^2^ i Office of Inspector General
Report of Audit
PRO"^
WETLANDS:
EPA's Implementation and Management
of the Section 404 Wetlands Program
Audit Report Number E1hWEO-04-0291-1100434
September 30, 1991
David Cooper
I S I'VVS
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Ralph Tim-r
Atlantic CfiflSfal mnr
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Inspector General Division
Conducting the Audit:
Southern Audit Division
Atlanta, Georgia
(Audit Control Point)
Central Audit Division
Kansas City, Missouri
Regions Covered: Region 4
Atlanta, Georgia
Region 6
Dallas, Texas
Region 7
Kansas City. Missouri
Program Office Involved:
Office of Water
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1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
53SJ
^ WASHINGTON, D.C. 20460
% PRCS*?
OFFICE OF
September 30, 1991 the inspector general
MEMORANDUM
SUBJECT: EPA's Implementation and Management of the Section
404 Wetlands Program
Audit Report No. E1HWE0-04-0291-1100434
FROM: Kenneth A. Konz
Assistant Inspector General £6r Audit
TO: Lajuana S. Wilcher
Assistant Administrator for Water
Attached is the final report entitled "EPA's Implementation
and Management of the Section 404 Wetlands Program." Our overall
audit objective! was to determine if EPA was fulfilling its basic
legislative and program responsibilities under Section 404 as set
forth in the Clean Water Act and the Agency's Annual Operating
Guidance for FYs 1988, 1989, and 1990. This report contains
substantive findings and recommendations regarding the operations
of EPA's wetlands program.
Action Required
In accordance with EPA Order 2750, you, as the action
official are required to provide this office a written response
to the audit report within 90 days of the final audit report
date. For corrective actions planned but not completed by your
response date, reference to specific milestone dates will assist
this office in closing the report. We have no objections to the
further release of this report to the public.
This audit report contains findings that describe problems
the Office of Inspector General has identified and corrective
actions the OIG recommends. This audit represents the opinion of
the OIG. Final determinations on matters in this report will be
made by EPA managers in accordance with established EPA audit
resolution procedures. Accordingly, the findings described in
this report do not necessarily represent the final EPA position.
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If you have any questions or need additional information
regarding this report, please contact Mary Boyer, Divisional
Inspector General, Southern Audit Division, at FTS 257-3623.
Attachment
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EXECUTIVE SUMMARY
PURPOSE
Until enactment of Section 404 of the Clean Water Act (CWA) in
1972, wetlands historically had been considered unimportant and
routinely filled or drained for various commercial uses. Over
half of our nation's original wetland acreage had been destroyed
at the time Section 404 was enacted and current wetland losses
continue at an estimated rate of 300,000 acres annually.
Wetlands generally include swamps, marshes, bogs, and similar wet
areas. Scientific research and studies have shown that wetlands
provide many essential and economically valuable services to
include buffering the impact of floods/storms, serving as
groundwater recharge areas, maintaining water quality of adjacent
rivers and streams as well as providing habitat for many species
of fish and wildlife. Section 404 prohibited the draining and
filling of regulated wetlands without a prior Federal regulatory
review of the activity and issuance of a permit.
Because of the Agency's (EPA) significant statutory and
regulatory role in wetlands protection and public concern over
continuing wetland destruction, the Office of Inspector General
(OIG) initiated a review of EPA's implementation and
administration of the Agency's basic statutory responsibilities
under Section 404 of the CWA and the wetlands program
responsibilities established in the Agency's Annual operating
Guidance. Specific areas of audit emphasis were: (l) EPA's
enforcement against unpermitted discharges into wetlands; (2)
EPA's implementation of its responsibilities under the Section
404 regulatory program; and (3) EPA's use of strategic
initiatives, including advanced wetland identification and other
public outreach activities to enhance the regulatory
effectiveness of the wetlands program.
BACKGROUND
Under Section 404 the EPA and the COE have primary roles in
implementing and managing the Section 404 wetlands program.
Although the COE has responsibility for issuing Section 404
permits and ensuring permit compliance, both the COE and EPA
under Section 404 and various memorandums of agreement share
certain responsibilities for: development of program guidelines;
wetland identification and jurisdictional determinations; permit
review; and enforcement. Other Federal1 and affected State
resource agencies may also participate in the Section 404
1 Federal resource agencies involved in Section 404 permit
reviews include Department of Interior's Fish and Wildlife
Service and Department of Commerce's National Marine and
Fisheries Service.
Audit MO. E1HWE0-04-0291
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Executive Summary
permitting process by reviewing and commenting on COE public
notices of proposed permit issuances.
The EPA's Office of Wetland Protection (OWP) has overall
responsibility for the nationwide implementation and management
of EPA's Section 404 wetlands program through individual regional
programs- Each EPA region has a wetlands program staff
responsible for implementing and managing the Section 404 program
within regional boundaries. However, because of the Agency's
limited resources and the large resource demands of other EPA
programs related to public health and safety, EPA's wetlands
activities were not designated as a high priority function until
1984. Since 1984, the wetlands program's resources and
organizational status have steadily increased. For FYs 1990 and
1991, EPA's wetlands program had a staff of 105 and 155 permanent
employees, respectively, and budgets of $10.4 and 18.8 million.
Regulations related to the EPA's Section 404 wetlands program are
contained in applicable subparts of the Code of Federal
Regulations (CFR) Title 40. Each fiscal year the program's goals
and objectives are provided in the Agency's Annual Operating
Guidance.
From its inception, the EPA's Section 404 program has been
described by program managers as "difficult to administer and
beset by conflict and controversy" concerning the extent to which
Section 404 was to function in overall wetlands protection
efforts. Many interagency conflicts over program direction and
implementation have required resolution. These conflicts
included methodologies for Section 404 jurisdictional
determinations and the need for sequential mitigation.
Subsequent Federal attempts at resolving these issues, such as
the interagency wetlands delineation manual issued in January
1989, have resulted in increased criticism of Federal wetland
protection efforts by the regulated public which viewed the
interagency manual (to clarify Section 404 jurisdiction) a change
in Federal policy. While many interagency wetland issues have
been resolved to some degree, many significant questions related
to EPA's wetland protection efforts still require action.
RESETS IN PfilEF
Although the Administrator through the Office of Wetlands
Protection (OWP) established Agency priorities and objectives for
the Section 404 program, Agency management did not ensure that
the plan was accomplished by Headquarters staff and regional
program operations. Some program goals related to unresolved
wetland issues continue to affect the Government's overall
ability to adequately protect valuable wetland resources. Other
program objectives were approached inconsistently or ignored by
ii Audit No. E1KWE0-04-0291
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Executive Summary
regional management resulting in a wetlands program that was
unpredictable to the regulated public and, therefore, subject to
public distrust and criticism.
PRINCIPAL FINDINGS
IMPROVEMENT NEEDED IN MANAGEMENT DIRECTION. CONTROL.
AND ACCOUNTABILITY FOR THE SECTION 404 PROGRAM
Management controls over implementation of EPA's Section 404
program did not ensure that regions prioritized and accomplished
the Agency's wetlands objectives and established effective and
efficient wetland protection programs. Internal controls, that
should have been established under the FMFIA, to provide
reasonable assurance that program objectives were accomplished,
were either not established or not fully implemented. Instead,
regional wetland programs were permitted to respond to the agenda
of regional management rather than commit to the Administrator's
and the Office of Water's program objectives. This condition
contradicts EPA's organizational accountability as stated in 40
CFR 1.61 which holds each Regional Administrator accountable to
the Administrator for accomplishing national program objectives
as established by EPA Headquarters program offices. As a result
of inadequate management control and accountability, wetlands as
a whole were not afforded the protection under Section 404 as
envisioned by the Administrator and as detailed in findings
presented in Chapters 3 through 5 of this report.
EPA'S SECTION 404 ENFORCEMENT PROGRAM IS NOT CONTROLLING AND
DETERRING ILLEGAL DISCHARGES INTO PRIORITY WETLANDS
Although enforcement is a key wetlands program objective, the
three EPA regions included in our audit had not developed
effective, consistent enforcement programs and had not adequately
monitored and coordinated Section 404 enforcement against
unpermitted discharges of dredged and fill material into
regulated wetlands. The ineffective and inadequate control over
program implementation and direction by national program
management permitted regions to establish their own enforcement
priorities which contributed substantially to inconsistent,
ineffective, and sometimes controversial enforcement against
Section 404 violators. In addition, regional enforcement
deficiencies could be attributed to a lack of measurable regional
goals and commitments for enforcement activities as well as
insufficient resources to accomplish enforcement program
objectives. As a result, EPA's Section 404 enforcement has not
effectively reduced or deterred unpermitted/illegal wetland
discharges and the backlog of reported illegal dredge and fill
activities steadily increased (over 32 percent) during our audit
iii Audit NO. E1HWE0-04-0291
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Executive Summary
period, 1988 through 1990.
SECTION 4 04 REGULATORY PROGRAM NEEDS BETTER OVERSIGHT. GUIDANCE.
AND INTERAGENCY COORDINATION TO PROPERLY FULFILL STATUTORY
RESPONSIBILITIES
Regional wetland programs did not: (1) maintain sufficient,
viable data on which to base Section 404 regulatory decisions;
(2) implement consistent, controlled approaches to Section 404
public notice reviews; and (3) properly exercise EPA's statutory
authorities related to jurisdictional determinations and
interagency disputes concerning Section 404 permitting. Limited
program resources restricted the effectiveness of regulatory
actions under the Section 404 program; however, the quality and
consistency of the Section 404 regulatory process could have been
enhanced through improved national and regional program controls
and guidance. National and regional program oversight was
minimal with national management providing only general Section
404 goals and objectives in annual Agency Operating Guidance and
minimum definitive guidance. Because regional regulatory
processes and use of statutory authorities were inconsistent and
uncontrolled, important program responsibilities were not
effectively administered and regional permit review processes
were often viewed by the COE and regulated public as
unpredictable and ineffective, occasionally placing EPA and COE
in adversarial roles.
STRATEGIC INITIATIVES WERE NOT EFFECTIVELY IMPLEMENTED TO
PRODUCE LONG-TERM IMPROVEMENTS IN WETLANDS PROTECTION
Limited by resources and insufficient national direction and
oversight, the Regions did not; (1) identify and prioritize
wetlands as to value and vulnerability in order to target limited
program resources and inform the regulated public: and (2)
implement strategic initiatives within established program
guidelines as established by OWP. Therefore, the strategic
initiatives initiated by Regions 4, 6, and 7 during the audit
period did not target limited resources to the most valuable and
threatened wetlands within each region. Also, the Regions*
approaches toward strategic initiatives, specifically advanced
identification were generally inconsistent and unfocused, did not
demonstrate a leadership role in improving wetland protection
over the long run, and sometimes sent a negative message to other
government entities and the regulated public regarding EPA's
commitment to the preservation and restoration of the most
valuable wetlands experiencing continued conversion and
cumulative wetland losses.
iv
Audit No. E1HWE0-04-0291
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Executive Summary
RECOMMENDATIONS
Significant improvements are needed in the management of EPA's
Section 404 wetlands program if legislative and Agency goals and
objectives are to be achieved. The Agency needs a long-term
program strategy with measurable management commitments and
improved national oversight to maximize the effectiveness of
available program resources and related wetland protection. In
addition, better use of available wetland regulatory statutes,
improved program coordination, and increased program resources,
where possible, must be obtained if EPA is to effectively
implement a comprehensive wetland protection program and preclude
further losses of the nation's valuable and vulnerable wetlands.
