Office of Inspector General
Report of Audit
SUPERFUND
Region 5 Oversight of PRP-lead
Remedial Design and Remedial Action
Audit Report No. ElSGF8-05-0035-8100208
August 17,1998
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Inspector General Division
Conducting the Audit: Northern Audit Division
Chicago, Illinois
Region Covered: Region 5
Regional Office Involved: Superfund Division
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF THE INSPECTOR GENERAL
NORTHERN DIVISION
77 WEST JACKSON BOULEVARD
CHICAGO, IL 60604-3590
August 17,1998
MEMORANDUM
SUBJECT: Audit Report No. El SGF8-05-0035-8100208
Region 5 Oversight of PRP-lead Remedial
Design and Remedial Action
(2/*JL
FROM: ^AnthonyC. Carrollo
Divisional Inspector General for Audits
Northern Division
TO: David Ullrich
Acting Regional Administrator
Region 5
Attached is the final report on Region 5's oversight of PRP-lead remedial design and remedial
action. The purpose of the audit was to evaluate the effectiveness of Region 5's oversight of
responsible parties, and the impact of administrative reform on reducing oversight of cooperative
responsible parties. We found that Region 5 had effective oversight over responsible parties. In
FY 1998, Region 5 will be in a better position to evaluate the impact of the reduced oversight
reform because of the evaluation form it will prepare for sites in the reform.
This audit report contains findings that describe problems the Office of Inspector General has
identified and corrective actions the OIG recommends. This audit report represents the opinion
of the OIG and the findings contained in this audit report do not necessarily represent the final
EPA position. Final determinations on matters in this audit report will be made by EPA
managers in accordance with established EPA audit resolution procedures.
ACTION REQUIRED
In responding to the draft report, your office provided corrective actions, with milestone dates,
for each recommendation. Therefore, no further response is required, and we are closing this
report in our tracking system. Please track all corrective actions in the Management Audit
Tracking System.
We have no objections to the further release of this report to the public.
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We appreciate the cooperation you and your staff provided during this review. Should you or
your staff have any questions, please contact Charles Allberry, Audit Manager, Northern Audit
Division, at 312-353-4222.
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Region 5 Oversight of PRP-lead
Remedial Design and Remedial Action
EXECUTIVE SUMMARY
INTRODUCTION
OBJECTIVES
RESULTS IN BRIEF
The Office of Inspector General (OIG) performed an audit of
Region 5's management of potential responsible party (PR?) lead
remedial design and remedial action activities (remedial
construction projects). We selected this audit because PRPs
perform the majority of Superfund cleanup activities and many of
these are in the remedial design and action phases. When the PRPs
conduct the cleanup, the Environmental Protection Agency's
(EPA) role is to ensure that the PRP complies with all applicable
laws, regulations, and requirements; and meets all performance
standards in the settlement agreement or order.
The objectives of the audit were to determine, for PRP lead sites in
the remedial design and action phases:
• if Region 5 was effectively overseeing responsible parties
and
• the impact of the Superfund Administrative Reform on
reducing oversight for cooperative responsible parties.
Region 5 provided effective oversight of PRPs. Regional project
managers (RPMs) ensured that remedies were being completed in
accordance with the record of decision and that time schedules in
the settlement agreement or order were met. The RPMs
accomplished effective oversight by establishing good working
relationships with the PRPs. This included open communication
and working through issues as they occurred, before they turned
into major problems. More frequent use of independent quality
assurance teams is one area where Region 5 could improve its
oversight of PRPs.
The impact of the reduced oversight administrative reform in
Region 5 was difficult to measure due to (a) the inherent nature of
the oversight process and (b) cost savings from reductions in
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oversight not being computed. As a result, for fiscal years (FY)
1996 and 1997, the Agency could not determine the extent of the
impact of this reform and whether it was successful in Region 5.
For FY 1998, the Agency has developed an evaluation form that,
when completed, may provide management with the information it
needs to evaluate the impact of the reform.
RECOMMENDATIONS
AGENCY COMMENTS
AND ACTIONS
We recommend that the Acting Regional Administrator, Region 5,
take the following actions.
• Require the Superfund division to (1) use independent
quality assurance teams for PRP lead remedial construction
projects, and (2) verify that independent quality assurance
teams are being used appropriately. When independent
quality assurance teams are not used, the reasons for not
using them should be documented.
• Ensure the Superfund division yearly completes the
evaluation form for sites in the reduced oversight
administrative reform in order to compute costs savings.
Region 5 agreed to take action to address the findings and
recommendations in the report.
Starting October 1,1998, the RPM will evaluate the
appropriateness of using an independent construction
quality assurance team for each workplan received for PRP
remedial construction projects performed pursuant to an
EPA settlement or order. In any case where such a team
will not be used, the RPM will document the reasons in a
memorandum.
• The evaluation form for sites in the reduced oversight
reform will be completed and submitted to EPA
Headquarters by October 10,1998.
