
identification and charged over $10,000 in goods and services over
a three-week period. The case was investigated jointly by the EPA
OIG, Secret Service, and Postal Inspection Service.
Training Provider Guilty of Selling Certificates
Robert G. Cooley, former owner and operator of I. P.C. Chicago, Inc.,
a business authorized to provide certified asbestos abatement
training, pleaded guilty in July 1996 to mail fraud. In June 1996,
Cooley was charged with defrauding the Illinois Department of Public
Health and EPA by selling training certificates to workers and
contractors without requiring class attendance. These certificates
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ed to obtain the initial and renewal state licenses to work on
state- and federally-funded projects, including asbestos
abatement projects in public schools. Depending on the course,
Cooley charged $75 to $550 for the training certificates. The
investigation was conducted jointly by the EPA DIG, the FBI, the
General Services Administration DIG, and the EPA Criminal
Investigations Division.
Corporate President Pleads Guilty to Conspiracy
Robert Feller, president of Non Hazardous Incineration (NHI), a non-
hazardous waste broker in New Jersey, pleaded guilty to conspiracy
to create and distribute a phony EPA approval letter in April 1996.
Feller knew that one of NHI's major clients produced transdermal
nicotine patches and attempted to persuade several people at EPA to
reclassify the patches as non-hazardous waste. When EPA refused
Feller's request, he conspired to create and distribute a phony EPA
letter stating that transdermal nicotine patches were not classified as
hazardous waste. The case was investigated by the EPA DIG.
Illinois Businessmen Charged with Conspiracy
William Foss, president of Loyalty Environmental, Inc. (Loyalty), of
Skokie, Illinois, a private company engaged primarily in asbestos
abatement, was indicted in May 1996 for conspiracy and making
false statements. Also charged were Mark Zander, a Loyalty
estimator and salesman; Michael Cahill, an estimator and salesman
employed by Eau Claire Mechanical Insulation of Orland Park, Illinois;
and David Shewmake, an insurance agent from Crestwood, Illinois.
In March 1991, the Chicago Board of Education accepted Loyalty's
bid of $1,290,132 for asbestos abatement at Kennedy High School,
but the bid package did not include a bid bond. A second round of
bids were accepted on the same job in May 1991, including one from
Loyalty of $1,444,015. The indictment charged that Shewmake
obtained a power of attorney form reflecting authorization of a bid
bond on behalf of Indiana "Lumberman's" Mutual Insurance Company
and an embossing device bearing the name of the company from a
local printer. It further charged that Zander signed the fraudulent
document as an authorized representative of the insurance company
with a fictitious name along with William Foss. The investigation
was conducted by the EPA DIG.
EPA Contractor Employee Indicted for Soliciting Kickback
Keith McCullough, a contractor employee in Region 3, was indicted
in September 1996 for allegedly soliciting a kickback related to a
government contract. According to the indictment, McCullough
entered into an agreement with Cabletron Systems, Inc., of
Rochester, New Hampshire, for a ten percent kickback on the value
of a Local Area Network contract that he would facilitate awarding
to Cabletron. McCullough was an employee of Management
Technology, Inc., which was contracted by the General Services
Administration to run the computer room in Region 3. The
investigation was conducted jointly by the EPA DIG and the FBI.
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Fraud Prevention Activities
Suspension and Debarment Activities
EPA's policy is to do business only with contractors and assistance
recipients who are honest and responsible. EPA enforces this policy
by suspending or debarring contractors, assistance recipients, or
individuals within those organizations, from further contracts or
assistance for acting improperly, having a history of substandard
work, or willfully failing to perform on EPA- or other federally-funded
activities. Both procurement and nonprocurement debarments or
suspensions by one agency are effective in all agencies.
In fiscal 1996, 17 debarment, suspension, or compliance agreement
actions were taken, based on the work of the DIG, including the
following:
• EPA debarred Keith L. Westbrook in November 1995 for three
years. Westbrook had pleaded guilty to felony theft charges
as a conspirator in a $1.2 million embezzlement of funds used
to construct sewage treatment plants and other water quality
improvements in Maryland.
• In March 1996, EPA suspended Khemsafe Environmental, Inc.,
and its president, Inno Obiorah, after a multi-count indictment
involving larceny, fraud, and falsifying business records.
Many of the offenses occurred in conjunction with asbestos
removal in schools.
• In June 1996, EPA debarred Scott R. Rippey, a Commissioned
Officer of the U.S. Public Health Service, and William
Burkhardt, a Food and Drug Administration employee, for
knowingly filing false confidential statements of employment
and financial interest. Both failed to disclose their ownership
and employment interest in Biosearch Limited, New England
Scientific, and Biological Analytical Laboratories (BAD. EPA
contracted with BAL on the Narragansett Bay project.
• EPA suspended Pauline M. Ewald, President, Environmental
Compliance Organization (ECO) in November 1995. In its
proposals to obtain contacts from the recipients of Superfund
Technical Assistance Grants, ECO submitted false resumes
by misrepresenting degrees and professional certifications,
including those for people not employed by ECO.
