United States Office of the Inspector General September 1992
Environmental Protection 401 M Street, S.W. (A-109)
Agency Washington, D.C. 20460
EPA's Office of the
Inspector General
Annual
Superfund Report
to the Congress
for Fiscal 1991
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ANNUAL
SUPERFUND REPORT
TO THE CONGRESS
FOR FISCAL 1991
September 1992
Required by
Section 111 (k) of the
Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (CERCLA),
as amended by the Superfund Amendments and
Reauthorization Act of 1986 (SARA)
OFFICE OF THE INSPECTOR GENERAL
U.S. ENVIRONMENTAL PROTECTION AGENCY
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991
FOREWORD
This report covers fiscal 1991 activities, and is our fifth Annual Superfund
Report to the Congress. The Superfund Amendments and Reauthorization Act
of 1986 (SARA) requires the Office of the Inspector General (OIG) to audit the
Superfund program annually and to report to Congress annually on these audits.
The beginning of the Superfund program created new and unique cost
accounting requirements. EPA has responded to these new requirements over
the years by significantly improving its accounting and documentation of
Superfund costs on a site-specific basis. However, in its fiscal 1991 Federal
Managers' Financial Integrity Act (FMFIA) report, EPA listed five material
noncomformances in its accounting system, the Integrated Financial
Management System (IFMS). The three highest priority noncomformances
were also reflected in our fiscal 1991 Trust Fund audit report. -Two of these
were the lack of centralized capability to record, bill and write-off accounts
receivable, and inadequate reconciliation to external Treasury Department
reports. Our Trust Fund audit found that accounts receivable and collections
were often not recorded timely, and the report aging accounts receivable EPA
generated for the Treasury Department was not accurate or reliable. A third
nonconformance was inadequate reconciliation between the Personal Property
Accountability System (PPAS) and IFMS. We found accountable property items
recorded as disbursements in IFMS were often not recorded in PPAS at year
end, or were recorded inaccurately.
SARA requires the EPA Administrator to submit to Congress an annual
Superfund progress report each January 1 covering activities during the prior
fiscal year. EPA submitted its third such report, due January 1, 1991, on
February 25, 1992. SARA requires the OIG to review that report for
reasonableness and accuracy. SARA also requires that the Agency report
include our report. Our review of the Agency's report found that information in
the report for the most part was reasonable and accurate. However, we noted
a continued problem with Comprehensive Environmental Response,
Compensation, and Liability Information System (CERCLIS) data integrity. We
also issued a separate report on the timeliness of the Agency reports. We
found that failure to emphasize to data providers the need for the data included
in the report, failure of some other Federal agencies to provide data timely, and
lengthy OMB reviews contributed to the lateness of the reports.
SARA requires the OIG to annually review claims to determine if they are
being appropriately and expeditiously considered. In fiscal 1991, EPA paid its
first response claim to a potentially responsible party (PRP) under a mixed
funding agreement. We therefore performed our first annual audit of response
claims. We found significant internal control weaknesses in the commitment
and obligation of funds. EPA had not properly and timely recorded obligations
for any of the ten sites for which it had entered into preauthorization
agreements allowing PRPs to submit response claims. EPA had also failed to
bill PRPs for its remedial and oversight costs at the site for which it paid its first
claim.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 ii
Our reviews of the Agency's performance in managing the Superfund
program also found significant deficiencies. We reviewed EPA's compliance
with the SARA requirement for initiation of 175 new remedial actions (RAs) at
National Priorities List (NPL) sites by October 16, 1989. EPA claimed initiation
of 178 new RAs by that date. We judgmentally selected 42 of these claimed
RA starts to review, and found 28 did not meet the criteria listed in SARA.
EPA Headquarters did not adequately control and document the RA reporting
process. EPA procedures for identifying and defining RAs used different criteria
than those established by SARA. Further, the new RAs did not always address
the most contaminated sites on the NPL, as Congress intended.
We completed our reviews of EPA's oversight of responsible party cleanup
activities under settlement agreements. We found EPA (1) delayed cleanups by
taking between 7 and 36 months to review settlement deliverables, (2) was not
aggressive in assessing stipulated penalties for missing settlement milestone
dates, and (3) did not adequately oversee its enforcement support contractors.
We continued a major investigative effort into the Contract Laboratory
Program (CLP). This complex investigation found fraud committed by a number
of EPA contractors. In fiscal 1991, this effort produced a number of
convictions and settlements of cases. Fines and recoveries amounted to almost
$3.5 million, and one settlement agreement resulted in a cost avoidance of $3
million. Our auditors also reviewed the adequacy of selected EPA operational
controls over the CLP. We found that EPA did not obtain and safeguard all
original CLP documentation which might be useful in litigation, failed to
consistently use important quality assurance measures, and sometimes paid for
unused data or data of limited use.
In addition to reviewing Agency performance, we also take a proactive role
to help EPA management prevent future problems. This includes review of
draft documents and participation in EPA work group meetings. During fiscal
1991, we continued to help an Agency work group on technical assistance
grants to citizens' groups. We also participated in an Agency task force to
review and improve EPA policies and procedures for closeout of grants,
cooperative agreements and interagency agreements, and the deobligation of
unused funds from them.
We are addressing difficulties in providing timely and adequate audit and
investigative coverage of major EPA contracts, many of which support the
Superfund program. We are requesting additional resources to respond timely
to audit requests from Agency contract managers, and to identify contractor
fraud, abuse and mismanagement. We are improving coordination with other
Federal audit organizations responsible for auditing many EPA contractors. For
several major Superfund contractors, we have assumed Federal audit
responsibilities formerly held by others. We are placing auditors at some major
contractors to provide ongoing audit coverage. We intend to audit major EPA
cost-type contracts on a regular schedule to identify problems for correction
during the terms of the contracts.
We began preparing a new long range strategic plan for Superfund audits
and investigations during fiscal 1991, and completed it in fiscal 1992. We will
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 lii
use this plan in developing our annual audit and investigative plans for fiscal
years 1993-96.
We will continue to help Agency management deliver the most effective
and efficient Superfund program through a comprehensive program of audits,
investigations and fraud prevention.
^^\
c.
John C. Martin
Inspector General
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991
TABLE OF CONTENTS
PURPOSE 1
BACKGROUND 2
HAZARDOUS SUBSTANCE SUPERFUND 4
RESPONSE CLAIMS 10
COOPERATIVE AGREEMENTS AND GRANTS 14
ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION 14
ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY - FOLLOW-UP 17
BROWARD COUNTY, FLORIDA 19
LOUISIANA DEPARTMENT OF ENVIRONMENTAL QUALITY 20
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL
PROTECTION - MULTI-SITE 21
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL
PROTECTION - P.S.C. RESOURCES 23
NEW HAMPSHIRE DEPARTMENT OF ENVIRONMENTAL SERVICES ... 25
NEW MEXICO HEALTH AND ENVIRONMENT DEPARTMENT 27
NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL
CONSERVATION 28
OKLAHOMA DEPARTMENT OF HEALTH - COMPASS INDUSTRIES SITE 30
OKLAHOMA DEPARTMENT OF HEALTH - SAND SPRINGS SITE 31
RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT . 32
SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL
CONTROL 33
TEXAS WATER COMMISSION 35
WASHINGTON DEPARTMENT OF ECOLOGY - COLBERT LANDFILL
SITE 37
WASHINGTON DEPARTMENT OF ECOLOGY - COMMENCEMENT BAY
SITE 38
WASHINGTON DEPARTMENT OF ECOLOGY - CORE PROGRAM 41
UNIVERSITY OF CINCINNATI - SOIL LEAD DEMONSTRATION GRANT . 42
REGION 1 SUPERFUND COOPERATIVE AGREEMENT DEOBLIGATIONS 43
REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES 45
SOUTHERN MARYLAND WOOD TREATING SITE, HOLLYWOOD,
MARYLAND 45
LOUISIANA-PACIFIC SITE, OROVILLE, CALIFORNIA 46
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991
PERFORMANCE AUDITS AND SPECIAL REVIEWS 50
POST-SARA REMEDIAL ACTION STARTS MANDATE 50
OVERSIGHT OF POST-SETTLEMENT ACTIVITIES 53
CONTRACT LABORATORY PROGRAM 58
CONTRACTOR PROPERTY OVERSIGHT SPECIAL REVIEW 62
SITE CLEANUP DOCUMENTS EARLY WARNING ALERT 63
REGION 1 MEDICAL MONITORING PROGRAM ALLEGATION REVIEW . 64
EMERGENCY WAIVER CRITERIA SPECIAL REVIEW 66
INTERAGENCY AGREEMENTS 68
AGENCY FOR TOXIC SUBSTANCES AND DISEASE REGISTRY 68
U.S. ARMY CORPS OF ENGINEERS 68
FEDERAL EMERGENCY MANAGEMENT AGENCY 68
DEPARTMENT OF THE INTERIOR 69
INTERNAL REVENUE SERVICE 69
DEPARTMENT OF JUSTICE 69
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 69
NATIONAL INSTITUTE OF ENVIRONMENTAL HEALTH SCIENCES 70
CONTRACTS 71
ENVIRONMENTAL HEALTH RESEARCH AND TESTING 72
GUARDIAN ENVIRONMENTAL SERVICES 74
OHM REMEDIATION SERVICES CORP 76
ASSISTANCE TO EPA MANAGEMENT 78
REVIEW OF AGENCY'S SUPERFUND PROGRESS REPORT 80
REPORT REVIEW FOR SUBMISSION IN AGENCY REPORT 80
REGION 4 ACCOMPLISHMENTS REPORT 81
REGION 5 ACCOMPLISHMENTS REPORT 82
TIMELINESS REPORT 83
INVESTIGATIVE ACTIVITY 84
EXHIBIT I - EPA HAZARDOUS SUBSTANCE SUPERFUND SCHEDULE OF
OBLIGATIONS FOR FISCAL 1991 92
EXHIBIT II - EPA HAZARDOUS SUBSTANCE SUPERFUND SCHEDULE OF
DISBURSEMENTS FOR FISCAL 1991 96
EXHIBIT III - SUPERFUND AUDIT REPORTS ISSUED DURING FISCAL 1991 99
APPENDIX: ACRONYMS AND ABBREVIATIONS 103
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 1
PURPOSE
This report is provided pursuant to section 111 (k) of the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA) of 1980,
as amended. The Superfund Amendments and Reauthorization Act (SARA) of
1986 amended that section of CERCLA to add several annual requirements for
the Inspector General of each Federal agency carrying out CERCLA authorities.
These requirements include four audit areas and an annual report to Congress
about the required audit work. This report covers fiscal 1991 audits of
Superfund activities. The required four audit areas are discussed below.
This report contains chapters on three of the mandated audit areas. We
also summarize other Superfund audit work, assistance to EPA management
and Superfund investigative work performed during fiscal 1991. We exceed
the statutory requirements by providing Congress with the significant results of
all of our Superfund work.
Trust Fund
CERCLA requires ". . .an annual audit of all payments, obligations,
reimbursements, or other uses of the Fund in the prior fiscal year. . . ." Our
"Trust Fund audit" is a financial and compliance audit of EPA obligations and
disbursements from the Hazardous Substance Superfund during the fiscal year.
Claims
CERCLA requires an annual audit to assure ".. . that claims are being
appropriately and expeditiously considered . ..." Since SARA did not include
natural resource damage claims as allowable Fund expenditures, the only claims
provided in CERCLA, as amended, are response claims. The first claim was
paid late in fiscal 1991. Our first claims audit is summarized in this report.
Cooperative Agreements
CERCLA requires audits "... of a sample of agreements with States (in
accordance with the provisions of the Single Audit Act) carrying out response
actions under this title ...." We perform financial and compliance audits of
cooperative agreements with States and political subdivisions. Some of our
audits also review program performance. In addition, we sometimes review
EPA regional management of the cooperative agreement program.
Remedial Investigations/Feasibility Studies (RI/FS)
CERCLA requires our"... examination of remedial investigations and
feasibility studies prepared for remedial actions ...." Our RI/FS examinations
review the adequacy of the studies to provide a sound technical basis for
remedial action decisions. These examinations may be done as part of audits of
EPA management or as special reviews by our technical staff.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991
BACKGROUND
The Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (CERCLA), Public Law 96-510, enacted on December 11, 1980,
established the "Superfund" program. The purpose of the Superfund program
is to protect public health and the environment from the release, or threat of
release, of hazardous substances from abandoned hazardous waste sites and
other sources where response is not required by other Federal laws. CERCLA
established a Hazardous Substance Response Trust Fund to provide funding for
responses ranging from control of emergency situations to permanent remedies
at uncontrolled sites. CERCLA authorized a $1.6 billion program financed by a
five-year environmental tax on industry and some general revenues. CERCLA
requires EPA to seek response, or payment for response, from those responsible
for the problem, including property owners, generators, and transporters.
CERCLA was revised and expanded by the Superfund Amendments and
Reauthorization Act of 1986 (SARA), Public Law 99-499, enacted October 17,
1986. SARA reinstituted the environmental tax and expanded the taxing
mechanism available for a five-year period. It authorized an $8.5 billion
program for the 1987-1991 period. It renamed the Trust Fund the Hazardous
Substance Superfund. The Budget Reconciliation Act of 1990 reauthorized the
program for three additional years and extended the taxing mechanism for four
additional years.
The basic regulatory blueprint for the Superfund program is the National Oil
and Hazardous Substances Contingency Plan (NCR), 40 CFR Part 3pO. The
NCP was first published in 1968 as part of the Federal Water Pollution Control
Plan, and has been substantially revised three times to meet CERCLA
requirements. The NCP lays out two broad categories of response: removals
and remedial response. Removals are relatively short-term responses and
modify an earlier program under the Clean Water Act. Remedial response is
long-term planning and action to provide permanent remedies for serious
abandoned or uncontrolled hazardous waste sites.
CERCLA recognized that the Federal Government can only assume
responsibility for remedial response at a limited number of sites representing the
greatest public threat. Therefore, EPA must maintain a National Priorities List
(NPL), and must update it at least annually. The NPL consists primarily of sites
ranked on the basis of a standard scoring system, which evaluates their threat
to public health and the environment. In addition, CERCLA allowed each State
to designate its highest priority site, without regard to the ranking system.
CERCLA section 104(c)(3) does not allow EPA to fund remedial actions
unless the State in which the release occurs enters into a contract or
cooperative agreement with EPA to provide certain assurances, including cost
sharing. At most sites, the State must pay 10 percent of the costs of remedial
action. EPA may fund 100 percent of site assessment activities (preliminary
assessments, site inspections), remedial planning (remedial investigations,
feasibility studies, remedial designs), and removals. For facilities operated by a
State or political subdivision at the time of disposal of hazardous substances,
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 3
the State must pay 50 percent of all response costs, including removals and
remedial planning previously conducted.
CERCLA sections 104(c)(3) and 104(d) authorize EPA to enter into
cooperative agreements with States or political subdivisions to take, or to
participate in, any necessary actions provided under CERCLA. A cooperative
agreement serves to delineate EPA and State responsibilities for actions to be
taken at the site, obtains required assurances, and commits Federal funds. EPA
uses cooperative agreements to encourage State participation in the full range
of Superfund activities - site assessment, remedial, removal and enforcement.
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EPA Office of the inspector General Annual Superfund Report to the Congress for Fiscal 1991 4
HAZARDOUS SUBSTANCE SUPERFUND
SCOPE AND OBJECTIVES
We contracted with an independent public accounting (IPA) firm to perform
an audit of EPA's Schedules of Obligations and Disbursements for the
Hazardous Substance Superfund (Superfund) for the fiscal year ended
September 30, 1991. The IPA firm examined, on a test basis, financial
management records at EPA's Servicing Finance Offices and accounting points
located at four of the ten regional offices, the National Contract Payment
Division in Research Triangle Park, North Carolina, the Cincinnati Financial
Management Center and Headquarters. The six regional offices and the Las
Vegas Financial Management Center excluded from audit field work accounted
for only 6.5 percent of fiscal 1991 disbursements.
As part of the audit, the IPA firm selectively tested (using statistical and
non-statistical samples) obligation and disbursement transactions. The
objectives of this audit were to determine if EPA:
a. Presented the Schedules of Obligations and Disbursements fairly, in all
material respects, in accordance with applicable laws, regulations and
guidelines;
b. Complied with laws and regulations which, if not followed, might have a
material effect upon the Schedules of Obligations and Disbursements; and
c. Established an adequate control environment, accounting system and
control procedures to ensure the reliability of applicable financial
management records.
The audit also included a review of the status of findings and
recommendations included in the prior audit reports for fiscal years 1989 and
1990. In addition, the IPA firm performed agreed-upon procedures regarding
certain financial management and personal property records for fiscal 1991.
FINDINGS
1. Financial Results of Audit
For fiscal 1991, EPA reported obligations of $1,583,598,838 and
disbursements of $1,353,486,899. The IPA firm questioned specific
obligations and disbursements from sampled transactions. The majority of
questioned costs resulted from lack of documentation or recording errors.
When the IPA firm projected the transactions resulting in questioned costs to
the universes of obligations and disbursements, the projected questioned
amounts were not considered material in relation to the amounts reported. We
detail the financial results of this audit in Exhibits I and II. In the opinion of the
IPA firm, except for a scope limitation regarding the allowability and allocability
of certain general support services costs, the Schedules of Obligations and
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EPA Office of the Inspector General Annual Simerfund Report to the Congress for Fiscal 1991
Disbursements presented fairly, in all material respects, the obligations and
disbursements of EPA's Superfund for fiscal 1991, on the basis of accounting
prescribed by the Office of Management and Budget (OMB).
SUMMARY OF FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Misclassified costs3
Obligations
$1,583,598,838
1,575,345,645
0
8,253,193
114,752
Disbursements
$1,353.486,899
1,350,158,774
7.353
3,320,772
656,774
1 . Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs resulting from transactions in which an incorrect Superfund account number is
charged, an incorrect object class is charged or complete accounting data is not
recorded. Misclassified costs are not questioned for audit purposes.
2. Improvements Needed in Reporting and Recording Accounts Receivable and
Collections
EPA needed to improve in the areas of classifying and reporting receivables,
recording receivables timely, and recording collections timely. The receivables
aging report EPA generated for reporting to the Department of the Treasury was
not accurate or reliable. The IPA firm found that 39 receivables totaling
$18,166,622 and eight collections totaling $1,073,485 were not recorded
timely in the Agency's financial management system. The IPA firm also found
that six receivables totaling $2,473,645 which should have been recorded in
fiscal 1991 were not recorded until fiscal 1992. The effectiveness of EPA's
management of accounts receivable was hampered by the lack of accurate and
reliable reports. Also, EPA's failure to record receivables and collections timely
may affect the collectability of receivables, interest and penalties.
The IPA firm recommended that EPA complete proposed corrective actions
for accounts receivable.
3. Improvements Needed in Accounting for and Controlling Personal Property
During our review of 348 accountable property items, costing $2,599,963,
the IPA firm noted that 141 items costing $1,287,463 were not recorded in the
Agency property records. Also, the IPA firm found the following weaknesses in
accounting for personal property: 76 accountable property items, costing
$592,346, were incorrectly entered in the Personal Property Accountability
System (PPAS); EPA did not complete reconciliations of physical inventories to
the PPAS at some locations; and EPA did not perform annual inventories and
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 6
walk-through inspections for laboratories at some locations. Past audits and
internal control reviews showed similar weaknesses. As a result, EPA property
could be subject to waste, loss, unauthorized use and misappropriation. Also,
EPA has inaccurate property records as a result of not recording property items
in the PPAS.
The IPA firm recommended that EPA:
• Make sure that ordering and obligating documents for property and
equipment purchases are forwarded to facilities personnel where the
property is to be received.
• Enforce the policy requiring property to be received only by authorized
property management personnel at each location.
• Issue a policy requiring annual certifications from the appropriate
Regional Administrators and Assistant Administrators that the annual
physical inventories and walk-through inspections of laboratories were
performed and the physical inventories reconciled to the official PPAS
records within the fiscal year.
4. Certain Allocable Costs Were Not Allocated to Superfund
EPA did not charge $2,404,921 of allocable general support services costs
and personnel costs to the Superfund program because expense ceilings were
reached before the end of the fiscal year. These costs were absorbed by the
Salaries and Expenses appropriation. If EPA had charged allocable support and
personnel costs to Superfund after it reached budgetary ceilings, it would have
exceeded the administrative expense ceiling in the budget by at least
$1,690,119.
The IPA firm recommended that EPA obtain a written opinion from the
Office of General Counsel on the legality of charging Superfund administrative
expenses to the Salaries and Expenses appropriation. If this practice is
determined to be improper, the Office of General Counsel should provide
guidance on appropriate corrective action.
5. Nonpayroll Documentation and Recording Errors
The IPA firm questioned $8,253,193 of nonpayroll obligations as
unsupported transactions and identified $114,752 of misclassified costs from
its statistical samples. EPA needs to improve its preparing of justifications
when Superfund money is obligated, date stamping of obligating documents
upon receipt, forwarding of obligating documents timely to the Financial
Management Officers (FMOs), and timely posting of obligations to the
Integrated Financial Management System (IFMS).
The Agency's proposed corrective actions on this finding were responsive
to recommendations in the draft report. Therefore, the IPA firm made no
additional recommendations in the final report.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991
6. Lack of Approvals and Inadequate Reviews of Disbursements
The IPA firm questioned $3,312,690 of nonpayroll disbursements as
unsupported transactions and identified $652,870 as misclassified costs from
its statistical samples. EPA needs to improve its obtaining, reviewing and
approving Automated Clearing House payments; timely and accurate
completion of Project Officers' approval forms; and training of individuals
responsible for preparing procurement requests about the importance of
charging the correct object class codes.
The Agency's proposed corrective actions on this finding were responsive
to recommendations in the draft report. Therefore, the IPA firm made no
additional recommendations in the final report. However, the IPA firm
suggested that EPA implement the proposed corrective actions more quickly.
7. Inadequate Reviews and Lack of Documentation for Personnel Compensation
Costs
The IPA firm questioned $15,435 of personnel compensation
disbursements as ineligible or unsupported transactions and identified $3,904
as misclassified costs from its statistical samples. The questioned costs
resulted from errors in recording redistributions of hours, unrecorded
redistributions of hours, missing documentation supporting transactions,
account number data and hours not in agreement with source information,
incorrect pay rates, time sheets not signed by employees or supervisors, and
input and adjustment errors. EPA needs to improve its training of designated
agents and timekeepers in reviewing time cards, time sheets and RCB-3A
reports.
The Agency's proposed corrective actions on this finding were responsive
to recommendations in the draft report. Therefore, the IPA firm made no
additional recommendations in the final report.
8. Internal Control Weaknesses in Program and Financial Management
EPA's Federal Managers' Financial Integrity Act (FMFIA) fiscal 1991 report
listed the following five material nonconformances in the Agency's accounting
system:
• Lack of centralized capability to record, bill and write-off accounts
receivable.
• Inadequate reconciliation to external Treasury Department reports.
• Inadequate reconciliation between PPAS and IFMS.