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OIG EVALUATION
Region 5's actions, when completed, will address the findings and
recommendations in the report.
in
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Table Of Contents
EXECUTIVE SUMMARY i
ABBREVIATIONS v
CHAPTERS
1 INTRODUCTION 1
Purpose 1
Background 1
Scope and Methodology 3
2 REGION 5'S OVERSIGHT OF PRPS WAS EFFECTIVE 4
Definition of Effective Oversight 4
Examples of Effective Oversight 5
Factors Contributing to Effective Oversight 6
Area for Improvement 7
Conclusion 9
Recommendation 9
Agency Comments and Actions 9
OIG Evaluation 9
3 IMPACT OF THE REDUCED OVERSIGHT REFORM WAS
DIFFICULT TO MEASURE 10
Reduced Oversight Reform 10
Limited Effect On Oversight Decisions 11
Cost Savings Not Computed 11
Conclusion 12
Recommendation 13
Agency Comments and Actions 13
OIG Evaluation 14
IV
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EXHIBITS
1 Scope, Methodology, and Prior Audit Coverage 15
2 Related DIG Reports 18
3 Issues Corrected During the Audit 19
APPENDICES
1 Region 5 Response to the Draft Report 20
2 Distribution 25
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ABBREVIATIONS
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act
CERCLIS Comprehensive Environmental Response, Compensation, and Liability
Information System
EPA
FY
OIG
PRP
ROD
RPM
Environmental Protection Agency
Fiscal Year
Office of Inspector General
Potential Responsible Party
Record of Decision
Remedial Project Manager
VI
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CHAPTER 1
Introduction
PURPOSE
BACKGROUND
The Office of Inspector General (OIG) performed an audit of
Region 5's management of potential responsible party (PRP) lead
remedial construction projects. We selected this audit because
PRPs perform the majority of Superfund cleanup activities and
many of these are in the remedial design and action phases. The
objectives of the audit were to determine, for PRP lead sites in the
remedial design and action phases:
• if Region 5 was effectively overseeing responsible parties
and
• the impact of the Superfund Administrative Reforms on
reducing oversight for cooperative responsible parties.
Congress established the Superfund program in 1980 by passing
the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) and amended it in 1986 with the
Superfund Amendments and Reauthorization Act. The Superfund
program provides Federal cleanup authority and funds to address
the problem of hazardous waste sites. The National Priorities List
identifies the most serious sites for possible long term remedial
response. As of September 30,1997, there were 1,405 sites on the
National Priorities List.
After EPA determines the nature and extent of the contamination at
a site, it announces the proposed method for cleaning up the site in
the record of decision (ROD). The next two phases of the site
cleanup are the remedial design and remedial action. During the
remedial design, the technical specifications for the cleanup
remedy and technologies are prepared. Remedial action involves
the actual construction or implementation of the remedial design.
As of September 30,1997, about 43 percent of all Superfund sites
were in the remedial design or action phases.
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CERCLA requires EPA to take legal action against PRPs to ensure
that they contribute their equitable share toward cleaning up
Superfund sites. Through EPA's enforcement program, PRPs now
perform about 70 percent of all cleanups. If a PRP elects to
perform the remedial design or action, they must do so in
accordance with a settlement agreement or in compliance with an
EPA issued unilateral administrative order. The settlement
agreement can be either an administrative order on consent, or
judicial consent decree. When the PRPs conduct the cleanup under
EPA oversight, EPA's role is to ensure that the PRP complies will
all applicable laws, regulations, and requirements; and meets all
performance standards in the settlement agreement or order. For
sites where EPA is the lead agency enforcing the terms of the
agreement or order, the EPA Remedial Project Manager (RPM)
has the primary responsibility for overseeing the PRP. There are
some sites where a state environmental agency enforces the terms
of the agreement or order under state law.
At PRP lead sites, the RPM's role is one of coordination and
monitoring. During remedial design, the RPM will review and
approve documents such as the work plan, remedial design report,
and construction quality assurance plan. During remedial action,
the RPM, most often with the assistance of an EPA contractor,
oversees the PRP's construction and implementation of the
remedy. The level of oversight the RPM provides will depend
upon the requirements of the settlement agreement or order,
complexity of the remedy, past performance of the PRP, and
qualifications of the PRP's design and construction teams.
Administrative Reforms Since 1993, EPA has announced three sets of reform initiatives
designed to improve the Superfund program. The purpose of the
reforms were to assist state and local governments, communities,
and industries by making cleanups easier and promote economic
redevelopment at Superfund sites. The reforms were also to
protect public health and the environment by increasing the speed
and lowering the cost of cleanups, while promoting fairness for
stakeholders. The reduced oversight reform is one of the reforms
that impact how EPA oversees PRPs.
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EPA designed the reduced oversight reform with the goal of
decreasing the cost of EPA's oversight of PRPs. As the Superfund
program matured, PRPs had developed considerable experience in
conducting cleanup activities. In addition, PRPs were working
cooperatively with EPA during the cleanup and enforcement
processes. In recognition of this, and to promote further
cooperativeness, under this reform EPA rewards PRPs who have
experience and are cooperative by significantly reducing oversight.
EPA maintains sufficient oversight to ensure that the work is
performed properly and in a timely manner.
