United States Office Of The EPA 205-R-98-002
Environmental Protection Chief Financial Officer December 1997
Agency (2710)
vvEPA 1997 Integrity Act Report To
The President And Congress
Federal Managers' Financial
Integrity Act (PL. 97-255)
October 1,1996 - September 30,1997
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Cover photo by Steve Delaney
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o^0St%
2 A \
I I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\c wo,t/ WASHINGTON, D C. 20460
_ , ^ THE ADMINISTRATOR
DEC I 9 1997
The President
The White House
Washington, DC 20500
Dear Mr. President:
I am pleased to report that the Environmental Protection Agency's (EPA)
management and financial controls, with several exceptions noted, provide reasonable
assurance that the Agency's programs and resources are protected from fraud, waste,
and mismanagement. In my judgment, EPA has achieved the intent of the Federal
Managers' Financial Integrity Act (P.L. 97-255), to prevent problems through systematic
review and evaluation of the Agency's programs and operations.
My assurance to you is based on EPA's annual self-evaluations, conducted in
accordance with the Office of Management and Budget's (OMB) national
management integrity guidance under Circular A-123, Management Accountability and
Control. Over the last year, EPA's Assistant and Regional Administrators have carried
out this policy by exercising personal judgment in reviewing their operations and in
identifying, correcting, or reporting significant issues that affect the management
integrity of the Agency's environmental programs.
In October 1997, my Senior Leadership Council (SLC) invited senior
managers from EPA's principal oversight agencies - OMB, the General Accounting
Office (GAO) and EPA's Inspector General - to present their views of the Agency's
most significant management problems. This annual discussion with some of EPA's
toughest evaluators in government is of great value in challenging the Agency's own
estimates of success in managing our environmental programs.
Our senior managers held follow-up meetings with our oversight colleagues to
clarify positions and to provide the latest information on EPA's progress in addressing
issues identified at the meeting. I am pleased to report that these sessions enabled all
parties to gain a better understanding and appreciation of each other's perspectives,
and to maintain a continuing dialogue on difficult management questions.
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2
The SLC met again in November 1997 to review the results of EPA's self-
evaluations, including the Assistant and Regional Administrators' formal responses to
OMB's, GAO's, and the Office of Inspector General's material weakness candidates.
The SLC then developed its recommendations on the status of EPA's management
control weaknesses and financial non-conformances for my final decision, which I am
conveying to you in this report.
As a result of this systematic Agency-wide evaluation process, I am pleased to
advise you that EPA corrected three of its five material management control
weaknesses: 1) Environmental Data Quality, 2) Accounting System-Related Financial
Management Problems, and 3) Information Resources Management Planning and Investment.
These weaknesses were identified by EPA more than six years ago, and their final
correction this year reflects the results of sustained senior management attention
during this Administration.
Two material weaknesses are scheduled for correction in FY 1999 and FY 2002
respectively: 1) Grants Close Out and Oversight of Assistance Agreements, and
2) Construction Grants Close Out. EPA is making excellent progress in closing out its
open grant commitments and in deobligating and reusing or returning expired funds
to the U.S. Treasury. I am also pleased to report that EPA corrected its three
longstanding financial non-conformances with government-wide accounting
standards, bringing the Agency into compliance with those requirements.
Finally, I am identifying one new material weakness: Information Systems Security
Plans. EPA's major information systems may be at risk due to incomplete or
inadequate security plans. This area had been identified as a vulnerability by EPA's
information resources managers and the Office of Inspector General, and is scheduled
for correction in FY 1999. The plans and corrective action milestones for these
weaknesses are contained in the enclosures to this report.
With your sustained leadership and support, I will continue my efforts with
the Congress, our State and Tribal partners, and the American people to protect the
integrity of EPA's programs as we develop and carry out common sense, cost effective,
and flexible strategies to protect public health and the environment.
Sincerely,
Carol M. Browner
Enclosures
Identical letters sent to The Honorable Albert Gore, Vice President of the United States, as President of the Senate,
and to The Honorable Newt Gingrich, Speaker of the House of Representatives.