• Failure to convert general ledger accounts from the Financial
Management System, the prior accounting system, to the IFMS.
• Need for more automation of the exchange of information between
IFMS and other administrative systems.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 8
The Agency's proposed corrective actions on this finding were responsive
to recommendations in the draft report. Therefore, the IPA firm made no
additional recommendations in the final report.
AGENCY RESPONSE
In response to the draft audit report, the Agency stated it:
• Had conducted accounts receivable reviews in all ten regions.
• Had established quarterly meetings with Department of Justice (DOJ)
officials and program counterparts to ensure effective implementation
of new lockbox procedures.
• Is updating Resources Management Directive 2550D, which contains
all policies and procedures for. financial management of the Superfund
program.
• Had established an Accounts Receivable Work Group to identify
system-related problems and develop appropriate corrective action
plans, including the development of new status codes for delinquent
receivables.
• Had developed an action plan to enhance IFMS reporting capabilities.
• Would obtain missing annual inventory, inspection and reconciliation
certifications.
• Would obtain property records and corrections certifications for
property items detailed in the report.
• Had completed a Congressionally directed study of the Agency's
Superfund administrative charging practices. The study report stated
that charging Superfund administrative expenses to the Salaries and
Expenses appropriation is legal.
• Has procedures in place to review and redistribute the administrative
ceiling among the Responsible Planning and Implementation Offices.
• Would review and resolve questioned transactions.
• Would issue a memorandum to allowance holders on the need for valid
and reasonable Superfund justifications.
• Would issue a memorandum to program officials on the importance of
timely forwarding obligating documents to FMOs.
• Would issue a memorandum to FMOs re-emphasizing the importance of
date stamping obligating documents, and reviewing for correctness,
completeness and approvals before entering into IFMS in a timely
manner.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991
• Would issue a memorandum reminding program officials to ensure
correct object class codes are used in procurement requests.
• Would issue a memorandum reminding FMOs of the importance of
reviewing documents for proper approvals and accuracy of accounting
data.
• Would issue a memorandum reminding FMOs of the importance of
meeting prompt payment requirements.
• Would issue a memorandum reminding designated agents and
timekeepers of the available training.
• Would issue a policy on certification of prior year unliquidated
obligations.
We issued the final audit report (PI SFF1-11-0026-2100660) on
September 30, 1992. EPA has 90 days to respond to the report.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 10
RESPONSE CLAIMS
BACKGROUND
EPA may pay a claim for response costs incurred by "any other person"
under CERCLA section 111 (a)(2). It may reimburse potentially responsible
parties (PRPs) for "certain costs of actions under the agreement that the parties
have agreed to perform but which the President has agreed to finance" under
CERCLA section 122(b)(1).
EPA uses three different types of mixed funding settlements -
preauthorization, cash-out and mixed work. Response claims arise from
preauthorization. Under preauthorization, EPA approves in advance a PRP
conducting a response action and allows the PRP to submit claims against the
Fund for an agreed portion of the response costs. EPA will reimburse response
costs only to those who have reached a preauthorized mixed funding agreement
with EPA. EPA documents this approval in a Preauthorization Decision
Document (PDD).
The PDD defines the scope of work for which a PRP is eligible to seek
reimbursement, identifies when it may submit claims and sets a ceiling on the
amount of such claims. EPA policy allows PRPs to submit claims only at the
completion of discrete portions of the response action, while the PRP is in
compliance with the settlement agreement, and for at least $250,000.
A PRP starts the preauthorized mixed funding process by submitting a
settlement offer to EPA. If EPA finds the offer satisfactory, it reaches an
agreement in principle with the PRP. The PRP then submits an application for
preauthorization. If EPA finds the application acceptable, it issues a PDD. The
PDD becomes an attachment to the consent decree or administrative order on
consent. The PRP then undertakes the response action at the site.
After completion of a discrete portion of the agreed response action, the
PRP first submits a claim to non-settling PRPs for reimbursement. If the non-
settling PRPs do not pay within 60 days, the PRP sends the claim to EPA for
reimbursement. EPA reviews the work performed and the costs claimed by the
PRP. EPA then pays its agreed portion of all allowable, reasonable and
necessary costs for the response action.
EPA had entered into ten preauthorized mixed funding agreements at the
time of our audit. The ten agreements provided for responses estimated to cost
about $160 million, of which EPA's share would be about $35 million.
EPA paid its first claim for reimbursement for a preauthorized mixed funding
site on June 13, 1991. The PRP claimed about $13 million for the construction
of site facilities at the MOTCO Superfund site in EPA Region 6. EPA's
Procurement and Contract Management Division reviewed ("adjusted") this
claim. The claims adjusters recommended acceptance of about $2.8 million for
reimbursement, and EPA paid the adjusted amount.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 11
SCOPE AND OBJECTIVES
CERCLA Section 111 (k) requires the Inspector General to conduct an
annual audit to determine if claims are being appropriately and expeditiously
considered. For fiscal 1991, we reviewed the one claim EPA paid and the
preauthorization process. Our audit objectives were to:
a. Assess EPA's accounting policies and procedures for preauthorized mixed
funding settlements;
b. Determine if claims for reimbursement are being appropriately and
expeditiously considered; and
c. Determine if EPA has collected oversight costs from the responsible parties
in accordance with the terms specified in the MOTCO consent decree.
We reviewed EPA's policies and procedures, including those in draft, for
the preauthorized mixed funding (response claims) process. Sections of our
review focused solely on the MOTCO site in Region 6 because MOTCO was the
only preauthorized site for which EPA had paid a claim. We also reviewed the
commitment and obligation of funds for all preauthorized mixed funding sites.
FINDINGS
/. Improvements Needed in the Commitment and Obligation of Funds
We found significant internal control weaknesses in the commitment and
obligation of funds. EPA did not record, did not record timely, or improperly
recorded $35 million in commitments and obligations in the Agency's Integrated
Financial Management System (IFMS). Of the ten agreements where obligation
should have occurred, all ten were recorded late (between 112 and 429 days),
or improperly recorded. Further, before we brought this to EPA's attention for
corrective action, five of the ten had not been recorded in IFMS, the Agency's
official accounting system. Without reserving sufficient funds to pay
obligations, and reserving them timely, EPA can not be sure that funds will be
available to cover claims. It also risks violating the Anti-Deficiency Act.
2. Improvements are Needed in the Response Claims Review Process
EPA paid $2.8 million for the first preauthorized response claim when there
was inadequate assurance of eligibility of all reimbursed costs and PRP
compliance with the settlement agreement. Before approval of payment, EPA
guidance requires a detailed review of each response claim to determine
whether claimed costs are eligible for reimbursement and whether the PRPs
complied with the settlement agreement. The complex nature of each response
claim requires the combined talents of the Remedial Project Manager (RPM), an
Office of Regional Counsel (ORC) attorney and claims adjusters to conduct the
review. However, in evaluating the first preauthorized response claim, EPA did
not require written reports from the* RPM or ORC on their portions of the
detailed review. Although the RPM and the ORC were responsible for
evaluating significant complex issues, only the claims adjusters were required to
submit a written report. Consequently, the process provided inadequate
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 12
assurance of PRP compliance, and we could not determine the depth of the
reviews by the RPM and ORC. In addition, the lack of written reports from the
RPM and ORC might have resulted in EPA paying the PRP too much.
3. Cost Collection Efforts for the MOTCO Site
EPA had not billed PRPs for $1.1 million of EPA's remedial and oversight
costs for the MOTCO site incurred through August 1990. The consent decree
provided for EPA to annually recover costs for source control and oversight -
starting in 1988. EPA incurred such costs in 1988, 1989, 1990 and 1991, but
had not billed or collected for them. Since the completion of our audit field
work, EPA has billed for costs incurred through August 1990.
RECOMMENDATIONS
We recommended that EPA:
• Periodically reconcile preauthorized site commitments and obligations
with information contained in IFMS.
• Delegate responsibility for ensuring sufficient funds are committed and
obligated to its Coordinating Official for response claims.
• Develop proper procedures for the timely commitment and obligation of
funds.
• Correct sites inappropriately obligated.
• Develop and implement Resources Management Directive 25SOD,
Chapter 11 for response claims.
• Require the RPM and ORC to review the documentation provided by the
PRPs showing compliance with the PDD and certify that the
documentation is correct and complete. The RPM and the ORC should
provide written reports to the decision official for their portions of the
response claim review. The reports should address any technical
evaluations provided to the claims adjusters, all relevant components
required for a site Close Out Report, and any additional analyses
performed to determine compliance with all terms and conditions of the
settlement agreement.
• Modify the preauthorized mixed funding guidance to require the ORC to
verify and document, at the time of claim review, that EPA has billed
and collected costs in accordance with the terms of the consent
decree. Furthermore, EPA should include language in the consent
decrees allowing EPA to offset PRP claims by amounts owed to EPA.
• Review the remaining nine preauthorized mixed funding agreements to
determine if EPA has billed and collected costs in accordance with the
terms of the respective consent decrees.
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EPA Office of the Inspector General Annual Siroerfund Report to the Congress for Fiscal 1991 13
• Collect the $1.1 million billed to the MOTCO PRPs for the 1987
through 1990 costs, and bill and collect the costs for August 1990
through March 1992 in accordance with the consent decree.
AGENCY RESPONSE
In response to our draft report, EPA stated it:
• Will make sure that all preauthorized site commitments and obligations
are reflected in IFMS.
• Will draft desk procedures to make sure that sufficient funds are
committed and obligated for all mixed funding preauthorized sites. In
addition, the Coordinating Official will periodically obtain copies of
IFMS reports to ensure that preauthorized site commitments and
obligations are reconciled with information within IFMS.
• Drafted guidance detailing procedures for the commitment and
obligation of funds sufficient to satisfy claims against the Superfund.
The final procedures will be reflected in final Agency guidance no later
than 90 days from promulgation of the final Response Claims
Procedures rule in the Federal Register. EPA will also track timeliness
as defined by the EPA Comptroller. -
• Will establish obligations account numbers for committed claims and
correct any inappropriately obligated sites.
• Is updating Resources Management Directive 25 SOD, which contains
all policies and procedures for financial management of the Superfund
program. EPA will determine what further guidance is needed for
response claims.
• Will require certifications and appropriate supporting documentation by
the RPM and the ORC. In addition, EPA will require the PRPs to
document, as part of each claim, their compliance with the terms and
conditions of the PDD.
• Will review other mixed funding settlements for compliance with the
terms of the consent decrees concerning the recovery of oversight
cost.
• Will consider, in future negotiations, use of offsets between eligible
reimbursement cost and the recovery of oversight costs.
• Will require the ORC to verify that EPA has documented and billed for
the recovery of oversight costs.
We issued the final audit report (E9HHF2-11-0031-2100662) on
September 30, 1992. EPA has 90 days to respond to the report.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 14
COOPERATIVE AGREEMENTS AND GRANTS
In fiscal 1991, we issued sixteen audit reports on Superfund cooperative
agreements, one follow-up report on a State's management of Superfund
cooperative agreements, one audit report on a Superfund research grant and
one audit report on a region's deobligation of funds not needed for Superfund
cooperative agreements. The combined financial results of the financial audits
of Superfund cooperative agreements and grants were as follows:
FINANCIAL RESULTS OF FISCAL 1991 SUPERFUND
COOPERATIVE AGREEMENT AND GRANT AUDIT REPORTS
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$65,887,559
58,223,810
3,763,498
3,900,251
0
Total Costs
$72,884,746
63,908,765
4,432,157
4,543,824
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
We summarize all of the audits related to Superfund cooperative
agreements and grants below.
ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Scope and Objectives
We contracted with an independent public accounting (IPA) firm to perform
a final audit of a cooperative agreement awarded to the Alaska Department of
Environmental Conservation (ADEC) to identify and rank hazardous waste sites.
Our audit objectives were to determine:
a. The reasonableness, allocability and allowabilrty of the costs claimed;
b. ADEC's compliance with provisions of the cooperative agreement and
applicable laws and regulations; and
c. The adequacy, effectiveness and reliability of the accounting and
management controls exercised by ADEC in administering the cooperative
agreement.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 15
The audit covered costs claimed by ADEC from June 28, 1985 through
January 31, 1988.
Findings
1. ADEC/s Internal Controls Need Strengthening
ADEC needed to strengthen its internal financial management controls to
meet Federal regulations. We found (a) ADEC did not equitably allocate leave
and fringe benefit costs in accordance with Federal regulations,
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 IB
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$490,381
374,563
115,499
319
0
Total Costs
$490,381
374,563
115,499
319
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA Region 10:
• Require ADEC to establish procedures so that it:
• Allocates leave costs equitably in accordance with OMB Circular A-
87.
• Maintains supporting documentation showing the source and
application of all funds.
• Reconciles travel reimbursement claims to employee time sheets.
• Files financial reports timely.
• Maintains files in accordance with Federal requirements.
• Complies with all cooperative agreement special conditions.
• Disallow the costs questioned for Federal participation, and recover
Federal funds paid exceeding the amounts accepted in the audit report.
Agency Response
This audit had not been resolved at the time we prepared this report.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 17
ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY - FOLLOW-UP
Scope and Objectives
We performed a special review of corrective actions taken on
recommendations of our prior audit report on Letter-of-Credit (LOO Privileges
for the Arizona Department of Environmental Quality (ADEQ) (Report No.
E1AW7-09-0181-79031), dated September 3, 1987. The ADEQ is the Arizona
State agency primarily responsible for receiving and administering EPA grants
and cooperative agreements. The purpose of the follow-up review was to
determine the effectiveness of the Region's actions in correcting the previously
reported conditions. The specific objectives of our review were to determine
whether:
a. The Region took the corrective actions indicated in its response to the audit
recommendations;
b. The corrective actions were implemented timely; and
c. The actions were effective in correcting the conditions addressed in the
previous report.
Due to its limited scope, the review was not an audit following the
Government Auditing Standards (1988 Revision) issued by the Comptroller
General of the United States.
Findings
1. Region Took Satisfactory Action To Correct Previously Reported LOG
Findings
In response to our previous report, the Region advised us it was not giving
ADEQ LOG privileges at that time. Instead, the Region placed the ADEQ on the
reimbursement method of funding. The Region satisfactorily carried out its
action plan. It completed its efforts in April 1988 and then gave ADEQ LOG
privileges.
2. Region Later Learned of Additional Weaknesses Impacting LOG
A consulting firm retained by the Region to review ADEQ's accounting
processes and procedures reported the following on November 17, 1988:
• ADEQ's system for reporting actual labor charges was still in
development and not available for recording costs under the Superfund
cooperative agreements.
• ADEQ's system for recording costs by Superfund site and type of cost
could only accumulate costSifor a limited number of sites.
• ADEQ distributed employee leave costs to sites each pay period rather
than on a fiscal year basis. The allocation base was also questionable.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 18
• ADEQ did not reconcile travel claims to make sure they were consistent
with the employee's labor charges for the same time period.
• ADEQ did not charge certain motor pool vehicle costs to the
appropriate Superfund sites.
• ADEQ did not include the acquisition cost of vehicles in the costs used
to develop vehicle mileage rates.
• ADEQ did not have invoices available to support all material and supply
disbursements.
• Services provided by the Office of the Attorney General to ADEQ were
based on budgeted, not actual costs.
The Region sent a letter to the Director of ADEQ on October 15,1990,
stating it would pursue grant sanctions against ADEQ because corrective action
had not been accomplished. ADEQ's appeal of this decision was still under
review at the time of this review.
3. Region Needs to Monitor ADEQ's Compliance with Single Audit
Requirements
The Region did not have a procedures to follow up with (grant recipients on
the status of their Single Audits. As of December 12, 1990, the Region had
not received a copy of ADEQ's Single Audit report for the fiscal year ended
June 30, 1988, even though it was issued on June 16, 1989.
Recommendations
We recommended that EPA Region 9:
• Expeditiously address the ADEQ appeal and impose sufficiently strident
sanctions to encourage ADEQ to immediately correct all the accounting
weaknesses identified in the consulting firm's report. If it failed to
obtain corrective action in the near future, it should suspend additional
grant and cooperative agreement payments and/or terminate the
agreements.
• Develop and implement procedures to contact grant and cooperative
agreement recipients regularly to make sure they are meeting their
Single Audit requirements.
Agency Response
In response to our report, EPA Region 9 indicated:
• New senior managers at ADEQ were committed to implement
corrective actions.
• It had placed ADEQ's Superfund multi-site and core program
cooperative agreements on a reimbursement basis.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 19
• It would routinely compare its list-of agencies for whom EPA is
cognizant with its logbook of Single Audit reports received. It will
follow up with agencies who have not submitted the required report.
BROWARD COUNTY, FLORIDA
Scope and Objectives
We performed a limited scope review of the costs claimed under a
cooperative agreement awarded to Broward County, Florida, for a remedial:
action project at the Davis Landfill site. Our objective was to determine
whether the costs claimed were reasonable and eligible for EPA reimbursement.
Our audit covered costs claimed by Broward County from June 30, 1988
through June 30, 1990.
Findings
1. Reasonableness of Chance Orders Not Documented and Work Outside the
Agreement's Scope
The County did not document the reasonableness of change orders of
$531,653. The County did not document why the increased quantities did not
reduce the unit price, as required by Federal regulations. In addition, the
County spent $352,580 of the $531,653 to create a County park at the site.
This work was beyond that needed to remove and dispose of the sludge lagoon
contents, and constituted ineligible construction costs.
2. Broward County Failed to Award to Low Bidder
Broward County awarded a contract to clean up the site at a cost of
$76,993 over the low bid. Federal regulations require that selection of the
successful bidder be principally on the basis of price. Instead of using price as
the primary determinant, the County awarded the contract based upon legal
technicalities.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Rscal 1991 20
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$1,052,336
748,013
304,323
0
0
Total Costs
$2,104,673
1,496,027
608,646
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA Region 4 not participate in the ineligible costs,
and recover funds due EPA.
Agency Response
In response to our audit report, EPA Region 4 reviewed the costs
questioned, and accepted all claimed costs. The Army Corps of Engineers
reviewed the change orders, and found them to be necessary and reasonable
despite our audit finding that the County failed to follow proper procurement
procedures. EPA found the work questioned as outside the scope of the
cooperative agreement to be the most cost effective alternative. EPA also
found that the low bid was non-responsive, and the County properly awarded
the contract. The OIG continued to have reservations about the use of the
Superfund for purposes that seemed to go beyond what was needed to clean
up the site. However, the OIG recognized that the State required this work
before it would issue a permit to close the landfill. Therefore, we accepted the
audit response as a management decision and did not refer it to the Audit
Resolution Board.
LOUISIANA DEPARTMENT OF ENVIRONMENTAL QUALITY
Scope and Objectives
We contracted with an independent public accounting firm to perform a
final audit of a cooperative agreement awarded to the Louisiana Department of
Environmental Quality (LDEQ) for remedial activities at the Old Inger site. Our
audit objective was to determine whether costs claimed were reasonable and
allowable under the terms of the cooperative agreement and applicable
regulations. The audit covered costs claimed by LDEQ from September 29,
1982 through June 30, 1990.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 21
Finding
LDEQ Billed Excessive Overhead Costs
LDEQ billed excessive overhead costs of $524 by not applying the correct
overhead rate of the contractor who conducted the remedial
investigation/feasibility study.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$1,900,329
1,899,805
524
0
0
Total Costs
$2,013,466
2,012,942
524
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 6 not participate in the ineligible costs,
and recover funds due EPA.
Agency Response
In response to the audit report, EPA Region 6 disallowed the questioned
costs.
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION -
MULTI-SITE
Scope and Objectives
We contracted with an IPA firm to perform a final audit of a cooperative
agreement awarded to the Massachusetts Department of Environmental
Protection (MDEP) to identify and rank hazardous waste sites, and conduct
management assistance for ten sites. The audit objective was to determine the
allowability of costs claimed. The audit covered costs claimed by MDEP from
April 1, 1985 through September 30, 1989.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Rscal 1991 22
Findings
1. MDEP'S Cash Management System Needs Improvement
MDEP's cash management system maintained cash in excess of MDEP's
immediate needs for seven of the ten letter of credit drawdowns tested for
calendar years 1986 and 1987.
2. MDEP Needs to Monitor Its Drawdown Policies
MDEP requested letter of credit drawdowns without specifying for which
sites and activities the funds were to be used, as required by the cooperative
agreement. Instead MDEP drew and deposited all funds into a general pool of
cash under a non-site-specific account, and allocated funds in excess of needs
for pre-remedial (non-site-specific) activities to remedial activities which must
be site specific. Additionally, MDEP exceeded the EPA authorized budget for
some remedial activities, and had to obtain subsequent approval.
3. MDEP Failed to Submit Progress Reports Timely
MDEP failed to filed 16 of the 17 quarterly reports within the time required
by the agreement.
4. MDEP Claimed Ineligible Costs
MDEP claimed $13,017 in excessive indirect costs by using an incorrect
indirect cost rate.
FINANCIAL RESULTS OF AUDIT
Federal Share
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
$3,751,296
3,738,279
13,017
0
0
Total Costs
$3,751,296
3,738,279
13,017
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 23
Recommendations
We recommended that EPA Region 1:
• Require MDEP to establish and effectively monitor cash forecasting
procedures to limit requests for Federal funds to immediate needs,
and to comply with the required letter of credit drawdown
procedures.
• Require MDEP to institute and monitor drawdown policies to ensure
adequate projections and forecasted budget needs.
• Require MDEP to develop appropriate administrative procedures to
ensure that progress reports are submitted timely.
• Not participate in the questioned costs, and recover funds due
EPA.
Agency Response
In response to the audit report, EPA Region 1 disallowed $6,287 of the
claimed costs.
MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION -
P.S.C. RESOURCES
Scope and Objectives
We contracted with an IPA firm to perform a final audit of a cooperative
agreement awarded to the Massachusetts Department of Environmental
Protection {MDEP) for a remedial investigation and feasibility study at the P.S.C.
Resources site in Palmer, Massachusetts. The audit objective was to determine
the allowability of the costs claimed. The audit covered costs claimed by
MDEP from October 1, 1987 through September 30, 1989.
Findings
1. MDEP'S Cash Management System Needs Improvement
MDEP'S cash management system maintained Federal cash in excess of
MDEP's immediate needs for the period April 1988 through May 1989 in
violation of EPA regulations.
2. MDEP Did Not Submit Progress Reports Timelv
MDEP did not submit progress reports within thirty days after the end of
each Federal fiscal quarter as required by the cooperative agreement. Instead
MDEP submitted only two reports during a two-year period.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 24
3. MDEP Did Not Retain Records
MDEP did not retain records necessary to reconcile personnel costs for the
Federal 1988 fiscal year, as required by EPA regulations.
4. MDEP Did Not Record All Indirect Costs.
MDEP did not record all indirect costs claimed to the project's Budgetary
Control Register. As a result, we were unable to reconcile indirect costs
claimed.
5. MDEP Claimed Unsupported Contractual Costs
MDEP claimed $162,842 of contractual costs in excess of the contractor
invoices. MDEP stated that the amount claimed was in error and corrections
were reflected in their later reports.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$591,874
429,032
0
162,842
0
Total Costs
$591,874
429,032
0
162,842
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA Region 1:
• Require MDEP to establish and effectively monitor cash forecasting
procedures to limit requests for Federal funds to immediate needs.