SCOPE AND
METHODOLOGY We performed our audit in accordance with the Government
Auditing Standards, 1994 Revision, issued by the Comptroller
General of the United States, and included such tests as we saw
necessary to complete our objectives.
For further details on the audit scope, methodology, and prior audit
coverage, see exhibit 1.
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CHAPTER 2
Region 5's Oversight Of PRPs Was Effective
DEFINITION OF
EFFECTIVE
OVERSIGHT
Region 5 provided effective oversight of PRPs. Regional project
managers (RPMs) ensured that remedies were being completed in
accordance with the record of decision (ROD) and that time
schedules in the settlement agreement or order were met. The
RPMs accomplished effective oversight by establishing good
working relationships with the PRPs. This included open
communication and working through issues as they occurred,
before they turned into major problems. More frequent use of
independent quality assurance teams is one area where Region 5
could improve its oversight of PRPs.
The objectives of PRP oversight are to ensure that the remedies
the PRPs implement protect the public health and the environment
and that the remedial actions comply with the settlement agreement
or order. To accomplish this, the RPMs must ensure that PRPs (1)
implement the remedies described in the ROD and settlement
agreement or order and (2) meet time schedules in the settlement
agreement or order. Holding PRPs responsible and accountable for
the remedial actions is the ultimate goal of oversight. According to
Guidance on Oversight of PRP Performed RD/RA, dated February
14,1990, EPA developed a focused approach to oversight of PRPs
consisting of two elements.
• The RPMs should concentrate their efforts on certain key
documents and activities throughout the remedial
design/remedial action process. RPMs must use a high
level of oversight at the onset of the remedial design and
again when the remedial action is initiated. The amount of
oversight effort may be increased or decreased over time,
depending on various factors including the PRPs
capabilities and competence, the implementation of a
construction quality assurance program, and the nature of
the remedy.
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EXAMPLES OF
EFFECTIVE
OVERSIGHT
The PRP should use an independent quality assurance team
during construction. The independent quality assurance
team, obtained by the PRP, provides a level of confidence
to the PRP by selectively testing and inspecting the work of
the construction contractor, and ensuring the construction
quality control plan is effectively implemented. The
quality assurance team must be completely independent of
the construction contractor so the results of the quality
assurance are unbiased and objective. This is standard
practice in the private sector and will keep the
responsibility for quality assurance with the PRP.
Region 5 provided effective oversight of PRPs. The RPMs
ensured that PRPs implemented remedies that protected the public
health and environment and complied with the settlement
agreement or order.1
For the 13 sites selected for audit, the RPMs ensured that the
remedies were being implemented in accordance with the ROD
and settlement agreement or order. Where there were changes to
the remedy, the changes were documented through ROD
amendments or Explanation of Significant Differences reports.
These changes resulted from collection of additional data, field
investigations, and design studies that occurred after the ROD. The
changes often resulted in a savings of time and money which was
beneficial to the public health and environment. For example, at
one site, new information was identified during the pre-design and
design of the remedy which resulted in a ROD amendment. The
changes included having off-site rather than on-site incineration,
and doing excavation of the waste rather than bioremediation.
Clean-up levels will still be met and the change in remedy will
result in a quicker, cheaper clean-up. The RPM estimated that
instead of taking until 2026 for the bioremediation to be
'Of the 15 sites reviewed, 2 sites had on-going negotiations that impacted the implementation and
timeliness of the remedy. Therefore, we have excluded these 2 sites from our conclusions regarding EPA's
oversight.
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accomplished, the cleanup should be completed by the year 2000
with a cost savings of $30 million.
For 11 of the 13 sites, the remedies were being completed in
accordance with the time schedules in the settlement agreements or
orders.2 For example, at one site, the PRP met the dates
anticipated in the settlement agreement or order for both the
remedial design and remedial action. The ROD anticipated that it
would take five years for the PRPs to implement the remedy. The
PRPs completed construction at this site in five years and three
months.
FACTORS
CONTRIBUTING TO
EFFECTIVE
OVERSIGHT
There were a couple factors that contributed to Region 5's effective
oversight of PRPs at the 13 sites in our review. They included
good working relationships between RPMs and the PRPs and early
identification of problems.
Generally, the RPMs had a good working relationship with the
PRPs due to their rapport and communications.
• At one site, a good working relationship occurred because
(1) the RPM thought the PRP was cooperative, (2) there
was open communication between the parties, and (3) the
PRP thought the RPM was competent and knowledgeable.
According to the PRP at another site, the RPM was
responsive to the PRP's needs, and clearly communicated
EPA's views. The RPM listened to the PRP and took the
PRP's views and concerns into consideration.
A second factor contributing to effective oversight was early
identification of problems. This occurred through RPM site visits
and the RPMs' open communication with the PRPs and EPA's on-
2 At two sites, we had some concerns about the timeliness of the remedy implementation. At one of these
sites, we had an issue with the level of oversight. However, for that site, Region 5 has agreed to take action to
address our concerns. At the other site, the delays occurred a number of years ago. The exceptions we found were
isolated instances and not indicative of regional oversight.