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UNITED STATES
MQN AGENCY
FISCAL
INTEGj
Lgers' Financial
October 1,1996 - September 30,1997
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TABLE OF CONTENTS
Page
Administrator's Letter to the President 1
ENCLOSURE A
Statistical Summary of Performance A1
ENCLOSURE B
Material Weaknesses Summary and Schedule of
Corrective Actions B1
New Material Weaknesses
Information Systems Security Plans B2
Tarry Over Material Weakness^
Grants Close Outs and Oversight of Assistance Agreements B4
Construction Grants Close Out B6
Cnrrpirteri Material Weaknesses
Environmental Data Quality B8
Accounting System-Related Financial Management Problems BIO
Information Resources Planning and Investment B12
ENCLOSURE C
Financial Non-Conformances Summary and
Schedule of Corrective Actions CI
rnrrerteri Financial Non-Conformances
Regional/General Ledger Superfund Accounts Receivables C2
Property Accounting Process C4
Accounting System Interfaces C6
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ENCLOSURE A
STATISTICAL SUMMARY OF PERFORMANCE
1997 INTEGRITY ACT REPORT
U.S ENVIRONMENTAL PROTECTION AGENCY
Integrity Act Section 2
NUMBER OF MATERIAL WEAKNESSES
Number reported
for the first
time in:
For that year,
number that have
been corrected:
For that year,
number still
pending:
Prior Years
42
42
0
1995 Report
0
0
0
1996 Report
2
0
2
1997 Report
1
0
1
Total
45
42
3
Of the total number corrected, how many were corrected in 1997?
3_
Integrity Act Section 4
NUMBER OF FINANCIAL NONCONFORMANCES
Number reported
for the first
time in:
For that year,
number that have
been corrected:
For that year,
number still
pending:
Prior Years
18
18
0
1995 Report
0
0
0
1996 Report
0
0
0
1997 Report
0
0
0
Total
18
18
0
Of the total number corrected, how many were corrected in 1997?
3_
Enclosure A Page 1
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ENCLOSURE B
SUMMARY OF
MATERIAL WEAKNESSES AND
SCHEDULE OF CORRECTIVE ACTIONS
1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
NEW MATERIAL WEAKNESSES
FISCAL YEAR
FIRST
REPORTED
LAST YEAR'S
CORRECTION
DATE (FY)
CURRENT
CORRECTION
DATE (FY)
. ^
1. Information Systems Security Plans
1997
N/A
1999
B-2
CARRY OVER MATERIAL WEAKNESSES
FISCAL YEAR
FIRST
REPORTED
LAST YEAR'S
CORRECTION
DATE (FY)
CURRENT
CORRECTION
DATE (FY)
Page
1. Grants Close Outs and Oversight of
Assistance Agreements
1996
1998
1999
B-4
2. Construction Grants Close Out
1996
2002
2002
B-6
CORRECTED MATERIAL WEAKNESSES
FISCAL YEAR
FIRST
REPORTED
LAST YEAR'S
CORRECTION
DATE (FY)
FINAL
CORRECTION
DATE (FY)
Page
1. Environmental Data Quality
1992
1997
1997
B-8
2. Accounting System-Related Financial
Management Problems
1992
1997
1997
B-10
3. Information Resources Planning &
Investment
1992
1997
1997
B-12
Enclosure B Page 1
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£ \
ENVIRONMENTAL PROTECTION AGENCY
FY 1997 INTEGRITY ACT REPORT
pgmw
[X] Materia! Weakness
( } Hnaucial Noix-cooforraaijc^ [ J Agency Weakness
f ] Corrected [ 1 Carryover
TITLE: Information Systems Security Plans
DESCRIPTION: Office of Inspector General (OIG) audits identified that security plans for many of the Agency's
major applications and general support systems are deficient or non-existent, potentially placing the respective
Agency organizations in a state of non-compliance with Federal and Agency regulations. Security plans serve as a
management control mechanism to assist officials in the implementation of Agency security policies and in protecting
valuable information technology (IT) resources. Each POH is required to develop and implement their own
information security program based on EPA's Information Security Program requirements. Organizational security
programs are to include the development, maintenance, and management reviews of information security plans; to
date, this has not occurred. At risk is the possible unauthorized access, use, modification, or destruction of EPA
information resources that could result from exploitation of vulnerabilities.
CORRECTIVE ACTION STRATEGY: EPA's corrective action strategy will assist EPA organizations with
security program development. EPA will: 1) provide assistance at both Primary Organization Head and Security
Plan Developer organizational levels; 2) develop a model information security program that provides a framework
for the managerial role in organizational security planning and oversight; 3) disseminate detailed guidance with
explicit examples and narratives for security plan development for major applications and general support systems;
and 4) develop security plans for the Agency's telecommunications network and EPA's National Computer Center
computer platforms. This latter action addresses a vulnerability at a single location attached to the EPA
telecommunications network that has the potential to make other users of the network vulnerable at other locations,
and will ensure that Agency users understand the minimum security controls that must be in place and followed when
using these services.
RESULTS INDICATORS: As a means of ensuring that security plans are continuing to be addressed, EPA's Chief
Information Officer (CIO) will issue an annual call to Primary Organization Heads requiring certification of
information security planning activities and accomplishments in their respective organizations. EPA's Information
Security Program Manager will perform spot checks of security plans to test the effectiveness of EPA's guidance.