• Require MDEP to submit progress reports timely.
• Require MDEP to retain its records in accordance with EPA
regulations.
• Require MDEP to record all related costs in the project's Budgetary
Control Register.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 25
• Assure that MDEP's subsequent quarterly and interim reports
reflect the correction of the $162,842 error.
Agency Response
In response to the audit report, EPA Region 1 indicated MDEP had
documented the correct amounts submitted on the most recent interim financial
status report. EPA reviewed the documents and considered them responsive
and acceptable.
NEW HAMPSHIRE DEPARTMENT OF ENVIRONMENTAL SERVICES
Scope and Objectives
We performed an audit of cooperative agreements awarded to the New
Hampshire Department of Environmental Services (NHDES). These included
site-specific, multi-site and core cooperative agreements. Our audit objectives
were to determine whether:
a. NHDES had implemented previous audit report recommendations;
b. State financial management, procurement, accounting, contract
administration and property management controls were adequate to assure
that costs claimed and reported are allocable to the cooperative
agreements; and
c. Financial management systems were adequate to ensure the timely close-
out of the cooperative agreements.
Our audit covered the period January 1, 1988 through December 31, 1990.
Findings
1. NHDES Needs to Maintain Evidence that Cost Analyses of Contract
Amendments Were Performed
NHDES did not provide evidence that cost analyses were performed, as
required by Federal regulations, for approved contract amendments in excess of
$25,000. This resulted in approval of cost amendments of $809,154 without
evidence of cost analysis. Therefore, excessive costs may have been incurred
under the cooperative agreement.
2. NHDES Needs to Submit Financial Status Reports (FSRs) Timely
FSRs were not submitted timely by NHDES as required by Federal
regulations. Four of six cooperative agreements terminated between April 1984
and November 1990 did not have FSRs submitted within 90 days after the
termination of the cooperative agreement as required by Federal regulations.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 26
3. NHDES Needs to Account for Travel and Payroll Costs Accurately
NHDES did not accurately account for site-specific travel and payroll costs.
Travel vouchers filed for fiscal 1990 were not in agreement with site-specific
payroll charges. Six of thirteen travel transactions reviewed had errors in site-
specific charges, resulting in funds being incorrectly charged.
Recommendations
We recommended that EPA Region 1:
• Instruct NHDES to provide evidence that a cost analysis of the
amendments was performed. EPA should disallow costs not
adequately supported as reasonable.
• Instruct NHDES to develop, implement and submit to the Region for
approval procedures to ensure that all future proposed cost
amendments in excess of $25,000 receive a documented cost analysis
prior to approval. Further, NHDES must document the contract files to
provide evidence that a cost analysis was performed in accordance
with Federal regulations.
• Instruct NHDES to provide for Regional review the State's newly
developed internal tracking system to ensure cooperative agreement
activities are reported in accordance with applicable Federal regulations.
• Monitor the implementation of the State's newly developed internal
tracking system.
• Instruct NHDES to develop a travel voucher which would list times of
arrivals and departures at individual site locations.
• Instruct NHDES to periodically review travel vouchers and time sheets
to verify the accuracy of site-specific charges.
• Instruct NHDES to develop a procedure for preparation and submittal of
time sheets and travel vouchers for review within the same time period.
• Instruct NHDES to submit for Regional approval newly developed
NHDES procedures to ensure compliance with site-specific travel and
payroll requirements.
• Instruct NHDES to provide assurance to the Region of accurate
accounting for site-specific travel and payroll costs charged to
cooperative agreements.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 27
Agency Response
In response to our audit report, EPA Region 1 indicated:
• NHDES has developed and submitted procedures to EPA for performing
cost analyses of architect/engineer service contracts and amendments.
EPA reviewed the procedures and considered them acceptable.
• NHDES conducted internal reviews of the four contract amendments
identified in the audit report, and documented them by memorandums
to the file. EPA reviewed this data and found that the reviews
adequately supported the reasonableness of the costs charged.
• NHDES has developed and submitted procedures to EPA for tracking
cooperative agreement activities, including the specific dates when
FSRs are due and when they are issued, and dates when cooperative
agreements terminate. EPA reviewed the tracking report and found
that all FSR submissions were current.
• NHDES had developed a procedure to monitor travel and payroll costs.
It identified past errors in specific site charges and made adjustments
to appropriate accounts. NHDES Grants Management personnel will
perform a random sampling of travel vouchers and time sheets
quarterly to verify accuracy.
NEW MEXICO HEALTH AND ENVIRONMENT DEPARTMENT
Scope and Objectives
We contracted with an IPA firm to perform an interim audit of a cooperative,
agreement awarded to the New Mexico Environmental Improvement Division
(NMEID), part of the Health and Environment Department. EPA awarded the
agreement for identification and ranking of hazardous waste sites, forward
planning and management assistance at a number of New Mexico sites.
Our audit objective was to determine whether the costs claimed were
reasonable and allowable under the terms of the cooperative agreement and
applicable regulations. The audit covered costs claimed by NMEID from
December 31, 1984 through March 31, 1990.
Findings
1. NMEID Claimed Unsupported and Ineligible Costs
NMEID claimed labor costs for an employee no longer working on the
Superfund project, and for another employee whose time sheet could not be
located. NMEID's method of allocating leave costs did not comply with Federal
requirements. NMEID claimed unsupported equipment and contractual costs.
NMEID claimed costs for contract payments at rates in excess of those allowed
by the contract.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 28
2. NMEID Needs to Comply With Property Management Standards
The equipment list supplied by NMEID did not include the cost of the
equipment of the date of purchase, both items required by Federal regulations.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$1,580,448
1,430,313
34,592
115,543
0
Total Costs
$1,580,448
1,430,313
34,592
115,543
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 6 not participate in the questioned
costs, and recover funds due EPA.
Agency Response
In response to the audit report, EPA Region 6 disallowed $13,132 of
NMEID's claimed costs, and billed NMEID for that amount.
NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Scope and Objectives
We contracted with an IPA firm to perform a interim audit of a cooperative
agreement awarded to the New York State Department of Environmental
Conservation (NYSDEC) for remedial activities at the Love Canal site in Niagara
Falls, New York. The audit objective was to determine the allowability and
allocability of costs claimed under the cooperative agreement. The audit
covered costs claimed by NYSDEC from July 12, 1982 through June 30, 1989.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 29
Findings
1. NYSDEC Did Not Submit Financial Status Reports (FSRsl Timely
NYSDEC did not submit its FSRs within 90 days of completion of an
activity as required by the cooperative agreement. NYSDEC instead only
submitted the FSRs annually.
2. NYSDEC Did Not Report All Expenditures on FSRs Timely
NYSDEC did not report all expenditures on FSRs timely. The FSR for the
period ended June 30, 1989, covered only costs incurred through March 31,
1987 for the New York State Department of Health. That Department lagged
two years in reporting costs on the FSR. Those expenditures applicable to the
period April 1, 1987 to June 30, 1989 had not been reported to EPA although
cash drawdowns were made concurrently with the payments of the
expenditures.
3. NYSDEC's Financial Reporting System Did Not Track Costs bv Project
NYSDEC was unable to break down costs by contract and vendor for
contractual and construction costs incurred and reported on the FSR for the
period ended June 30, 1989. NYSDEC could not reconcile contractual and
construction costs reported by the accounting system with the cumulative
contract payments reported by the vendor, nor with the costs reported on the
FSR.
4. NYSDEC Claimed Ineligible and Unsupported Costs
NYSDEC claimed $953,392 of personnel, travel, supplies
construction/contractual services, force account, fringe benefit and other
expenses that were not supported by documentation, in excess of the approved
budget, or for unallowable interest on late payments.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 30
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$25,873,162
24,950,379
1,389
921,394
0
Total Costs
$27,933,986
26,980,594
1,390
952,002
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 2 not provide Federal funding for the
ineligible costs and evaluate the appropriateness of funding the unsupported
costs.
Agency Response
This audit had not been resolved at the time we prepared this report.
OKLAHOMA DEPARTMENT OF HEALTH - COMPASS INDUSTRIES SITE
Scope and Objectives
We contracted with an IPA firm to perform an interim audit of a cooperative
agreement awarded to the Oklahoma State Department of Health (OSDH) for
remedial activities at the Compass Industries site. The audit objective was to
determine whether costs claimed were reasonable and allowable under the
terms of the cooperative agreement and applicable regulations. The audit
covered costs claimed by OSDH from June 29, 1984 through December 31,
1989.
Finding
OSDH Claimed Ineligible Costs of $30.434
The IPA questioned costs related to unallowable contractor interest costs,
contractual costs exceeding the contract price and excessive contractor
overhead charges.
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EPA Office of the Insoector General Annual Suoerfund Reoort to the Congress for Fiscal 1991 31
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$1,147,518
1,117,084
30,434
0
0
Total Costs
$1.147,518
1,117,084
30,434
0
0
1 . Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 6 not participate in the questioned
costs, and recover funds due EPA.
Agency Response
In response to the audit report, EPA Region 6 disallowed $34,434 of
OSDH's claimed costs, and billed OSDH for $26,174 that had been paid by EPA
in excess of the costs it accepted.
OKLAHOMA DEPARTMENT OF HEALTH - SAND SPRINGS SITE
Scope and Objectives
We contracted with an IPA firm to perform an interim audit of a cooperative
agreement awarded to the Oklahoma State Department of Health (OSDH) for
remedial activities at the Sand Springs Petrochemical Complex site. The audit
objective was to determine whether costs claimed were reasonable and
allowable under the terms of the cooperative agreement and applicable
regulations. The audit covered costs claimed by OSDH from June 29, 1984
through December 31, 1989.
Finding
QSDH Claimed Ineligible Costs of $46.906
The IPA questioned unallowable contractor interest costs and excessive
contractor overhead charges.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 32
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$1,564,834
1,517,928
46,906
0
0
Total Costs
$1,564,834
1,517,928
46,906
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 6 not participate in the questioned
costs, and recover funds due EPA.
Agency Response
In response to the audit report, EPA Region 6 disallowed $46,906 of
OSDH's claimed costs, and billed OSDH for $42,146 that had been paid by EPA
in excess of the costs it accepted.
RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT
Scope and Objectives
We performed an audit of the administration of Superfund cooperative
agreements by the Rhode Island Department of Environmental Management
(RIDEM). We performed final audits on three site-specific remedial cooperative
agreements for the Picillo Farm, Western Sand and Gravel, and Davis Liquid
Waste sites, and two core program cooperative agreements. We had
previously performed interim audits of the Picillo Farm and Western Sand and
Gravel agreements. In addition, we performed interim audits of active
cooperative agreements to identify and rank hazardous waste sites, for
management assistance at National Priorities List sites, and for the core
program. Our audit objectives were to determine whether:
a. RIDEM exercised adequate controls through its financial management,
procurement, accounting, contract administration and property
management systems to assure that costs claimed and reported are
allocable to the cooperative agreements;
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 33
b. Costs reported and claimed were reasonable, allowable and allocable to the
cooperative agreements; and
c. Financial management systems and controls were adequate to allow for the
proper identification and accountability of costs and cost recovery actions
by EPA.
The audit covered costs claimed by RIDEM through December 31, 1990.
Finding
RIDEM Needs to Conduct Physical Inventories
RIDEM had not conducted inventories of non-expendable equipment as
required by EPA and the State since 1988. The lack of inventories was due to
oversight, an unawareness of property management requirements and other
workload priorities. As a result, RIDEM had inadequate property management
controls and limited deterrence to theft and loss of property. Accordingly,
Federal funds could potentially be spent unnecessarily to replace lost or stolen
property which had not been properly controlled.
Recommendations
We recommended that EPA Region 1 direct RIDEM to:
• Develop procedures to make sure that periodic inventories are
conducted. These procedures should require reconciliation of the
results of inventories as needed.
• Provide the Region with results of the physical inventory RIDEM was
conducting.
Agency Response
In response to the audit report, EPA Region 1 indicated that RIDEM had
provided a copy of its procedures for conducting periodic inventories and the
results of its recent physical inventory. EPA considered these documents
responsive and acceptable.
SOUTH CAROLINA DEPARTMENT OF HEALTH AND ENVIRONMENTAL
CONTROL
Scope and Objectives
We performed a limited scope interim audit of the costs claimed under two
cooperative agreements awarded to the South Carolina Department of Health
and Environmental Control (SCDHEC) for the core program and for management
assistance. Our audit objectives were to determine whether:
a. Costs incurred/claimed were reasonable and eligible for EPA reimbursement;
and
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 34
b. SCDHEC was aggressively pursuing the program objectives set forth in the
cooperative agreements.
The audit covered costs incurred/claimed by SCDHEC from April 1, 1988
through February 28, 1991.
Findings
1. SCDHEC Needs to File Required Financial Status Report
SCDHEC failed to submit Financial Status Reports annually as required by
the cooperative agreements. These reports were due 90 days after the end of
each Federal fiscal year. In addition, SCDHEC submitted the Reports based on
budgeted expenditures rather than actual costs incurred, as required by the
cooperative agreements.
2. SCDHEC Needs to Improve Letter of Credit Drawdown Procedures
SCDHEC did not use site specific identifiers for letter-of-credit drawdowns
as required by a special condition of one cooperative agreement. EPA needed
theses to adequately determine the charges associated with the final site
cleanup cost.
3. Lack of Progress In Accomplishment of Goals
SCDHEC was not making timely progress in accomplishing program goals.
At the time of the audit, 50 percent of the budget period had expired but only
6.6 percent of budgeted cost had been incurred. Based on the amount of time
spent and dollars incurred, SCDHEC apparently had not devoted the required
resources needed to timely accomplish the cooperative agreement goals.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$1,357,373
1,357,373
0
0
0
Total Costs
$1,482,135
1,482,135
0
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 35
Recommendations
We recommended that EPA Region 4:
• Require SCDHEC submit Financial Status Reports timely based on
actual costs incurred.
• Monitor SCDHEC's drawdowns to be sure that each letter-of-credit
drawdown identifies the specific site on which the effort was
expended.
• Require SCDHEC to comply with the letter-of-credit Users Manual when
making future grant or cooperative agreement drawdowns.
• Evaluate SCDHEC's progress in accomplishing program goals and
determine if the amount of funds awarded needs to be adjusted.
Agency Response
In its response to the audit report, Region 4 stated that it will:
• Require SCDHEC to submit Financial Status Reports in a timely manner,
based on actual costs incurred.
• Monitor drawdowns to ensure specific site identification as required by
grant conditions. In addition, SCDHEC must reconcile funds in the core
program and not draw down additional funds until any excess balance
has been used.
• Monitor progress under the cooperative agreement and encourage
SCDHEC to contact them if it encounters any difficulties in fulfilling its
obligations under the agreement.
TEXAS WATER COMMISSION
Scope and Objectives
We contracted with an IPA firm to perform a final audit of a cooperative
agreement awarded to the Texas Water Commission (TWO for remedial
activities at the Geneva Industries site. The audit objective was to determine
whether costs claimed were reasonable and allowable under the terms of the
cooperative agreement and applicable regulations. The audit covered costs
claimed by TWC from December 28, 1983 through August 31, 1990.
Findings
1. Change Order Was Not Documented with Cost Analysis
TWC approved a $3,298,679 change order with its contractor due to
differing site conditions without conducting a formal cost analysis, as required
by an EPA regulation. Therefore, the IPA could not determine the
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 36
reasonableness of the change order price and questioned the amount of the
change order.
2. Contractor Charged Excessive Overhead Rates
The contractor charged, and TWC paid, overhead rates in excess of those
determined by audit in some cases, or by the contractor itself in others.
Therefore, we questioned $36,799 of contractor overhead charges.
FINANCIAL RESULTS OF AUDIT
I Federal Share
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
$20,357,339
17,354,424
3,002,915
0
0
Total Costs
$22,493,867
19,157,434
3,336,433
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 6 not participate in the questioned
costs, and recover funds due EPA.
Agency Response
In response to the audit report, EPA Region 6 stated it had:
• Requested and received a deviation from EPA regulations requiring a
cost analysis on all negotiated change orders exceeding $10,000. EPA
did not require negotiation of the change order because of a hostile
negotiating environment, adverse market conditions and indications
that the bid unit price would have been raised had it been renegotiated.
• Received final approved indirect cost rates for the contractor from the
Defense Contract Audit Agency, and adjusted the allowed amounts
accordingly.
• Disallowed $35,497 in total costs, of which $32,073 is the Federal
share.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 37
WASHINGTON DEPARTMENT OF ECOLOGY - COLBERT LANDFILL SITE
Scope and Objectives
We contracted with an IPA firm to perform a final audit of a cooperative
agreement awarded to the Washington State Department of Ecology (WDOE)
for a remedial investigation/feasibility study of the Colbert Landfill. The audit
objectives were to determine:
a. The reasonableness, alienability and allowability of the costs claimed;
b. WDOE's compliance with provisions of the cooperative agreement and
applicable laws and regulations; and
c. The adequacy, effectiveness and reliability of the procurement, accounting
and management controls exercised by WDOE in administering the
cooperative agreement.
The audit covered costs claimed by WDOE from May 1, 1984 through
September 30, 1987.
Findings
1. WDOE's Procurement Procedures Need Improvement
WDOE did not obtain EPA approval before awarding a contract under the
agreement, although its procedures did not ensure procurements complied with
Federal regulations and it had agreed to prior EPA review and approval of any
procurement actions. In addition, WDOE (a) did not perform cost and price
analysis as required by Federal regulations, (b) awarded a cost-plus-percentage-
of-cost work assignment unallowable under Federal regulations, and (c) did not
have written justification in the procurement files for the type of subagreement
as required by Federal regulations.
2. WDOE Needs to Allocate Employee Leave Equitably
WDOE needed to establish procedures for equitable allocation of holiday,
sick and annual leave costs to cost objectives as required by Federal
regulations. WDOE allocated leave costs based upon the judgement of the
supervisor.
3. WDOE Claimed Other Ineligible and Unsupported Costs
WDOE claimed $200 in travel costs not shown to be necessary and
reasonable and $586 in indirect costs in excess of the final negotiated indirect
cost rate.
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EPA Office of the Inspector General Annual Suoerfund Report to tha Congress for Fiscal 1991 38
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$542,434
320,370
9,155
212,909
0
Total Costs
$1,937,263
1,144,178
32,696
760,389
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA Region 10:
• Require WDOE to establish procedures to make procurements and
allocate leave costs in accordance with Federal requirements.
• Disallow the costs questioned for Federal participation, and recover
Federal funds paid exceeding the amounts accepted in the audit report.
Agency Response
This audit had not been resolved at the time we prepared this report.
WASHINGTON DEPARTMENT OF ECOLOGY - COMMENCEMENT BAY SITE
Scope and Objectives
We contracted with an IPA firm to perform a final audit of a cooperative
agreement awarded to the Washington State Department of Ecology (WDOE)
for a remedial investigation/feasibility study of the Commencement Bay
Nearshore/Tideflats site. The audit objectives were to determine:
a. The reasonableness, allocability and allowability of the costs claimed;
b. The adequacy, effectiveness and reliability of the procurement, accounting
and management controls exercised by WDOE in administering the
cooperative agreement; and
c. WDOE's compliance with provisions of the cooperative agreement and
applicable regulations.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 39
The audit covered costs claimed by WDOE from April 14, 1983 through
March 31, 1989.
Findings
1. WDOE's Procurement Procedures Need Improvement
WDOE did not obtain EPA approval before awarding a contract under the
agreement, although its procedures did not ensure procurements complied with
Federal regulations and it had agreed to prior EPA review and approval of any
procurement actions. In addition, WDOE (a) did not perform cost and price
analysis as required by Federal regulations, (b) awarded a cost-plus-percentage-
of-cost work assignment unallowable under Federal regulations, (c) awarded a
contract non-competitiyely contrary to Federal regulations, (d) did not obtain
conflict of interest certifications from bidders or offerors as required by the
cooperative agreement, (e) did not have required documentation in their
procurement files, and (f) did not have evidence of making good faith efforts to
solicit minority and women-owned businesses in three of the four contracts
reviewed.
2. WDOE Needs to Allocate Employee Leave Equitably
WDOE needed to establish procedures for equitable allocation of holiday,
sick and annual leave costs to cost objectives as required by Federal
regulations. WDOE allocated leave costs based upon the judgement of the
supervisor.
3. WDOE Failed to Allocate Cost Between EPA and the Center for Disease
Control (CDC)
WDOE did not allocate the costs incurred for the Ruston portion of the
agreement between the CDC and EPA in accordance with a special condition
requiring reimbursement of EPA for that portion of the study relating to human
health.
4. WDOE's Property Management System Needs Improvement
WDOE's disposal of computer equipment purchased under the agreement
did not comply with Federal regulations. In addition, WDOE did not
consistently perform required physical inventories of equipment.
5. WDOE Claimed Other Ineligible and Unsupported Costs
WDOE claimed $5,754 for a personal computer system not used for the
project, $8,038 for contractual costs incurred after the cut-off date for the
task, $856 in indirect costs in excess of the final negotiated indirect cost rate,
and $9,661 in the same indirect costs charged to two different accounts.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 40
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$2,897,650
279,643
130,763
2,487,244
0
Total Costs
$2,973,941
287,006
134,206
2,552,729
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA Region 10:
• Require WDOE to improve its procurement system to meet Federal
requirements or obtain EPA's approval before awarding contracts.
• Require WDOE to allocate holiday and leave costs in accordance
with Federal requirements.
• Require WDOE to revise its property management policies and
procedures to include Federal equipment disposal requirements.
• Require WDOE to install controls to ensure timely performance of
physical inventories of personal property.
• Disallow the costs questioned for Federal participation, and recover
Federal funds paid exceeding the amounts accepted in the audit
report.
Agency Response
This audit had not been resolved at the time we prepared this report.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 41
WASHINGTON DEPARTMENT OF ECOLOGY - CORE PROGRAM
Scope and Objectives
We contracted with an IPA firm to perform a final audit of a cooperative
agreement awarded to the Washington Department of Ecology (WDOE) for core
program activities. The audit objectives were to determine:
a. The reasonableness, allowability and alienability of the costs claimed;
b. The adequacy, effectiveness and reliability of accounting and
management controls exercised by WDOE in administering the
cooperative agreement; and
c. WDOE's compliance with applicable EPA regulations and the
provisions of the cooperative agreement.
The audit covered costs claimed by WDOE from September 1, 1987
through September 30, 1988.
Finding
WDOE's Internal Controls Need Strengthening
WDOE needed to strengthen its internal controls in order to comply with
Federal requirements to maintain a financial management system that
consistently records and allocates costs. WDOE inequitably allocated leave and
benefit costs, and made unedited and unreyiewed entries into the accounting
system that did not reconcile to employee time cards.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$250,000
224,282
25,718
0
0
Total Costs
$288,479
258,928
29,551
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 42
Recommendations
We recommended that EPA Region 10:
• Disallow costs questioned for Federal participation, and obtain recovery
of Federal funds paid in excess of the amount accepted in this report.