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site contractors. Early identification allowed the RPM and PRPs to
resolve problems before implementation of the remedy or time
schedules were affected.
• At one site, the RPM made weekly visits to determine for
himself how the work was progressing and to resolve any
potential problems that might arise. He met with the PRP
group and their contractors. If a problem surfaced, they all
discussed it, and agreed to a solution that all the parties
could accept and still meet the requirements for the clean-
up. The weekly meeting fostered a sense of trust and
cooperation among the various parties involved in the
work. This cooperation went a long way in helping the
PRP meet its time frames for site clean-up.
• At another site, the RPM made site visits to resolve any
issues or problems that arose and that the EPA on-site
contractor or state representative brought to his attention.
The on-site contractor kept in daily phone contact with the
RPM, when needed, to inform him of the work being done
and any potential problems. The involved parties discussed
problems and resolved them early. In this way, major
issues never arose between the PRP and EPA.
IMPROVEMENT Region 5 could improve the quality of its oversight by increasing
the use of independent quality assurance teams. For some sites, the
personnel performing quality assurance were not independent.
This was because the RPMs did not view the use of independent
quality assurance teams as necessary to ensure appropriate cleanup.
As a result, quality assurance could be reduced and EPA could be
taking on extra work, responsibility, and risk.
The February 1990, Guidance on Oversight of PRP Performed
RD/RA, recognized the importance of using an independent quality
assurance team during construction. That document identified the
use of independent quality assurance teams as an important aspect
of PRP oversight. The guidance does provide regions the flexibility
to decide to increase their oversight if there is not an independent
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quality assurance team. However, the ultimate goal is to hold the
PRP accountable.
Use of independent quality assurance teams is (1) prevalent in EPA
guidance and (2) standard practice in industry. The September
1997 Draft EPA order, Policy and Program Requirements for the
Mandatory Agency-wide Quality System, and industry standards,
recommend the use of independent quality assurance teams.
According to these documents, one element of a quality system is a
quality assurance organization independent of the organization
conducting environmentally-related measurements.
Nine of the sites in our sample had construction quality assurance
plans with sufficient information to evaluate the independence of
the quality assurance contractor. Five of these nine lacked an
independent quality assurance team. Based on the comments from
the RPMs, they did not believe it was necessary that the quality
assurance contractor be independent. For example, at one site the
quality assurance team consisted of contractor employees that were
from the same company. The RPM said that requiring separate,
independent contractors would be overkill. At another site, where
the PRP contractor was performing quality assurance, the RPM did
not perceive this as a problem since EPA had its own on-site
contractor and the RPM made site visits.
The purpose of an independent quality assurance team is to provide
confidence that the constructed remedy meets project requirements
through testing and inspection of the construction contractor's
work. It is necessary for the quality assurance team to be
completely independent of the construction contractor so the
results of the quality assurance are unbiased and objective. If there
is no independent quality assurance team, the PRP, and ultimately
EPA may in some cases be unable to reasonably ensure that
performance measures are met. Therefore, it is possible that EPA
would need to expend a greater amount of time and resources on-
site to achieve a reasonable confidence that the constructed remedy
meets project requirements.
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CONCLUSION
RECOMMENDATION
AGENCY COMMENTS
AND ACTIONS
OIG EVALUATION
Region 5 provided effective oversight of PRPs. Effective
oversight resulted from good working relationships and open
communication between the RPM and PRP, and early
identification of problems. As a result, the cleanups are
progressing on schedule. Region 5 could improve the
effectiveness of its oversight by more frequently using independent
quality assurance teams.
We recommend that the Acting Regional Administrator, Region 5,
require Superfund division to (1) use independent quality
assurance teams for PRP lead remedial construction projects where
appropriate, and (2) verify that independent quality assurance
teams are being used appropriately. When independent quality
assurance teams are not used, the reasons for not using them
should be documented.
Region 5 agreed with the recommendation and proposed that,
starting October 1,1998, the RPM will evaluate the
appropriateness of using an independent construction quality
assurance team for each workplan received for PRP remedial
construction projects performed pursuant to an EPA settlement or
order. In performing this evaluation, the RPM will use EPA's
Guidance on Oversight of PRP Performed RD/RA dated February
14,1990, and other applicable EPA regulations and guidances, as
references. In any case where such a team will not be used, the
RPM will document the reasons in a memorandum.
Region S's actions, when completed, will address the finding and
recommendation in this chapter.
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CHAPTER 3
Impact Of The Reduced Oversight Reform
Was Difficult to Measure
The impact of the reduced oversight administrative reform in
Region 5 was difficult to measure due to (a) the inherent nature of
the oversight process and (b) cost savings from reductions in
oversight not being computed. Specifically,
• the reform had only a limited effect on how Region 5
determined the appropriate level of oversight at PRP
cleanups.
• Region 5 could not compute cost for savings from
reductions for fiscal years (FY) 1996 and 1997 because
management did not require RPMs to identify oversight
activities that they reduced.