AGENCY COMMENTS
In general, the Agency did not agree with many of the report's
findings and some of the recommendations; however, the Agency did
not provide specific criteria, sources, or specific documents to
support many of its disagreements. In some instances, the
Agency's response did not address specific findings or
recommendations. The Agency did basically agree with our
findings and/or recommendations concerning the need for better
implementation of FMFIA reguirements for the Section 404 wetlands
program, regular Headquarters reviews of regional wetland
programs, integrating EPA's wetland database with COE's database,
inadequate regulation and enforcement of solid waste discharges
into wetlands, and the need for regional compliance with advance
wetlands identification guidance and Headquarters monitoring of
this compliance. The Agency did not agree to the need for
establishing definitive, measurable goals and staff commitments
for program objectives, EPA monitoring of COE's Section 404
enforcement actions taken on EPA's behalf, better controls over
regional permit review activities, and certain recommended
improvements in implementation of strategic wetland initiatives.
More detailed Agency comments have been incorporated into
appropriate report chapters and Appendix I along with OIG's
evaluation of these comments.
v Audit No
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vi
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TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY i
1 INTRODUCTION... 1
AUDIT PURPOSE 1
BACKGROUND 2
SCOPE AND METHODOLOGY 6
PRIOR AUDIT COVERAGE 11
2 IMPROVEMENT NEEDED IN MANAGEMENT DIRECTION, CONTROL,
AND ACCOUNTABILITY FOR THE SECTION 404 PROGRAM 13
BACKGROUND 13
. WETLANDS PROGRAM NEEDS MEASURABLE PROGRAM GOALS,
STAFF COMMITMENTS, AND NATIONAL GUIDANCE FOR
IMPLEMENTING PROGRAM OBJECTIVES 14
WETLANDS PROGRAM'S FMFIA IMPLEMENTATION INCONSISTENT
WITH CG STANDARDS AND OMB POLICY 24
CONCLUSION 30
RECOMMENDATIONS 31
3 EPA'S SECTION 404 ENFORCEMENT PROGRAM IS NOT
CONTROLLING AND DETERRING ILLEGAL DISCHARGES INTO
PRIORITY WETLANDS 35
CRITERIA 35
INSUFFICIENT OVERSIGHT OF AND COORDINATION WITH
THE COE ON MOA ENFORCEMENT ACTIONS 36
EPA SECTION 404 ENFORCEMENT ACTIONS DID NOT COMPLY
WITH AGENCY POLICY AND EFFECTIVELY DETER
VIOLATIONS 46
CONCLUSION 63
RECOMMENDATIONS 64
vii Audit No. E1HWE0-04-0291
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Table of Contents
4 SECTION 404 REGULATORY PROGRAM NEEDS BETTER CONTROLS,
GUIDANCE, AND INTERAGENCY COORDINATION TO FULFILL
STATUTORY RESPONSIBILITIES 67
BACKGROUND 67
REGIONS DID NOT ADEQUATELY TRACK, MONITOR, AND
REPORT PROGRAM ACTIVITIES 69
REGIONS DID NOT IMPLEMENT CONSISTENT/CONTROLLED
PUBLIC NOTICE REVIEW PROCESSES 77
INTERAGENCY DISPUTE RESOLUTION AUTHORITIES UNDER
SECTION 404 RARELY USED BY REGIONS 82
REGIONS DID NOT ALWAYS FULFILL JURISDICTIONAL
RESPONSIBILITIES 90
CONCLUSION 99
RECOMMENDATIONS 99
5 STRATEGIC INITIATIVES WERE NOT EFFECTIVELY IMPLEMENTED
TO PRODUCE LONG-TERM IMPROVEMENTS IN WETLANDS
PROTECTION 103
BACKGROUND 103
REGIONS DID NOT IDENTIFY AND PRIORITIZE THE MOST
VALUABLE, VULNERABLE WETLANDS 104
STRATEGIC INITIATIVES NEEDED MORE NATIONAL
GUIDANCE, COORDINATION, AND OVERSIGHT 110
ADVANCED IDENTIFICATIONS NEED TO BE ADEQUATELY
PLANNED, COORDINATED, AND CONTROLLED TO ENSURE
EFFECTIVENESS AND COMPLIANCE WITH GUIDANCE 113
CONCLUSION 118
RECOMMENDATIONS 119
APPENDIXES
APPENDIX I: AGENCY COMMENTS AND OIG EVALUATION.. 123
APPENDIX Hi GLOSSARY OF ACRNYMS AND
ABBREVIATIONS 169
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rable of Contents
APPENDIX III: FEDERAL RESPONSE UNDER THE CLEAN
WATER ACT TO WETLAND DESTRUCTION 171
APPENDIX IV: EPA AND COE SECTION 404
RESPONSIBILITIES 175
APPENDIX V: EPA PROCEDURES FOR SECTION 404(q)
AND 404(c) ACTIONS 181
APPENDIX VI: PRIOR AUDITS AND SPECIAL REVIEWS
OF EPA'S SECTION 404 PROGRAM 185
APPENDIX VII: REPORT DISTRIBUTION 187
ix Audit Mo. E1HWE0-04-0291
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x
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CHAPTER 1
INTRODUCTION
AUDIT PURPOSE
Section 404 of the CWA was intended to regulate and reduce the
destruction or degradation of U.S. waters, including valuable
wetlands, from dredging and filling. EPA's involvement in the
regulation of wetland dredging and filling under section 404 of
the CWA has been part of Agency's statutory responsibilities
since 1972. However, 18 years after Section 404's enactment,
significant wetland losses continue to be reported at the rate of
approximately 300,000 acres annually. Our overall audit
objective was to determine if EPA was fulfilling its basic
statutory and program responsibilities under Section 404 and the
Agency's Annual Operating Guidance for FYs 1988, 1989, and 1990.
Specific objectives were to:
1. Determine if EPA was effectively coordinating enforcement
activity with the COE under the related 1989 memorandum of
agreement (MOA)1. Also, that Agency enforcement actions
served as a deterrent against unauthorized discharges into
regulated wetlands.
2. Evaluate EPA's implementation of the Section 404 regulatory
program through the review of dredge or fill permit
applications to include: program controls to assure
compliance with Section 404(b)(1) Guidelines; oversight of
COE jurisdictional determinations; and use of the
interagency dispute resolution process outlined under the
Section 404(g) MOA2 between EPA and COE or the use of EPA's
Section 404(c) authority to prohibit or restrict use of
specified wetlands for the discharge of dredged or fill
material.
3. Evaluate the effectiveness of strategic initiatives,
including advanced wetlands identification, and other public
outreach activities designed to enhance the effectiveness of
the Section 404 regulatory process.
1 Federal Enforcement of Section 404 Program of the CWA.
effective January 19, 1989.
2 Elevating Permitting Decisions Within the COE under
Section 404(gl of the CWA. effective November 12, 1985.
Audit No. E1HWE0-04-0291
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Chapter 1
Introduction
BACKGROUND
Section 404 of the CWA was originally enacted in October 1972 as
an amendment to the Federal Water Pollution Control Act
(thereafter known as the Clean Water Act), Public Law 92 -50 03.
The CWA of 1977 changed Section 404 into its current form.
Section 404 was intended to regulate the discharge of dredge or
fill material into the waters of the United States. "Waters of
the United States" include rivers, streams, estuaries, the
territorial seas, along with most ponds, lakes, and wetlands.
The term "wetlands" includes swamps, marshes, bogs and similar
areas. Although Section 404 regulates the discharge of dredge or
fill materials into all waters of the United States, EPA's
regulatory program has become commonly known as a "wetlands
program."
Regulatory Responsibilities
Section 404 provides the basic legislative authority for Federal
regulation of wetlands by establishing a permitting program to
ensure that dredge or fill discharges comply with environmental
requirements. The C0E is the Federal agency responsible for
regulating wetlands development under Section 404. However, EPA
has a primary role in several aspects of the Section 404
permitting program. EPA, in conjunction with the COE, developed
the Section 404 guidelines against which the COE evaluates all
dredge and fill permit applications. EPA can make advisory
comments to the COE on proposed permits and has the authority to
specifically prohibit discharges that it believes will result in
unacceptable adverse environmental impacts. EPA also has the
authority to make wetland jurisdictional determinations and
identify those activities exempt from Section 404 requirements.
However, under a 1989 MO A4, the COE is authorized to make Section
404 jurisdictional determinations for EPA during the permit
application review process.
Enforcement authority is shared between EPA and the COE. Under
Section 404 the COE, as the permitting authority, has primary
responsibility for enforcing against Section 404 permit
3 Appendix III outlines the statutory evolution of the
Section 404 regulatory program.
4 Determination of the Geographic Jurisdiction of the
Section 404 Program and the Application of the Exemption Under
Section 404ff) of the CWA. effective January 19, 1989.
Audit MO. E1HWE0-04-0291
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I
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Chapter 1
Introduction
violations; however, under Section 309, EPA and the COE have
joint authority for permit violations. Under Section 301, EPA is
the authority to enforce against unpermitted dredge or fill
discharges through the Agency's Section 309 administrative,
civil, or criminal authorities. Again, under a January 1989 MOA,
the COE is authorized by EPA to enforce against certain
categories of illegal, unpermitted dischargers on EPA's behalf.
Finally, in advance of any permit applications, EPA and the COE
are authorized to jointly participate in initiatives to study
wetland resources and specify wetland areas as either suitable or
unsuitable for the discharge of dredge and fill material. The
COE may perform similar studies (Special Area Management Plans)
of wetlands under authority it was granted by the Coastal Zone
Management Act.5
Wetland Values and Historical Losses
Scientific research and studies have shown that wetlands are a
particularly important and sensitive segment of the country's
aquatic ecosystems. Wetlands provide critical habitat for many
important species of fish and wildlife, and provide a source of
food for aquatic organisms in adjacent waters. Peak flood waters
are absorbed by wetlands, sheltering downstream property, often
farms and municipalities. In addition, wetlands also improve
water quality as a result of a number of natural processes that
filter pollutants and recharge groundwater as water flows through
wetland areas.
Studies and reports document that over half of the nation's
original wetland acreage has been lost. Between 1950 and 1980
wetland conversions accelerated with over 11 million acres lost.
This acreage does not include degraded wetlands that can no
longer function ecologically. Current studies continue to show
wetland losses at an estimated 300,000 acres annually6. Much
greater losses of particular types of wetlands have occurred in
specific geographical regions, such as in coastal Louisiana where
40-50 square miles of wetlands disappear each year, or in
California or Iowa where over 90 percent of their original
5 Appendix IV provides additional detail on EPA and COE
Section 404 responsibilities.
6 Section 404 regulates only direct conversions of wetlands
resulting from the discharge of dredge and fill material into
U.S. waters.
3
Audit NO. E1HWE0-04-0291
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Chapter 1
introduction
wetland acreage have already been lost. While wetlands are being
destroyed bit by bit, additional unknown numbers of wetlands are
steadily being degraded by pollution, and by hydrological and
physical alteration. In addition, examples of wetland
destruction have been found in the Federal wildlife refuges and
parks. Two examples are the documented destructive effects water
diversions are having on the Florida Everglades National Park and
the chemical contamination of the Kesterson Wildlife Refuge from
agricultural runoff.
According to November 1990 statistics issued by the Fish and
Wildlife Service (FWS), of the original 225.9 million acres of
wetlands in the contiguous United States, only 105.5 million
acres (47 percent) remain. Over 120 million acres (53 percent)
have been destroyed. The acreage and percent of wetland loss by
EPA region are illustrated in the charts below.
HISTORICAL WETLAND LOSSES
BY REGION FOR CONTIGUOUS U.S.
LEGEND
Hill LOSSES
Hi REMAINING £
« R4 R3 R4 RS R» R7 R8 R» RIO
EPA REGIONS
-j J dk
R1 *2 *3 R4 RS fte R7 RA R« RIO
EPA REGIONS
EPA's "Wetlands" Program
Because of the Agency's limited resources and the large resource
demands of other EPA program's related to public health and
safety, EPA's wetlands activities were not designated as a high
priority function until 1984. Since 1984, the wetlands program's
Audit NO. E1HWE0-04—0291
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Chapter 1
Introduction
resources and organizational status have steadily increased. For
FYs 1990 and 1991, EPA's wetlands program had a staff of 105 and
155 FTEs, respectively, and budgets of $10.4 and $18.8 million.
The 1991 staffing represents an 82 percent increase over the 85
FTEs authorized for the Section 404 program in 1988, the start of
our audit period.7
From its inception, EPA's Section 404 program has been described
by program managers as "difficult to administer and beset by
conflict and controversy" concerning the extent to which Section
404 was to function in overall Federal wetlands protection
efforts. Many interagency conflicts over program direction and
implementation have required resolution. These conflicts
included methodologies for Section 404 jurisdictional
determinations and the need for sequential mitigation.