Personnel Security Program
The Personnel Security Program is one of the Agency's first lines of
defense against fraud, using background investigations to review the
integrity of EPA employees and contractors. During fiscal 1996, the
OIG reviewed and adjudicated 602 investigations. Based on the,
OIG's activities, the Agency took appropriate actions, including
terminations and reprimands for falsification or omission on SF- 171s
or security questionnaires.
Hotline Activities
The OIG Hotline opened 21 new cases and completed and closed 30
cases during fiscal 1996. Of the 30 cases closed, 9 resulted in
environmental, prosecutive, or administrative corrective action.
Cases that did not have immediate validity due to insufficient
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may be used to identify trends or patterns of potentially
vulnewrole areas for future reviews.
i The following are examples of corrective action resulting from calls
to the OIG Hotline:
• A complainant alleged time and attendance abuse and
falsification of timekeeping documents by a regional
employee. The allegations were substantiated and the
timekeeper was suspended and given a written reprimand.
• A complainant alleged misuse of government resources by
a senior Headquarters official. A review disclosed that the
official had conducted personal business on government
time using government resources. The official received an
oral reprimand.
• A complainant alleged that a regional manager frequently
engaged in inappropriate speech and behavior. The
allegations were substantiated and the manager was
directed to attend training on cultural diversity and sexual
harassment.
OIG Streamlining and Management Improvement
The OIG continued to improve its efficiency and value to the Agency
through organizational streamlining, strategic planning, and
technology. To meet Government Performance and Results Act
requirements, a team of Office of Audit, Office of Investigations, and
Office of Management staff developed an OIG Strategic Plan that will
guide our future audit and investigative activities. All three offices
were preparing or enhancing performance measures, and the OIG
also worked on customer service plans that will identify who our
customers are, how often we will survey them, what we will ask,
and how we will use responses to improve operations.
The OIG streamlined OIG Manual Chapters, bulletins, and guidance
to eliminate one-half of internal regulations as required by executive
order. In addition, OIG offices participated in developing a new OIG
management information system that will consolidate and enhance
the usefulness of information on the multiple systems in use. Our
system plan, which is being developed by a GSA contractor and
includes input from both Headquarters and field office staff, specifies
our system needs, computer equipment, software,
telecommunications requirements, cost estimates, and schedules.
We also reviewed workload to determine long-range staffing needs
which will form the basis for the OIG position management plan that
will allocate resources among offices and locations.
• The OIG participated as a full partner in implementing EPA's National
Environmental Performance Partnership System (NEPPS) to ensure
success of the program. .We participated in Agency workgroups to
rewrite Federal regulations that affect performance partnership grants
and OIG divisional staff worked directly with regional staff on
NEPPS issues. We also reviewed two demonstration grants to
identify lessons learned from these early endeavors. In addition, OIG
staff participated as panel members at EPA's 'National Grants
Management Conference and All States Conference, and gave
presentations at the Assistance Agreement Project Officer Training
courses sponsored by the Agency's program offices.
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Divisional Inspectors General
Audit
Headquarters
Regions 1 & 2
Region 3
Headquarters Audit Division
Edward Gekosky
Financial Audit Division
Melissa M. Heist
Washington Contract
Division
Gordon C. Milbourn III
Eastern Audit Division
Paul D. McKechnie
Mid-Atlantic Audit Division
Carl A. Jannetti
Region 4 & RTP Southern Audit Division
Mary M. Boyer
Region 5
Northern Audit Division
Anthony C. Carrollo
Regions 6, 7 & 8 Central Audit Division
Bennie S. Salem
Regions 9 & 10
Western Audit Division
Truman R. Beeler
Investigations
(703) 308-8222
(202)260-1479
(703) 308-8224
(617) 565-3160
(215) 566-5800
(404) 562-9830
(312) 353-2486
(913) 551-7878
(415) 744-2445
Headquarters
Regions 1, 2 & 3
Regions 4, 5, 6
&7
Regions 8, 9
& 10
Washington Field Division (703) 308-8282
David Sermos
Eastern Investigations
Division
Thomas L. Papineau
Central Investigations
Division
Ailverdes Cornelious
Western Investigations
Division
Mark Vallerga
(617)565-3928
(312)353-2507
(206)553-1273
If you are aware of any fraud, waste, or mismanagement, please
contact the EPA Inspector General Hotline or the appropriate
Divisional Inspector General. Information is confidential. The Hotline
may be reached at (202) 260-4977.
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GET A HOLD
ON SPENDING
REPORT FRAUD, WASTE, OR ABUSE TO THE
INSPECTOR GENERAL
HOTLINE
• INFORMATION IS CONFIDENTIAL
202-260-4977
US. ENVMONMBfTAL mOTECtlON AGENCY • OFFICE OP THE DiSrECTO* GENERAL • 4*1 M STREET S.W. WASHINGTON, D.C. IMM
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