RESPONSIBLE MANAGER:
Mark A. Day, Acting Director
Office of Information Resources Management
Enclosure B Page 2
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ENVIRONMENTAL PROTECTION AGENCY
FY 1997 INTEGRITY ACT REPORT
TITLE: Information Systems Security Plans
APPROPRIATIONS/ACCOUNTS r
[X] EPM C 3 SF [JB&F U Oil Spills [ ] FIFRA
[ JS&T I} LUST tHG 11 STAG H Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
1997
Original Targeted Correction Date;
1999
Correction Date In Last Year's Report:
N/A
Current Correction Bate:
1999
Explanation for Change in Date:
Not Applicable
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
CXTOENT
TARGET
DATE
ACTUAL
COMPLETION
DATE
1. Issue First Annual Call by EPA's Chief Information
Officer for Certification of Security Planning Activities
by POHs.
3/98
3/98
2. Develop and Make Available to POHs OARM
Information Security Program Manual.
6/98
6/98
3. Develop a Security Plan for EPA's National Computer
Center's Computing Platforms per OMB Circular A-130,
Appendix III Requirements.
6/98
6/98
4. Develop an EPA Telecommunications Network
Security Plan per OMB Circular A-130, Appendix III
Requirements.
6/98
6/98
5. Test and Validate the Effectiveness of Security Plan
Guidance and Plans in Correcting the Problem.
9/98
9/98
Enclosure B Page 3
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
PCJ Material Weakness
r INew
J ] Financial Non-confonsaiice
[ T Corrected
[ ] Agency Weakness
[X] Carryover
TIILE: Grants Close Outs and Oversight of Assistance Agreements
DESCRIPTION:
EPA's Office of Inspector General (OIG) found that neither Project Officers (POs) nor the Grants Administration
Division (GAD) adequately managed assistance agreements. Agency project files lacked documentation to show
that EPA monitored progress on the projects or required recipients to complete projects and submit the required
close out documentation. This lack of oversight created a significant backlog of assistance agreements to be
closed out.
CORRECTIVE ATTTON STRATEGY;
EPA's strategy to improve assistance agreement management is to: 1) establish a team of grants and program staff
to develop and implement creative ways to realign grants administration responsibilities to devote more time to
post award grants management; 2) develop a policy on Grants Management Officer (GMO) oversight
responsibilities; 3) emphasize post award management in PO training; 4) develop a policy on PO roles and
responsibilities to address issues such as site visits, monitoring expenditures and improving record retention
methods; and 5) develop and implement a validation strategy to evaluate the effectiveness of the PO training.
RESTn TS INDICATORS:
EPA is taking aggressive action to close assistance agreements that have become inactive. As of September 30,
1997 EPA has trained more than 3,000 Project Officers and 150 Grants Specialists; and closed out more than
8,000 grants, reducing the backlog from 18,000 to under 10,000. EPA will measure progress in correcting the
material weaknesses by closely monitoring the close out of remaining grants. Regions will conduct Management
Effectiveness Reviews using GAD's review protocol. GAD will perform Management Oversight Reviews with
Regional offices and the Headquarters GMOs to ensure that corrective actions are being completed. GAD will
use the Project Officer Validation Study to ensure that corrective actions are working to correct weaknesses.
RESPONSIBLE MANACT.R;
Harvey Pippen, Director, Office of Grants and Debarment
Office of Administration and Resources Management (OARM)
Enclosure B Page 4
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Grants Close Outs and Oversight of Assistance Agreements
k / a' e-k^^4i,4i2 •
[X] EPM |Xj SF m B&F 1X3 Oil S
Pd S&T ' |X|LW PQIG IX} STA<
pais [X] FEFRA
j [ ] Other
| PACE OF CORRECTIVE ACTION: ||
Fiscal Year First Identified:
1996
Original Targeted Correction Bate;
1998
Correction Date In Last Year's Report:
1998
Current Correction Date (FY>:
1999
Kxplanatftm for Changp in Date:
In July 1996 EPA proposed a corrective action date of FY
2000 to Congress. EPA has since determined that the close out
backlog will be completed by December 1998, FY 1999.
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
CURRENT
TARGET
DATE
ACTUAL
COMPLETION
DATE
1. Develop Older Grants Close Out Strategy and Resolve
Generic Close Out Issues.
12/96
3/98
3/98*
2. Develop GMO Oversight Responsibility Policy.
4/97
12/97
3. Close Out 50% of Pre-1990 Physically Completed
Grants.
7/98
7/98
4. Study to Realign Grants Operations Branch to Allow
More Time for Post Award Administration.
7/97
7/97
7/97
5. Develop/Implement PO Training Validations Strategy.
10/97
10/97
6. Issue Policy on PO Roles and Responsibilities With
Emphasis on Post Award Administration.
12/97
12/97
7. Train EPA Staff.
Ongoing
Ongoing
8. Implement the Recommendations from the Realignment
Study. Projected Savings: 30%.
12/98
12/98
9. Develop Assistance Files Documentation Procedures
Fact Sheet.