Subsequent Federal attempts at resolving these issues, such as
the interagency wetlands delineation manual issued in January
19898, have resulted in increased criticism of Federal wetland
protection efforts by the regulated public which viewed the
interagency manual (to clarify Section 404 jurisdiction) a change
in Federal policy. While many interagency wetland issues have
been resolved to some degree, many significant questions related
to EPA's wetland protection efforts still require action.
organizational Changes In EPA's Wetlands Program
On May 1, 1991, the Office of Water (OW) reorganized its
Headquarters offices and combined the Office of Wetlands
Protection (OWP) with other water programs involving ecological
risk management. The new Office of Wetlands, Oceans, and
Watersheds will be responsible for the EPA's Section 404 wetlands
program. The Section 404 program has been reduced from an
"Office" to a "Division" level program within the Office of
Water.
7 Although Section 404's inadequate program resources was a
contributing factor to the program deficiencies cited in this
report, we made no recommendations in this regard. EPA has
limited control over current budget restrictions and the Agency
and individual regions have strived to improve and allocate
additional resources to the Section 404 program whenever
possible.
, 8 Federal Manual for Identifying and Delineating
Jurisdictional Wetlands, dated January 10, 1989.
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Audit Mo. E1HWE0-04-0291
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Chapter 1
Introduction
SCOPE AND METHODOLOGY
Because of its large wetlands acreage9 and significant Section
404 activity, EPA's Region 4 was selected as the "pilot" audit
region. The Region 4 audit was conducted from June 1988 to
November 1989. The pilot audit report WETLANDS: Region 4
Implementation and Management of the Section 404 Wetlands
Program. Audit No. Elh7F8-04-0331-0100208 was issued on March 23,
1990. Based on the significance of program deficiencies found in
Region 4, this EPA-wide audit was initiated to determine if
similar problems existed in other EPA regions. This audit
includes the results of our review of Section 404 program
operations at the Office of Wetlands Protection, EPA
Headquarters, and a judgmental sample of 3 regional wetland
programs. In addition to Region 4 (Atlanta, Georgia) which was
included in the pilot audit, we selected Regions 6 (Dallas,
Texas) and Region 7 (Kansas City, Kansas).
Many program variables exist between individual EPA regions
including the geographic area of responsibility, different
wetland types, amount of jurisdictional wetlands, and type of
impacts to wetlands. Therefore, because of these program
variables, lack of EPA-wide databases for program activity, and
absence of a defined universe, regional wetland programs were
judgementally selected for review. Region 4 and Region 6 were
selected because of the size and importance of their wetland
acreage and the significant volume of Section 404 activity in the
regions. Region 7 was chosen because its smaller wetlands
program would provide a contrast and balance to the larger
programs in Regions 4 and 6. In addition, Region 7 would offer a
more extensive evaluation of inland wetland protection
activities. We therefore considered these programs to be
basically representative of the Section 404 programs in all EPA
regions. However, because of the decentralized structure of EPA
and the resulting variables between regional programs, common
wetland program deficiencies for these three regions may not
necessarily reflect the program operations in other EPA regions.
According to FWS wetland data as of November 1990, Regions 4, 6,
and 7 had 59.6 of 105.5 (56.5 percent) million acres of remaining
wetlands in the contiguous United States. The following regional
maps illustrate the current wetland acreage and the historical
9 Region 4 contains over one third (36 million acres) of
the remaining natural wetlands in the contiguous United States.
6
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Jhapter l
introduction
wetland losses in these three regions.
1 KANSAS ^
MISSOURlS
J A 48%
A 8455 ^
REGION 7
Original 13.3 Million
Lotl 9.9 Million
Remaining 3.4 Million
EGION 6
'Original 45.6 Million
Lost 25 Million
Remaining 20.6 Million
REGION 4
1 Original 65.6 Million)
Last 30 Million
Remaining 3S.6 Mill)
LEGEND
A Percent Wetland Loss
¦ Wetland Acreage (Millions)
We conducted this multi-regional audit from June 1990 to July
1991. The audit was performed in accordance with generally
accepted government auditing standards issued by the Comptroller
General of the United States. The fieldwork performed included
tests of only those management controls and procedures
specifically related to the audit objectives. We did not
evaluate all internal controls related to EPA's wetlands program.
Therefore, the findings in this report address only the material
internal control weaknesses we identified within the limited
scope of the audit. However, we did examine the procedures and
results of EPA's management accountability system and methods for
documenting Section 404 program controls to assess compliance
under the Federal Managers Financial Integrity Act (FMFIA).
Recommendations have been made where appropriate to improve
management control through the FMFIA process (see Chapter 1). No
other issues came to our attention during the audit which we
believed were sufficiently material to warrant expanding the
scope of our review.
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Chapter 1
Introduction
In conducting this audit, we examined various records of and held
discussions with: wetlands program staff at EPA and the other
Federal resource agencies10; COE District offices; and various
State agencies and related county program offices. We also
reviewed applicable documentation including: laws and
regulations; EPA goals and objectives for the wetlands program;
wetlands program policies, procedures, and budgetary/staffing
processes (including documented FMFIA controls and reports for
Section 404 activities); Congressional testimony; and prior
audits and special reviews related to the Section 404 program.
Information obtained from prior audit reports and special reviews
was used only as additional support for findings. A detailed
list of the special reviews and audit reports included as part of
this review are presented in Appendix VI.
To assess regional Section 404 permit review processes,
enforcement against unauthorized discharges into wetlands, and
initiation of strategic type activities, we selected random and
judgmental samples from three program universes in each selected
region. The three samples addressed: COE Section 404 and Section
10/404 public notices; enforcement actions taken against
unpermitted discharges; and regional strategic initiatives and
other actions, such as advanced wetland identification studies.
Sample of Section 404 Permit Reviews
To evaluate Region 4's effectiveness in protecting jurisdictional
wetlands using Section 404 regulatory authorities, we selected a
random statistical sample of 508 Section 404 public notices
issued by six of the nine COE districts in Region 4. Using a 95
percent confidence level and a 5 percent precision rate for the
population, we initially selected the required minimum sample of
345 Section 404 records from the National Marine Fisheries
Service (NMFS) database for the test period (October 1, 1985
through December 31, 1987). While all of the public notices in
the NMFS database should have been documented in Region 4's
records, we randomly selected an additional 163 records under the
assumption that a substantial number of the public notices would
not be documented in Region 4*s files. Our sample was generated
from a computerized database of 3,276 Section 404 records
maintained by the NMFS Southeast Region.
10 Major federal resource agencies involved in the Section
404 program: Department of Commerce's National Marine Fisheries
Service (NMFS); Interior Department's Fish and wildlife Service
(FWS); and EPA's, Office of Wetlands Protection (OWP).
Audit NO. E1HWE0-04-0291
8
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chapter 1
introduction
The NMFS database was the most comprehensive computer based
information available on Section 404 permitting activity in
Region 4. This database provided data on Section 404 public
notices issued by the COE in Region 4 with the exception of the
inland States of Kentucky and Tennessee. Region 4 did not have a
comparable information source for the pilot audit test period.
The sampling methodology used in Regions 6 and 7 to test the
Section 404 permit public notice review process was also a
stratified, random selection to include proposed permits for both
large and small Section 404 dredge or fill activities. We
selected samples of 25 and 35 permit public notices,
respectively, from Region 6 and 7's records of public notices
received during the audit period (October 1, 1987 through July
17, 1990 for Region 6 and October 1, 1987 through August 23, 1990
for Region 7). There were approximately 3,795 Section 404 public
notice records documented in Region 6 and 1,043 in Region 7 for
the audit period. Additional wetland projects that came to our
attention during regional staff interviews were also subjected to
a detailed file review.
Each regional sample of individual permits was analyzed to
determine if EPA had fulfilled its regulatory and oversight
responsibilities during the permit review process. Because of
the technical nature of the permitting process, we did not
generally make value judgments concerning EPA regional
recommendations on individual permits or whether these
recommendations were appropriately considered by the COE prior to
permit issuance. However, we did evaluate the appropriateness of
EPA's response when major permit recommendations were ignored by
the COE and adverse environmental impacts apparently resulted.
Because the regions' Section 404 public notice records did not
routinely contain documentation of the COE's final actions on
permit applications, COE's final permit decisions had to be
obtained directly from COE district files. We visited eight COE
Districts and contacted several others to obtain the needed
documentation. We visited COE districts in Jacksonville,
Florida; Savannah, Georgia; Charleston, South Carolina;
Wilmington, North Carolina; Mobile, Alabama; Rock Island,
Illinois; Kansas City, Missouri; and Omaha, Nebraska. These
visits not only provided essential information on our sample of
Section 404 permits that we needed to complete our analysis of
each regions' public notice review process, but also allowed
discussion of key wetland issues with COE personnel to include
mitigation of wetland discharges, nonregulatory initiatives
including advanced identification of vulnerable wetlands, and
Audit No. E1HWE0-04-0291
9
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Chapter l
Introduction
enforcement of unpermitted discharges.
Sample of Section 404 Enforcement Actions
We reviewed a judgmental sample of 39 of approximately 80 EPA
enforcement actions taken against unpermitted discharges in
Regions 4 (17 actions reviewed), Region 6 (21 actions reviewed),
and Region 7 (1 action reviewed), to evaluate EPA's
identification and investigative process for these actions and to
determine the conditions under which EPA imposed legal sanctions
against Section 404 violators and the extent of the action. We
also contacted the COE to obtain regulatory reports summarizing
the number of alleged illegal Section 404 wetland discharges
reported and the type of corrective action taken. We also
interviewed EPA and COE personnel to determine the extent of
EPA's oversight of the COE actions and the appropriateness of EPA
enforcement actions. We used this information not only to
determine compliance with the enforcement MOA and related
enforcement policies but to ensure that violations are
consistently and timely enforced.
Sample of Strategic Initiatives
For our audit period, approximately 24 strategic initiatives were
initiated in Regions 4 (7 initiatives), 6 (7 initiatives), and 7
(10 initiatives). We reviewed all 14 initiatives reported for
Regions 4 and 6 and 1 of the 10 initiatives in Region 7. The 15
strategic initiatives reviewed represented 100 percent of the
advance identification studies initiated by the regions. We
reviewed the selected strategic initiatives to determine if the
regional initiatives and related actions complied with Agency
program goals and objectives. We also interviewed personnel to
establish existing policies and long-term plans for strategic
initiatives and other activities designed to complement the
regulatory process.
Sample selections and certain data used in this report were
extracted from various regional wetland databases. In addition,
the sample of Section 404 permits used to evaluate Region 4's
permit review process was taken from a NMFS Section 404 database.
No audit tests were performed to evaluate the adequacy of
controls over these database systems and only limited tests,
related to our sampling units, were performed concerning the
accuracy and integrity of the data in these systems.
Our findings were discussed with personnel during audit fieldwork
and comments were obtained from Regions 4, 6, and 7. The draft
10
Audit MO. E1HWE0-04-0291
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hapter 1
introduction
report was provided to the Assistant Administrator for Water and
each Regional Administrator in Regions 4, 6, and 7 for comment.
The Office of Water's (OW) comments to the draft report and OIG's
evaluation of these comments have been incorporated into
appropriate report chapters and Appendix I.
PRIOR AUDIT COVERAGE
In March 1990 we issued the pilot audit report on Region 4*s
Section 404 wetlands program. The audit was entitled WETLANDS:
Region 4 Implementation and Management of the Section 404
Wetlands Program (Audit Report No. Elh7F8-04-0331-0100208,
3/23/90). The results of the pilot audit were incorporated into
this national report; therefore, no separate evaluation was made
of the Agency's implementation of the pilot report
recommendations. No other prior audit reports had been issued on
EPA's Section 404 wetlands program.