As a result, for FY 1996 and 1997, the Agency could not determine
the extent of the impact of this reform and whether it was
successful in Region 5. For FY 1998, the Agency has developed
an evaluation form that, when completed, may provide
management with the information it needs to evaluate the impact
of the reform.
Region 5 was not the only region that had difficulty determining
the impact of this administrative reform. A recent OIG report also
found that Region 2 could not show actual reductions in oversight.
Details of this OIG report are included in exhibit 2.
REDUCED OVERSIGHT
REFORM In July 1996, the Superfund program issued guidance to help the
regions identify those sites where PRPs were cooperative and
capable and, therefore, reductions in oversight were appropriate.
To implement this reform, the guidance called for the regions to
perform specific activities, including the following:
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LIMITED EFFECT ON
OVERSIGHT
DECISIONS
COST SAVINGS NOT
COMPUTED
Use the criteria in the guidance to identify sites where
reduced oversight was appropriate.
Maintain documentation showing the criteria used,
including the specific criteria set forth in the guidance, in
determining that each site was or was not appropriate for
reduced oversight.
Report estimates of how much oversight had been reduced
at sites during 1996.
The reduced oversight reform had only a limited effect on how
Region 5 determined the appropriate level of oversight at PRP
cleanups. Some of the RPMs who had sites in this reform stated
that without this reform they would not have been comfortable
reducing oversight. However, other RPMs stated that this reform
had no impact on their decision to reduce oversight.
The inherent nature of the oversight process, in part, limited the
impact of this reform. Because each site, and each PRP is
different, Agency guidance does not establish a defined level of
oversight that must be used at every Superfund site. For example,
Agency guidance states that RPMs have the flexibility to adjust the
level of oversight as they see necessary. The guidance on reduced
oversight gave limiting the number of field visits based on PRP
competence as an example of reduction in oversight. However,
even before EPA issued the reduced oversight guidance, RPMs
could limit the number of site visits. Therefore, it is difficult to
determine whether the RPMs decision to reduce oversight was
because of this reform or whether they would have done so without
this reform.
For FY 1996 and 1997, Region 5 could not document costs savings
attributed to this reform. While some RPMs could estimate cost
savings from reductions in oversight, there was no documentation
to support the estimates. Other RPMs did not estimate the cost
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savings. This occurred because RPMs did not document the
activities that they reduced. For FY 1998, Region 5 will estimate
cost savings for all sites in this reform.
In FY 1998, the Office of Site Remediation and Enforcement
prepared an evaluation form that Region 5 will complete during the
fourth quarter for all sites in the reform. The evaluation form
includes several questions that are aimed at estimating costs
savings from reductions in oversight. The questions include
identification of the following:
• planned oversight costs before changes due to the reform,
• decisions the region made to reduce oversight prior to the
site's inclusion in the reform, and
• reductions in oversight that were made as a result of
participation in the reform.
With the completion of the evaluation forms, Region 5
management may have the information it needs to evaluate the
success of this reform. This evaluation is important for several
reasons.
• Throughout the Agency there is a greater emphasis on
measuring the results of EPA activities. While there are
many activities that EPA cannot measure, there are cost
savings associated with reductions in oversight that it can
estimate if the necessary information is collected.
• Information on the success of this reform at specific sites
will assist management in determining whether it should
reduce oversight at more sites.
CONCLUSION
The Agency's original goal for this reform was to reduce oversight
costs at sites where the PRPs were cooperative and capable. While
this reform did influence some RPMs to reduce oversight, the
impact of the reform was limited and difficult to measure. The
evaluation form the Agency prepared will assist Region 5 in
computing the costs savings from this reform. While the Agency
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has modified the emphasis of this reform to maximizing the
efficiency and effectiveness of PRP oversight, a significant factor,
and the true measure of success for this reform, remains reduction
in oversight costs.
RECOMMENDATION
AGENCY COMMENTS
AND ACTIONS
We recommend that the Acting Regional Administrator, Region 5,
ensure the Superfund division yearly completes the evaluation
form for sites in this reform in order to compute costs savings.
During 1998, Region 5 took significant actions to improve the
management of this reform. During the year, Region 5 issued
several memorandums to Superfund staff explaining how the
reform was to be conducted. RPMs identified sites that should be
included in the reform and documented how oversight was
reduced. For 15 sites, RPMs met with PRPs to discuss how the
reform would be implemented at the site. RPMs began to
document the cost savings that were achieved. Letters were also
sent to the PRPs after they were billed for oversight costs,
describing what type of reduced oversight activities took place.
In responding to the draft report, Region 5 proposed the following
schedule for annual reporting of oversight reductions:
July 28-30 Evaluation form will be discussed at the national
Superfund Division Directors meeting in Denver,
CO.
August RPMs will fill out the evaluation form.
September Regional contacts on reform will collect, analyze,
and transmit evaluations to EPA-Headquarters.
October 10 Regional evaluations due to EPA-Headquarters.
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DIG EVALUATION
Region 5's actions, when completed, will address the finding and
recommendation in this chapter.