12/97
12/97
10. Develop PO Refresher Course.
12/98
12/98
11. Implement PO Training Class Changes from the
Validation Strategy.
9/98
9/98
!
Enclosure B Page 5
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/X\ 1997 integrity act report
iSS' U S- ENVIRONMENTAL protection agency
\«/
£XJ Material Weak&sss : { J FlpfWfcfoJ [ 3 Agency Weakness .
^ PQCmover
TIELE: Construction Grants Close Out
DESCRIPTION:
Of the more than $50 billion in construction grants awarded in the last 20 years, grants totaling $12 billion had
not been closed out at the end of FY 1996. In 1990, EPA developed the Construction Grants
Completion/Closeout Strategy to expedite completion and close out of this program and to reallocate resources
to other activities. In 1992 EPA designated this area as an Agency weakness since the program still involved
many billions of dollars, and EPA was concerned that lack of Agency-wide attention might result in the loss of
resources to properly complete the program. Without sufficient oversight resources, the close out process could
slow down to an unacceptable pace, and risk development of problems resulting from loss of institutional
knowledge, loss of records, and loss of ability to manage over an extended period of time. Millions of dollars
in potentially ineligible program costs might not be available for reimbursement for reuse on other high priority
state clean water projects.
roRRF.rrrvF action stratfcy?
The Agency has developed and implemented a strategy to expedite project audits that are on the critical path to
project close out. This new process allows program officials to close out a greater number of projects without
requesting an audit, and expedites scheduling and completion of necessary audits. The Agency will continue to
work with Regions and states to develop revised projections consistent with the audit strategy. Regions are
making excellent progress in meeting goals, but the rate of progress in several Regions is a concern. The Agency
will: 1) increase the priority of, and attention to, administrative completions, audits and dispute resolution, and
close outs; 2) assure that close out resources are directed to organizational units where resource inadequacy
impedes more rapid completion and close out of projects; and 3) develop plans in each Region with specific
actions to successfully close out the program.
RFSTTTTS INDICATORS;
At the end of FY 1990 there were 5,860 projects with a grant amount of $34 billion remaining to be closed out.
By the end of FY 1996 there were 1,085 projects totaling $12.1 billion remaining to be closed out. At the end
of FY 1997 there were 643 projects totaling $8.1 billion remaining to be closed out. In June 1997 EPA issued
a strategy that contains actions to be taken in each location to successfully accomplish close out of the program.
The Agency will develop other options to more effectively close out the program as action plans are implemented.
By the end of FY 1999, only four Regions are projected to have ten or more projects remaining to be closed out.
RFSPONSTBI F. MANACTB-
Michael B. Cook, Director, Office of Wastewater Management
Office of Water (OW)
Enclosure B Page 6
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Construction Grants Close Out
APPROPRIATION,S/ACCOTMS:
[ ] EPM { ]SF [ JB&F { ] Oil Spills [ ] FIFRA
r ] S&T [ ] LUST [ ] IG [ ] STAG [X] Other: CG_
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified;
1996*
Original Targeted Correction Date:
2002
Correction Date In Last Year's Report:
2002
Current Correction Date (FY):
2002
Explanation for Change fn Date:
~Identified as an Agency Weakness in 1992;
reclassified as a material weakness in 1996.
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
rTTDi>i7\rr
TARGET
DATE
ACTUAL
COMPLETION
DATE
1. Update state strategies
First Quarter
Annually
First Quarter
Annually
First Quarter
Annually
2. Monitor achievement of commitments for
administrative completion/closeout
3/31 and 9/30
Annually
3/31 and 9/30
Annually
3/31 and 9/30
Annually
3. Issue progress reports
4/93
Periodically as
required
Periodically as
required
4. Assistant Administrator level memo to Regions
that need to take corrective actions.
N/A
11/96
11/96
5. Complete strategy for addressing remaining
projects awaiting closeouts.
N/A
4/97
6/97
6. Administrative completion of all construction
grants projects.
9/95
9/99
7. Close out of all construction grants projects
9/97
9/02
Enclosure B Page 7
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1997 INTEGRITY ACT REPORT
| U.S. ENVIRONMENTAL PROTECTION AGENCY
1 [XJ Material Weakness
[ J Financial Non-conformance
I ] Agency Weakness
I [ ] New
[X3 Corrected
[ ] Carryover
TITLE: Environmental Data Quality
DESCRIPTION:
EPA organizations that make or use environmental measurements are required to maintain a Quality Assurance
(QA) program to assure that environmental data of the appropriate type and quality are collected to support Agency
decisions. The General Accounting Office (GAO) and EPA's Office of Inspector General (OIG) have criticized
the Agency for failing to systematically plan and assess the integrity of the Agency's environmental data
measurement program.