• Require the WDOE to make the following improvements to their
financial management system:
• Develop an agency-wide leave rate, consisting of employee holiday
and leave costs to be applied against direct labor costs; or allocate
employee leave and fringe benefit costs on an equitable basis in
accordance with Office of Management and Budget (OMB) Circular
A-87.
• Add a review and edit function to the payroll accounting system to
make sure that only supportable direct labor charges are made to
the cooperative agreement.
Agency Response
This audit had not been resolved at the time we prepared this report.
UNIVERSITY OF CINCINNATI - SOIL LEAD DEMONSTRATION GRANT
Scope and Objectives
We performed an interim audit of an EPA demonstration grant awarded to
the University of Cincinnati (UC) College of Medicine in Cincinnati, Ohio. The
grant's primary purpose was to determine whether the blood lead levels of
small children are effectively reduced by procedures to reduce the lead
concentration in soil and exterior dust and in house dust. The audit objective
was to determine whether the costs claimed by UC were reasonable, allocable
and allowable under the terms of the award. The audit covered costs claimed
by UC from September 30, 1988 through June 30,1990.
Finding
UC Claimed Excessive Overhead Charges
UC claimed excessive overhead charges due to application of the on-campus
rather than the off-campus overhead rate and an incorrect calculation of the
base to which the overhead rate was applied.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 43
FINANCIAL RESULTS OF AUDIT
(Federal Share
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
$2,530,585
2,482,322
48,263
0
0
Total Costs
$2,530,585
2,482,322
48,263
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendation
We recommended that EPA Region 5 make sure that UC reduced its
incurred grant costs by the amount of the questioned costs.
Agency Response
In response to our audit report, EPA Region 5 indicated that UC agreed
with the audit funding and had reduced its incurred costs by the questioned
amount.
REGION 1 SUPERFUND COOPERATIVE AGREEMENT DEOBLIGATIONS
Scope and Objectives
We performed a special review of Region 1 's management of Superfund
cooperative agreement unliquidated obligations. During an audit of the
administration of Superfund cooperative agreements by the New Hampshire
Department of Environmental Services, we identified a need to improve
Regional management of unliquidated obligations of these agreements. Our
review objective was to determine if other States within Region 1 also had
Superfund cooperative agreement funds that should have been deobligated.
Due to its limited scope, the review was not an audit following the
Government Auditing Standards (1988 Revision) issued by the Comptroller
General of the United States.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 44
Finding
Region 1 Needed to Improve Its Management of Suoerfund Cooperative
Agreement Unliquidated Obligations
Region 1 needed to make more effective use of Superfund cooperative
agreement funds so they do not lay idle as invalid, unpaid obligations on
projects where they may no longer be needed. We reviewed 10 of 25
cooperative agreements with expired budget periods. All ten had excess funds,
totaling $1,310,336, that could have been deobligated. As a result, these
funds could not be used for other priority Superfund site actions. This
condition was caused by a lack of Regional internal controls to monitor the
completion dates of cooperative agreements, ensure required grantee reports
were requested and received, and ensure that funds were deobligated timely.
Recommendations
We recommended that EPA Region 1:
• Establish and implement an internal control system to track Superfund
site completion dates to ensure required reports are received from
grantees and funds are expeditiously deobligated.
• Identify and timely deobligate any excess Superfund unliquidated
cooperative agreement funds for the grants we did not review.
Agency Response
In response to our report, EPA Region 1 indicated it had:
• Prepared an action plan to implement the report's recommendations.
• Requested and received final FSRs for seven sites.
• Deobligated $263,440 for one cooperative agreement.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 45
REMEDIAL INVESTIGATIONS AND FEASIBILITY STUDIES
In fiscal 1991, we issued a technical report on remedial
investigation/feasibility study (RI/PS) activities at the Southern Maryland Wood
Treating site. The OIG Technical Assistance Staff conducted this review. That
report contained no recommendations, and required no response from the
Agency. We also conducted a special review of Rl activities at the Louisiana-
Pacific site. The reviews are summarized below.
SOUTHERN MARYLAND WOOD TREATING SITE, HOLLYWOOD,
MARYLAND
Scope and Objectives
Our review objectives for the Southern Maryland Wood Treating site in
Hollywood, Maryland, were to:
a. Determine if the RI/FS formed an adequate basis for selection of a remedial
action; and
b. Evaluate the contract management of EPA Region 3 to determine if the
Region took all reasonable and necessary measures to ensure a successful
RI/FS process for the site.
Our review considered all phases of the RI/FS, the Record of Decision
(ROD) and current information on the design of the site remediation.
Conclusions
1. The RI/FS was incomplete. Site sampling provided conflicting data on
shallow groundwater pollution, the causes of which were not investigated.
Also, important site characteristics were not adequately addressed in the
RI/FS.
The RI/FS report presented two sets of sampling data which provided
conflicting data on the extent of groundwater contamination. One set of
samples was taken in 1986. A second set was taken in 1988 at the same
monitoring wells. There were measurable differences in the analyses of these
two sets of samples which should have raised the concern of site investigators
and been explained in the report.
The RI/FS report did not include an evaluation of possible impacts of
removal activities on the characterization of contaminant levels on the site.
There were 188 containers containing residues from the removal action on the
site. These were to be taken care of during the remedial action (RA), but were
not mentioned in the RI/FS report. The final report on the removal activities
indicated that problems during the removal resulted in the spreading of
contaminants in an area sampled during the later Phase II Rl. While a
memorandum indicated that Phase II activities would be modified to address
this issue, we found no indication that adequate modifications were made.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 46
2. The FS activities were not performed in a manner to produce reasonably
accurate estimates of remediation cost. Quantities of materials to be
remediated mav have been underestimated and alternative and innovative
technologies mav not have been properly considered.
The 1988 FS incorrectly calculated the amounts of contaminated material
to be remediated. It also did not adequately consider the construction methods
to be used in the remediation of the area of contaminated shallow groundwater.
The FS proposed a slurry wall to contain the area of contaminated shallow
groundwater. The soil quantity in this zone was estimated as 90,000 cubic
yards. The slurry wall was not a practical option due to the topography of the
site, the need for a structural wall since dewatering would be required to
implement the remediation plan, and other physical features of the site. The
U.S. Army Corps of Engineers in 1989 designed a revised containment wall of
steel sheet pile to provide the needed structural strength. The Corps also
provided a revised alignment which would contain 171,000 cubic yards of
potentially contaminated soils. The revised wall design would significantly
increase the cost of wall construction and soil treatment. The FS estimated
that 1,400 cubic yards of contaminated soil were to be remediated in the land
treatment area, when the correct volume was 14,000 cubic yards. The FS
failed to mention the excavated pond soils storage pile, the decontamination
pads or the 188 containers of contaminated material resulting from the removal
action.
The original work plan recognized the need for treatability studies for
bioremediation alternatives. However, funds for this purpose were transferred
to source and site characterization activities.
3. The management of the RI/FS did not produce a document that was timely.
cost effective or complete.
The work plan provided for the RI/FS to "be conducted in three (3) phases
to facjlitate a more comprehensive, efficient and expedient approach to
sampling and analysis at the site." However, the phased approach actually
resulted in piecemeal approvals and contributed to delays and increased cost.
The RI/FS cost about $370,000 more than originally estimated and was 22
months late. The RI/FS lacked a consistent and comprehensive approach to
work plan implementation. Most documents submitted were never finalized. A
formal Quality Assurance Project Plan was not prepared. The contractor
approved the final RI/FS without allowing sufficient time for EPA to provide
comments on the draft and to consider comments. We documented report
deficiencies in site characterization, estimated soil volumes to be remediated,
and evaluations of alternative remedial technologies. The report likely
significantly underestimated the cost of the containment and soil incineration
portion of the selected remedy.
LOUISIANA-PACIFIC SITE, OROVILLE, CALIFORNIA
Scope and Objectives
We performed a special review of EPA Region 9's administration and
management of the Louisiana-Pacific (L-P) Superfund site in Oroville, California,
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 47
in response to a Congressional inquiry. The Congressional inquiry was
prompted by concerns of the Louisiana-Pacific Corporation that EPA RI/FS work
duplicated the Corporation's RI/FS work, and that EPA's RI/FS was too
expensive. Our overall purpose was to determine whether the Region's
administrative controls were adequate to ensure the timely and cost effective
completion of the RI/FS. Our specific review objectives were to determine
whether:
a. The costs charged to the RI/FS appear reasonable and necessary and in
accordance with applicable Superfund guidance; and
b. EPA's RI/FS tasks were comparable to specific work elements conducted
by L-P and, if so, how the costs of each compared.
Our review fieldwork was conducted through August 1990, and included
site activities from the proposed listing of the site on the NPL in October 1984
up to the preparation of the draft Rl report. This was a special review and not
an audit following the Government Auditing Standards (1988 revision) issued
by the Comptroller General of the United States.
Findings
1. Region 9 Generally Conducted the L-P RI/FS Consistent with Agency Policy
and Guidance
We found that Region 9 conducted the L-P RI/FS in a manner generally
consistent with existing Agency policy and guidance. However, we noted
some administrative control weaknesses which are summarized below.
2. EPA RI/FS Not Comparable to L-P Investigation
The independent L-P investigation was not conducted under the authority
of CERCLA, applicable regulations or EPA guidance. Furthermore, it did not
have EPA oversight and review. Therefore it was not an Rl as defined by
Federal law and was not comparable to an RI/FS governed by legal and
regulatory standards.
3. Controls Over RI/FS Costs and Performance Need Improvement
The EPA RPM was dependent on EPA's contractor for the development of
work plans, schedules, budgets and cost reports. The Region did not prepare
independent cost estimates for the L-P RI/FS tasks. We found little
documentation to indicate the RPM closely monitored the RI/FS costs or
progress. The RPM's award fee recommendations were not always consistent
with contractor performance problems documented in the Region's records.
Increased oversight and control of contractor performance under cost
reimbursement contracts is needed to assure that EPA receives cost effective
and timely completion of RI/FS tasks. Failure to implement adequate controls
can result in project delays and cost overruns.
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EPA Office of the Inspector General Annual Super-fund Report to the Congress for Fiscal 1991 48
4. Site Files Were Not Current and Complete
The RPM's files on the L-P site were not current and complete. Contractor
performance, work status, financial status and Regional review comments were
not consistently maintained. Various technical and managerial review
comments were missing from the site files. The RPM did not keep copies of
product drafts or his review comments. Formal review comments were not
prepared or maintained on contract deliverables. Monthly progress reports were
not submitted or maintained by the RPM. We concluded that the RPM's
records did not comply with Agency contract management manual require-
ments.
Recommendations
We recommended that EPA Region 9:
• Require RPMs to prepare and use independent RI/FS cost estimates for
evaluating contractor cost proposals.
• Assure that RPMs comply with Agency guidance for monitoring and
controlling Superfund contractor performance. RPMs should review
contractor monthly status reports to determine project progress and
review contractor invoices for reasonableness.
• Require RPMs to obtain adequate justifications from contractors for
increases, delays and contract overruns.
• Revise Region 9 guidance on award fees for consistency with the
Federal Acquisition Regulations. Award fees should only be awarded
when the contractor has performed at a satisfactory or better level.
• Establish and maintain Superfund site files consistent with Agency
contract management guidelines.
Agency Response
In response to our draft report, EPA Region 9 indicated:
• EPA has developed and is providing a Work Assignment Manager
training course for RPMs to improve their performance in areas
described in the OIG report.
• The Region has increased the number of staff in the project officer role,
reducing the number of work assignments they monitor, and thereby
enabling them to provide more effective support to the Work
Assignment Managers.
• The Region established a Technical Support Section of Regional experts
and technical specialists to support the RPMs in monitoring quality and
progress of contract deliverables.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 49
• Region 9 Guidelines and Manager's Transmittal Memo for Independent
Government Cost Estimates were issued.
• The Region established a Voucher Coordinator.
In response to the final report, EPA Region 9 further indicated it:
• Issued a memorandum directing the preparation of independent
government cost estimates for all Architect-Engineer work assignments
in excess of $25,000.
• Was completing automation of its voucher verification tracking system.
• Followed EPA guidelines on documentation of contractor Work Plan
Revision Requests.
• Followed EPA national policy on award fees.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 50
PERFORMANCE AUDITS AND SPECIAL REVIEWS
In addition to reviews required by CERCLA, as amended, we conducted
other reviews of EPA's management of the Superfund program. We summarize
below performance audits and special reviews completed in fiscal 1991.
POST-SARA REMEDIAL ACTION STARTS MANDATE
Scope and Objectives
We performed an audit of EPA's compliance with requirements in the
Superfund Amendments and Reauthorization Act of 1986 (SARA) for initiation
of 175 new remedial actions (RAs) at National Priorities List (NPL) sites by
October 16, 1989. In a report entitled Commencement of Post-SARA Remedial
Actions, EPA claimed 178 new RA starts during the timeframe specified in
SARA. Our audit objectives were to:
a. Determine whether RAs claimed by EPA complied with SARA criteria for
the 175 initial RA starts on NPL sites;
b. Evaluate EPA's system for identifying and reporting RA starts and the
adequacy of controls at the regional and Headquarters levels to assure the
integrity and accuracy of RA data received and the compliance of reported
RA starts with established criteria; and
c. Determine whether EPA complied with Congressional intent as to the type
of remedial activities reported and the priority of sites on which RAs were
initiated.
We limited the scope of the audit to the 178 initial RAs reported by EPA for
the period October 17, 1986 through October 16, 1989, in compliance with
section 116(e) of SARA. We selected Regions 2, 3 and 4 for review because
they reported 86 (48 percent) of the 178 claimed RA starts, and Regions 2 and
3 reported over 42 percent of their RA starts during the last 75 days of the
reporting period. We also selected Region 10 because it reported four of its
five (80 percent) RA starts during the last 75 days. We generally limited our
review to the 91 RA starts reported by these four regions. We selected a
judgmental sample of 42 of these RA starts for review. We selected these sites
because they were started in the last 75 days or there were other indicators of
potential problems. Because we selected our sample based on indicators of
potential problems, our conclusions on the sample may represent the worst
case situation and should not be directly extrapolated to the total universe of
178 sites.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 51
Findings
1. Inadequate Controls. Conflicting Criteria, and Misinformation Resulted in an
Overstatement of Post-SARA Remedial Actions Reported to Congress
Our review of the judgmental sample of 42 of the 178 claimed post-SARA
RA starts disclosed 28 sites where initial RAs were claimed for (1) subsequent
RAs; (2) pre-cleanup site preparation, remedial designs and work plans; (3)
isolated, insubstantial cleanup actions; (4) noncontinuous cleanup actions;
and/or (5) contract awards where physical on-site activity had not begun at the
time of our audit or began many months after the post-SARA reporting period.
In addition, an RA start outside our sample was reported for a non-NPL site.
The June 1986 NPL indicated that 91 of the 178 post-SARA RA sites claimed
by EPA had one or more operable units completed prior to SARA. SARA
specified that the RA starts be for "substantial and continuous physical on-site
remedial action," sites on the NPL and sites for which no RA had begun before
enactment of SARA. EPA improperly claimed site activities as RA starts
because of (1) insufficient EPA Headquarters control and documentation of the
RA reporting process to ensure the quality, integrity and reliability of RA data
received; (2) inadequate Headquarters planning, review and evaluation of RAs
reported by regions; (3) conflicting criteria between SARA and EPA procedures
for identifying and defining RAs; and (4) failure of Headquarters and regional
management to properly communicate SARA RA requirements to Remedial
Project Managers (RPMs).
2. Post-SARA Remedial Actions Did Not Always Address the Most
Contaminated Sites as Reflected on the NPL
Contrary to Congressional intent, EPA did not ensure that post-SARA RAs
addressed the most hazardous sites on the NPL. The House Public Works and
Transportation Committee report on SARA stated that, "Attempts by the
Administrator to avoid such resource commitments needed to meet
commencement targets set out in the schedule by systematically addressing
less hazardous or less costly sites first would be contrary to the Committee's
intent and contrary to the requirement of the Act." (emphasis added) Of the
178 post-SARA RA starts reported to Congress, 72 or over 40 percent
represented actions at sites in the lower 40th percentile of the NPL. EPA had
recorded no initial RA start for 264 of the top 300 sites on the June 1986 NPL.
These conditions occurred because EPA had not set priorities for remedial
activities based on NPL ranking, and had no established system for planning
and tracking RAs in relation to NPL priorities. By the time of our audit, EPA had
implemented an Environmental Priority Setting Initiative which assesses
remedial priorities based on environmental criteria. Because of this action, we
made no recommendations on this finding.
3. Critical Documentation and Procedures for Headquarters and Regional
Identification of Post-SARA Remedial Actions Were Contradictory.
Inadequate, or Nonexistent
EPA did not implement a formal controlled process for reporting SARA
accomplishments. As a result. Headquarters and regional documentation of the
RA identification process, and therefore control of the process, was almost
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 52
nonexistent. EPA had ineffective and conflicting RA reporting procedures. We
found little or no documentation at the regional and Headquarters levels of the
decision-making process for individual RA sites and how or what criteria were
applied for selecting sites for the Congressional report. Headquarters could not
locate any documentation to support the starts claimed in Region 2. RA start
dates for 102 (57 percent) of the 178 post-SARA RAs reported to Congress on
October 17, 1989, did not agree with RA start dates in CERCLIS (as of
December 28, 1990), the EPA's primary tracking system for remedial activities.
For seven of the conflicting dates, CERCLIS showed pre-SARA start dates while
post-SARA start dates were reported to Congress. In addition to the 102
conflicting dates, another 14 claimed post-SARA RA starts showed no RA start
date in CERCLIS 14 months after the post-SARA reporting period ended.
Recommendations
We recommended that EPA:
• Revise current procedures for identifying RA starts to bring Agency
guidance in line with Congressional intent and clearly delineate
between pre-cleanup activities and RAs.
• Inform regional staffs of the specific site activities that constitute an
RA, and the definitive criteria for identifying future post-SARA RA
starts.
• Review records for the 91 sites shown in the June 1986 NPL listing as
having pre-SARA RAs to determine whether post-SARA RAs reported
were first RA starts for these sites.
• Review the 178 RA starts reported to Congress to ensure that RAs
reported met SARA requirements, and delete any where statutory
requirements were not met.
• Review and revise the Commencement of Post-SARA Remedial
Activities report to more accurately reflect actual accomplishments.
• Refine and expand the quality control of the formal RA planning and
reporting system so that future post-SARA RA starts are reported
accurately and reliably.
• Completely document the decision-making process used by
Headquarters and regional staff to identify Agency accomplishments
included in external reports.
• Require regional certification of data reported for inclusion in the list of
200 RA starts required by SARA between October 17, 1989 and
October 16, 1991.
• Establish proper controls and retention requirements at Headquarters
and regional levels for documentation supporting EPA's report on the
additional 200 RA starts.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 53
• Reconcile differences in post-SARA RA start dates reported to
Congress and dates contained in CERCLIS.
Agency Response
In response to the draft report, EPA indicated it:
• Had provided guidance to the regions on the 200 RA starts and
tracking activities, and would provide more detailed guidance to reflect
the lessons learned on the 175 RA starts.
• Reviewed the 91 sites in which the June 1986 NPL indicated actions
had been completed, and found none where an RA contract had been
awarded.
• Would thoroughly investigate each RA start reported to determine if the
sites still meet SARA requirements and Congressional intent.
• Was refining and expanding the system for documenting progress
toward the 200 RA starts.
• Would require regional certification of all sites for the 200 RA starts
mandate.
In response to the final report, EPA further indicated it:
• Issued a June 1991 Final Status Report on the 178 Post-SARA RA
starts reported.
• Delineated procedures and documentation requirements for reporting
accomplishments in the Superfund Program Management Manual, and
reemphasized in an Office of Solid Waste and Emergency Response
(OSWER) Directive the need for source documentation for
accomplishments reported.
• Would advise the regions to keep a complete set of RA start
questionnaires in their central files, as well as copies of individual
questionnaires with site files.
• Was correcting CERCLIS for discrepancies in dates.
OVERSIGHT OF POST-SETTLEMENT ACTIVITIES
Scope and Objectives
We completed reviews of oversight of Superfund post-settlement activities
by Region 1 and Region 5. We issued reports or' these reviews and a
consolidated report in fiscal 1991. We completed reviews of Region 2 and
Region 3 in fiscal 1990 and summarized them in our last report. The purpose
of these reviews was to determine the timeliness and effectiveness of regional
post-settlement activities. The specific objectives of our reviews were to
determine whether EPA was:
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 54
a. Adequately monitoring compliance with settlements and taking effective
measures when parties are not in compliance;
b. Assessing and collecting applicable penalties and damages for
noncompliance; and
c. Adequately monitoring enforcement support contractors' oversight of PRP
post-settlement compliance.
Our reviews primarily focused on EPA initiated settlement documents
issued between October 1986 and March 1990. A judgmental sample of 39 of
207 sites was chosen from Comprehensive Environmental Response,
Compensation, and Liability Information System (CERCLIS) printouts listing
settlement documents. Because our sample was judgmental, we cannot make
statistical projections from them. Most of the settlement documents issued by
the regions during our review period were for RI/FS activities and our sample
reflected that fact.
We issued separate audit reports for Region 1 and Region 5 and a
consolidated report to the Assistant Administrator for Solid Waste and
Emergency Response and the Acting Assistant Administrator for Enforcement.
The findings for the two regions reviewed were similar. We have not
separately summarized the findings by region, but do summarize the responses
of the regions as well as EPA Headquarters.
Findings
1. EPA Needs to Correct Practices that Contribute to Site Cleanup Delays
The performance of Superfund cleanup work was unnecessarily delayed
after EPA reached settlements with potentially responsible parties (PRPs). The
review and approval of PRP documents and plans submitted to initiate and
conduct work look from 7 to 36 months at 24 of 39 sites reviewed. EPA
assigned remedial project managers (RPMs) the brunt of site responsibility
without providing adequate support, supervision, policy guidance and
procedures, or monitoring tools. RPMs acted with great independence within a
sometimes lengthy review process. This freedom of action led to inconsistency
and varied decision making. The lengthy review and approval process caused
delays in Superfund cleanup actions, increasing the potential for adverse public
health effects and further environmental degradation.
2. EPA Needs to be More Aggressive in Assessing Stipulated Penalties
EPA was not considering stipulated penalties for noncompliance with
settlement milestone dates. The regions did not take aggressive enforcement
action, basically limiting their actions to verbal negotiations or warning letters
and only seeking penalties in extreme instances. The regions were reluctant to
assess stipulated penalties because they did not want to inhibit progress on site
cleanups. In our review of 15 sites where noncompliance occurred, we found
the regions assessed PRPs only $45,000 in three cases. EPA did not assess
potential penalties of $4,855,500 in seven other cases where stipulated
penalties would have been appropriate. In addition, we reviewed two other
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 55
cases where potential judicial sanctions could have totaled $8,125,000 had
EPA referred the cases for enforcement action. As a result, there was little or
no inducement for PRPs to comply with compliance order requirements. This
lack of enforcement encourages PRPs to delay implementing important
provisions of settlement documents, which leads to unnecessary delays in the
overall cleanup process. Such delays can be detrimental to public health and
the environment.