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Exhibit 1
Page 1 of3
Scope, Methodology, and Prior Audit Coverage
SCOPE AND
METHODOLOGY Our audit focused on Region 5's Superfund program and its
oversight of PRP lead remedial construction projects. We
performed our fieldwork from October 7,1997 to June 17,1998.
As part of our review, we used the following EPA guidance as
criteria for evaluating Region 5's activities:
• OSWER Directive 9355.5-01, Guidance on Oversight of
PRP Performed RD/RA, dated February 14,1990.
OSWER Directive 9200.4-15, Reducing Federal Oversight
at Superfund Sites with Cooperative and Capable Parties,
dated July 31,1996.
• Special Account Reform Implementation Notebook, issued
by the Office of Site Remediation Enforcement, in March
1997.
To evaluate Region 5's oversight of PRPs and the impact of the
two reforms, we selected a sample of 15 PRP lead sites that had
remedial design and action activities either (1) completed between
October 1,1995, and December 8,1997 or (2) in progress as of
December 8,1997. In selecting the 15 sites, we selected 7 sites that
were part of the reduced oversight reform and 2 sites that had
special accounts as of December 8,1997. We selected the sample
based on information from CERCLIS as of December 8,1997. We
did not evaluate the controls related to CERCLIS and the adequacy
of the controls were not critical to the results of our audit.
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Region 5 Oversight of PRP-lead
Remedial Design and Remedial Action
Exhibit 1
Page 2 of3
To determine if Region 5 was effectively overseeing PRPs, we
reviewed EPA's files relating to the remedial design and action,
and discussed the site activities and EPA's oversight with the RPM
for each site in our sample. As appropriate, we contacted the PRPs
and state officials to obtain their opinions on EPA's oversight. We
also discussed with Region 5 management the controls that were in
place to ensure that RPMs were effectively overseeing PRPs.
To evaluate the impact of the reduced oversight reform, we
determined the following for the sites in our sample that were part
of the reform:
• how the site was selected for the reform,
• what activities were reduced,
• whether reductions in oversight were appropriate, and
• what documentation was maintained regarding cost savings
from reductions in oversight.
Based on the sites in our sample, we expanded our review to all
sites that were part of the reduced oversight reform to determine
whether issues we identified in our sample existed at other sites.
During the audit, we dropped one objective on evaluating the
impact of the special account reform for two reasons. First, the
Agency has not completed the guidance on disbursing special
account funds to PRPs. Second, the reform was relatively new,
and there were only two remedial design and action sites that had
special accounts in Region 5. The enforcement negotiations at the
two sites had not reached a point where we could evaluate the
impact of the special account. Therefore, we did not pursue this
objective further during this audit, but referred what we had found
to another OIG office that was performing a detailed review of the
special account administrative reform.
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Region 5 Oversight of PRP-lead
Remedial Design and Remedial Action
Exhibit 1
Page 3 of 3
During the audit, Region 5 took action to correct several problems
we identified. The problems, and actions Region 5 took, are
described in exhibit 3.
We issued position papers to the Director, Superfund Division,
Region 5 between May 26 and June 9, 1998. We discussed the
position papers with Superfund program personnel and considered
their comments in preparing the draft report. The draft report was
issued to the Acting Regional Administrator, Region 5, on June 29,
1998. The Acting Regional Administrator responded on July 30,
1998. The response was incorporated into the report, and included
in Appendix 1 .
COVERAGE One component of Region 5's oversight of PRPs is the billing of
oversight costs. In March 1997, the OIG issued a report on Region
5's Billing and Collection of Accounts Receivable (Report No.
7100139). The audit found that for Superfund oversight billings,
Region 5 did not (1) promptly send initial billings, (2) timely send
follow-up notices on unpaid balances, or (3) include delinquent
amounts on subsequent billings. As a result, the Superfund Trust
Fund was not timely replenished.
In responding to the audit report, Region 5 agreed to take a number
of corrective action to improve the billing and collection of
oversight costs. Follow-up audit work to these corrective actions
was performed as part of the OIG's annual audit of the Agency's
financial statements. As a result, we did not review the issue of
billing of oversight costs during this audit.
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Exhibit!
Page 1 of 1
RELATED OIG REPORTS
The OIG recently issued a draft report on Region 2's Billing of
Superfund Costs (Report no. E1SFF8-02-0007-8100206). As part
of the audit, the OIG evaluated Region 2's efforts to implement the
reduced oversight administrative reform. The report found that
Region 2 had identified six Superfund sites as candidates for
reduction in oversight. However, the Region had not reported
estimated oversight reductions.
The report noted that the impact of administrative reform was
difficult to assess for several reasons, including the lack of accurate
information regarding specific site reductions. There was also no
defined level of the amount of oversight EPA was to perform,
which made it difficult to identify what qualified as a reduction in
oversight. It was also difficult to quantify the value of activities
EPA did not perform.
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Exhibit 3
Page 1 of 1
ISSUES CORRECTED DURING THE AUDIT
During the audit, we identified two issues that Region 5 corrected
during our field work. One concerned the level of regional
oversight at a specific site and the second was the accuracy of
management list of sites in the reduced oversight reform.