CORRECTIVE ACTION STRATEGY:
ORD focused top management attention on the importance of QA to improve environmental data quality
supporting Agency decisions. ORD provided QA compliance status reports and distributed policies and regulations
to all senior managers. During FY 1997, ORD continued its management assessments and provided training on
QA policies and practices. Since FY 1992, ORD has reviewed quality assurance programs in the forty affected
Agency organizations. In FY 1997, ORD focused attention on completing revisions to the Agency quality
management policies and requirements, following up corrective actions requested after management assessments,
and developing training for the Agency quality community. By EPA Order, responsibility for current, documented,
and implemented Quality Management Plans (QMPs) is the continuing responsibility of EPA program and Regional
offices.
RESULTS INDICATORS:
ORD is working with Agency organizations to achieve their full compliance with the QMP requirements. ORD
is also monitoring responses to corrective action plans generated from the findings of its management assessments.
Deficiencies most often cited are: 1) incomplete implementation of the QMP; 2) inadequate training of staff; and
3) inadequate oversight of intramural (including State, local and Tribal assistance programs) and extramural
environmental measurement programs. Currently thirty-six of the forty covered EPA organizations have approved
QMPs in place; two QMPs have expired and are under revision; the two remaining EPA organizations have
declared their lack of approved QMPs as Agency management control weaknesses in FY 1998.
RESPONSIBLE MANAGER:
Henry L. Longest II, Acting Assistant Administrator
Office of Research and Development (ORD)
Enclosure B Page 8
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Environmental Data Quality
APPRGPRT ATT0NS/ACCOT JNTS:
PQEPM PQSF I ]B&F £X] Oil Spills PC] FBFRA
IX[ S&T [XI LUST C ] IG f I STAG f ] Other
MCE Of COEMC1W1 ACTION:
Btscal Year First Identified:
1992
Original Targeted Correction Date:
1994
Correction Pate In last Year's Report:
1997
Current Correction Date (FY);
1997
Explanation for Cbange in Date:,
Not Applicable
MAJOR CORRECTIVE ACTION
¦ MILESTONES
ORIGINAL
TARGET
DATE
CURRENT
TARGET
r»ATi?
ACTUAL
COMPLETION
DATE
1. Include QA performance standard in ail senior
manager's performance agreements.
12/95
12/95
3/96
2. Distribute schedule for planned FY 1996
Management Systems Reviews.
12/95
12/95
1/96
3. Develop Agency-wide generic training on
definitions, principles, and practices.
3/96
3/96
9/96
4. Submit Quality Manual and revised QA Order
to Agency Directives Clearance Process.
4/94
11/97
11/97
5. Develop dispute resolution procedures on QA-
related documentation and implementation issues.
4/96
4/96
10/96
6. Complete action plans responding to unresolved
QM corrective actions and report in QM Annual
Report and Work Plan.
11/96
11/96
11/96
7. Make QA documentation/implementation status
a standing agenda item for management meetings.
12/96
3/97
Ongoing
Enclosure B Page 9
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1997 INTEGRITY ACT REPORT
I2EZI U.S. ENVIRONMENTAL PROTECTION AGENCY
ms^
[X] Material Weakness
[ ] Financial Non-conformance
{ J Agency Weakness
[ ] New
[X] Corrected
{ 1 Carryover
TITLE: Accounting System-Related Financial Management Problems
DESCRIPTION:
While EPA's Integrated Financial Management System (IFMS) meets the Joint Financial Management
Improvement Program core accounting system requirements, specific systems-related problems have impaired
EPA's ability to provide complete, and timely data for Agency decision-making and asset control. These
problems initially included: 1) incomplete user manuals and system documentation; 2) inadequate automated
project cost accounting capability; 3) incomplete interfaces with programmatic and administrative systems; and
4) inadequate financial management reports. By the beginning of FY 1997 EPA had corrected all deficiencies
except for the Fixed Asset System, which was implemented in FY 1997, correcting the remaining problem.
CORRF.CITIVF. ACTION STRATEGY:
EPA's strategy was to implement the Fixed Asset System (FAS) module and issue new policies and procedures
to address the new function in IFMS. The Agency implemented FAS in FY 1997 and trained users in the
Servicing Finance Offices (SFOs).
RESULTS INDICATORS-
EPA's key success measure is complete, reliable, and timely financial data to support effective Agency decision-
making. Final results indicator was to implement the FAS and issue new policies and procedures; this has been
accomplished in FY 1997.