11
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Audit MO. E1HWE0-O4-0291
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CHAPTER 2
IMPROVEMENT NEEDED IN MANAGEMENT DIRECTION. CONTROL,
AND ACCOUNTABILITY FOR THE SECTION 404 PROGRAM
Management controls over implementation of EPA's Section 404
program did not ensure that regions prioritized and accomplished
the Agency's wetlands objectives and established effective and
efficient wetland protection programs. Internal controls, that
should have been established under the FMFIA, to provide
reasonable assurance that program objectives were accomplished,
were either not established or not fully implemented. Instead,
regional wetland programs were permitted to respond to the agenda
of regional management rather than commit to the Administrator's
and the Office of Water's program objectives. This condition
contradicts EPA's organizational accountability as stated in 40
CFR 1.61 which holds each Regional Administrator accountable to
the Administrator for accomplishing national program objectives
as established by EPA Headquarters program offices. As a result
of inadequate management control and accountability, wetlands as
a whole were not afforded the protection under Section 404 as
envisioned by the Administrator and as detailed in findings
presented in Chapters 3 through 5 of this report.
BACKGROUND
Agency regulations in 40 CFR 1.49, charged the Office of Water,
through the Office of Wetlands Protection (OWP), with
administering the Section 404 wetlands program and developing
specific Agency policies, procedures, regulations, and strategies
addressing the protection of the nation's wetlands. Since OWP's
organization in October 1986, it has established three essential
elements for a viable wetlands program: Section 404 permit
reviews, enforcement against unpermitted wetland discharges of
dredge and fill material, and strategic initiatives such as
advanced identification wetland studies. These program elements
were codified in 40 CFR 230.
In 1982, Congress passed the Federal Manager's Financial
Integrity Act (FMFIA). FMFIA required that each executive agency
establish internal accounting and administrative controls in
accordance with standards prescribed by the Controller General.
Under EPA Order 1000.24, EPA designated the Deputy Administrator,
Assistant Administrator for Water, and the Regional
Administrators as "primary organization heads" responsible for
overall development and maintenance of effective systems of
internal control under FMFIA. OMB Circular A-123 and EPA
Resources Management Directive 2560 prescribed the policies and
procedures for Agency implementation of FMFIA requirements.
These policies and procedures specifically stated that one of the
13
Audit MO. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction/ Control/ and Accountability
major objectives of the FMFIA internal control requirements was
to provide management with reasonable assurance that "programs
are efficiently and effectively carried out in accordance with
applicable law and management policy."
WETLANDS PROGRAM NEEDS MEASURABLE PROGRAM GOALS. STAFF
COMMITMENTS. AND NATIONAL GUIDANCE FOR IMPLEMENTING PROGRAM
OBJECTIVES
While OWP has established basic, general missions and objectives
for the Section 404 wetlands program in the annual Agency
Operating Guidance, the Headquarters program management has never
established definitive, measurable goals (measurable as to
quality as well as quantity) and priorities or obtained
measurable commitments for regional wetland operations for each
of the program elements established by OWP with the exception of
strategic initiatives. In addition, the OWP has not issued
detailed guidance for regional activities to ensure effective and
consistent implementation of the wetland program
elements/missions. The absence of definitive, measurable program
goals and priorities, regional commitments to these goals, and
measurement of regional accomplishments versus commitments has
resulted in a lack of management accountability for program
results, inconsistent program implementation, no assurance of an
effective and efficient wetlands program, and inadequate support
for program budgets contributing to the program's resource
limitations.
a. Agency Operating Guidance Contained No Quantifiable Goals
EPA management for the various Agency programs normally use the
SPMS/STARS1 management accountability system for establishing
individual program objectives, setting measurable goals or
commitments for individual program offices, and measuring
performance in relation to the goals and commitments. The
SPMS/STARS process has three primary phases. The first phase
involves the development of the annual operating guidance. This
guidance includes identifying annual program objectives/functions
and the establishment of program goals. The goals are usually
1 Strategic Planning Management System (SPMS) recently
renamed Strategic Targeted Activities for Results (STARS).
Additional goals/commitments could also be established under the
Office of Water Accountability System (OWAS). Reference to
SPMS/STARS in the report infers those additional
goals/commitments obtained through the OWAS.
14 Audit NO. E1HWE0-04-Q29J
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hapter 2
mprovement Needed In Management Direction, Control, and Accountability
established through program management's negotiation of
commitments from regional and Headquarters staffs. While program
management has established annual operating guidance for the
Section 404 wetlands program, this guidance has been a general
restatement of the three primary elements or missions of the
wetlands program (permit review, enforcement, and strategic
initiatives) with no measurable goals (measurable by quality or
quantity) or commitments for regional programs (except strategic
initiatives) and no detailed guidance to regions as to the
establishment of effective permit review, enforcement, or
strategic initiative activities.
For example, the FY 1990 Agency Operating Guidance for wetlands
(only four pages) included the FY 1990 objectives for permit
review and enforcement as follows:
Regions will continue to actively address wetlands loss
problems through implementation of the section 404
regulatory program [permit reviews].
Regions will continue to actively utilize EPA's civil and
criminal enforcement authorities in order to ensure
deterrence of inappropriate behavior and where possible,
remediation of environmental damage....
Neither this FY 1990 annual program guidance nor any other
program guidance contained detailed operational instructions as
to what constituted an effective permit review or enforcement
program for wetlands or what level of performance was expected
from individual regional staffs.
b. Long-term Operating Plans Were Never Finalized
The second phase of the SPMS/STARS process involved the
establishment of "two year" or long-term operating plans for
implementing program objectives set forth in the annual operating
guidance. These plans were to serve as a basis for negotiating
annual program commitments for accomplishment and for supporting
program budget requests. However, wetlands program management
has never been able to finalize such long-term operating plans.
This inability to develop long-term program goals and related
operational levels has contributed, at least in part, to the
section 404 program's poor operational performance and inadequate
budgets and related staffing.
Wetlands program managers made several attempts at developing
long-term guidance and goals for the Section 404 program.
However, Headquarters and regional program management could never
15 Audit Mo. E1HWE0-04-0291
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Chapter 2
improvement Needed in Management Direction, control, and Accountability
agree on a strategic plan. Therefore, the program remains
without any comprehensive long-term guidance on how EPA's
managers are to approach wetlands protection. The Office of
Federal Activities (predecessor to OWP) first attempted to
develop a "two year" operating plan for FYs 1986 and 1987.
However, it was not well received at the regional level.
National and regional program managers apparently could not agree
on the program strategies which would comprise the main body of
the guidance and it was never finalized. In 1986/87, OWP
initiated another attempt at developing a long-term wetlands
strategic plan which was referred to in the 1988 Agency Operating
Guidance as the Wetlands Protection Strategy. However, according
to program managers, this document was again never finalized.
According to OWP's response to regional comments on the draft FY
1988 operating guidance, regions were concerned with the
"...pattern of increasing responsibilities and priorities being
required of regional programs in FY 1988, in the absence of any
additional regional resources."
For 1988/89, OWP issued a wetlands planning document entitled
Program Agenda which described goals and on-going or planned
activities for the FYs 1988 and 1989. However, the plan did not
specify any regional commitments to the stated goals or indicate
any regional responsibility for implementing the plan's
provisions. The document was prefaced as follows:
In reading and using this document, the reader should
note that the activities outlined apply only to the
Headquarters program office. They do not in and of
themselves create any direction or obligations for
wetland units in EPA's Regional Offices.
Therefore, this operating plan, as such, still did not specify
any measurable goals for regional wetland programs and required
no regional commitments toward accomplishing the plan's
objectives.
In January 1989, OWP issued the Wetlands Action Plan in response
to the Wetlands Policy Forum's recommendations. This latest
document was referenced in the 1990 Agency Operating Guidance,
however, it did not provide specific direction to the regions or
set measurable goals. The document only restated objectives and
recommended activities, many of which, had been emphasized by the
Office of Federal Activities almost five years earlier. Overall,
this and the earlier planning documents had little impact on
regional commitments for Section 404 programs and fell far short
of fulfilling the requirements of the SPMS/STARS management
accountability system.
16
Audit MO. ElHWEO-04-029^
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bapter 2
mprovement Heeded In Management Direction, Control, and Accountability
c. Lack of Specific Program Goals and Detailed Implementation
Guidance Resulted In Inconsistent and Unpredictable Wetland
Regulation
In a 1987 OWP assessment and planning document for the wetlands
program entitled "Wetlands strategic Planning Initiative", OWP
stated that the regional wetlands programs were "inconsistently
administered across Regional offices" with a tendency to take on
the "personalities of their leadership rather than emphasize the
Agency's plan to protect the Nation's wetlands." OWP attributed
this condition to a "lack of specific [program] goals and a
detailed implementation manual." Without established goals with
a consistent management approach toward the Section 404 program,
OWP indicated that the wetlands program had become "...
unpredictable to the regulated public while significant
differences in results and approach exist across Regions."
Our reviews of wetland programs in three EPA regions support
OWP1s statements and indicated that these inconsistencies between
regional programs still exist (see Chapters 3 - 5). We concluded
that until the Office of Water (OW) requires the program to
develop long-telrm definitive guidance along with measurable
commitments to include quality as well as quantity of program
results, EPA regions will continue to follow their own agendas.
Regional Commitments to Ma-ior Program Goals Were Almost
Nonexistent
Commitment to measurable program accomplishments by wetlands
program management was critical to the success of the Agency's
management accountability systems (SPMS/STARS); however, such
commitment had never been obtained from regional program
management with the exception of strategic initiatives.
Therefore, no level or quality of performance had been quantified
for the major program elements to gauge program efficiency and
effectiveness and/or identify program successes and failures.
Without measurable regional commitments and related performance
standards for program managers, the establishment of generic
program goals and long-term plans will have little impact on
program operations.
Under SPMS/STARS systems third phase (Management Tracking and
Followup), performance commitments for each program year were to
be negotiated between EPA regions and the applicable national
program office with the Deputy Administrator giving final
approval. The regions were to report actual program
accomplishments each quarter during the program year for
measurement against commitments. Essentially, the commitments
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Audit No. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction/ Control, and Accountability
were intended as performance agreements designed to achieve the
objectives spelled out in the Agency's annual operating guidance.
However, under SPMS/STARS, we found that regional managers had
made few commitments for the Section 404 program.
Under the SPMS/STARS systems, wetlands program managers for FY
1990 committed to: (1) protect the most important wetlands and
other special aquatic sites; and (2) manage an effective Section
404 compliance and enforcement program. These commitments
contained no measurable targets or goals other than the
initiation of one or two (Regions 1, 2, and 4) new strategic
initiatives (such as an advanced identification study). The
strategic initiative commitment was basically the same for all
regional programs regardless of program staffing or workload.
Therefore, we question whether this goal would accurately measure
the efficiency of individual regional programs. In addition,
these commitments did not address all of the program
responsibilities and related objectives outlined in the 1990
Agency Operation Guidance (EPA Wetlands Action Plan) such as:
enhancing State participation in the wetlands program; improving
consistency between Federal agencies on wetland policy; and
building a wetlands database to track changes in wetland
ecosystems over time. Furthermore, the SPMS/STARS program
reporting requirements for FY 1990 were: (1) the number of
strategic initiatives started and completed; (2) the number of
compliance orders and administrative penalty complaints issued;
(3) the number of civil and criminal cases referred to DOJ; and
(4) number of enforcement cases resolved. OWAS tracked permit
review statistics and other selected enforcement activity.
However, there was no way to measure program performance except
for strategic initiatives because program commitments had not
been quantified and "acceptable performance" had not been
defined. Also, the expected quality of program actions had not
been established.