At 1 of 15 sites, we had concerns about the level of oversight
Region 5 was providing. We discussed our concerns with
management, and they agreed to assess the level of oversight that
was needed and prepare a plan of action for continuing work at the
site. We reviewed Region 5 assessment and plan of action and
determined that the planned oversight would address our concerns.
During our review we found Region 5's list of sites in this
administrative reform was inaccurate. Region 5 continually
updates the list of sites in this reform because of changing
conditions, such as a remedial action being completed, or the
relationship with the PRP's has changed. However, for some of
the sites that Region 5 management identified as part of this
reform, the RPMs stated that they were not aware that the site was
part of the reform nor were they reducing oversight. To determine
the extent to which the list was inaccurate, we evaluated a list
Region 5 management provided us dated March 13,1998. Of the
16 remedial design or remedial action sites on the list, two did not
have reduced oversight. We also found two sites that RPMs stated
they were reducing oversight and they considered part of this
reform, but were not included on the March 13,1998 list. After
discussing this issue with Region 5, it took action to improve the
controls over the accuracy of the list, including specific criteria that
must be met before a site is identified as part of the reduced
oversight reform.
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Region 5 Oversight of PRP-lead
Remedial Design and Remedial Action
Appendix 1
Page 1 of 5
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
1 REGION 5
77 WEST JACKSON BOULEVARD
CHICAGO. IL 60604-3590
JUL 30 1998
REPLY TO THE ATTENTION OF
MEMORANDUM
SUBJECT: Draft Audit Report El SGF8-05-0035
Region 5 Oversight of PRP-Lead Remedial
Design and Remedial Action
FROM: David A. Ullrich
Acting Regional Administrator
TO: Anthony C. Carrollo
Divisional Inspector General for Audits
Northern Division
Thank you for the opportunity to comment on the subject draft audit report.
Attached is the Region's response to the report. If you have any questions, please contact
William Muno, Director, Superfund Division at 3-9773.
Attachment
cc: Robert Springer, ARA for RMD
William E. Muno, Director, Superfund Division
Cyprian Ejiasa, Regional Comptroller
Howard Levin, Acting Chief, Program Accounting & Analysis Section
Recycied/Recyclable-Pnnted with Vegetable Oil Based Inks on 100 Recycled Paper (40% Postconsumer)
Note. The original response was signed by Jerri-Anne Carl for David A Ullrich
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Appendix 1
Page 2 of 5
DATE: JUL231998
SUBJECT: Draft Report No. E1SGF8-05-0035
Region 5 Oversight of PRP-Lead Remedial Design
and Remedial Action
FROM: William E. Muno, Director
Super-fund Division
TO: Howard Levin
Regional Audit Coordinator (MF-10J)
We have reviewed the Draft Report referenced above, prepared by the Office of the Inspector
General for the Northern Division (OIGND), U.S. Environmental Protection Agency, and offer
our comments below. Our individual remarks follow an identification of the Section or Chapter
of the Draft Report that we are commenting upon.
Executive Summary
We acknowledge the two primary findings summarized in the Results in Brief subsection.
We agree with the first finding that Region 5 provided effective oversight of PRPs. In regard to
the second finding, we believe it would be more accurate to state that the "impact of the reduced
oversight administrative reform in Region 5 was difficult to measure", rather than say the
"impact., was limited'. We will explain our reasoning for this comment later in this
memorandum.
Consistent with other Sections of the Report, we believe the first bullet point of the
Recommendation subsection should should be revised to read:
"We recommend that the Acting Regional Administrator, Region 5,
• require the Superfund Division to (1) use independent quality assurance teams for
PRP-lead remedial construction projects where appropriate, and (2) verify that
independent quality assurance teams are being used appropriately. When
independent quality assurance teams are not used, the reasons for not using
them should be documented."
This wording reflects the way this recommendation is articulated at the end of Chapter 2 of the
Draft Report, and clarifies that when such teams are used, they are only used during the
construction phase of a project.
Note. The original response was signed by William E. Muno
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Appendix 1
Page 3 of 5
Chapter 1, Introduction, Background
For clarity, we suggest portions of paragraphs 2 and 3 be written as follows, with our additions
italicized:
"...If a PRP elects to perform the remedial design or action, they must do so in accordance
with a settlement agreement or in compliance -with an EPA-issued unilateral
administrative order. The settlement agreement can be either an administrative order on
consent, or a judicial consent decree. When the PRPs conduct the cleanup under EPA
oversight, EPA's role is to ensure that the PRP complies with all applicable laws,
regulations, and requirements; and meets all performance standards in the settlement
agreement or order For sites where EPA is the lead agency enforcing the terms of the
agreement or order, the EPA Remedial Project Manager (RPM) has the primary
responsibility for overseeing the PRP. There are some sites where a State environmental
agency is enforcing the terms of an agreement or order under Slate law
" ..During remedial action, the RPM, most often with the assistance of an EPA
contractor, oversees the PRP's construction and imlementation of die remedy
The level of oversight the RPM provides will depend upon die requirements of
the settlement agreement or order..."