3. Oversight of Technical Enforcement Support (TES) Contractors Needs
Improvement
EPA needed to improve its oversight of TES contractors. Specifically,
regions did not conduct and document quality assurance audits, contractor
office reviews or field oversight reviews. These conditions occurred because of
inadequate monitoring of RPMs by supervisors, lack of written procedures and
low priorities or insufficient resources assigned to certain task's. As a result,
EPA had limited assurance that TES tests or records were reliable or accurate
and contractors were performing work as required.
Recommendations
We recommended that EPA:
• Develop policy for use in all administrative orders on consent setting
specific timeframes for EPA review and approval of PRP submissions.
• Develop and issue guidance on extending settlement document due
dates and documenting of these decisions.
• Implement guidance including the June 1991 OSWER Directive
9835.1 (c) to streamline the PRP submission review process to eliminate
the tendency toward multiple revisions and reviews. One possibility
would be to limit the number of revisions.
• Develop and implement a standard post-settlement automated tracking
system for use by all regions. The system should track PRP deliverable
submission milestone dates and EPA responses.
• Establish national guidelines for scheduling, performing and
documenting periodic quality assurance audits, contractor office
reviews and field oversight visits.
• Aggressively pursue the option of stipulated penalties when PRPs are
generally in noncompliance with settlement document requirements.
. Regions should provide written justification of decisions not to pursue
stipulated penalties.
• Use the dispute resolution process as an effective mechanism to
resolve differences with PRPs.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 56
Agency Consolidated Headquarters Response
In response to the draft report, EPA stated it:
• Recently issued guidance which included a flow chart with time ranges
for PRP deliverable reviews, detailed instructions on conducting PRP
submittal reviews, and specific RPM responsibilities and oversight
activities.
• Established the capability in EPA's automated national information
system to identify settlement compliance status. In addition, two
regions have developed detailed prototype systems which enable
managers to track the status of milestones in settlements and the
status of enforcement response.
• Will be evaluating the use of stipulated penalties with the intention of
developing guidance documents to ensure their greater use.
• Periodically conducts TES contract management reviews in the regions
as part of its national oversight of TES contracts.
• Is updating the TES User's Manual. It will include guidance and
checklists for conducting reviews of EPA regional and contractors'
offices as well as an audit checklist for field offices.
In response to the final report, EPA further stated it:
• Established "time windows" for EPA review time of PRP submittals in a
June 1991 guidance document. EPA stated that fixed time limits
would not give the regions the flexibility it needs to review PRP
submittals.
• Established an Agency workgroup to develop guidance that will address
the process and criteria for granting extensions to settlement due
dates.
• Distributed the June 1991 OSWER Directive to RPMs in all regional
offices and trained regional staff on the guidance. This guidance limits
the number of document revisions to one.
• Implemented tracking requirements for PRP submissions, EPA's review
of the submissions and milestone dates on January 1, 1992.
• Issued a final OSWER Directive on November 12, 1991, outlining
regional tracking requirements.
• Continues its evaluation of stipulated penalty use. An evaluation report
will be issued during the second quarter of fiscal 1992.
• Outlined the dispute resolution process and encouraged its use in the
June 1991 OSWER Directive.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 57
• Scheduled reviews in fiscal 1992 of TES contracts management for all
regions and included all TES contractors' offices.
• Will finalize the updated version of the TES Users Manual during fiscal
1992. The manual will contain an audit checklist for field office audits
and recommendations on when to conduct these audits.
• Is currently developing the statement of work for the next generation of
TES contracts. The new contracts will include requirements for more
frequent field audits when field work is conducted under these
contracts.
Agency Regional Responses
Each region reviewed also stated in responses to draft and final audit
reports that it was taking regional actions which would correct the deficiencies
cited in the reports. We summarize these actions below by region.
Region 1
Would develop an automated system to record, track and monitor
enforcement actions.
Would develop policy and guidelines for monitoring and tracking of
enforcement actions. The policy will identify major/minor deliverables
and PRP communication procedures. It will address timeframes for
resubmitting deliverables and will present guidelines for developing
realistic deliverable schedules.
Prepared stipulated penalty guidance in June 1990 stressing the
importance of compliance monitoring and the merits of penalties as an
economic incentive for complying with orders.
Will monitor compliance more closely and use their enforcement
authority when appropriate.
Will implement the national guidance on quality assurance audits for
the TES contractors when issued.
Will conduct semi-annual regional audits using the information and
format included in the national audit guidance.
Region 5
• Will provide instructions on project manager workload and guidance for
granting and documenting extensions for PRP deliverables.
• Would issue a memorandum requiring the use of the latest model
enforcement documents in the appropriate situations.
• Is implementing a compliance tracking system which will allow
managers to monitor compliance with all enforcement actions.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 58
• Will modify their regional tracking system when the national compliance
tracking policy is issued.
• Is developing guidance on the invocation and documentation of
stipulated penalties.
• Will contact Department of Justice to gather the appropriate materials
and set the necessary procedures to facilitate assessing statutory
penalties.
• Will emphasize the use of current stipulated penalties language in
conjunction with instructions on use of model settlement documents in
negotiations.
• Revised the memorandum of understanding between the two divisions
involved in approving the quality assurances plans for the PRP cleanups
to include a framework for monitoring compliance with its provisions
(using an internal control review process).
CONTRACT LABORATORY PROGRAM
Scope and Objectives
The Contract Laboratory Program (CLP) consists of laboratories under
contract to EPA which produce chemical data analyses of samples from
potential and confirmed Superfund hazardous waste sites for EPA regions' use.
The objectives of this audit were to determine whether:
a. Original CLP analytical documentation was properly safeguarded;
b. Two major regional program controls, use of performance evaluation
samples and data evaluation oversight, were sufficient to help ensure the
integrity of CLP data;
c. Regional reviews of CLP test results (data packages) were timely and
effective;
d. EPA was paying full price for unacceptable or partially acceptable data
packages; and
e. Decisions were made using questionable data packages.
We performed our fieldwork from August 1989 through May 1990 at EPA
Headquarters, the Sample Management Office (contractor provided) and
Regions 2, 3, 4, 7 and 8. We sent a questionnaire to six regions to get
information on the methods they used to evaluate CLP laboratories'
performance. We talked with Superfund remedial project managers in Regions
2, 3 and 8.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 59
Findings
1. EPA Needs to Safeguard All Original CLP Documents that Mav be Useful in
Legal Proceedings
EPA did not obtain and safeguard all original documentation which was
generated when samples from Superfund sites were analyzed by CLP
laboratories. Shortly after a CLP laboratory completes work for EPA, it sends
the results of this work, and supporting documents (called a data package), to
the appropriate regional office and other authorized parties. However, various
documents were not always sent with the data package. Generally, these
documents included original chain of custody records. EPA regions did not
obtain or safeguard some of these records because the Agency's existing
policies did not require them to.
As a result, the Agency risked not having documentation that may be
needed to (a) obtain restitution from companies that contaminated a Superfund
site, and (b) investigate fraud cases against CLP laboratory personnel. In
addition, when documentation was discarded, as happened in Region 7, the
Agency wasted the money it spent to have the documentation collected,
reviewed and delivered to Region 7.
2. Guidance and Standards Needed to Ensure Adequate Oversight of Data
Review Contractors and to Instruct Regional Offices in the Use of Test
Samples
EPA regional offices were not consistent in their use of two important
quality assurance measures. First, regions followed different practices in using
performance evaluation (PE) samples to monitor CLP laboratories' performance.
Regional use of PE samples was not a requirement of the CLP. However, two
regions used them regularly, while the other eight regions rarely used them, or
did not use them at all (since we completed our original fieldwork additional
regions have started using PE samples). Second, regions followed different
practices in monitoring the data validation process. For example, some regions
rechecked (revalidated) a certain percentage of CLP data review reports
(validations), while at least one region did not confirm whether anyone
completed an initial validation.
This lack of consistency in both using and monitoring quality assurance
measures could have resulted in regional offices making different decisions
regarding the quality and use of comparable CLP data. In addition, when the
oversight given to the process of checking CLP analyses is minimal, a region
risks citing unvalidated samples in important Agency documents. One reason
validation is important is that it sometimes keeps CLP test results from being
used. For example, Region 2 officials estimated that approximately eight
percent of CLP test results in Region 2 were not. used because of problems that
were only detected during validation or oversight of the validation process
(oversight may include revalidation).
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 60
3. EPA Needs to Complete Its Improvements to the Internal Controls over the
SAS Contracting and Payment Process
EPA's internal controls, at the time of our audit fieldwork, were not
sufficient to protect the Agency from paying Special Analytical Services (SAS)
contractors for laboratory results which were not used for the region's intended
purpose. We reviewed 32 cases in four regions where the regions found
problems with CLP analyses and recommended that payments be reduced or
not made. These cases were brought to our attention by regional officials. "We
estimated that these "problem" cases represented approximately 5.5 percent of
all cases in these four regions. We found no reductions in payments were
made for poor quality based on the regions' recommendations in 18 of the 32
cases. In five additional cases, partial payments were made but the data
results were not used. As a result, EPA paid at least $161,463 for unused data
or data of limited use. These payments show the Agency's internal procedures
and controls did not always protect it from paying the full invoiced amount for
analyses found to be useless or of limited use.
Recommendations
We recommended that EPA:
• Issue guidance requiring Agency officials to take consistent actions to
obtain documentation files (which may be needed for legal proceedings)
that remain on contractors' premises.
• Develop regional plans to implement the guidance, including
designation of a responsible manager, milestone dates, and designation
of resources to accomplish the plans.
• Establish national policy and guidance on the use of PE samples.
• Issue guidelines for oversight of contractors performing data validations
and make sure these guidelines are followed.
• Clarify the Agency's national policy on validation of all CLP samples
cited in key Agency documents (including RODs, Rl reports and FSs);
and require validation of sufficient CLP samples in sensitive cases.
• Confirm whether this policy has been followed with existing Agency
RODs, Rl reports, and FSs that are still being used.
• Implement the revised SAS subcontract.
• Include an evaluation factor for a laboratory's SAS technical quality as
shown by past performance.
• Review Sample Management Office to make sure these new
procedures are followed.
• Issue guidance instructing that all SAS contract deliverables be
reviewed timely for contractual compliance, and stressing the
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 61
importance of formal, timely written notice when regional data
validation reviews find technical or contractual problems with the data.
Agency Response
In response to our draft report, EPA stated it:
• Asked the National Enforcement Investigations Center (NEIC) to identify
all documentation files that have not been safeguarded. The NEIC will
help the regions to obtain documentation.
• Would provide guidance to the regions for obtaining documentation
files.
• Would develop a national program for inserting blind PE materials into
cases of regular site samples.
• Implemented the revised SAS subcontract and increased eligibility
factors for SAS subcontracts.
In response to our final report, EPA further stated it:
• Was developing an implementation plan for obtaining documentation
files.
• Designated the Environmental Services Division Director in each region
as the management official responsible for obtaining documentation
files.
• Would allow each region to establish its own approach to recovering
missing documentation files based on regional program priorities and
guidance.
• Was developing guidance and minimal standards for use of
performance evaluation samples.
• Was assisting the regions in establishing repositories of PE samples.
• Was developing a priority workplan for implementing guidance on
oversight of contractors performing data validation.
• Completed implementation of Basic Ordering Agreements for the SAS
contract services.
• Strengthened SAS eligibility requirements to include factors for SAS
technical quality demonstrated by past performance.
• Continuously monitors the SAS operations to ensure compliance with
procedures.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 62
• Would send letters to the regions instructing them on the need for
timely data review.
CONTRACTOR PROPERTY OVERSIGHT SPECIAL REVIEW
Scope and Objectives
We performed a special review of EPA's oversight of contractor property
control systems. This issue came to our attention while conducting a survey of
Government property in the hands of contractors. Our review included all three
EPA contract management offices - Headquarters, Cincinnati and Research
Triangle Park. This was a special review and not an audit following the
Government Auditing Standards (1988 revision) issued by the Comptroller
General of the United States.
Findings
1. Initial Reviews of Property Control Systems Not Completed
At the time of our review, EPA had completed property control system
reviews for only 26.4 percent of its contractors with Government property.
These contractors possessed 38.7 percent of Government property under
contractor control. The Federal Acquisition Regulations (FAR) require Federal
agencies to review and approve the property control system of any contractor
that possesses Government assets to make sure its procedures are adequate to
protect Government interests. If a contractor fails to correct its system after
being notified of deficiencies by the reviewing agency, the contractor is liable
for loss of Government property. If the agency approves or fails to review the
system, the contractor's liability is limited to cases of willful misconduct or lack
of good faith on the part of the contractor's management personnel. The
number of completed system reviews may have been limited, in part, because
of duplication of effort on the part of the three EPA offices. The offices were
also inconsistent in the acceptance of reviews by other Federal agencies. The
FAR directs agencies to accept the review and approval of a contractor's
property control system by other Federal agencies. While two of EPA's
contract management offices approved systems based on other Federal agency
approvals unless there was a reason to question it, the third office routinely
reviewed systems approved by another agency.
2. Subsequent Compliance Reviews Not Performed
As of January 1991, EPA had performed follow-up compliance reviews for
only 24.3 percent of its contractors with Government property. These
contractors controlled 38.4 percent of Government property in the hands of
contractors. EPA had never reviewed the four largest contractors, in terms of
dollar value of Government property held. It had not reviewed 16 contractors
with property over $500,000. Two of the offices stated they were unable to
conduct additional reviews due to insufficient staff and limited travel budgets.
EPA issued a policy in 1990 requiring annual compliance reviews of contractors
holding Government property valued at $500,000 or more, and reviews every
three years for those holding property with less value. EPA scheduled fiscal
1991 reviews to meet the annual compliance review policy.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 63
Recommendations
We recommended that EPA document the completion of corrective actions
it was taking and establish a timeliness standard for completing initial property
control system reviews for new contractors.
Agency Response
In response to the draft report, EPA indicated it believed that its contract
property administration program now complied with the OIG recommendations.
EPA had taken final action on property control systems accounting for 85
percent of the property assigned to contractors. In response to the final report,
EPA indicated it had completed action on all contractor property systems
except for contracts being closed, a contract under which no Government
property has been provided, a contract for which no system had yet been
submitted for review, and a contract for which the initial system submission
was unsatisfactory.
SITE CLEANUP DOCUMENTS EARLY WARNING ALERT
Scope and Objectives
We issued an early warning alert based on findings by an independent
public accounting (IPA) firm during a financial audit of an EPA Region 3 removal
subcontractor. That audit included testing of EPA's official removal site
cleanup documentation. The IPA firm performed its testing at EPA facilities in
Philadelphia, Pennsylvania; Edison, New Jersey; and Washington, D.C. The
OIG had found similar conditions in Region 3 during three prior audits.
Findings
1. Deficient Labor and Equipment Field Records
EPA's entry and exit logs for on-scene personnel and equipment were
deficient at 18 of the 21 Superfund sites tested. Daily work orders were
deficient at 15 of the 21 sites. EPA's On-Scene Coordinators (OSCs) should
have used the logs and work orders to approve the contractor's costs shown
on their EPA Forms 1900-55 (dailies).
2. Late QSC Reviews and Certifications of Dailies
At five of the largest of the 21 sites tested, OSCs approved dailies an
average of 38.84 days after the dates covered. Dailies are the principal records
of each day's site cleanup costs. The OSCs' untimely approvals raise concerns
about the effectiveness of their cost control efforts and the accuracy of the
contractor's claims.
Recommendations
We recommended that EPA Region 3 review the IPA firm's findings,
communicate the findings to appropriate Superfund managers and respond to
the findings.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress far Fiscal 1991 64
Agency Response
In response to the report, EPA Region 3 indicated it had taken the following
actions since the removal actions reviewed had been completed:
• Created and filled Field Administrative Specialist positions to assist
OSCs with their administrative and financial duties.
• Developed a Field Administrative Protocol which clarified the roles and
responsibilities of OSCs and Field Administrative Specialists to ensure
thorough, consistent application of cost accounting and administrative
support at removal sites.
• Initiated an internal site management review process covering cost
management, contract interpretation and application, and records
maintenance.
• Developed a Field Handbook and Audit Program covering field audit
procedures for site start-up and ongoing cost accounting and
administrative support.
REGION 1 MEDICAL MONITORING PROGRAM ALLEGATION REVIEW
Scope and Objectives
We performed a review of allegations about the Region 1 medical
monitoring program. The complainant alleged that:
• Examinations had been provided to ineligible EPA employees at a cost
of about $800 each.
• The medical monitoring contractor had not properly disclosed pertinent
medical information obtained from employees' medical examinations to
EPA staff as required by its contract.
In addition to reviewing these allegations, we also determined whether:
• The contract was procured and executed according to generally
accepted government contracting procedures and was in the best
interest of the Agency.
• The Regional staff established and implemented controls to ensure that
only eligible staff receive medical examinations, billings are accurate,
and proper oversight is maintained over the administration of the
contract.
This was a special review and not an audit following the Government
Auditing Standards (1988 revision) issued by the Comptroller General of the
United States.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 65
Findings
1. Complainant's Allegations Were Not Substantiated
We found no evidence to substantiate the allegations. The Region
generally complied with established Regional procedures and policies regarding
the medical monitoring program.
2. Contract Was Properly Procured and Executed
The contract was procured and executed in accordance with generally
accepted government contracting standards. Satisfactory price analysis was
performed for the medical examinations, which had a price of $469 each.
3. Region Needs to Strengthen Contract Administration
We could not determine the accuracy of the contractor's listing of
employees who were actually given an examination. Most Regional divisions
kept records of employees scheduled for examinations, but did not confirm
whether the employees actually received an examination. The contractor's
monthly invoices contained the number of examinations provided, but did not
include the names of employees examined. The contractor did provide an
annual listing of employees examined, but the Region did not verify the listing.
As a result, the Region was not able to detect if there were billing errors.
Recommendations
We recommended that EPA Region 1:
• Develop a control register maintained by the Project Officer that
accounts for eligibility, scheduling and proof of examination.
• Require employees or the responsible division to provide the Project
Officer with written certification that the medical examination was
obtained.
• Require the contractor to provide with each invoice a listing of
employees examined.
Agency Response
In response to our final report, EPA Region 1 stated it:
• Would discuss with each division contact the need to carefully track
and record appointments, and to provide the Project Officer with a
copy of the record periodically.
• Would meet with the contractor to develop a mutually acceptable and
simple way for the Project Officer to assure validation of the invoices.
• Had requested Headquarters to provide an independent expert
evaluation of the Region's medical monitoring program.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 66
EMERGENCY WAIVER CRITERIA SPECIAL REVIEW
Scope and Objectives
We performed a special review of EPA's processing of emergency waivers
of the $2 million and 12 month statutory limits on removal actions, the
primary objective of this review was to identify potential deficiencies in Agency
criteria for establishing the existence of emergencies warranting such waivers.
Our review covered 26 emergency waivers approved by EPA between
October 1988 and June 1990. Our evaluation was limited to OSWER
operations and documentation. No review was conducted at the regions where
the requests for waivers originated.
This was a special review and not an audit following the Government
Auditing Standards (1988 revision) issued by the Comptroller General of the
United States.
Findings
The emergency waivers included in our review were generally supported by
documentation in the files of the Emergency Response Division. However,
documentation submitted by the regions was not always consistent or com-
plete. The Emergency Response Division sometimes had to obtain additional
information from the regions or add clarifying addenda to the waiver requests
before approval. EPA's guidance for removal actions did not define key ele-
ments that support a waiver of the statutory limits on removal actions. EPA
had not established criteria or parameters to identify emergency situations
justifying a waiver request or defined the term "immediate risk" (to public
health and the environment) used to document emergency conditions.
Processing time for the 26 waivers ranged from 6 to 135 days, with an average
processing time of 34 days from receipt of the formal request to approval.
EPA's goal was to process emergency waivers within 21 calendar days.
Recommendations
We made no recommendations in the final report because the Agency had
taken action during the review to correct the deficiencies found.
Agency Response
During the course of our review, EPA took the following actions:
• Issued revised Action Memorandum Guidance which should improve
the overall documentation of action memorandums and related
emergency waiver requests.
• Reviewed action memorandums at each region as part of the 1990
OSWER reviews of regional operations.
In response to the final report, EPA further stated it:
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EPA Office of the Inspector General Annual Sunerfund Report to the Congress for Fiscal 1991 67
• Planned a follow-up to the review of action memorandum quality.
• Was examining the exemption request and approval process at
Headquarters to determine where greater efficiencies can be obtained
in processing these documents.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 68
INTERAGENCY AGREEMENTS
EPA enters into interagency agreements (lAGs) with several other Federal
agencies to perform Superfund tasks. The Offices of Inspector General or other
audit organizations of the receiving agencies audit the cost records for these
agreements and/or their agency's performance. The EPA OIG also issues these
audit reports to EPA with a coyer letter, which includes recommendations for
EPA action if appropriate. In fiscal 1991, we issued eight of these reports to
EPA management. We summarize the eight audits below by agency audited.
We did not recommend any EPA actions on any of these audits. CERCLA
requires other Inspectors General, like EPA's, annually to audit their agency's
use of the Superfund and report on that audit to the Congress.
AGENCY FOR TOXIC SUBSTANCES AND DISEASE REGISTRY
The Department of Health and Human Services (HHS) OIG audited the
Agency for Toxic Substances and Disease Registry (ATSDR) Superfund costs
for fiscal 1987 through 1989. The ATSDR was mandated by CERCLA to
perform health assessments at Superfund sites and to develop and maintain an
inventory on toxic substances and toxic health problems. During the audit of
costs incurred during the three year period, HHS OIG found that generally,
transactions were properly and accurately recorded and reported. However, the
accounting system used by ATSDR at the time of the OIG's audit did not meet
EPA's requirements of identifying costs for work at specific toxic waste sites.
The HHS OIG identified this problem as a material internal control weakness for
which they issued a later separate report.
U.S. ARMY CORPS OF ENGINEERS
The U.S. Army Audit Agency audited the fiscal 1989 Superfund financial
transactions of the U.S. Army Corps of Engineers (COE). In general, the COE
properly supported and accurately recorded and reported Superfund obligations
and disbursements. The Audit Agency reported that obligations and disburse-
ments were generally supported by valid contracts, contract modifications, or
interdistrict agreements. Obligation amounts were correct and were for valid
Superfund projects. However, there were two obligations (for $31,833 and
$847) recorded at one site that were not supported. The COE took corrective
action to resolve this oversight.
FEDERAL EMERGENCY MANAGEMENT AGENCY
The Federal Emergency Management Agency (FEMA) OIG audited FEMA's
administration of the permanent and temporary relocation components of the
Superfund program for fiscal 1990. Generally, expenditures were for eligible
purposes and were supported by documentation. The FEMA OIG did report
ineligible and unsupported payments for which they questioned $15,300 in
costs. In addition, contractor cost of $239,007 had not been recorded in
FEMA's accounting records because of timing differences and a computer
programming problem which delayed the recording of some costs. FEMA
management agreed to correct the minor problems noted in the report.