For example, the SPMS/STARS for FY 1990 enforcement activity
showed that the 10 EPA regions reported the resolution -of 222
enforcement cases. The cases were resolved either voluntarily or
through formal administrative, civil, or criminal actions. Since
no quantifiable enforcement resolution goal was established for
FY 1990, it is difficult to assess the regional performance.
Averaged per region, the number of enforcement resolutions
equaled 22.2 cases. Compared to regional wetlands FTEs, this
activity equaled 2.5 cases per FTE. If the 1990 enforcement
resolution activity was compared to 1988 when only 43 cases were
resolved, the increase was significant. However, if this
activity was compared to the 1990 COE statistic reporting almost
6,000 backlogged allegations of illegal discharges into wetlands,
18
Audit MO. E1HWE0-04-
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hapter 2
mprovement Needed In Management Direction, Control# and Accountability
the number resolved by EPA in FY 1990 does not appear significant
(see finding in Chapter 3). However, acceptable performance was
subject to broad interpretation because "acceptable performance"
could not be determined until management defined it. Therefore,
without adequately defined and measurable commitments, each
region could do as much or as little as they wished toward
protecting wetland resources and rationalize the results.
Our audit also disclosed indications that regions were not using
consistent criteria in reporting program accomplishments.
For example, the 1990 instructions for strategic initiative (SI)
commitments indicated that: "At a minimum, an SI should
constitute a program component that represents one-tenth [10
percent] or more of the Region's wetlands program attention."
According to Headquarters program management, each project, in
order to be considered a strategic initiative for the SPMS/STARS
commitment, would have to be significant enough to require a 10
percent commitment of the current year's resources. Region 4
committed for two initiatives and reported 4. Regions 6 and 7
committed for one each and reported one. Region 3, however,
committed for one strategic initiative but reported 16 (160
percent commitment of wetland resources?) in SPMS/STARS. EPA
Headquarters personnel expressed doubts about the accuracy and
comparability of the regional information reported. However, the
statistics accumulated in SPMS/STARS was crucial to each region's
program development because this data was used in OWP's annual
workload model which determined regional resource allocations.
While we did not audit the specific information reported in
SPMS/STARS, our reviews of selected program documentation during
reviews in Regions 4, 6, and 7 relative to wetlands enforcement
(see Chapter 3), permit review processes (see Chapter 4), and
strategic initiative (see Chapter 5) indicated that the program
accomplishments/statistics included the SPMS/STARS reports were,
to some degree, questionable.
Aaencv Comments On Management Accountability/Controls And PIG
Evaluation
Agency Comment
"We disagree with the statement...that •EPA's organizational
accountability . . . holds each Regional Administrator
accountable for accomplishing national program objectives as
established by EPA Headquarters program offices."' The
Administrator himself has said that the Regional Administrators
work for him and for the President, not for the program offices."
19
Audit NO. E1HWEO-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control, and Accountability
OIG Evaluation
EPA's Statement Of Organization And General Information in 40 CFR
1 describes the Agency's organizational hierarchy and basic
responsibilities. According to 40 CFR 1.61: "Regional
Administrators are responsible to the Administrator, ... for the
execution of the Regional Programs of the Agency ...." However,
this subpart continues by outlining one of the Regional
Administrators' responsibilities as "Accomplishing national
program objectives within the Regions as established by the
Administrator, Deputy Administrator, Assistant Administrators
[emphasis added], Associate Administrators, and Heads of
Headquarters Staff Offices." EPA's program offices, through the
Administrator, established program objectives, goals, and
performance measures through the Agency Operating Guidance.
Therefore, Regional Administrators are accountable to the
Administrator for the accomplishment of the national program
objectives and goals as established by the program offices and
presented in the annual Agency Operating Guidance. The CFR
reference was added to the report and other revisions were made
to clarify this issue.
Aaencv Comment
"By criticizing Headquarters for failing to set definitive,
measurable goals or measurable commitments for the Regional
wetlands programs, the draft report is promoting a management
philosophy that is at odds with the Administrator's and Deputy
Administrator's management approach and goals."
"We strongly disagree with the summary conclusion (page 14) that
a lack of definitive, measurable program goals and Regional
commitments resulted in inconsistent program implementation, no
assurance of an effective and efficient program, and inadequate
budgetary support. To the contrary, the draft report appears to
ignore the fact that, prior to FY 1989, Headquarters did
establish 'definitive, measurable goals' and obtain 'measurable
commitments for regional wetland operations.' However, this 'bean
counting' approach proved to be unsuccessful, given the need for
flexibility in a program that required very limited regional
staffs to address a wide variety of responsibilities and
environmental challenges."
"The draft report...incorrectly states that Headquarters has
never obtained measurable commitments from Regional program
management, with the exception of strategic initiatives. As
explained above, prior to FY 1989, Headquarters set targets for
both enforcement actions and advance identification (ADID)
20
Audit Mo. ElHITE0-04-O29^
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mprovement Needed in Management Direction, Control, and Accountability
OIG Evaluation
Off indicates that establishing management controls through
definitive measurable program goals and commitments was done
prior to FY 1989 and found to be only a form of "bean counting"
and is considered contrary to current management philosophy.
However, Off provided no sources or documentation in its response
to support its disagreement.
We were unaware of any new EPA management philosophy until our
preliminary exit with national wetlands program mangers when a
November 1, 1989 memorandum and task force report were brought to
our attention. We subsequently reviewed these documents and
found that they present similar concepts as those we are
recommending in this report. The memorandum and task force
report document concepts such as: putting program accountability
into strategic planning; making the management accountability
systems convey a strong sense of the Administrator's priorities;
creating a more meaningful balance between performance and the
quality of products; continuing to develop joint targets or
estimates of each Region's activity levels in support of national
program objectives: and tracking key program activities.
Therefore, none of the information provided or eluded to by the
Regions or CWP supports OW's statement that measurable
commitments are not required under current management philosophy.
In addition, none of the information provided to us by the
Regions or CWP support OW's statement that measurable commitments
were ever established for the Section 404 program in the areas of
public notice review or enforcement. There were regional
reporting requirements under SPMS/STARS or OWAS but no
established targets/commitments with the exception of advanced
identification. Regions negotiated an FY 1987 target level of
performance for advanced identification which continued under the
strategic initiative element introduced in FY 1989. Also, no
where in the draft report did we state that program
accomplishments should be evaluated exclusively on the level of
program activity. We stated, consistent with the SPMS/STARS
guidance, that commitments should be measurable, whether
numerically or qualitatively, and designed to assure the
achievement of established program goals and objectives. In
addition, the Agency's SPMS/STARS management accountability
system emphasizes the importance of commitments whether they are
quantifiable outputs, deadlines associated with a specific
product, or some other means of measuring accomplishment toward
achieving pre-established program goals and objectives.
Negotiating meaningful commitments and measuring accomplishment
of those commitments is the primary management control within
21
Audit Mo. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control, and Accountability
these management accountability systems.
Furthermore, other Agency programs, including other water
programs, make reference to targets (measurable commitments) in
the FY 1992 Agency Operating Guidance. Until a level of
performance was established in FY 1987, limited progress had been
made toward performing advanced identifications. If establishing
meaningful goals and objectives with commitments to measure
program effectiveness is not considered a valid control mechanism
under current management philosophy, then the SPMS/STARS systems
will have no real function or purpose for evaluating the Section
404 program.
The FY 1992 measures for Section 404 enforcement demonstrates the
continued inadequacies of the wetlands SPMS/STARS goals in
evaluating progress toward accomplishment of program objectives.
The FY 1992 enforcement objective is to "Enforce the Section 404
program to improve rates of compliance with program
requirements." While this is a necessary goal, the performance
measures in STARS include reporting only the numbers of regional
actions taken, referred, and resolved and these statistics will
not demonstrate achievement of the goal to improve rates of
compliance. Only evaluating current rates of noncompliance
(illegal activities) and demonstrating reductions in this level
of noncompliance will indicate accomplishment of that goal.
OW's remarks concerning the use of "bean counting" conflicts with
later statements that lack of "bean counting", i.e., measurable
goals and staff commitments, has increased the program's success
as evidenced by the increase in Section 404 enforcement actions
from a low of 63 in FY 1987 to 146 in FY 1990. Such evidence of
successes appears to be the same bean counting Off takes exception
to. The numbers do not reflect the quality and consistency of
the actions taken. As stated in the report, our audit in three
regions found that enforcement actions were generally
inconsistent euid ineffective. In addition, the memorandum and
task force study which CM indicated represented the new
management philosophy was dated November 1989. An FY 1990 policy
cannot effect 3 to 4 prior years of enforcement actions.
Furthermore, according to the chart included in CW's response,
enforcement actions increased from 63 in 1987 to 120 (almost 100
percent Increase) in FY 1988 when, according to CW, »bean
counting" was still in effect. Between FYs 1988 and 1989,
enforcement actions increased by only 30 or 25 percent over 1988
and actually decreased in 1990. Finally, the Section 404 program
staff increased over 82 percent (from 85 to 155 FTEs) between
1988 and 1991. This would also impact the number of enforcement
actions Initiated. Therefore, we can not conclude, as CM has
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mprovement Needed In Management Direction, Control, and Accountability
done, that "bean counting" was unsuccessful and that the lack of
measurable program goals and regional commitments contributed to
the increase in Section 404 enforcement actions.
Aaencv Comment
"The draft report fails to credit Headquarters for the various
"program" guidance documents and memoranda of agreement that have
been developed in recent years, some of which have been issued
jointly with the Corps. The Corps has also issued its own
program guidance documents, known as Regulatory Guidance Letters,
with input from and review by the EPA wetlands program."
OIG Evaluation
We disagree with Off's comment. The draft report cites all of the
MOAs between EPA and COE in effect and the guidance applicable to
the various report topics. These documents were not all
specifically referenced in Section B of Chapter 2, because they
did not relate to the needs of a long-term overall program
operating plan or specific guidance for use by the Regions in
designing programs to accomplish individual program objectives.
OW does not list the "various program guidance documents and
memoranda" we "failed to credit" to the program. Also, program
management's input into COE's regulatory guidance, was not an
objective of our audit and has little relationship to this
finding concerning Agency guidance for internal program
operations.
Aaencv Comment
"The SPMS/STARS data on enforcement (bottom of page 18), is
meaningful and significant as a measure of the continuing
increase in EPA Section 404 enforcement activity nationwide. It
is inappropriate to compare the number of EPA enforcement
resolutions for FY 1990 to the number of Corps backlogged cases;
the trend of increased enforcement resolutions is a more
significant fact.1'
OIG Evaluation
Off does not state why this comparison is inappropriate and we see
no reason for not using the comparison. In our opinion, the
comparison demonstrates that while the enforcement program shows
growth, there was a growing problem with Section 404 compliance.
23
Audit NO. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control/ and Accountability
WETLANDS PROGRAM'S FMFIA IMPLEMENTATION INCONSISTENT WITH CG
STANDARDS AND OMB POLICY
FMFIA and Comptroller General (CG) standards2 require complete
documentation of program objectives and identification or
establishment of internal control techniques to ensure
accomplishment of these objectives. Our audit generally
disclosed a lack of understanding by program management of FMFIA
requirements and related processes. As a result, FMFIA
requirements relative to the Section 404 program had not been
properly implemented. Many critical event cycles applicable to
wetland program activities and related control processes had not
been properly established and incorporated into the FMFIA
process. This included the SPMS/STARS management accountability
system and OW's annual program evaluations. Also, program
assessments and management accountability systems, that should
have been identified as primary FMFIA control techniques for
wetland activities, had not been properly implemented and did not
adequately evaluate the efficiency and effectiveness of EPA's
wetlands program and its compliance with applicable law and
management policy as required by EPA Resource Management
Directive 2560, ,0MB Circular A-123, and the FMFIA.