RESPONSIBLE manacfr-
Jack Shipley, Acting Comptroller, Office of the Comptroller
Office of the Chief Financial Officer (OCFO)
Enclosure B Page 10
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Accounting System-Related Financial Management Problems
APPROPRMTfONS/4CCOT?NTS:
m EPM pq SP pq B&F IX) Oil Spills r 1FIFRA
PCI S&T fXl LUST [X\ IG fXl STAG [ ] Other
PACE OF CORRECTIVE ACTION:
Ffseal Year First Identified:
1989
Original Targeted Correction Date:
1990
Correction Date In Last Year's Report:
1997
Current Correction Pate (FY):
1997
Explanation for Change in Date:
Not applicable
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
CURRENT
TARGET
DATE
ACTUAL
COMPLETION
DATE
1. Complete final on-site verification reviews.
6/93
N/A
6/93
2. Conduct Strategic and Master Plan Study.
3/93
N/A
7/93
3. Complete Property System Requirement Study.
1/94
N/A
6/94
4. Implement Version 5. le of IFMS - User Manuals
and System Documentation
2/94
N/A
5/94
5. Develop Funds Management Requirements.
9/93
N/A
9/94
6. Complete enhancements to produce accurate
reports.
6/94
N/A
9/94
7. Develop Project Cost Accounting Requirements.
9/93
N/A
9/94
8. Implement interface between IFMS and GICS.
9/93
N/A
7/95
9. Eliminate Automated Document Control Register.
6/94
N/A
9/94
10. Replace FMS function in CPARS.
2/95
N/A
4/95
11. Install Project Cost Accounting System.
9/95
N/A
9/95
12. Implement Fixed Asset System.
7/96
2/97
9/97
Enclosure B Page 11
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1997 INTEGRITY ACT REPORT
f I U.S. ENVIRONMENTAL PROTECTION AGENCY
[X| Material Weakness
[ ] Financial Non-conformance
[ | Agency Weakness
M New
[X] Corrected
[ ] Carryover
TITLE: Information Resources Planning and Investment
DESCRIPTION: OIG and GAO believed that material management control weaknesses resulted in duplication,
inefficiency, cost overruns, and delays in developing and implementing EPA information systems, and caused
ineffective Agency management of ADP contracts, data quality deficiencies, exposure of sensitive data to
unnecessary risk, and inability to support EPA's cross-media mission. The lack of a cohesive information
management planning and investment review process, top management commitment, and sufficient resources to
support Information Resources Management (IRM) impede a comprehensive Agency-wide assessment of
environmental risks and solutions.
CORRFCTIVF, ACTION STRATEGY: The elements of EPA's original three-phased corrective action strategy
remain as originally proposed and updated last year to reflect new Information Technology Management Reform Act
(ITMRA) requirements. The goal of the strategy was to implement an effective IRM planning and investment process
that ensures the Agency's Information Technology (IT) investments effectively support both its mission and
management goals by: 1) developing a research plan and comprehensive action plan; 2) establishing policies and
procedures to formalize Agency IT planning; and 3) implementing pilot projects to build the knowledge necessary
to refine Agency planning processes and adopt IT capital planning best practices. Key accomplishments include:
a) appointment of an Agency Chief Information Officer (CIO) to strengthen EPA's central IRM authority; b)
designation of the Agency's IRM Executive Steering Committee (ESC) as the IRM Investment Review Board; and
c) issuance of the Agency's first formal 5-Year IRM Plan and integrated IRM Strategic Plan. By the summer of
1997, EPA had implemented a formal Capital Planning and Investment Control process that ensures IT investments
effectively support the Agency's mission. Completion of this step is in addition to the core elements of the strategy
as outlined in 1995.
RFSTTT.TS INDICATORS: Key success measures for IRM planning and investment include: 1) more effective
mission support as proposed investments are evaluated based on a cohesive, Agency-wide IRM Strategic and
Implementation Plan; 2) increased data quality for better decision-making; and 3) reduced costs from integrated
planning and budgeting and coordinated systems development. The integrity of the process will be indicated by a
reduction in the number of instances of systems duplication, identification of additional opportunities for integration,
better control of costs, and earlier detection and resolution of delays in system implementation. The ESC conducted
project review to ensure that: 1) IT investments yield appropriate mission benefits; 2) new development projects are
not duplicative; and 3) costs and schedules are followed. These reviews will consider whether Agency guidance
supports the IT Capital Planning and Investment Control process, and will support efforts to validate the effectiveness
of the corrective action strategy and will provide valuable data for refining the program.
RESPONSIBLE MANAGER:
Mark Day, Acting Director, Office of Information Resources Management
Office of Administration and Resources Management (OARM)
Enclosure B Page 12
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Information Resources Planning and Investment
APPROPRIATIONS/ ACCOf 1NTS:
EXJ EPM IX] SF PC} B&P ffl m Spills | } FIFRA
[X] S&T fX] LUST [Xf 1G [X] STAG [ ] Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
1992
Original Targeted Correction Bate:
1995
Correction ©ate lb Last Year's Report;
1997
Current Correction Date (FY):
1997
Not applicable
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
CURRENT
TARGET
DATE
ACTUAL
COMPLETION
DATE
1. Establish Program Office planning process.
9/93
N/A
9/93
2. Establish central review capability.
12/93
N/A
12/93
3. Initiate pilot integrated planning cycle.
5/94
N/A
5/94
4. Publish formal Integrated IRM Plan
12/94
N/A
4/95
5. Finalize planning procedures and guidance.
2/95
N/A
11/95
6. Initiate Agency-wide IRM 5-Year Plan process.
5/95
N/A
11/95
7. Issue Agency-wide IRM 5-Year Plan.
3/96
N/A
3/96
8. Establish Pilot Investment Review Board Process
5/96
N/A
7/96
9. Initiate pilot investment reviews.
7/96
6/97
6/97
10. Complete Pilot Investment Review process, revise
and issue Agency-wide capital planning guidance.