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EPA Office of the Inspector General Annual Stioerfund Report to the Congress for Fiscal 1991 69
DEPARTMENT OF THE INTERIOR
The Department of the Interior (DOI) DIG performed an audit of costs
claimed in fiscal 1989 by the Office of Environmental Affairs in the Office of
the Secretary. The DOI OIG concluded that except for travel questioned costs,
the Office maintained accurate and complete cost records for Superfund
activities. The DOI OIG reported that the Office claimed $15,283 for travel
which did not occur. As a result of recommendations made in the audit report,
DOI took corrective action.
INTERNAL REVENUE SERVICE
The Internal Revenue Service (IRS) provides EPA with 1) statistical
tabulations of environmental taxes and 2) administrative services to Region 5.
The IRS Inspection Service reviewed fiscal 1989 costs incurred for IRS lAGs.
The Inspection Service reported that IRS reasonably charged its cost to EPA.
DEPARTMENT OF JUSTICE
The Department of Justice (DOJ) OIG performed a financial and compliance
audit of the Environment and Natural Resources Division (ENRD) costs incurred
in fiscal 1989. The ENRD is responsible for the conduct and control of all
litigation arising under Superfund. The DOJ OIG found that ENRD procured
routine accounting, reporting and support services totaling over $500,000 from
an accounting firm under an expert witness agreement, whereas these services
should have been acquired under a formal contract pursuant to the Federal
Acquisition Regulations (FAR). In addition, the ENRD did not provide EPA with
the report on minority business utilization for contracting activities as required
by SARA.
Although ENRD's procurement method did not result in questioned costs by
the DOJ OIG, ENRD did not have the necessary assurance that the required
accounting, reporting, and support services are being obtained at the most
reasonable price. The DOJ OIG recommended that ENRD initiate procurement
action consistent with the FAR requirements.
The DOJ OIG also recommended that ENRD take needed action to fully
comply with the requirement for a minority business utilization report.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
The National Aeronautical and Space Administration (NASA) performed
research and development of a prototype instrument to analyze soil and water
samples at hazardous waste sites for trace elements such as lead or arsenic.
The cost of the IAG also included the production and delivery of this instrument
to EPA. The EPA and NASA shared the cost of this effort at 75 and 25
percent, respectively. The NASA OIG audit found that NASA properly support-
ed and accurately recorded and reported all Superfund monies provided under
the IAG. In addition, the report stated that the deliverable, the prototype
instrument, was delivered to EPA in May 1989.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 70
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$226.575
226,575
0
0
0
Total Costs
$226,575
226,575
0
0
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
NATIONAL INSTITUTE OF ENVIRONMENTAL HEALTH SCIENCES
The HHS OIG audited National Institute of Environmental Health Sciences
(NIEHS) Superfund costs for fiscal 1987 through 1989. The NIEHS receives
Superfund monies to carry out health related activities such as training person-
nel engaged in hazardous waste removals and studying short and long-term
effects of exposure to specific chemicals. The HHS OIG's audit found that
NIEHS generally administered the funds in accordance with Superfund legisla-
tion. However, the HHS OIG could not express an opinion on $251,281 of
personnel costs because documentation supporting the costs could not be
found and NIEHS had internal control weaknesses in recording and reporting
obligations.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 71
CONTRACTS
The 01G is responsible for conducting and supervising independent and
objective audits of Superfund programs and operations. To carry out this
responsibility, the DIG performs financial and compliance audits of EPA
contractors. Each of the Public Laws authorizing EPA to award contracts
provides the Agency authority to audit and examine the books and records of
the contractors and subcontractors receiving Federal funds. Each EPA contract
also contains audit provisions. Our primary audit objectives are to determine
(1) whether the controls exercised by the contractors and subcontractors
through their accounting, procurement, contract administration, and property
management systems are adequate to account for costs claimed; and (2) costs
claimed are reasonable, allowable, and allocable, in accordance with applicable
laws and regulations, to the sponsored project.
Audits of contracts not only yield financial benefits to the Agency, but also
aid in improving Agency management. We expect to devote increased
resources to auditing EPA contractors and subcontractors given the increased
size of the program and EPA's conduct of more actual cleanups. These audits
also play an integral part in supporting EPA's cost recovery actions.
During fiscal 1991, we issued 39 Superfund contract audit reports. Of
these, 20 were initial pricing reviews in which we reviewed costs proposed by
offerers or bidders seeking EPA contract awards. Because these are only
proposed costs, our reviews do not question costs but rather recommend as
efficiencies costs which we believe EPA should not incur. The combined
financial results of the initial pricing reviews were as follows:
Total Costs Audited $ 412,903,400
Total Recommended Efficiencies $ 183,268,195
We issued 10 reports on incurred costs under EPA contracts. The financial
results of these audits were as follows:
Total Costs Audited $ 18,693,576
Total Costs Accepted $ 14,753,445
Total Costs Ineligible1 $ 1,339,604
Total Costs Unsupported2 $ 2,600,527
Total Costs Unnecessary/Unreasonable3 $ 0
1 Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement, or other agreement or document governing the
expenditure of funds.
2 Costs questioned because, at the time of the audit, they were not supported by adequate
documentation and/or had not been approved by responsible program officials.
3 Costs questioned because they were not necessary or not reasonable.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 72
In addition, we issued five reports on proposed indirect cost rates, two
system survey reports and two program review reports on EPA contractors.
The OIG can choose to have the audits performed by in-house staff,
independent public accounting firms or another Federal audit agency. During
fiscal 1991, our Superfund financial and compliance audits of contracts were
performed as follows:
Audits Performed by OIG Staff 3
Audits Performed by Independent Public Accountants 30
Audits Performed by Defense Contract Audit Agency 6
Exhibit III contains a listing of all Superfund audit reports issued by the OIG
during fiscal 1991.
We summarize five particularly significant contract audit reports covering
three Emergency Response Cleanup Services (ERCS) contractors below.
ENVIRONMENTAL HEALTH RESEARCH AND TESTING
Scope and Objective
We contracted with an IPA firm to perform an interim audit of an ERCS
contract with Environmental Health Research and Testing, Inc. (EHRT). The
audit objective was to determine whether costs incurred under two delivery
orders were reasonable and allowable under the terms of the contract and
applicable regulations. The audit covered costs claimed by EHRT from
March 28, 1988 through April 1, 1991.
Findings
1. Required Cost and Pricing Data Not Submitted
The contractor did not submit cost and pricing data for a subcontract for
$334,856. The Federal Acquisition Regulations (FAR) require contractors to
submit cost and pricing data supporting the proposed price on negotiated
procurement actions over $100,000. The President of the subcontractor was
the son of EHRT's owner. The subcontractor's costs were originally billed as
prime contractor costs. EPA's Contracting Officer discovered the arrangement
and required the contractor to bill the costs as subcontractor costs and enter
into a contract with the subcontractor. The transfer of the costs and the
execution of the subcontract took place after the subcontractor had completed
work. In addition, key contract responsibilities were delegated to the
subcontractor without EPA's approval. We questioned all costs for the
subcontract as ineligible.
2. EHRT Selected High Bidder as Subcontractor Without EPA Contracting
Officer Approval
EHRT selected the highest of four bidders for site security services. The
second lowest bidder was rejected because of alleged unsatisfactory
performance in the past, but the contractor's files did not adequately document
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 73
the unsatisfactory performance. The other two bidders were ejected because
they had no record of performance with EPA, and were not given an
opportunity to provide references on job performance. Although the
subcontractor was paid about $200,000 and EPA Contracting Officer approval
is required for procurement actions over $25,000, the action was not sent to
the Contracting Officer for approval. We questioned the difference ($94,236)
between the lowest bidder's price and the highest bidder's price as ineligible.
3. EHRT Claimed Unsupported Costs
The contractor claimed $5,802 of personnel cost that were billed as
overtime and could not be supported by time sheets. The contractor also
claimed $ 17,240 for a passenger van the contract required to be billed at cost.
However, EHRT's accounting system does not accumulate costs for individual
equipment items.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$4,779.068
4,326,934
429,092
23,042
0
Total Costs
$4.779,068
4,326,934
429,092
23,042
0
1 . Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA contracting officials adjust the eligible costs
in accordance with our determination and take appropriate action to recover the
excess funds paid to the contractor.
Agency Response
In response to the audit report, EPA Region 3 indicated:
• EPA's analysis of the costs of the subcontractor referenced in
Finding 1 above found that the billed rates were reasonable. EPA
also performed selected reviews to verify personnel, and no
deficiencies were noted. EPA certified and accepted the services
performed by the subcontractor. Based on the principle of
equitable doctrine, the EPA Contracting Officer (CO) allowed all
costs claimed for this subcontract.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 74
• The EPA CO conducted an extensive market survey to determine a
fair and reasonable rate for security services. The CO determined
that $46,472, the difference between the CO market analysis and
the highest bidder's price, is ineligible and will recover excess funds
paid to the contractor.
• The CO disallowed the $5,802 of unsupported overtime costs.
• The CO directed EHRT to compute the costs associated with vans
and passenger vehicles. The CO disallowed $1,724 representing
profit, and reserves the possibility of further disallowance if EHRT's
computations to verify incurred costs are inadequate.
GUARDIAN ENVIRONMENTAL SERVICES
Scope and Objectives
We contracted with an IPA firm to perform an interim audit of two ERCS
contracts with Guardian Environmental Services, Inc. The audit objective was
to determine the allowability of direct costs claimed under the contracts. The
audit covered costs claimed by Guardian from the inception of the contracts
through June 30, 1990.
Findings
1. Guardian Environmental Services. Inc. Had Material Weaknesses in Its
Internal Control Structure
The contractor had material weaknesses involving the internal control
structure and its operation. Guardian did not:
• Maintain an accounting system to report costs under EPA contracts,
but instead used EPA's Removal Cost Management System.
• Maintain written accounting procedures.
• Require initialization of changes to time sheets.
• Maintain adequate segregation of duties.
• Document cash payments to employees.
• Identify and segregate unallowable costs.
2. Guardian Environmental Services. Inc. Claimed Ineligible Costs
The contractor claimed $406,443 of costs ineligible under the terms of the
contract and the Federal Acquisition Regulations. The ineligible costs included
(1) $391,136 of unauthorized equipment, materials and personnel costs; (2)
$11,248 of unallowable items included in the overhead rates; (3) $3,228 of
personnel costs billed at incorrect billing rates; and (4) $831 of duplicate travel
costs.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress far Fiscal 1991 75
3. Guardian Environmental Services. Inc. Claimed Unsupported Costs
The contractor claimed (1) $510,215 of equipment, personnel and material
costs lacking backup documentation; (2) $244,145 of unit rate materials costs
based on an incorrect billing method; and (3) $42,134 of overhead costs
associated with unsupported unit rate materials costs. In addition, the IPA
considered $385,346 of overhead costs unsupported because the overhead
rate had not yet been audited.
FINANCIAL RESULTS OF AUDIT
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$5,732,303
4,144,020
406,443
1,181,840
0
Total Costs
$5,732,303
4,144,020
406,443
1,181,840
0
1 . Costs questioned because of an alleged violation of a provision of a law, regulation.
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA:
• Require Guardian to provide evidential matter for unsupported costs.
• Make sure that Guardian reimburses EPA for ineligible costs.
• Make sure that Guardian establishes and maintains an adequate internal
control structure and complies with all provisions of the contract.
Agency Response
In response to the audit report, EPA Region 3 indicated it:
• Would require Guardian to provide evidential matter for costs EPA
considered unsupported under the terms of the contract. The CO
determined that some costs questioned in the audit were allowable,
and reserved the possibility of allowing certain other costs without
additional documentation upon definitization of the delivery orders.
• Would require Guardian to reimburse EPA for $7,863 in ineligible costs
for duplicate travel charges and incorrect billings of overtime hours.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 76
The CO allowed charges for which there were no daily work orders
based on other evidence of EPA authorization of the work.
• Had required Guardian to implement an acceptable accounting system,
documented in writing, and develop related improvements in its internal
controls. Guardian now requires the signing and initialing of time
sheets, maintains segregation of duties and has written procedures to
document cash payments to employees for meals and incidental
expenses. EPA required Guardian to:
• Identify and segregate indirect costs;
• Develop procedures to control equipment utilization records;
• Develop equipment rates; and
• Identify and segregate unallowable/allowable costs.
OHM REMEDIATION SERVICES CORP.
Scope and Objective
We contracted with an IPA firm to perform reviews of management costs
claimed by OHM Remediation Services, Corp. under three different ERCS
contracts. The management part of the contracts was performed on a cost-
plus-award fee basis. Management efforts encompassed all managerial,
financial, administrative and clerical functions needed to support and track
performance of the cleanup activities.
The objective of the three reviews was to determine whether costs billed
were reasonable, allowable and allocable under the terms of the contract, and
in accordance with appropriate Federal regulations. The reviews covered cost
claimed for different periods for each of the three contracts.
Findings
1. OHM Billed In Excess of Actual Costs
OHM claimed $403,703 in excess of actual costs, including labor, travel,
other direct costs and overhead.
2. OHM Claimed Unsupported Costs
OHM claimed $507,802 for overhead costs for two years for which costs
were not auditable due to the unacceptability of OHM's accounting system.
OHM claimed an additional $63,870 for travel costs not supported by
documentation, labor costs for which a final rate had not yet been negotiated
with EPA, and associated overhead costs.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 77
FINANCIAL RESULTS OF AUDITS
Amount audited
Amount accepted
Ineligible costs1
Unsupported costs2
Unnecessary/unreasonable costs3
Federal Share
$3,631,519
2,656,144
403,703
571,672
0
Total Costs
$3,631,519
2,656,244
403,703
571,672
0
1. Costs questioned because of an alleged violation of a provision of a law, regulation,
contract, grant, cooperative agreement or other agreement or document governing the
expenditure of funds.
2. Costs questioned because, at the time of the audit, they were not supported by ade-
quate documentation and/or had not been approved by responsible program officials.
3. Costs questioned because they were not necessary or not reasonable.
Recommendations
We recommended that EPA:
• Recover the entire questioned ineligible costs.
• Require OHM to provide documentation to support the questioned
unsupported costs. If OHM could not provide supporting
documentation, we recommend that EPA either negotiate a lump
sum settlement (for unauditable overhead rates applicable to one
contract) or recover the costs (for the remaining two contracts).
Agency Response
In response to the audit report, EPA negotiated final costs with OHM for
all three contracts. For two of the contracts, the negotiated final costs agreed
exactly with the audit recommendations. For the contract with the unauditable
overhead rates, the EPA Contracting Officer worked closely with the OIG in
reaching figures for allowable costs. OHM removed all costs from the overhead
pool that appeared in any way to be unallowable.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 78
ASSISTANCE TO EPA MANAGEMENT
In addition to performing audits and investigations, the OIG responds to EPA
management requests for OIG input in the development of regulations, manuals,
directives, guidance and procurements. These are proactive efforts to prevent
problems that might later result in negative audit findings or investigative
results. The OIG reviews and comments on draft documents prepared by
Agency offices. In some instances, an OIG staff person attends meetings of an
EPA work group to provide input. Fiscal 1991 was an active year for OIG
preventive assistance to EPA management in the Superfund area. In addition to
assisting EPA management, we coordinate with other Federal agencies. We
also seek to improve Superfund audit and investigative capabilities of our OIG
and of other Federal OIGs.
Technical Assistance Grants
The EPA Administrator requested in fiscal 1987 that the OIG work closely
with the Superfund office to develop and administer the technical assistance
grants program. This program assists groups of persons affected by Superfund
sites. Because these grants are awarded to small groups without grants
experience or much administrative structure, the Administrator recognized that
this program presented special management challenges. In response to this
request, in fiscal 1991 the OIG continued to participate in the technical
assistance grants work group by reviewing the draft final rule.
Closeout/Deobligation of Assistance Agreements
We have been part of the Agency's Superfund Closeout/Deobligation Task
Force. EPA established this Task Force to review and improve EPA policies and
procedures for closeout of grants, cooperative agreements and interagency
agreements, and the deobligation of unneeded funds from them. During fiscal
1991, we participated in Task Force conference calls and commented on draft
policies and procedures.
Coordination with Other Agencies
Since EPA manages the Hazardous Substance Superfund (Trust Fund),
EPA's OIG took on the task of informing the Federal OIG community (as well as
appropriate audit organizations) of the mandated audit requirements. The
Superfund Amendments and Reauthorization Act of 1986 (SARA) requires
"... the Inspector General of each department, agency or instrumentality of
the United States which is carrying out any authority ..." under SARA to
conduct an annual audit of uses of the Superfund. In July 1987, we formed a
work group of representatives from several OIGs and other audit organizations
of those Federal departments or agencies with significant Fund-financed
responsibilities under CERCLA or Executive Order 12580. The objectives of our
work group are to:
• Clarify the statutory requirement;
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Rscal 1991 79
• Coordinate schedules and reports under the mandatory annual audit
requirement;
• Discuss funding mechanisms for the mandatory audit work; and
• Discuss program areas of concerns or audit findings.
Because of the experience gained from performing audits in past years, we
held no work group meetings this year. However, individual meetings with
staff of other OIGs and audit organizations were held in response to individual
needs.
Superfund Orientation Course
As Superfund spending has increased and the program has expanded and
developed, the OIG has recognized a need to be sure that its auditors and
investigators who review Superfund have a good understanding of the program.
Therefore, we have developed a special orientation course explaining the key
aspects of the Superfund program, including:
• Superfund and related legislation and regulations;
• The removal, remedial and enforcement parts of the Superfund
program;
• Organizational structure and functions of EPA offices delegated specific
Superfund responsibilities; and
• The OIG's role and responsibilities concerning Superfund and the type
of Superfund audits the OIG performs.
We require all OIG employees and OIG audit services contractor employees
performing Superfund audits to take this course. We also offer the course to
other Federal OIGs and audit organizations who perform audits in their own
agencies. We presented this course to three OIG audit divisions in fiscal 1991.
We planned additional presentations for fiscal 1992 for all remaining OIG
auditors and investigators doing Superfund work. We include the course in the
OIG Training and Development Sources course catalog.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 80
REVIEW OF AGENCY'S SUPERFUND PROGRESS REPORT
Section 301 (h) of CERCLA, as amended by SARA, requires that, "On
January 1 of each year the Administrator of the Environmental Protection
Agency shall submit an annual report to Congress of such Agency on the
progress achieved in implementing this Act during the preceding fiscal year."
The provision also requires the inclusion of seven specific areas in the report.
CERCLA requires the Inspector General to review this report "... for
reasonableness and accuracy and submit to Congress, as a part of such report
a report on the results of such review."
The third Annual Report was due to Congress on January 1, 1991,
covering fiscal 1990 activities. The report was not signed by the EPA
Administrator until February 12, 1992. Our review of the report was submitted
on February 11, 1992, to the Administrator (Audit Report No. E1SFF1-11-
0015-2100237). Most of our audit work for this review was conducted during
fiscal 1991.
In addition to the report we are required to submit as a part of the
Agency's report, we issued three other reports in connection with our review.
Two of these reports were submitted to the EPA regions we reviewed about the
accomplishments they claimed in CERCLIS. Since the Agency corrected the
accomplishments we questioned in their report to Congress, we did not discuss
the details of our regional findings in our report on the Agency report. The third
was a report on the timeliness of the Agency reports to Congress. We
summarize all four reports below.
REPORT REVIEW FOR SUBMISSION IN AGENCY REPORT
For the most part, the Annual Report was reasonable and accurate.
However, the Agency did not always rely on the Comprehensive Environmental
Response, Compensation, and Liability Information System (CERCLIS), the
Agency's primary Superfund information system, when preparing the Annual
Report.
CERCLIS contained data needed to comply with several of the statutory
requirements for the Annual Report. However, when some sections of the
Annual Report were prepared, either another information source was used or
the CERCLIS data were revised because of a lack of confidence in CERCLIS
data integrity. The lack of CERCLIS data integrity resulted in EPA officials and
EPA contractor staff spending extensive time manually reviewing the data
before using it for the Annual Report. We confirmed the problems with
CERCLIS data integrity through reviews of data from two EPA regions.
We also noted a significant change in policy regarding the Superfund
Innovative Technology Evaluation (SITE) program. Initially, Agency projects
were excluded from the demonstration program. The program involved
demonstrations by private sector participants, with the Agency evaluating the
results. However, two of the SITE demonstrations identified in this Annual
Report were Agency, not private developer, projects. Neither the Annual
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 81
Report nor the SITE Program Report to Congress identify the policy change,
although they both describe Agency demonstrations as part of the SITE
Program.
REGION 4 ACCOMPLISHMENTS REPORT
Scope and Objectives
We reviewed selected Superfund accomplishments claimed by EPA Region
4 for fiscal 1990. The purpose of our review was to determine whether the
Region could properly support its reported accomplishments. The
accomplishments we evaluated were either the start or completion of a
Superfund action defined in the Superfund Program Management Manual
(SPMM) for fiscal 1990.
We selected a random sample of 115 accomplishments from a universe of
1,047 fiscal 1990 accomplishments claimed by Region 4 in CERCLIS. The
universe included the following types of accomplishments: preliminary
assessments completed, site inspections completed, RI/FSs started, RI/FSs
completed, remedial designs (RDs) started, RAs started, removals started and
removals completed. For the sampled accomplishments, we determined the
appropriateness of the claimed accomplishments by comparing the supporting
documentation to the Superfund Comprehensive Accomplishments Plan (SCAP)
definition in the SPPM. We questioned the appropriateness of the claimed
accomplishments when Region 4 officials could not provide documentation
showing the SCAP definition was met during fiscal 1990.
Our final special report was issued on March 31, 1992 (E1SFG1-11-0015-
2400030).
Findings
1. Most Accomplishments Were Properly Supported
We found that 103 (90 percent) of the 115 sampled accomplishments were
appropriately supported. This was a considerable improvement from fiscal
1988, when we found only 56 percent of the accomplishments we reviewed
were appropriately supported. However, we questioned 12 claimed
accomplishments (10 percent). We questioned one accomplishment because
the SCAP definition was not met, five accomplishments because they were not
achieved during fiscal 1990 and six because of a definitional disagreement
between Headquarters and Region 4 (see finding below).
2. Definition of Accomplishment for RI/FS Starts at Federal Facilities Is Unclear
We questioned six accomplishments because Region 4 claimed them
prematurely because they interpreted the SCAP definition for RI/FS starts at
Federal facilities differently than Headquarters officials. Headquarters
maintained that the letter of intent for a site Federal Facilities
Agreement/lnteragency Agreement needed to be signed before a first RI/FS
start could be claimed. A subsequent RI/FS start could be claimed if the
Agreement was signed, or the Agreement was elevated to Headquarters for
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 82
issue resolution. Region 4 claimed starts done in the spirit of such an
agreement, even if it had not actually been signed. After our fieldwork was
completed, a Headquarters official suggested a change to the definition. We
found the suggested change still unclear.