Similar conditions were previously reported by the Office of
Inspector General (OIG) in its 1989 assessment of the Agency's
FMFIA internal control program3. While OWP was not included in
OIG's prior audit of EPA's FMFIA implementation, this audit
disclosed that similar deficiencies existed in the Section 404
program's FMFIA process.
a. Critical Cyclical Program Events and Controls Not Included in
FMFIA Documentation
OWP listed only three event cycles: implement annual extramural
budget administration process; issue Section 404(c)
determinations; and work with State programs for wetlands
protection as in its prior years' FMFIA documentation. However,
national program responsibilities and functions were much more
extensive than these three program events as evidenced in program
regulations and the Agency Operating Guidance. For example, OWP
2 Comptroller General publication Standards for Internal
Controls in the Federal Government issued in June 1983.
3 EPA's 1989 Federal Managers' Financial Integrity Act
Activity. Audit Report Number E1LMFO-11-0012-0100357, issued June
22, 1990.
24 Audit MO. E1HWE0-04-O291
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hapter 2
improvement Needed In Management Direction/ Control# and Accountability
was also responsible for: (1) overall program direction,
planning, and budget processes along with establishing regional
and national goals/commitments, overseeing the effectiveness of
regional programs, and measurement of program accomplishments
(regionally and nationally) in relation to goals (SPMS/STARS);
(2) interagency coordination with the COE and other resource
agencies to develop joint wetland program guidance and implement
other Federal statutes affecting wetlands; (3) intra-agency
coordination of Section 404 responsibilities with
related/overlapping EPA programs; (4) development of internal
program guidance and strategies addressing the overall
maintenance, enhancement, and protection of the nation's
wetlands; and (5) large-scale ecosystem strategic initiatives.
None of these critical, recurrent events and related program
objectives were included in OWP's FMFIA documentation along with
management control techniques for the Headquarters and regional
programs designed to ensure accomplishment of these tasks.
Region 4, 6, and 71s approach to the FMFIA internal control
process was not only inconsistent with the national program
process but equally deficient. The regions listed the Section
404 program as the only cyclical program event, with a limited
list of control objectives. For example, Region 4's 1990 FMFIA
documentation for the wetlands program listed: apply guidance and
issue regulations; encourage the transfer of Section 404 permit
programs to the States; and provide guidance/litigation support
regarding non-compliance with permit conditions as FMFIA control
objectives. Region 4*s 1988 FMFIA documentation included the
same incomplete list of program objectives as control objectives.
However, Agency Operating Guidance for FYs 1988 through 1990
revealed completely different regional program objectives, i.e.,
permit review, enforcement of unpermitted discharges, etc.
Similar deficiencies in the FMFIA process were also found in
Regions 6 and 7. Like OWP, the regions' Section 404
responsibilities and functions were much more extensive than
reported in their FMFIA internal control documentation.
b. Critical Program Controls Have Not Been Properlv Implemented
The SPMS/STARS management accountability system is intended to
serve as a crucial program control. Program direction, goals,
and budgets are supported by this process. Proper commitments to
measurable goals by national and regional staffs and proper
measurement of goal accomplishment would represent the paramount
program management control as intended by FMFIA. However, as
previously detailed in the first section of this finding, this
system has not been sufficiently implemented for the Section 404
program. Adequate national direction/guidance has not been
25
Audit NO. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control, and Accountability
provided, measurable program goals have not been established,
regional program commitments have not been obtained, and reported
program accomplishments are of questionable value.
CG standards for internal controls supports our conclusion that
management accountability systems are an integral part of fmfia
controls.4
...[internal controls] should be recognized as an integral
part of each system that management uses to regulate and
guide its operations. In this sense, internal controls are
management controls. Good internal controls are essential
to achieving the proper conduct of Government business with
full accountability for the resources made available. They
also facilitate the achievement of management objectives by
serving as checks and balances against undesired actions....
Annual Program Evaluations
In addition, OW's annual program evaluations were not performed
in sufficient detail to adequately assess the performance of
individual programs including the Section 404 wetlands program.
Even when program deficiencies were noted, the identified
weaknesses were not emphasized and regional management
commitments or actions were not modified to correct deficiencies
or redirect regional priorities. As a result, program
deficiencies went undetected or uncorrected.
EPA regulation 40 CFR 1.49 listed one of the functions of the
Office of Water as: "evaluation of Regional water activities."
OW fulfilled this responsibility through its Water Program Mid-
Year Review. However, the mid-year review process has been
inconsistently performed with a mixture of on-site reviews by
national program managers, discussions with regional management,
or, more recently, regional self-evaluations. The last
documented national program assessment (FY 1989) was based
primarily on regional self-evaluations and information provided
during the SPMS/STARS quarterly reporting process. This type of
information develops levels of reported activity, but the
accuracy, consistency, and quality of the activity reported could
not be sufficiently assessed without analyzing the supporting
regional documentation. The FY 1990 OW mid-year review was an
4 Standards for Internal Controls in the Federal
Government. published by the Comptroller General, June 1, 1983.
26 Audit MO. E1HWE0-04-0292
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phapter 2
improvement Needed In Management Direction/ Control, and Accountability
abbreviated assessment which apparently consisted of one regional
wetlands program evaluation (Region 8). This evaluation was
based primarily on the national program director's discussions
with the Regional wetlands staff rather than an indepth review of
program documentation.
The FY 1989 Water Program Mid-Year Review - National Assessment
outlined the strengths (but not necessarily the weaknesses) of
each OW program and a brief response to issues resolved or where
follow-up action were reguired. Any weaknesses found were de-
emphasized and not necessarily identified as a program
deficiency. However, this mid-year review clearly documented the
inconsistent regional approaches to the section 404 program and
the disparity in program results obtained. Also, the assessment
emphasized the guantity of actions (without indepth verification)
rather than the quality.
For example, the Region 4 report states that: "Region 4 continues
to be the most active and effective EPA Region in the use of our
veto authority under Section 404(c)." This conclusion was based
exclusively upon the number of Region 4 Section 404(c) actions in
relation to other regions. The 1989 Agency Operating Guidance
encouraged the regions to use 404(c) to veto permits in cases
where a wetland discharge would result in significant adverse
environmental impact. Therefore, without an evaluation of the
quality of Region 4's Section 404(c) activities, the meaning and
significance of the mid-year review's statement about Region 4's
404(c) actions is unclear. Does it mean that Region 4, when
compared to other regions: was doing a better job protecting its
wetlands from significant impacts; had more significant impacts;
had more resources to contest improper permitting decisions using
404(c); better management support for 404(c) actions; or that
Region 4 was doing more than expected? Also, Region 4 may have
had other significant dredge and fill proposals that should have
been vetoed but were not (see Chapter 4). Without analyzing the
individual actions which support the reported activities,
national program managers could not effectively use the mid-year
program evaluations to verify the accuracy, consistency, or
quality of reported actions.
In Region 6, as another example, OW reported on the Region's 1989
advanced wetlands identification initiatives listing them
individually. Our review of the Region 6 wetlands program
disclosed that the COE refused to participate in two of the three
advanced identifications listed (see Chapter 5). Under
regulations in 40 CFR 230.80, joint participation by both the COE
and EPA was a prerequisite for an advanced identification study.
These actions may provide some benefit to Region 6's wetlands
27
Audit MO. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control, and Accountability
program; however, without COE support, the completed projects
will lack the impact on the regulatory process of a joint
advanced identification since COE's cooperation is essential in
excluding particular areas from permitting and dredge and fill
activities.
Even when wetland program deficiencies were documented during
past OW reviews, national program managers did not direct regions
to make appropriate program adjustments (i.e., through more
measurable commitments) to achieve Agency goals and objectives.
For example, the 1989 mid-year review categorized Region 7 as
"...one of the least aggressive Regions in terms of
implementation of EPA's responsibilities under Sectionr404." OW
encouraged " ...Regional management to take a hard look at their
reasons for not using EPA's explicit regulatory authorities."
However, there were no resulting changes in Region 7's SPMS/STARS
commitments for program results to commit Region 7's management
to the objectives established in the Agency Operating Guidance.
Our audit of the Region 7 wetlands program in late FY 1990
disclosed no apparent changes in Regional management's approach
toward protecting its wetlands resources including the use of the
EPA authorities emphasized in the 1989 Mid-Year Review.
OW's superficial approach to mid-year program evaluations can be
attributed directly to the SPMS/STARS deficiencies discussed
earlier. Without detailed program guidance, measurable program
goals, and definite regional commitments, program performance can
not be properly evaluated. OW's assessment of Region 4's use of
EPA's 404(c) authority, Region 6's advanced identification
initiatives, or any other region's activity has little meaning in
the absence of definitive program goals against which these
accomplishments or nonaccomplishments can be measured.
Agency Comments On FMFIA Process And PIG Evaluation
Aaencv Comment
"The draft report unfairly criticizes the wetlands program's
implementation of FMFIA requirements since the 16's office itself
has apparently approved our FMFIA documentation, although it
apparently has also acknowledged that there is an Agency-wide
problem in this area. Moreover, we disagree with the conclusion
that the wetlands program has not sufficiently implemented the
STARS system since, as stated above, our approach comports with
existing Agency management philosophy and has produced positive
results."
28
Audit Mo. E1HWE0-04-
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Chapter 2
Improvement Needed In Management Direction, Control/ and Accountability
OIG Evaluation
We have no knowledge or evidence that OIG has ever specifically
reviewed and approved FMFJA implementation for the Section 404
wetlands program. CM did not provide a source or other support
for this statement.
We found no management philosophy documented in the criteria and
requirements for the SPMS/STARS management accountability system
against "bean counting" for our audit period and OW provided no
adequate documentation of such a philosophy. Therefore, we
continue to conclude that OWP had not implemented the management
accountability system as recommended by Agency procedures. In
addition, establishment of program goals that can be measured by
quality, as well as quantity, as stated in the report, does not
necessarily entail "bean counting" as OW contends. Furthermore,
OW states that eliminating "bean counting" has produced positive
results. The example of the success of this management
philosophy emphasized by OW is the increase in EPA enforcement
actions between FYs 1989 and 1990. As previously stated this
appears to be "bean counting" in itself and provides no
measurement of the quality of the actions or their ability to
accomplish program goals and objectives.
Aaencv Comment
"The draft report's determination that annual program evaluations
should emphasize Regional weaknesses is inconsistent with modern
management theory, which provides that people are motivated by
positive feedback."
OIG Evaluation
OW did not provide documentation of this current management
theory and we are unaware of the theory referenced by OW.
However, we are aware of the intent of the FMFIA and related
program controls/evaluations to identify internal control
weaknesses and resolve such weaknesses to protect Government
resources from fraud, waste, and abuse and ensure accomplishment
of program objectives.
Aqengy comment
"contrary to statements in the draft report, Regions did initiate
changes and redirect priorities in response to the annual program
evaluations undertaken by Headquarters."
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Audit NO. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control, and Accountability
OIG Evaluation
CM contends that, contrary to statements in the draft report,
Regions did initiate changes and redirect program priorities in
response to Headquarters annual program evaluations. Our audit
of three Regions disclosed that annual program evaluations did
not identify some weaknesses and some identified were not
corrected. While changes may have been made in regional
emphasis, we could not attribute the shift to the annual
evaluations or subsequent changes in requirements under the
management accountability system. Since Off provided no specifics
as to sources or other evidence to support their statement, we
have no basis for changing the report's conclusion.
CONCLUSION
Our review of three EPA regions' implementation of the Section
404 program indicated that none were sufficiently committed to
achieving all the program objectives set-forth by OWP. While the
regions recognized the Agency's goals and objectives, they
continued to expend most of their resources reviewing COE public
notices. It was not until enforcement and advanced
identification program elements became a measure of performance
under SPMS/STARS in FYs 1987 and 1988 did the regions' make any
progress in these areas.
Considering the inconsistencies and deficiencies our audit
disclosed in the regional wetlands programs (detailed in Chapters
3 through 5), measurable performance commitments under the
SPMS/STARS management accountability system, based on the program
objectives in the Agency Operating Guidance, would have been a
valuable control mechanism over both national and regional
operations. Measurable commitments would have provided a bench
mark against which national program managers could have evaluated
program performance and progress, and, if necessary, made
adjustments to achieve established goals and objectives. If ow
had developed long-term operating guidance, established
measurable goals and related commitments, performed indepth
program reviews, and developed and documented program internal
controls to ensure that objectives were met, regional program
implementation would have been more consistent and the Agency's
Section 404 program might be viewed more favorably by the
regulated public.