Chapter 2
Anywhere the term "settlement agreement" is used, the phrase "or order" should be added
directly thereafter.
Examples of Effective Oversight
In paragraph 2, the first sentence should begin, "For the 13 sites selected for the audit "
Similarly, paragraph 3 should begin, "For II of the 13 sites..."
Area for Improvement
Paragraph 1, third sentence should read, "This was because die RPMs did not view the use of
independent quality assurance teams as necessary to ensure an appropriate cleanup. "
Paragraph 5, third sentence should read, "If there is no independent quality assurance team, die
PRP, and ultimately EPA, may in some cases not be able to reasonably ensure that performance
measures are met."
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Appendix 1
Page 4 of 5
Recommendation
As we commented on the Executive Summary Section, the only change to this text, for accuracy,
would be to substitute the phrase "remedial construction projects" for the phrase "remedial
design/remedial action sites".
The Region 5 Superfund Division agrees with the Recommendation, using the substituted phrase
noted in our comment above.
Corrective Action and Timeframe
October 1,1998 Each new workplan, received after this date, for remedial construction
activities to be performed by a PR? pursuant to an EPA settlement
agreement or order, will be evaluated by the RPM as to the
appropriateness of utilizing an independent construction quality assurance
team. In performing-this evaluation, die RPM will use EPA's
Guidance on Oversight of PRP Performed RD/RA dated
February 14, 1990, and other applicable EPA regulations and guidances,
as references. In any case where such a team will not be utilized, the RPM
will document the reasons in a memorandum.
Chapter 3
We believe the title of Chapter 3 is misleading. A more appropriate title for the Chapter would
be "Impact of The Reduced Oversight Reform was Difficult to Measure" versus "Impact of The
Reduce Oversight Reform was Limited". Starting in fiscal year 1998, Region 5 has been able to
document how reduced oversight has been implemented at those Superfund sites where there are
capable and cooperative PRPs. Several memos were issued to Superfund staff during fiscal year
1998 which explained how this reform was to be conducted. Remedial Project Managers
(RPMs) who had sites impacted by the reform, knew that in order to receive recognition for work
performed under the reform, three tasks needed to be accomplished. Briefly, the tasks were 1)
meet with the PRPs to inform them of the reduced oversight approach which was implemented at
the site; 2) issue the PRPs an oversight bill and 3) send the PRPs a letter which documents how
EPA reduced oversight activities during the billing period. It should be noted that the sites which
were addressed under this reform were sites that the RPMs themselves had decided to put
forward as reduced oversight candidates. Specifically, die RPMs knew about die reform, its
measures, and how the reform would impact their approach to implementing oversight. In
summary, to state that the reform had limited effect on oversight decisions does not properly
characterize the Region 5 Superfund Division's efforts in implementing this reform.
Cost Savings Not Computed
This section should include the following statements.
"Starting in FY 1998, however, RPMs began to document die cost saving activities which
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Appendix 1
Page 5 of5
took place at privately funded clean ups. RPMs met with PRPs from fifteen privately
funded clean up sites to discuss how the reform would be implemented on a site specific
basis. Additionally, letters were sent to the PRPs after they were billed, describing what
type of reduced oversight activities took place during the billing period."
These sentences should be inserted after the fourth sentence in the introductory paragraph of this
section. The Region 5 Superfund Division has put a tremendous amount of effort in FY 1998
into how it manages this reform. It is disappointing that the report does not reflect these efforts
and changes which have improved the documenting of the reform in FY 1998.
Conclusion
The first sentence of this section should read as follows:
"The Agency's original goal for this reform was to reduce oversight costs at those sites
where the PRPs have been capable and cooperative."
The Draft Report fails to recognize that EPA's original intent for the reform was to target those
sites which have capable and cooperative PRPs. Once the regulated community understood that
EPA would reduce oversight costs for PRPs who were capable and cooperative, presumably the
message would circulate regarding the type of behavior EPA was trying to encourage among the
regulated community.
Recommendations
The Region 5 Superfund Division agrees with the Draft Report's recommendation to complete
the evaluation form for sites in the reform on an annual basis.
Corrective Action and Timeframe
The following schedule will be followed for the remainder of FY 1998 to implement the Draft
Report's recommendation for annual reporting of oversight cost reduction:
July 28-30 Evaluation form will be discussed at the national Superfund Division
Directors meeting in Denver, CO.
August RPMs will fill out the evaluation form.
September Regional contacts on reform will collect, analyze and transmit evaluations
to EPA-Headquarters.
October 10 Regional evaluations due to EPA-Headquarters.
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Appendix 2
Page 1 of 1
DISTRIBUTION
Region 5
Senior Leadership Team
Audit Followup Coordinator
Library
Headquarters
Assistant Administrator for Enforcement and Compliance Assurance (2201)
Assistant Administrator for Solid Waste and Emergency Response (5101)
Agency Followup Official (3101)
Attn: Assistant Administrator, OARM
Agency Followup Coordinator (3304)
Attn: Director, RMD
Headquarters Library (3404)
Office of Inspector General
Inspector General
GAO Issue Area Planner
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