Recommendations
We recommended that EPA Region 4 correct the CERCLIS date on the
accomplishments we questioned. We recommended that the Headquarters
Office of Federal Facilities Enforcement clarify the SCAP definition for a Federal
facility RI/FS start.
Agency Response
In response to our draft report, EPA Region 4 indicated it had corrected the
Federal facilities starts in CERCLIS and that EPA Headquarters was revising the
SCAP definition. In response to our final report, EPA Region 4 further indicated
it had corrected all accomplishments in question in CERCLIS.
REGION 5 ACCOMPLISHMENTS REPORT
Scope and Objectives
We reviewed selected Superfund accomplishments claimed by EPA Region
5 for fiscal 1990. The purpose of our review was to determine whether the
Region could properly support its reported accomplishments. The
accomplishments we evaluated were either the start or completion of a
Superfund action defined in the Superfund Program Management Manual
(SPMM) for fiscal 1990.
We selected a random sample of 124 accomplishments from a universe of
834 fiscal 1990 accomplishments claimed by Region 5 in CERCLIS. The
universe included the following types of accompJishments: preliminary
assessments completed, site inspections (Sis) completed, RI/FSs started, RI/FSs
completed, RDs started, RAs started, removals started and removals completed.
When we identified some forward-dated accomplishments in the random
sample, we judgmentally expanded the sample of site inspections completed by
ten. For the sampled accomplishments, we determined the appropriateness of
the claimed accomplishments by comparing the supporting documentation to
the Superfund Comprehensive Accomplishments Plan (SCAP) definition in the
SPPM. We questioned the appropriateness of the claimed accomplishments
when Region 5 officials could not provide documentation showing the SCAP
definition was met during fiscal 1990.
Our final special report was issued on March 31, 1992 (E1SFG1-11-0015-
2400031).
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 83
Finding
Most Accomplishments Were Properly Supported
We found that 114 (92 percent) of the 124 randomly sampled
accomplishments were appropriately supported. This was a considerable
improvement from fiscal 1988, when we found only 73 percent of the
accomplishments we reviewed were appropriately supported. However, we
questioned 10 randomly sampled accomplishments (8 percent) and five
judgmentally sampled accomplishments claimed by the Region. We questioned
three accomplishments because the SCAP definition was not met, eight
accomplishments because they were not achieved during fiscal 1990 and four
because of data entry errors. Regional officials told us they sometimes entered
incorrect dates to ensure that all accomplishments were listed in CERCLIS, or
because they had met their targeted goals for the fiscal year. They indicated
that after they met their fiscal year goal for Sis completed, they forward dated
additional SI completions into the following fiscal year.
Recommendation
We recommended that EPA Region 5 correct the CERCLIS date on the
accomplishments we questioned.
Agency Response
In response to our draft report, EPA Region 5 indicated:
• It had corrected CERCLIS dates on accomplishments.
• Took steps to ensure that correct dates for SI completions are entered
into CERCLIS.
• Conducted an internal control review on data accuracy, and assigned
specific responsibility for accuracy of data entry to an Environmental
Protection Assistant in the Site Assessment Section.
In response to our final report, EPA Region 5 further indicated-it had
reviewed the CERCLIS database and found that all corrections had been made.
TIMELINESS REPORT
Scope and Objectives
We reviewed the reasons why the Agency has not met the statutory
deadline of January 1 for submitting the annual report. We examined the report
planning and oversight process, and the methods the report coordinator used to
obtain information. We reviewed the relevant legislative history. We
interviewed Agency, Office of Management and Budget and two senior
Congressional staffers.
Our final special report was issued on March 31, 1992 (E1SFG1-11-0015-
2400033).
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 84
Findings
1. EPA Information Can Be Provided More Timely
The report coordinator failed to adequately emphasize the deadline for
receiving report information. Some officials supplying information were not
aware that the information was for the Agency's report to Congress.
Therefore, officials providing information often gave it too low a priority.
The Agency has waited for the President's annual budget for information on
the current and following fiscal years in the resource estimates section. This is
released after the due date for the report. The Agency's Out Year Liability
Model could be used to provide information more timely. It is already used for
later year estimates.
EPA uses abstracts of Records of Decision (RODs) as the descriptions of
feasibility studies required by statute. An EPA contractor prepares these
abstracts. We found that the regional offices did not always supply copies of
their RODs to Headquarters promptly. In addition, there was a contractor work
load problem because 63 percent of the fiscal 1990 RODs were signed in
September 1990.
2. Information Obtained From Other Agencies Delays the Report
EPA must obtain from other Federal agencies information on Federal facility
RODs and the use of minority businesses in the Superfund work of other
agencies. Some agencies did not provide this information to EPA timely.
3. OMB Review Also Delays Report
Administration policy requires the report to be reviewed by the Office of
Management and Budget (OMB). For the first four annual reports, OMB has
taken between 78 and 183 days to review each report. This has been a
substantial part of the delay in issuing the reports.
Recommendations
We recommended that EPA:
• Stress the due date and the urgency of providing information to those
providing information for the report.
• Consider using the Out Year Liability Model, instead of the President's
budget, to estimate the resources needed to complete all duties under
CERCLA.
• Consider an alternate method of preparing the feasibility study
summaries for the report.
• Consider including the timely preparation of RODs for the report in each
Remedial Project Manager's standards.
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EPA Office of the Inspector General Annual Stioerfund Report to the Congress for Fiscal 1991 85
• Encourage other Federal agencies to submit information more timely.
• Continue to ask OMB in writing each year to expedite its review of the
report.
• Continue to offer a briefing to the OMB examiner each year on the
resource information and significant changes from prior reports.
• Meet with OMB officials to discuss how EPA can assist OMB in
performing its review more efficiently.
• Check with OMB every month on the status of its review of the report.
• Request that Congress consider adjustments to the due date, the report
contents or both.
Agency Response
In response to our final report, EPA stated it would:
• Stress the due date and urgency in requesting information for the fiscal
1992 report.
• Bring the audit recommendation on use of the Out Year Liability Model
to OMB's attention.
• Consider an alternate method of preparing the RODs and ROD abstracts
so that they are provided earlier.
• Continue to ask OMB in writing to expedite its review of the report.
• Continue to offer a briefing to OMB on the report and any significant
changes from prior reports.
• Request to meet with OMB officials to discuss how EPA can assist
OMB in performing its review more efficiently.
• Check with OMB every month on the status of its review of the report.
• Recommend that the due date and contents of the report be adjusted
to be realistically achievable.
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EPA Office of the Inspector General Annual Superfund Report to the Congress for Fiscal 1991 86
INVESTIGATIVE ACTIVITY
During fiscal 1991, our Superfund investigative efforts resulted in 21 indict-
ments and 18 convictions. Fines and recoveries, including those associated
with civil actions, amounted to approximately $3.46 million. One settlement
agreement resulted in a cost avoidance of $3 million. At the end of fiscal
1991, we had 49 active Superfund investigations underway, 26 percent of all
active OIG investigations at EPA.
The OIG Office of Investigations has a major investigative initiative
underway within the Superfund program, directed at fraud in the Contract
Laboratory Program (CLP). Laboratory analyses under the CLP are the empirical
basis for the entire Superfund program. Based on testing for the presence of
hazardous chemicals by these laboratories, the Superfund program decides
which cleanups to initiate and how to carry them out. Fraudulent analyses
could result in a danger to the public health and safety as well as the
unnecessary expenditure of cleanup funds. In addition, fraudulent analyses
could hinder the Department of Justice's efforts to collect the cost of cleanups
from the responsible parties. We achieved significant results during fiscal
1991. Several actions resulting from the contract laboratory investigations are
described below.
Contract Laboratory Vice President Sentenced To Maximum Prison Term
A two year investigation of a laboratory by the OIG resulted in the first
indictment of a laboratory participating in the Contract Laboratory Program and
the indictment of two officers of the firm. MetaTrace, Inc., of Earth City,
Missouri, one of several approved testing laboratories that receives samples
from Superfund sites for chemical analysis, pled guilty to a felony information
charging the submission of false statements to EPA. The investigation
disclosed that the firm and its officers routinely falsified data generated for the
Agency for sites on the National Priorities List. Laboratory personnel had
manipulated results for calibration and check standards during gas
chromatograph/mass spectrometer (GC/MS) analysis in order to show that a
group of environmental sample results were fully compliant with protocol
criteria when, in fact, they were not.
Dr. Carol Byington, Executive Vice President, pled guilty to a one count
felony information and was sentenced on July 22, 1991, to five years
imprisonment, the maximum penalty under the law, and a $20,000 fine.
Kenneth Baughman, a vice president, pled guilty to a one count felony
information and was sentenced to five years probation and fined $10,000. The
corporation was sentenced to five years probation and was fined $400,000.
The corporation and Dr. Byington have been debarred from further participation
in Agency programs. The laboratory, a wholly owned subsidiary of TRC
Corporation, was sold during the investigation.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 87
California Laboratory Pled Guilty, Was Fined $500.000. and Agreed to Pay
$805,000 in Civil Action
Six former employees of the Environmental Chemistry Laboratory of the
Science Applications International Corporation (SAIC), in La Jolla, California,
were indicted and pled guilty to charges of making false statements to EPA,
aiding and abetting the making of false statements to EPA, and aiding and
abetting the conversion of Government money. In addition, SAIC was indicted
and pled guilty to charges of making false statements to EPA.
EPA contracted with SAIC to perform analyses on samples taken from
Superfund sites. The purposes of these analyses were to (1) determine the
amount and identity of the hazardous substances, (2) establish priorities among
the sites so that the most dangerous sites could be cleaned up first, and (3)
help in identifying the parties responsible so that EPA could obtain
reimbursement for the cleanup costs.
In its contract with SAIC, EPA required that volatile organic analyses be
performed within ten days, so that certain chemicals would not dissipate.
Penalties were assessed for lateness. In addition, the contract required that
sample analysis equipment be tuned and calibrated every twelve hours to
ensure accuracy. The joint investigation by the EPA OIG and the Federal
Bureau of Investigation uncovered backdating of sample test results in order to
avoid the penalty. Also, SAIC manipulated the sample analysis equipment test
data to fraudulently reflect the accuracy of analysis equipment.
Five of the six former employees convicted were sentenced to probation.
In April 1991, Thomas Cullen, former divisional manager of the Environmental
Chemistry Laboratory at SAIC, was sentenced to five years supervised
probation and assessed a $2500 fine. In August 1991, SAIC pled guilty to ten
felony counts and agreed to pay a criminal fine of $500,000. As part of an
overall settlement between SAIC and the Government, SAIC agreed to pay
$805,000 (EPA $745,000 and the Air Force $60,000) for the civil claims
arising from the same conduct, making the total settlement (both civil and
criminal) over $ 1.3 million. Of this amount, $350,000 has been returned to the
Agency appropriation.
Major Testing Firm Fined $1 Million
United States Testing Company of Hoboken, New Jersey, a subsidiary of
SGS North America, Inc., (a part of the SGS Group, the world's largest inspec-
tion and testing company with over 21,000 employees in 140 companies), pled
guilty in April 1991 to making false statements to EPA. The court ordered the
company to pay a $100,000 criminal fine and to repay the entire contract price
of $869,486.90 as restitution to the United States.
U.S. Testing admitted to backdating tests of water and soil samples at
Superfund sites. U.S. Testing, by "peak shaving' (manual manipulation of
calibration), which violated the required testing sequence, tried to disguise its
failure to conduct timely tests.
U.S. Testing has been suspended from Government contracting.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 88
Connecticut Company Backdated Results, Used Unapproved Laboratory
YWC, Inc., a wholly-owned subsidiary of SRK Holding, Inc. based in
Connecticut, pled guilty in December 1990 to two charges of making false
statements to EPA and was fined $500,000.
EPA's contract with YWC required the company to analyze Superfund site
water samples within seven days of receipt and soil samples within ten days.
YWC's York Laboratories Division facility in Monroe, Connecticut, was an
approved CLP site. YWC was charged with backdating over 60 analyses and
using a then-unapproved laboratory to do the analyses.
In addition to the criminal fine, YWC also entered into a civil and
administrative settlement. Under the civil settlement, YWC agreed to pay EPA
$150,000 in damages for the defective samples. In the administrative
settlement, YWC agreed that the two laboratories involved in the fraud, located
in Monroe, Connecticut, and Whippany, New Jersey, would not take on further
Government-financed work.
Prosecutive activity continued in fiscal year 1992, resulting in the
conviction and sentencing of YWC's vice president, Robert Q. Bradley. These
actions will be discussed in next year's report.
Louisiana Contract Laboratory Employees Indicted
The EPA Analytical Operations Branch, in conjunction with the OIG,
identified several indicators of potential fraudulent activity and reviewed data
tapes in 1990 to identify possible fraud in the Contract Laboratory Program.
Environmental Industrial Research Associates, Inc., St. Rose , Louisiana, was
identified through the analysis as a potential target for investigation.
Concurrent interviews of several employees after business hours by a team of
OIG investigators and auditors resulted in the discovery of significant
manipulation of data by the company. Three employees were indicted on July
30, 1991, charged with conspiracy to submit false claims to EPA.
Metro Container Corporation and Metro-Enterprise Container Corporation Chief
Executive Officer Indicted
A superseding indictment added another defendant to a Pennsylvania
pollution case. Louis Maslow, the chief executive officer and majority owner of
two former Trainer, Pennsylvania firms, Metro Container Corporation and
Metro-Enterprise Container Corporation, was indicted on June 4, 1991, charged
with filing false statements to EPA. Sidney S. Levy, President and one of the
owners of Metro, and Steven Zubrin, a Metro maintenance supervisor, were
indicted in August 1990, charged with criminal violations of two Federal
environmental statutes, the Resource Conservation and Recovery Act and the
Clean Water Act, and with conspiracy to violate these statutes.
A joint investigation by the EPA OIG, the EPA Office of Enforcement, and
the Federal Bureau of Investigation was initiated after a criminal investigation
by the EPA OIG of another allegation involving the Superfund program found
evidence of serious environmental violations.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 89
As part of the joint investigation, a search was executed at the site by staff
of the EPA's National Enforcement Investigation Center {NEIQ. NEIC personnel
excavated portions of the site where Metro conducted a drum recycling
business. Buried drums were uncovered and numerous site samples showed
the presence of hazardous waste in the yard and in the building. In addition,
the contaminants were detected in a pipe leading from the Metro facility to
Stoney Creek, a tributary of the Delaware River.
All of the defendants in this case will be sentenced on February 28, 1992.
Settlement Obtained in Rocky Mountain Analytical Laboratory Case
The Rocky Mountain Analytical Laboratory (RMAL) in Arvada, Colorado, a
Corning, Inc. entity, reported single Inductively Coupled Plasma exposure
readings as the average of multiple readings in violation of its CLP contracts.
Reviews of pertinent records and interviews of former employees corroborated
that single exposure readings were taken and reported until early 1986, when
RMAL began doing multiple exposure readings. The alleged violations occurred
more than five years ago; outside the statute of limitations for criminal
prosecution. The United States Attorney's office declined prosecution because
of lack of sufficient evidence and because of the statute problem. The EPA
Office of General Counsel, Inspector General Division, expressed interest in
pursuing civil action against RMAL to recover more than $1 million for charges
made by RMAL when they were violating contract provisions.
On August 6, 1991, Enseco Inc., Corning Lab Services, Inc., and Corning
Inc. (the Corning entities) paid the Government $1.1 million. The payment was
part of a global settlement agreement under which EPA agreed to terminate its
June 25, 1991, government-wide suspension and proposed debarment of the
Corning entities. Under the settlement agreement, the Coming entities made
the $1.1 million payment to settle allegations that Enseco and its predecessor,
RMAL, Inc., had submitted false claims under six EPA Contract Laboratory
Program contracts. The $1.1 million has been returned to EPA's Superfund
program. In addition, Enseco agreed to give up its contract claim against EPA,
which amounted to approximately $3 million, including accrued interest.
Finally, the Corning entities agreed to implement a contract compliance plan
and an ethics policy to assure EPA that the Corning entities are presently
responsible to do business with the Government.
Two Employees of Geo-Con. Inc. are Indicted
Two employees of Geo-Con, Inc., Terry Lee Tebben and Daniel Workman,
were indicted on August 7, 1991, and charged with fraud in connection with
the cleanup of a Superfund site at Bruin Lagoon, Butler County, Pennsylvania.
EPA funded a $4 million contract with Geo-Con to clean up the lagoon,
which was contaminated with sulfuric and hydrochloric acid, as well as other
contaminants. The adjacent Bruin Oil Company had used the lagoon for
disposal of wastes since the 1930's.
the air
Tebben allegedly used the finger of a rubber glove and grease to cover up
air monitors required by the contract, causing them to give false readings
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 90
on the amount of hazardous gases being released, thus endangering public
health and safety.
The contract also required Geo-Con to treat any water which became
contaminated as a result of the cleanup. The company was to be reimbursed at
a rate of $0.30 per gallon of water treated. Workman allegedly pumped air
through the water metering system, leading to $62,000 in false claims for
reimbursement for water treated.
In fiscal 1992, both Tebben and Workman entered guilty pleas and were
suspended from participating in government contracting. The pleas and
resulting actions will be discussed in next year's report.
Texas Contractor Found Guilty and Sentenced to Imprisonment
Chem-Tle Environmental Services of San Antonio, Texas, and two of its
officers were sentenced on December 13, 1990, following an investigation of
false claims submitted to EPA on charges for an emergency removal of dioxin
contamination in the State of Kentucky.
EPA Region 4 awarded a contract to Chem-Tle as a qualified 8(a) minority
contractor. As part of the approval process, the contractor certified it had
quality assurance specialists which, in fact, it had never hired. EPA Region 4
contract personnel, during a routine audit, discovered that several suspicious
claims had been submitted by the contractor. Further investigation by the
Office of Investigations confirmed that false claims had been submitted on
several items under the contract, but the Agency had caught all the false
statements and had not paid for services not received except for those claims
for quality assurance.
The contractor and two officers were indicted on June 25, 1990, charged
with the submission of false claims to EPA. Both officers pled guilty. On
December 13, 1990, the corporation was sentenced to five years probation.
Thomas L. Ewing, President, was sentenced to ten months imprisonment and
three years supervised probation, and ordered to make restitution of
$52,567.26 to EPA. B. F. Rippey, Operations Manager, was sentenced to five
years probation and ordered to perform 200 hours of community service. EPA
acted to suspend and disbar all these entities from Government contracts.
Duo at I-CHEM Research, Inc., Indicted
Anita C. Rudd, Marvin W. Rudd and I-CHEM. Research, Inc., of Hay ward,
California, were indicted November 30, 1990, on charges of conspiring to make
false claims to EPA. Marvin Rudd is also charged with one count of using false
documents.
From June 1983 until December 1987, I-CHEM was EPA's sole supplier of
contaminant-free sample containers used to collect site samples for analysis
and evaluation by the CLP. The indictment charges that I-CHEM and the Rudds
conspired to make false claims to EPA for providing the containers. The
indictment alleged that I-CHEM shipped sample containers to authorized EPA
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 91
requesters without actually performing the required quality control testing on
the containers, notwithstanding certifications by I-CHEM to that effect.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 92
EXHIBIT I
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
HAZARDOUS SUBSTANCE SUPERFUND
SCHEDULE OF OBLIGATIONS
FISCAL YEAR ENDED SEPTEMBER 30, 1991
Description
Personnel Compensation &
Benefits
Travel and Transportation
of Persons
Transportation of Things
Rent, Communications and
Utilities
Printing and Reproduction
Other Contractual Services
Supplies and Materials
Equipment
Land and Structures
Grants, Subsidies and
Contributions
Insurance Claims and
Indemnities
Miscellaneous Receipts
GRAND TOTALS
Total
Accepted
Questioned Costs Misclassified
Ineligible* Unsupported6 Costs'
$ 176,418,158 $ 176,418,158
11,655,144
655,034
25,947,719
1,266,380
11,655,144
655,034
25,947.719
1,266,380
1,147,607,120 1,139,477,555
4,304,498
12,036,963
564,139
4,304,498
12,013,335
564,139
203,146,013 203,046,013
8,129,565
23.628
100,000
50.912
63,840
1,303
13^633)
1,303
(3,633)
S1.583.598.838 S1.575.345.645
The accompanying notes are an integral part of this schedule.
S8.253.193 S114.752
* Costs questioned because of an alleged violation of a provision of a law, regulation, contract, grant.
cooperative agreement or other agreement or document governing the expenditure of funds.
6 Costs questioned because, at the time of the audit, they were not supported by adequate documentation
and/or had not been approved by responsible program officials.
* Costs resulting from transactions in which an incorrect Suoerfund account number is charged, an incorrect
object class is charged or complete accounting data is not recorded. Misclassified costs are not questioned
for audit purposes.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 93
EXHIBIT I
(continued)
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
HAZARDOUS SUBSTANCE SUPERFUND
NOTES TO SCHEDULE OF OBLIGATIONS
FISCAL YEAR ENDED SEPTEMBER 30, 1991
1. Summary of Significant Accounting Policies
The Schedule of Obligations was prepared for audit purposes from
information provided by the EPA Financial Management Division based on
financial information contained in the Integrated Financial Management System
(IFMS) for the fiscal year ended September 30, 1991. EPA's policy is to
prepare the Report on Budget Execution (SF-133), from which this schedule is
derived, in conformity with accounting policies and procedures that are
prescribed by the Office of Management and Budget (OMB), which is a
comprehensive basis of accounting other than generally accepted accounting
principles. This schedule is not intended to present either the financial position
or the financial results of operations in conformity with generally accepted
accounting principles.
Obligations, as presented in this Exhibit, were reported by the Financial
Management Division from the Year to Date Obligation and Expended Totals
Report, prepared from information contained in the IFMS General Journal File
for the current fiscal year appropriation. Total obligations from this report
amounted to $1,583,598,838. The total reported obligations above were
compared to total obligations of $1,584,550,625, as shown on the Report on
Budget Execution (SF-133), submitted to the OMB on November 21, 1991.
The difference between the obligations reported to us and the obligations
reported to OMB amounted to $952,242. The difference was reconciled by
adding to, or subtracting from the Money Available by Appropriation (a monthly
report), certain general ledger account balances as of September 30, 1991, to
determine the obligations incurred and reported to OMB. The reconciling items
consist of miscellaneous receipts, uncollected debt allowances, discounts lost,
and reimbursements, which should not be included in obligations reported to
OMB, and have been consistent reconciling items in prior years.
2. Miscellaneous Receipts
Included in the Schedule of Obligations are Miscellaneous Receipts,
amounting to ($3,633), for which there were no object classes assigned to the
transactions in the General Journal File of IFMS. We were informed by EPA
officials that no object class was required for certain transactions such as year-
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 94
EXHIBIT I
(continued)
end accruals and cash receipts. This amount on the schedule was immaterial in
relation to total obligations.
3. Recording Transactions - Obligations - Nonpayroll
Obligations are amounts of materials and supplies, orders placed, contracts
awarded, services ordered, travel authorized and similar transactions during a
given period that will require payments during the same or future periods. Such
amounts reflect adjustments for differences between obligations previously
recorded and actual disbursements to liquidate those obligations. The term
includes both obligations that have matured (legal liabilities) and those that are
contingent upon some future performance, such as providing services or
furnishing materials. Obligations recorded in this schedule represent funds
obligated in the current fiscal year against the current fiscal year's
appropriation, which may include carry-over authority from prior years.