As recognized by Congress in the FMFIA, a sound internal control
system was essential to ensure accomplishment of program
objectives as well as safeguard Agency resources from fraud,
30
Audit NO. E1HWE0-O4—0291
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hapter 2
improvement Needed In Management Direction/ Control, and Accountability
waste, and abuse. EPA's management accountability systems were
the Agency's primary control over program implementation and
attainment of program goals. Therefore, the integration of the
Agency's management accountability systems into the FMFIA process
was crucial to the establishment of a foundation for a sound
internal control system over wetland program operations.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Water require
proper implementation of EPA's management accountability systems
and FMFIA internal control process to ensure that Section 404
program objectives are accomplished in an efficient and effective
manner and that a consistent, uniform regulatory approach to
wetlands protection is established. This should include:
- Establishing measurable Section 404 program goals and
obtaining management commitments to these goals to enhance
evaluations of program accomplishments and attainment of
program objectives on both a regional and national basis.
- Developing long-term guidance and plans for the wetlands
program that will provide uniform, consistent implementation
of program objectives by regional and national wetlands
staffs.
- Documenting all significant program events on a consistent
basis and identifying or establishing related internal
controls to fully comply with FMFIA requirements and ensure
the establishment of an adequate system of internal
controls.
- Integrating the SPMS/STARS management accountability
system into the FMFIA event cycles for the Section 404
program to enhance program direction and implementation and
the identification of material weaknesses in management
controls.
- Performing indepth annual program reviews which evaluate
the quality and consistency of program performance as well
as the levels of performance of program staffs. Regional
program reviews should emphasize the identification of
program weaknesses and recommendations for program
improvement rather than emphasizing self assessed program
strengths as is currently done.
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Audit NO. E1HWE0-04-0291
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Chapter 2
Improvement Needed In Management Direction, Control, and Accountability
Agency Comments On Recommendations And PIG Evaluation
Aaencv Comment
"For the reasons stated above, the wetlands program opposes the
recommendation that we establish measurable goals and obtain
Regional staff commitments."
OIG Evaluation
OW's position against establishing meaningful goals is contrary
to the purpose of the SPMS/STARS management accountability
systems. Without goals related to program objectives that are
measurable in quality and/or quantity, there is no basis for
evaluating the consistency, efficiency, or effectiveness of
regional programs. This results in insufficient management
controls to assure the accomplishment of management objectives as
required by the FMFIA and CG standards for internal controls.
Therefore, our recommendation related the establishment of
measurable program goals and commitments remains unchanged.
Agency Comment
"The program has developed program guidance, although this fact
is not we11-documented in the draft report. Moreover, EPA cannot
always commit to develop future programmatic guidance documents
ourselves since we frequently need to work jointly with the Corps
to develop "effective" programmatic guidance for the Section 404
program. •'
OIG Evaluation
During the audit we identified all the program guidance related
to EPA's internal program operations as provided by OWP and the
Regions. This guidance is referenced as appropriate throughout
the report. OW alludes that certain program guidance issued by
EPA Headquarters was not recognized in the draft report, but ow
presented no specifics as to what this unrecognized guidance
consists of. The recommendation was for developing long-term
(Internal) guidance and plans (strategies) in conjunction with
the Regions to implement a wetlands program designed to
accomplish program objectives. We see no requirement for joint
interagency coordination to produce such internal program
guidance as recommended by the report. Therefore, our
recommendation remains as stated in the draft report.
32
Audit NO. E1HWE0-04-
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hapter 2
mprovement Needed in Management Direction/ Control, and Accountability
Agency Comment
"We are willing to examine the adequacy of our implementation of
the FMFIA internal control process, and in particular, will
consider adding our SPMS/STARS measures and annual program
evaluations to that process. The office of Water also agrees
that there should be regular reviews of the Regional wetlands
programs, although not necessarily on an annual cycle."
OIG Evaluation
CM agreed to evaluate the wetlands program's implementation of
FMFIA requirements, to include adding the SPMS/STARS measures,
and to the need for regular reviews of regional wetlands
programs. Although OW has indicated that positive actions will
be taken on improving the FMFIA process, the inclusion of the
SPMS/STARS measures will have little effect without first
establishing meaningful annual program goals and commitments in
such systems.
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Audit Mo. E1HWE0-04-0291
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34
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CHAPTER 3
EPA'S SECTION 404 ENFORCEMENT PROGRAM IS NOT CONTROLLING AMD
DETERRING ILLEGAL DISCHARGES INTO PRIORITY WETLANDS
Although enforcement is a key wetlands program objective, the
three EPA regions included in our audit had not developed
effective, consistent enforcement programs and had not adequately
monitored and coordinated COE enforcement against unpermitted
discharges of dredged and fill material into regulated wetlands.
The ineffective and inadequate control over program
implementation and direction by national program management (see
Chapter 2) permitted regions to establish their own enforcement
priorities which contributed substantially to inconsistent,
ineffective, and sometimes controversial enforcement against
Section 404 violators. In addition, regional enforcement
deficiencies could be attributed to a lack of measurable
regional goals and commitments for enforcement activities as well
as insufficient resources to accomplish enforcement program
objectives (see Chapter 1, Background). As a result, EPA's
Section 404 enforcement has not effectively reduced or deterred
unpermitted/illegal wetland discharges and the backlog of
reported illegal dredge and fill activities steadily increased
(over 32 percent) during our audit period, 1988 through 1990.
CRITERIA
Under Sections 301 and 309 of the Clean Water Act (CWA), Congress
gave EPA the responsibility and authority to deter
illegal/unpermitted discharges into wetlands. Section 301 made
it unlawful to discharge dredged or fill material into the waters
of the United States except in compliance with the permit
provisions of Section 404. Section 309 gave EPA administrative,
civil, and criminal enforcement authority over any illegal act.
However, because of resource limitations, EPA's Section 404
program could not effectively perform its statutory enforcement
responsibilities. Therefore, under a 1976 enforcement Memorandum
of Agreement (MOA), revised in January 19891, the COE agreed to
assist EPA in fulfilling its enforcement responsibility. Because
the COE had more field resources, it agreed to be the lead agency
for the majority of enforcement actions taken against unpermitted
discharge violations. According to the MOA, EPA retained the
enforcement lead in actions where repeat or flagrant violations
occurred, where EPA requested the lead, or where EPA wished to
apply its administrative penalty provisions under Section 309.
1 MOA revised in 1989 to incorporate guidelines for EPA's
new administrative penalty authority.
35 Audit NO. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
EPA entered into the 1989 MOA with the COE primarily to
"allocate" enforcement responsibility for illegal actions between
the agencies. However, under Section 404, EPA remained
statutorily responsible for effective enforcement of unpermitted
wetland discharges. EPA could assign its Section 404 enforcement
authority, but it could not delegate its responsibility for
performing an effective enforcement program under the CWA.
Therefore, it was incumbent on EPA to design a system of controls
to ensure implementation of an effective Section 404 enforcement
program. Without appropriate oversight of and coordination with
the COE, EPA could not fulfill its statutory responsibility to
assure that all significant violations were adequately addressed
and priority wetlands were protected.
Our audit disclosed that regional enforcement deficiencies were
segregated into two broad categories, monitoring of the COE
enforcement program under the MOA and the regions' direct
enforcement against Section 404 violations. These two problem
areas are addressed as separate findings below.
INSUFFICIENT OVERSIGHT OF AND COORDINATION WITH THE COE ON MOA
ENFORCEMENT ACTIONS
Neither Region 4, 6, or 7 had a system for monitoring COE
enforcement determinations pursuant to the MOA nor did they
develop procedures and controls in conjunction with COE to
consistently coordinate enforcement actions as provided in the
MOA. Instead, the regions relied almost totally on the COE
districts to coordinate enforcement actions and fulfill EPA's
statutory responsibility to detect and deter illegal discharges.
Consequently, the regions had little knowledge of the COE
enforcement process, COE compliance with MOA requirements, or the
effectiveness of COE enforcement actions.
None of the regions considered the monitoring of COE enforcement
a wetlands program priority. Some regional managers felt that
regional oversight of COE enforcement activities would provide
little benefit because the regions did not possess the program
resources to process their own enforcement cases and those
currently being referred to the regions by the COE. The audit
disclosed that all three regions audited were returning referred
enforcement cases to the COE for action that EPA had agreed to
enforce under the MOA. However, without a monitoring system, EPA
had no assurance that COE actions were properly fulfilling EPA's
statutory responsibility to deter the unpermitted destruction and
degradation of wetlands, and no opportunity to review all
reported violations and select those cases for EPA enforcement-
36
Audit Mo. E1HWE0-04-0291
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Chapter 3
enforcement Program Is Not Controlling And Deterring Illegal Discharges
lead that would provide the maximum deterrent effect on the
regulated public.
Background
Under the enforcement MOA between EPA and the COE2, the
enforcement process contained different stages of decision
making: l) determining jurisdiction and existence of a violation;
2) case notification and consultation between EPA and COE; 3)
determining the lead agency by the criteria in the MOA; 4)
establishing the appropriate enforcement response; and 5)
determining violator compliance with enforcement conditions
including proper monitoring for any remedy, removal, compensatory
mitigation or other corrective measure.
a. Regions Did Not Adequately Oversee COE Enforcement
Determinations Under the MOA
Violation Determinations - The regions had no knowledge of how
COE districts were making illegal discharge determinations or if
the reported wetland destructive activities that COE determined
were not subject to Section 404 enforcement, could be regulated
or controlled under other Federal statutes. EPA regions and OWP
were unaware that from 1988 through 1990, the COE determined an
average of 56 percent (7,656 cases) of the reported illegal
wetland discharges as not qualifying for Section 404 enforcement.
Regional program management speculated that some of the cases
could be illegal fills occurring in conjunction with an
authorized permit which the COE elected to enforce as permit
violations rather than as illegal fills. However, regional
staffs admitted that some of these actions could have qualified
as "flagrant" under the MOA and enforceable by EPA because of the
violators prior knowledge of the law established during the
permitting process. Still other cases not pursed by COE under
Section 404, could represent solid waste disposal which EPA could
have regulated under Section 402.
The audit did not evaluate COE's determination of Section 404
violations; however, we concluded from past GAO and COE
regulatory reports, interviews of EPA and COE staff, Section 404
file reviews, and related Congressional testimony that the
potential existed for violations that should have been critically
addressed by EPA going unnoticed. For example, in Region 6 the
COE was aware of an illegal solid waste discharge into a wetland
2 MOA, Federal Enforcement for the Section 404 Program of .
the CWA. effective March 20, 1989.
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Audit MO. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
for months before the Region was notified. In Region 4, there
was an old land clearing case where the COE incorrectly
determined that a Section 404 discharge had not occurred when the
trees were bulldozed and stumps removed as part of a planned
agricultural conversion.
Case Notification and Consultation - Most applicable COE
districts did not provide the EPA regions in our audit with
notifications of violations or request consultation on potential
enforcement actions as prescribed in the MOA and required under
COE regulations. Regional staffs were aware of this situation,
but no efforts were made by the staffs to resolve the problem.
The notification and consultation provision was important because
it provided for the consideration of each agency's views and
recommendations on a case and a uniform, consistent approach to
enforcement initiatives. In addition, any decision made by the
lead enforcement agency in a particular case, including a
decision that no enforcement action be taken, was final.
For example, Region 6's wetlands data system indicated the Region
provided some type of support for 52 COE enforcement actions
during 1988 through 1990. For FY 1989 alone, the COE's Lower
Mississippi Valley Division and the Southwestern Division, which
serve Region 6, reported 729 Section 404 enforcement resolutions.