4/96
9/97
7/97
Enclosure B Page 13
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ENCLOSURE C
SUMMARY
FINANCIAL NON-CONFORMANCES AND
SCHEDULE OF CORRECTIVE ACTIONS
1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORRECTED FINANCIAL
NON-CONFORMANCES
FISCAL
YEAR FIRST
REPORTED
LAST YEAR'S
CORRECTION
DATE (FY)
CURRENT
CORRECTION
DATE (FY)
Page
1. Regional/General Ledger Superfund Accounts
Receivables
1989
1997
1997
C-2
2. Property Accounting Process
1983
1997
1997
C-4
3. Accounting System Interfaces
1985
1997
1997
C-6
Enclosure C Page 1
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1997 INTEGRITY act report
($32 I U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] Material Weakness
(X) Financial Non-conformance
| ] Agency Weakness
[ ) New
[X] Corrected
I 1 Carryover
TITLE: Regional/General Ledger Superfund Accounts Receivables
NON-CONFORMANCE TYPE AND DESCRIPTION: Core Financial System
EPA's Integrated Financial Management System (IFMS) accounts receivable module lacked the capabilities to
automatically process the unique Superfund requirements of compound interest and. flexible installment
receivables. IFMS enhancements in recent years and alternative procedures now allow EPA to adequately
account for the installments and compound interest. Therefore the Agency has discontinued national support for
implementation of the Superfund Accounts Receivable Collection Tracking System (CTS).
rORRFrTTVF ACTION STRATEGY:
The Agency decided to discontinue national support for implementation of the CTS system to automatically
account for installment receivables and compound interest due to cost-benefit concerns. IFMS enhancements in
recent years and alternative procedures are being employed in lieu of CTS to account for Superfund installment
receivables and compound interest. All other corrective actions have been completed
REST FI TS INDICATORS:
Key results indicators include updated and accurate IFMS user documentation, enhanced accounts receivable
installment functions within IFMS, and financial information in reporting formats that meet user requirements.
RF.SPONSTKI.E MANAGER:
Jack Shipley, Acting Comptroller, Office of the Comptroller
Office of the Chief Financial Officer (OCFO)
Enclosure C Page 2
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Regional/General Ledger Superfund Accounts Receivable
A FPROPRIATf ONIS / A CCOt INTiS i
[XJEPM m SF [X] B&F |X] Oil Spills pC] FIFRA
[XI S&T |X] LUST [X] IG fX) STAG r 1 Other
FACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
1989
1990
Correction Date In Last Year's Report:
1997
1997
Explanation far ClianRp in Date:.
Not applicable
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
CURRENT
TARGET
DATE
actual
COMPLETION
DATE
1. Install enhancements to Accounts Receivable
module to handle debt servicing.
12/92
N/A
5/93
2. Conduct third round of on-site verification
reviews.
6/93
N/A
6/93
3. Implement Version 5.1e of IFMS:
- User Manuals; and
- System Documentation
2/94
2/94
N/A
N/A
5/94
5/94
4. Complete enhancements to produce reports:
- Standard Form 220.9; and
- Supplemental Accounts Receivable Reports.
6/94
6/94
N/A
N/A
11/95
11/95
5. Provide training on accounting and managing
receivables
8/94
N/A
5/94
6. Install Superfund Accounts Receivable
Collection Tracking System and interface with
IFMS to automate accounting for installments and
compound interest.
2/94
3/97
Agency decision to
rely on IFMS
enhancements and
alternative
procedures, 9/97
Enclosure C Page 3
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
[ ] Material Weakness
[ j New
[X] Financial Nonconformance
jX] Corrected
f ] Agency Weakness
( 3 Carryover
UTLE: Property Accounting Process
NON-rONFORMANrF TVPF AND DESCRIPTION: Core Financial Subsidiary System
Property values were recorded in the Agency's General Ledger accounts and reconciled with data contained in
the Personal Property Accountability System (PPAS). Internal reviews identified continuing problems in
reconciling financial data recorded in the General Ledger to individual items in PPAS. The Agency formed a
Quality Action Team (QAT) which recommended procuring a property module compatible with EPA's Integrated
Financial Management System (IFMS), and developed an implementation strategy that would integrate financial
accounting (IFMS General Ledger) with property accountability. In FY 1997 EPA implemented the Fixed Asset
Systems (FAS) module, which is an integral component of IFMS.