Obligations are recorded for budgetary purposes at the time they are incurred.
4. Recording Transactions - Obligations - Payroll
Payroll obligations are based upon actual personnel compensation and
benefits recorded biweekly in the payroll subsystem (EPAYS) plus accruals at
month-end and year-end. Personnel compensation obligations amounted to
$146,184,459, which, based on EPA policy, were recorded as obligations for
budgetary accounting purposes for fiscal 1991.
5. Legal Limitations - Authorized Funds and Administrative Expense Ceiling
Funding for the Superfund program is achieved through a separate annual, no-
year appropriation. The legal limitation set by Congress on the Superfund
appropriation requires the Agency to stay within an administrative expense
ceiling. Congressional intent was to limit intramural expenses to ensure that
the primary function of Superfund for cleaning up hazardous waste sites was
protected. Intramural expenses are used to support staff and activities internal
to EPA. By Agency policy, the legally binding administrative expense ceiling
placed on the Superfund appropriation is managed by the Office of the
Comptroller through a distribution of specific ceilings to the individual
Responsible Planning and Implementation Offices.
Public Law 101-507 provided funding to carry out the CERCLA, as amended,
with $1,616,228,000 for fiscal 1991, to be derived from the Hazardous
Substance Superfund, plus sums recovered on behalf of the Hazardous
Substance Superfund in excess of $135,000,000 during fiscal 1991, with all
such funds to remain available until expended. The law also provides no more
than $233,000,000 be available for administrative expenses.
Our analysis of the administrative expenses for the year indicated that the
Superfund program recorded obligations of $232,285,198 for these types of
expenses, which were within the dollar limitation set by Congress. The Agency
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 95
EXHIBIT I
(continued)
defined administrative expenses to include all object classes in the Schedule of
Obligations except Other Contractual Services, Land and Structures, and
Grants, Subsidies and Contributions.
We noted that, due to the administrative expense ceiling, the Agency did not
record obligations of $2,370,939 which should have been allocated to
Superfund for general support services costs at Headquarters and Region 2.
Also, the Agency did not record an estimated $33,982 of personnel costs to
Superfund from an allocation methodology for personnel costs at the Cincinnati
Financial Management Center. We also found that Region 5 did not allocate all
support costs to Superfund from its allocation plan. Region 5 did not disclose
the amount that would have been allocable had the allocations been continued
through year-end. These costs that were not allocated would have increased
the administrative expenses above the legal limit set by Congress. These
unallocated expenses were absorbed by the Salaries and Expenses
appropriation. (See Finding 4 for additional details.) Further, we did not
perform procedures at all locations. Additional administrative expenses may
have been incurred at these locations that were not allocated to Superfund
which would have further increased the administrative expenses above the legal
limit.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 96
EXHIBIT II
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
HAZARDOUS SUBSTANCE SUPERFUND
SCHEDULE OF DISBURSEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 1991
Description
Personnel Compensation &
Benefits
Travel and Transportation
of Persons
Transportation of Things
Rent, Communications and
Utilities
Printing and Reproduction
Other Contractual Services
Supplies and Materials
Equipment
Land and Structures
Grants, Subsidies and
Contributions
Insurance Claims and
Indemnities
Miscellaneous Receipts and
Disbursements - Net
GRAND TOTALS
Total
Accented
$ 180,592,810 $ 180,577,375
11,406,567
560,175
25,828,766
882,855
941,739,773
5,068,689
18,991,290
57,189
186,852,101
3,127
11.406,567
560,175
25,828,766
882,855
940,601,274
5,068,689
18,991,290
57,189
186,852,101
3,127
(18.496.443) (18.496.443)
$1.353.486.899 $1.350.158.774
Questioned Costs Misclassified
Ineligible7 Unsupported8 Costs9
$7,353
8,082 $ 3,904
1,138,499
2,174,191
3,947
648,923
$7.353 $3.320.772 $656.774
The accompanying notes are an integral part of this schedule.
7 Costs questioned because of an alleged violation of a provision of a law, regulation, contract, grant,
cooperative agreement or other agreement or document governing the expenditure of funds.
8 Costs questioned because, at the time of the audit, they were not supported by adequate documentation
and/or had not been approved by responsible program officials.
8 Costs resulting from transactions in which an incorrect Superfund account number is charged, an incorrect
object class is charged or complete accounting data is not recorded. Misclassified costs are not questioned
for audit purposes.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 97
EXHIBIT II
(Continued)
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
HAZARDOUS SUBSTANCE SUPERFUND
NOTES TO SCHEDULE OF DISBURSEMENTS
FISCAL YEAR ENDED SEPTEMBER 30, 1991
1. Summary of Significant Accounting Policies
The Schedule of Disbursements was prepared for audit purposes from
information provided by the EPA Financial Management Division based on
financial information contained in the Integrated Financial Management System
(IFMS) for the fiscal year ended September 30, 1991. EPA's policy is to
prepare the Report on Budget Execution (SF-133), from which this schedule is
prepared, in conformity with accounting policies and procedures that are
prescribed by the Office of Management and Budget (OMB), which is a
comprehensive basis of accounting other than generally accepted accounting
principles. This schedule is not intended to present either the financial position
or the financial results of operations in conformity with generally accepted
accounting principles.
Disbursements, as presented in this Exhibit, were reported by the Financial
Management Division from a combination of disbursement data for treasury
symbols 68-20X8145 and 68-20M8145 taken from the Year To Date Disburse-
ment Totals Report, prepared from information contained in the IFMS General
Journal File. Total disbursements from this report amounted to
$1,353,486,899. The total reported disbursements agreed to total outlays of
$1,353,486,899 from the Report on Budget Execution (SF-133), submitted to
the OMB on November 21, 1991.
2. Miscellaneous Receipts and Disbursements - Net
The Schedule of Disbursements includes ($18,496,443) for which no object
classes were assigned to the transactions. We were informed by Agency
officials that no object classes were required for input of certain transactions.
The majority of transactions with no object classes were processed as
automatic disbursements which were offsetting transactions affecting Accounts
Payable, Non-Federal in the general ledger. Also, a small number of
transactions with large dollar amounts were processed as cash receipts in
balance sheet transfers, which do not affect disbursements by object class.
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 98
EXHIBIT II
(Continued)
The transaction codes for cash receipts were used to debit general
disbursements and credit various general ledger accounts for advances
previously recorded as disbursements. The cash receipt transactions were used
to reverse the original transaction when funds were received for
reimbursements, such as travel advances, collection of Superfund State
Contracts, and Interagency Agreements. These transactions should have been
credited to the same object class codes as the original transactions. This
coding occurs on the accounts payable/expense accounts for these
transactions, which affects the Statement of Operations. However, the Agency
cannot provide object class information for these transactions from the
disbursements accounts. However, the transactions with no object classes do
not materially affect the Schedule of Disbursements taken as a whole, or any of
the line items reported by major object class.
3. Recording Transactions - Nonpayroll
Disbursements represent the amount of cash outlays made to liquidate
obligations. These cash outlays represent funds disbursed during the current
fiscal year against either prior years' or current year's appropriations.
Nonpayroll disbursements are recorded on the cash basis of accounting.
4. Recording Transactions - Payroll
Personnel compensation disbursements are recorded biweekly in the payroll
subsystem (EPAYS). The detailed payroll transactions are recorded in the
Paymerge file of this subsystem. The Paymerge file contains current year
disbursement transactions and prior years' redistributions of disbursements
adjusting site specific and other account numbers. This data is transferred to
the IFMS general ledger file at a summary level. The disbursements presented
in Exhibit 2 include disbursements from all current year and prior year
adjustments.
5. Recording Transactions - Property and Equipment
EPA's policy is to capitalize property and equipment with a cost greater than
$5,000 and a useful life of two years or greater. Disbursements for equipment
recorded in this Exhibit are presented on a cash basis, including capitalized and
non-capitalized items.
6. Depreciation
Depreciation accounting recognizes the cost of depreciable property, plant or
equipment as an operating expense over the estimated useful life of the assets.
Depreciation is not recorded in this Exhibit because it is a non-cash item.
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EPA Office of the Inaneetor General Annual Sunerfund Report to the Conorass far Fiscal 1991 99
EXHIBIT III
1 OF 4
SUPERFUND AUDIT REPORTS
ISSUED DURING FISCAL 1991
INTERNAL AND MANAGEMENT AUDITS AND SPECIAL REVIEWS
Final
Report
Number Description
Reviews Required By CERCLA
1100026 EPA PROGRESS REPORT REVIEW, FISCAL 1989
1300054 MANAGEMENT OF LOUISIANA-PACIFIC RI, CA
1400053 RI/FS REVIEW, SO. MD. WOOD TREATING, NO
1100385 TRUST FUND AUDIT, FISCAL 1990
Performance Audits
1100411 CONTRACT LABORATORY PROGRAM
1100431 OVERSIGHT OF POST-SETTLEMENTS-CONSOLIDATED
1100133 OVERSIGHT OF POST-SETTLEMENTS - REGION 1
1100149 OVERSIGHT OF POST-SETTLEMENTS - REGION 5
1100155 POST-SARA REMEDIAL ACTION STARTS MANDATE
Follow-Up Review
1400005 ARIZONA DEQ COOPERATIVE AGREEMENTS
Special Reviews
1400014 ALLEGATION-HEALTH RESOURCES CONTRACT
1400046 CONTRACTOR PROPERTY OVERSIGHT
1400025 COOPERATIVE AGMT. DEOBLIGATIONS-REGION 1
1400028 EMERGENCY WAIVER CRITERIA
1400059 SITE CLEANUP DOCUMENTS-EARLY WARNING REV.
Audit
Control Number
E1SFFO-11-0018
B1SG*8-09-0143
E1SGG9-14-0012
P1SFFO-11-0032
E1SXE9-11-0047
E1SJEO-02-0157
E1SJDO-01-0145
E1SJDO-05-0195
E1SGCO-04-0407
E6FGG1-01-0082
E1SFG1-05-0018
E1SGG1-01-0184
E1SHGO-04-0103
E1SHT1-03-0396
Date
Report
Issued
10/18/90
3/29/91
9/26/91
9/16/91
9/24/91
9/30/91
2/27/91
3/29/91
3/30/91
E1SFGO-09-0117 1/31/91
3/26/91
9/27/91
6/18/91
8/14/91
9/27/91
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 100
EXHIBIT III
20F4
SUPERFUND AUDIT REPORTS
ISSUED DURING FISCAL 1991
Final
Report Audit
Number Audi tee Control Number
COOPERATIVE AGREEMENTS AND GRANTS
1100156 ALASKA DEPT. OF ENV. CONSERVATION-PA/SI P5CG*8-10-0084
1100175 BROWARD COUNTY, FL - DAVZE LANDFILL E5CGL1-04-0055
1300069 LOUISIANA DEPT OF ENV QUALITY-OLD IN6ER P5GFNO-06-0116
1100384 MASSACHUSETTS DEPT OF ENV PROT-MULTI-SITB P5BGLO-01-0154
1100383 MASSACHUSETTS DEPT OF ENV PROT-PSC RES. P5BGLO-01-0155
1100430 NEW HAMPSHIRE DEPT. OF ENVIRONMENTAL SERV. E5FGL1-01-0114
1300016 NEW MEXICO HEALTH & ENV. DEPT. -MULTI-SITE P5B6NO-06-0111
1100423 NEW YORK ST. DEPT OF ENV. CONS. -LOVE CANAL P5BGLO-02-0196
1300041 OKLAHOMA DEPT. OF HEALTH-COMPASS INDUSTRIES P5BFNO-06-0117
1300042 OKLAHOMA DEPT. OF HEALTH-SAND SPRINGS SITE P5BGNO-06-0118
1100313 RHODE ISLAND DEPT. OF ENVIRONMENTAL MGMT. E5FGL1-01-0083
1300113 SOUTH CAROLINA DEPT OF HEALTH 6 ENV* CONTR. E5BFN1-04-0224
1300080 TEXAS HATER COMM. -GENEVA INDUSTRIES RI/FS P5BFNO-06-0210
1100104 UNIVERSITY OF CINCINNATI - SOIL LEAD DEMO. E5BKLO-05-0402
1100146 WASHINGTON DEPT OF ECOLOGY -COLBERT LANDFILL P5CG*8-10-0076
1300066 WASHINGTON DEPT OF ECOLOGY-COMMENCEMENT BAY P5CGNO-10-0011
1300047 WASHINGTON DEPT OF ECOLOGY-CORE PROG.-FY88 P5CHN9-10-0155
INTERAGENCY AGREEMENTS
1100393 AGENCY TOXIC SUB. & DISEASE REG.-FY87-89 H5BFL1-11-0034
1100005 ARMY CORPS OF ENGINEERS-FISCAL 1989 M5BFL1-11-0011
1100392 FED. EMERGENCY MGMT. AGENCY-RELOCATION M5BFL1-11-0033
1100387 INTERIOR DEPT. -OFFICE OF SECRETARY-FY89 M5BFL1-11-0032
1100427 INTERNAL REVENUE SERVICE-FISCAL 1989 M5BFL1-11-0038
1100438 JUSTICE DEPARTMENT-FISCAL 1989 M5BFL1-11-0018
1100054 NAT'L AERONAUTICS & SPACE ADMINISTRATION M5BFL1-11-0013
1100429 NATIONAL INSTITUTES OF HEALTH-FISCAL 87-89 H5BFL1-11-0037
Date
Report
Issued
3/29/91
4/10/91
5/20/91
9/16/91
9/13/91
9/30/91
ll/ 2/90
9/27/91
3/ 6/91
3/ 8/91
7/11/91
9/26/91
6/19/91
1/16/91
3/20/91
5/ 7/91
3/26/91
9/16/91
10/12/90
9/16/91
9/16/91
9/30/91
9/30/91
10/31/90
9/30/91
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 101
EXHIBIT III
3 OF 4
SUPERFUND AUDIT REPORTS
ISSUED DURING FISCAL 1991
CONTRACT AUDITS
Final
Report
Number Auditee
Preaward Proposals
1300094 CLEMENT INTERNATIONAL,
1300106 CLEMENT INTERNATIONAL,
1100208 GEOPHEX LTD., NC
1100283 GREYSTONE ENVIRONMENTAL SERVICES,
1300107 ICF, INC., VA
1100279 LOCKHEED ENGINEERING 6 SC
1400044 MAECORP, INC., IL-ERCS 3
1400045 MAECORP, INC., IL-ERCS 3
1300085 OHM REMEDIATION SERVICES,
1400035 OHM REMEDIATION SERVICES,
1400036 OHM REMEDIATION SERVICES,
1300040 OHM REMEDIATION SERVICES,
1400034 OHM REMEDIATION SERVICES,
1300063 PRC EMI, IL
1300030 REIDEL ENVIRONMENTAL SERVICES,
1300052 REIDEL ENVIRONMENTAL SERVICES,
1100370 S&D ENGINEERING SERVICES,
1100282 URIBE 6 ASSOCIATES, CO
1400008 WESTINGHOUSE-HAZTECH, GA
Interim Audits
1400055 COM FEDERAL PROGRAMS CORF
1100075 ECOLOGY AND ENVIRONMENT, NY
ENVIRONMENTAL HEALTH, KY
GUARDIAN ENVIRONMENTAL S
OHM REMEDIATION SERVICES
OHM REMEDIATION SERVICES
ROGERS AND ASSOC. ENGINE
WW ENGINEERING & SCIENCE
1300110
1300101
1400031
1400032
1100002
1100159
Final Audits
1100102 BES ENVIRONMENTAL SPECIALISTS, PA
1300013 OHM REMEDIATION SERVICE
:., VA
:., VA
iRVICES, CO
IENTIFIC, TX
tEGION 5
tEGION 5
OH-ERCS 3 REG. 1
OH-ERCS 3 REG. 2
OH-ERCS 3 REG. 2
OH-ERCS 3 REG. 4
OH-ERCS 3 REG. 5
ICES, OR
ICES, OR-ERCS R4
NJ
(RATION, VA
[Y
[VICES, DE
OH-ERCS ZONE 1
OH-ERCS ZONE 2
LING CORP., UT
MI-FISCAL 1989
ISTS, PA
OH-ERCS Zl FY85-6
Audit
Control Number
P9AKN1-03-0327
P9AKN1-03-0355
D9AHL1-04-0309
D9AKL1-08-0082
P9AKN1-03-0356
D9AKL1-06-0124
P9AHP1-05-0297
P9AHP1-05-0296
P9AHN1-05-0191
P9AHP1-05-0313
P9AHP1-05-0313
P9AHN1-05-013S
-P9AHP1-05-0281
E9AKN1-05-0206
P9AHN1-10-0009
P9AHN1-10-0022
P9AHL1-02-0110
D9AHL1-08-0083
P9AHP1-04-0100
E9BGP1-03-0333
D9BGL1-02-0049
P9BHN1-04-0317
P9BHNO-03-0382
P9BHPO-05-0292
P9BHPO-05-0293
D9BGL1-08-0001
P9BGLO-05-0266
P9CHL9-03-0070
P9CHN9-05-0178
Date
Report
IB sued
8/ 7/91
9/13/91
5/ 3/91
7/ 2/91
9/16/91
7/ 1/91
9/20/91
9/23/91
7/ 9/91
9/ 6/91
9/ 6/91
2/28/91
9/ 6/91
5/ 1/91
1/29/91
3/27/91
9/ 6/91
7/ 2/91
3/ 6/91
9/27/91
12/17/90
9/23/91
8/29/91
8/19/91
8/19/91
10/ 2/90
3/29/91
1/16/91
10/26/90
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 102
EXHIBIT III
4 OF 4
SUPERFUND AUDIT REPORTS
ISSUED DURING FISCAL 1991
CONTRACT AUDITS (continued)
Final
Report Audit
Number Auditee Control Number
Indirect Costs
1300114 ZCF INFORMATION TECHNOLOGY, VA P9DXN1-03-0387
1100087 MAECORP, INC., IL-ERCS 2 REG. 5-FISCAL 1988 P9DHL9-05-0348
1400030 OHM REMEDIATION SERVICES, OH-FISCAL 1989 P9DHPO-05-0378
1400040 OHM REMEDIATION SERVICES, OH-FISCAL 1989 P9DHP1-OS-0285
1100108 REIDEL ENVIRONMENTAL SERVICES, OR-FY86 P9DHL9-10-0110
1100166 WW ENGINEERING & SCIENCE, MI-FISCAL 1989 P9DGLO-05-026S
System Surveys
1100367 CH2M HILL, OR-CAS BD DISCLOSURE STATEMENT P9EGL1-10-0040
1300021 OHM REMEDIATION SERVICES, OH-ACCT FOLLOW-UP P9EHNO-05-0079
Financial Management Reviews
1400052 DONOHUE, WI-ARCS REGION 5 P9FGP1-05-0411
1400056 WW ENGINEERING fi SCIENCE, MI E9FFP1-05-0442
Date
Report
leeued
9/26/91
12/20/90
8/19/91
9/11/91
1/24/91
4/ 4/91
8/29/91
12/12/90
9/26/91
9/27/91
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 103
APPENDIX: ACRONYMS AND ABBREVIATIONS
ADEC
ADEQ
ARCS
ATSDR
CA
CDC
CERCLA
CERCLIS
CFR
CLP
CO
COE
DE
DOI
DOJ
EHRT
ENRD
EPA
ERCS
FAR
FEMA
FL
Alaska Department of Environmental Conservation
Arizona Department of Environmental Quality
Alternative Remedial Contracting Strategy
Agency for Toxic Substances and Disease Registry
California
Center for Disease Control
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended
Comprehensive Environmental Response, Compensation, and
Liability Information System, the Superfund management
information system
Code of Federal Regulations
Contract Laboratory Program
Contracting Officer or Colorado
Corps of Engineers (U.S. Army)
Delaware
Department of the Interior
Department of Justice
Environmental Health Research and Testing, Inc.
Environment and Natural Resources Division (DOJ)
Environmental Protection Agency
Emergency Response Cleanup Services
Federal Acquisition Regulations
Federal Emergency Management Agency
Florida
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EPA Office of the Inspector General Annual Suoerfund Report to the Congress for Fiscal 1991 104
FMFIA Federal Managers' Financial Integrity Act
FMO Financial Management Officer
FS Feasibility Study
FSR Financial Status Report
FY Fiscal year
GA Georgia
GC/MS Gas chromatograph/mass spectrometer
HHS Department of Health and Human Services
IAG Interagency agreement
IFMS Integrated Financial Management System (EPA)
IL Illinois
IPA Independent public accounting (firm)
IRS Internal Revenue Service
KY Kentucky
LDEQ Louisiana Department of Environmental Quality
LOG Letter-of-Credit
L-P Louisiana-Pacific
MD Maryland
MDEP Massachusetts Department of Environmental Protection
Ml Michigan
NASA National Aeronautics and Space Administration
NC North Carolina
NCP or National National Oil and Hazardous Substances Contingency
Contingency Plan Plan, 40 CFR Part 300
NEIC National Enforcement Investigations Center (EPA)
NHDES New Hampshire Department of Environmental Services
NIEHS National Institute of Environmental Hearth Sciences
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NJ
NMEID
NPL
NY
NYSDEC
OH
OIG
OMB
OR
ORC
ORD
OSC
OSDH
OSWER
PA
PE
PA/SI
PDD
PPAS
PRP
RA
RD
Rl
RIDEM
RI/FS
RMAL
New Jersey
New Mexico Environmental Improvement Division
National Priorities List
New York
New York State Department of Environmental Conservation
Ohio
Office of the Inspector General
Office of Management and Budget
Oregon
Office of Regional Counsel (EPA)
Office of Research and Development (EPA)
On-Scene Coordinator
Oklahoma State Department of Health
Office of Solid Waste and Emergency Response (EPA)
Preliminary Assessment or Pennsylvania
Performance evaluation
Preliminary Assessment/Site Inspection
Preauthorization Decision Document
Personal Property Accounting System (EPA)
Potentially Responsible Party
Remedial Action
Remedial Design
Remedial Investigation
Rhode Island Department of Environmental Management
Remedial Investigation/Feasibility Study
Rocky Mountain Analytical Laboratory
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ROD
RPM
SAIC
SARA
SAS
SCAP
SCDHEC
SF
SI
SITE
SPMM
TES
Trust Fund
TWC
TX
UC
UT
VA
WDOE
Wl
Record of Decision
Remedial Project Manager
Science Applications International Corporation
Superfund Amendments and Reauthorization Act of 1986
Special Analytical Services
Superfund Comprehensive Accomplishments Plan
South Carolina Department of Health and Environmental
Control
Standard Form
Site Inspection
Superfund Innovative Technology Evaluation program
Superfund Program Management Manual
Technical Enforcement Support (EPA contracts)
Hazardous Substance Superfund
Texas Water Commission
Texas
University of Cincinnati
Utah
Virginia
Washington Department of Ecology
Wisconsin
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