CORRF.C1TTVF. ArTION STRATEGY-
EPA's corrective action strategy was to: 1) examine policies, procedures and EPA requirements; 2) reconcile
data; 3) develop user manuals and provide training prior to installing the system; and 4) install the FAS module.
These actions were completed in FY 1997
REST IT TS TNTMC ATORSi
EPA's key success measures are integration of accounting and accountability for property and increased accuracy
of property records. PPAS is no longer in use and the Financial Management Offices and Property Management
Offices are now using the IFMS FAS module to account for and track Agency property purchases.
RFSPONSIIU F MANAGER;
Jack Shipley, Acting Comptroller, Office of the Comptroller
Office of the Chief Financial Officer (OCFO)
Enclosure C Page 4
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Property Accounting Process
APPROPRIATIONS/ ACCOUNTS:
CX]EPM fX]SF [X]B
-------
1997 INTEGRITY act report
I SBzi U.S. ENVIRONMENTAL PROTECTION AGENCY
t 3 Material Weakness
(XI Financial Non-conformance
[ ] Agency Weakness
t } Hew
[X] Corrected
{ ] Carryover
TITLE: Accounting System Interfaces
NON-CONFORMANCF TVPF AND PFSCRTPTION: Core Financial System
Internal reviews identified problems with capability of key Agency administrative systems to electronically
interface with the Integrated Financial Management System (IFMS), as required by OMB Circular A-127:
Financial Management Systems to avoid duplication of data entry. EPA had identified two systems, the
Fixed Asset System (FAS) module and the Superfund Accounts Receivable Collection Tracking System
(CTS) that required interface with IFMS. EPA decided to discontinue national support for implementation of
CTS due to cost-benefit concerns; in FY 1997 EPA implemented the FAS module, resolving the remaining
problem.
CQRRFCTIVF ACTION STRATFCV:
EPA's corrective action strategy was to install the Fixed Asset System (FAS) followed by implementation of
the CTS. While CTS has been discontinued, the FAS module has been implemented and users have been
trained and are using the module.
RF.STTT.TS INDICATORS;
EPA installed, tested an operational FAS module. The Financial Management Offices and Property Management
Offices are using the FAS module to account for and track property purchases. PPAS is no longer in use. SFOs
have received FAS training.
RF.SPONSTBI ,F, MANACTR-
Jack Shipley, Acting Comptroller, Office of the Comptroller
Office of the Chief Financial Officer (OCFO)
Enclosure C Page 6
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1997 INTEGRITY ACT REPORT
U.S. ENVIRONMENTAL PROTECTION AGENCY
TITLE: Accounting System Interfaces
[X] EPM [X] SP ^PR0^^&FNS/ACC°^x] oi] Spills [X] FIFRA
PC] S&T fXl LUST [X\ IG |XJ STAG [ } Other
PACE OF CORRECTIVE ACTION:
Fiscal Year First Identified:
1985
Original Targeted Correction Hate:
1990
Correction Date In Last Year's Report:
1997
Current Correction Date (FY):
1997
Not applicable
MAJOR CORRECTIVE ACTION
MILESTONES
ORIGINAL
TARGET
DATE
CURRENT
TARGET
DATE
ACTUAL
COMPLETION
DATE
1. Analyze disposition of historical FMS data.
9/93
N/A
10/93
2. Eliminate ADCR.
6/94
N/A
9/94
3. Finalize project cost accounting requirements.
9/93
N/A
9/94
4. Install project cost accounting requirements.
9/95
N/A
9/95
5. Implement interface between IFMS and regional
GICS.
9/93
N/A
7/95
6. Implement replacement for FMS historical data.
3/95
N/A
9/95
7. Replace FMS function in CPARS.
2/95
2/95
4/95
8. Implement MARS view of historical data.
7/95
N/A
9/95
9. Implement account number changes.
10/95
N/A
10/95
10. Implement Fixed Asset System.
10/92
2/97
9/97
11. Install CTS and interface it with IFMS to
automate accounting for Superfund installment
receivables and compounding interest calculations.
1/96
3/97
Agency decision to
discontinue CTS
support 9/97.
Enclosure C Page 7
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|P% ;:#%
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1.. \ 1. '>*„
For additional copies of this Report, please contact:
Environmental ^rotecrtott Agency
Office of the Chief Financial Officer
Office of Planning, Analysis and Accountability
^Accountability Staff
401M Street, S*W,
Washington, DC 2046a
I I I
# ti;l
'":W
Phone: (202) 2604160
Fax: (202) 401-1515 ..
This Mprt is also located o» the Internet via BPA's Home Page at:
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% I
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