Annualized, Region 6's support for COE actions would be less than
3 percent. Only one COE district routinely sent a monthly
summary of COE enforcement actions to Region 6 along with
information on violation letters issued. One other COE district
routinely requested Regional input on its enforcement actions but
only on those illegal discharges determined by the district as
not qualifying for an after-the-fact permit. The other seven COE
Districts serving Region 6 apparently sent only sporadic
information.
Regions 4 and 7 experienced similar problems with its COE
districts. Therefore, the extent of coordination and
consultation was either nonexistent, inconsistent, or sporadic at
best varying by region and COE district.
Lead Aaencv Determination and Enforcement Response - Without the
capacity to track, monitor, and evaluate COE notifications of
violations, the regions could not determine that the COE properly
referred repeat offenders and severe violations for EPA lead in
accordance with the enforcement MOA. The MOA clearly divided
enforcement lead responsibility for unauthorized discharges
between EPA and COE. Following this hierarchy was important to
ensure a consistent enforcement approach since EPA and COE had
different enforcement authorities under Section 404 and different
38
Audit NO. E1HWE0-04-029i
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chapter 3
enforcement Program Is Mot Controlling And Deterring Illegal Discharges
enforcement policies. However, there were cases which should
have been referred for EPA enforcement that were retained by the
COE. since the COE's enforcement policies were not as stringent
as EPA's, there were enforcement inconsistencies and
controversial cases which might have been avoided with better EPA
and COE coordination as required under the MOA.
For example, identifying repeat violators was apparently a
problem in all three regions. In one case Region 6 personnel
identified a repeat violator that was under investigation by the
COE for a Section 404 violation. The COE's cease and desist
order (possibly unaware of past violations) did not identify the
illegal fill as a repeat violation. Fortunately, a Region 6
employee, who reviewed the subject cease and desist order, had
worked for the COE and recognized the violating company as a
repeat offender. Region 6 informed the COE of this fact and
requested the enforcement lead. Without the EPA employee's
personal knowledge of the violator, this repeat offence may have
gone undetected.
In Region 4, our review of a wetlands database obtained from the
National Marine Fisheries Service disclosed 9 violators that had
received two or more COE cease and desist orders (potentially
repeat violators). However, we found no documentation in Region
4's enforcement files that any of these potential repeat
offenders had been referred to EPA for enforcement lead by the
COE. If the regions had been consistently tracking COE
enforcement actions, identifying repeat violators would have been
enhanced and a more consistent enforcement approach to such
violations would have been established.
b. Differences in EPA and COE Enforcement Policies Caused
Regulatory Inconsistencies and Supported the Need for EPA
Oversight of COE Enforcement Actions
Despite EPA's resource limitations, enforcement against illegal
discharges into waters of the United States was, by statute,
EPA's responsibility. This was emphasized in a General
Accounting Office (GAO) report (GAO/RCED-88-110), dated July 28,
1988. GAO reported that COE districts had not placed a high
priority on detecting and enforcing against unauthorized Section
404 activities. According to GAO, the COE rarely used available
administrative, civil, or criminal remedies when violations were
detected. Instead, the COE preferred to rely on the voluntary
actions of violators to rectify the problems, and/or issued
after-the-fact permits. In response to the report, the
Department of the Army concurred with GAO's criticisms but,
despite the EPA and COE Enforcement MOA, rebutted:
39
Audit Ho. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Mot Controlling And Deterring Illegal Discharges
... the Clean Water Act vests the Administrator of EPA
with enforcement authority for unpermitted discharges,
not the Secretary of the Army, who is empowered to
enforce only against permit violations.
Apparently, the COE took enforcement against illegal Section 404
discharges only as a courtesy to EPA. Therefore, to rely on COE
enforcement without adequate oversight was not a very prudent
approach for EPA management.
Based on the COE enforcement deficiencies cited in GAO's 1988
report and the lack of participation by EPA regions in overall
COE enforcement, we question if COE's enforcement actions
supported the Agency's program objective to strengthen
enforcement for priority wetlands and ensure that significant
violators were returned to compliance or a formal action taken
against them. Allowing violators to get "after-the-fact" permits
without additional penalty assessments did little as a deterrent
or to resolve environmental problems. While restoring an illegal
wetland fill could have been a financial burden to a violator
and, therefore considered punitive, the end result was still a
degraded wetland that could take years, if ever, to regenerate.
Furthermore, issuance of after-the-fact permits without penalty,
could encourage developers and other applicable parties to
illegally discharge first, then apply for a permit or risk
detection.
EPA's General Enforcement Policy, GM-21 which governed
enforcement against illegal Section 404 discharges considered
penalties necessary to deter illegal wetland discharges. The
policy also promoted the fair and equitable treatment of the
regulated public and swift resolution of environmental problems.
Conversely, the COE's enforcement approach, as shown in the GAO
report, focused on voluntary rehabilitation of degraded wetlands
rather than punishment of violators through penalties. These
conflicting enforcement approaches were conducive to inconsistent
enforcement actions and unnecessary criticism from the regulated
public. While EPA cannot force its enforcement policy on the
COE, national program managers should have addressed the risk
inherent in the differing agency enforcement approaches by
directing the EPA regions, through the management accountability
system, to perform adequate oversight of COE enforcement
activities.
40
Audit NO. ElHWEO-04-0291
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hapter 3
uforcement Program Is Hot controlling And Deterring Illegal Discharges
c. Regions Could Have Received Other Benefits From Oversight Of
COE Enforcement
EPA oversight of COE enforcement decisions under the MOA would
have provided benefits other than identifying additional
enforcement cases for an EPA lead. With EPA's limited resources,
broad national wetland goals, and heavy program workload,
oversight could have provided data needed to develop a national
enforcement strategy, target limited enforcement resources for
maximum deterrent effect, and optimize the overall effectiveness
of Section 404 enforcement programs. However, to formulate an
enforcement strategy and target limited resources, the regions
must identify the types, location, and frequencies of violations
by tracking and evaluating all enforcement activity.
This would be a more proactive approach to protecting priority
wetlands than the current approach of reacting to COE referrals
and ignoring the overall enforcement picture. EPA oversight of
all Section 404 enforcement actions would give the regions the
opportunity to strategically select cases for EPA lead
enforcement and maximize enforcement effectiveness through a
measured and predictable program instead of reacting only to COE
referrals or "problem cases".
Implementation of adequate controls by the national and regional
wetlands programs to monitor and track COE enforcement actions
under the MOA would have made EPA cognizant of and provided EPA
the opportunity to evaluate and control the 5,992 enforcement
actions taken by COE from 1988 through 1990. Between 1988 and
1990, the COE identified nationwide, 13,648 potential unpermitted
discharges of which 7,656 were determined by the COE not to be
violations enforceable under Section 4043. Of the 5,992
discharges involving COE Section 404 enforcement actions, 2,214
represented illegal fills being permitted without penalty; 2,967
violations required restoration with no other penalty; only 280
cases referred to EPA for enforcement; 285 being litigated
(civil/criminal actions) by the COE; and 246 others under study.
The following charts reflect the percentages of each type of COE
enforcement response.
3 Since EPA regions did not monitor or maintain COE
enforcement statistics and COE divisional/district boundaries
sometimes overlapped multiple EPA regions, we reported national
COE enforcement actions in lieu of COE actions taken on a
regional basis.
41 Audit No. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Not controlling And Deterring Illegal Discharges
COE SECTION 4Q4 ENFORCEMENT ACTIONS
FOR 1988 -199Q
Typ« »f Artkn Tok»n
d. Field Level MOAs Could Improve Coordination Between EPA and
COE
The 1989 Section 404 enforcement MOA between EPA and the COE
encouraged COE divisions/districts and respective EPA regions to
enter into field level agreements to more specifically implement
the MOA. Adequate oversight of COE enforcement coupled with
field level MOAs could lead to better enforcement coordination
with the COE, identify or resolve problem areas in implementation
of the MOA; and provide for more effective use of existing EPA
resources. However, regions have not developed appropriate field
agreements with the COE as provided for under the MOA to formally
define regional enforcement programs. With the COE's highly
decentralized organization, field level MOAs were needed to
coordinate an effective and consistent enforcement program.
Without field level agreements, EPA regions and COE districts
have continued to follow their own independent enforcement
agendas.
In addition, field level MOAs between EPA regions and COE
districts provide a method for establishing the uniform,
comprehensive guidelines needed to resolve differences in
enforcement policies. For example, the types of cases to be
referred to EPA could have been more clearly defined along with
the identification of priority wetlands that should receive
special enforcement emphasis. Also, the types of violations
42
Audit Mo. E1HWE0-04-
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Chapter 3
mforcement Program Is Not Controlling And Deterring Illegal Discharges
eligible for after-the-fact permits or which required
administrative penalties and the appropriate procedures for pre-
enforcement consultation with EPA could have been established.
However, at the time of our Region 4 pilot audit, no field level
MOA's existed between Region 4 and its respective COE
divisions/districts. Region 4 subsequently negotiated a field
level MOA with one of its nine COE districts in FY 1991. Region
6 and Region 7 did not have any field level MOAs.
Aaencv Comments On Inadequate Monitoring Of COE Enforcement And
OTG Evaluation
Agency Comment
••The draft report demonstrates a continuing misunderstanding of
Section 404 enforcement on the part of the IG's office. The
statute gives both EPA and the Corps authority to enforce Section
404; the. Corps' authority is not derived from an EPA delegation."
"Similarly, the Enforcement MOA, as first negotiated in 1976 and
later revised in 1989, is intended as a mechanism for ensuring
that this joint enforcement authority is efficiently and
effectively implemented, under the terms of the 1989 Enforcement
MOA, EPA is lead enforcement agency for what it views as the most
important unpermitted discharge violations."
"Since each Agency has independent enforcement authority, both
EPA and the Corps are responsible for effectively enforcing
Section 404, and it is not EPA's job to "oversee" the Corps*
enforcement efforts, although we agree that coordination between
the two agencies is important. The Office of Water is concerned
that the IG's office, in an attempt to address perceived
deficiencies in the Corps' enforcement program, is instead
attempting to place even greater.demands on the Regional wetlands
programs, with a potential for increasing inefficiency."
PIG Evaluation
Off's response states that "the statute" gives both the COE and
EPA the authority to enforce Section 404, We are not sure to
what statute ON references. Section 404 only provided for the
COE to enforce against permit violations not unpermitted
discharges. There are no other enforcement authorities provided
in Section 404. Section 309 provides EPA and COE with joint
authority to enforce against permit violations. Section 301, in
concert with enforcement authorities under Section 309, provides
EPA with enforcement responsibility for unpermitted discharges.
43
Audit No. E1HWE0-04-0291
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chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
We could not find a CWA reference that gave the COE any
enforcement authority for illegal discharges. Therefore, the
COE's authority for enforcement against unpermitted discharges
can not be statutorily derived and can only be based on the
enforcement MOA between the COE and EPA. The report's criteria
regarding statutory responsibility for enforcement against
unpermitted discharges agrees with COE's understanding of this
authority. As pointed out by GAO in its 1988 report and by COE
in its response:
... the Clean Water Act vests the Administrator of EPA
with enforcement authority for unpermitted discharges,
not the Secretary of the Army, who is empowered to
enforces against permit violations.
Current COE regulations at 33 CFR 326.2, also state that
unauthorized discharges are EPA's independent responsibility, in
addition, we did not indicate in the report that EPA "delegated"
its authority to COE but said that it "allocated" it through the
joint MOA.
As stated in the MOA, its prime goal was to strengthen the
Section 404 enforcement program by using the expertise, resources
and initiative of both agencies in a manner which is effective
and efficient in achieving the goals of the CWA. The MOA
established an "allocation of enforcement responsibilities
However, as explained above, EPA has independent statutory
authority for unauthorized discharges. The Agency may allocate
its authority for enforcing against such illegal discharges under
the MOA but not its overall statutory responsibility for a viable
enforcement program.
Off also states that the 1989 enforcement MOA provided the
mechanism for implementing the joint enforcement authority and
under the terms of the MOA, "EPA is lead enforcement agency for
what it views as the most important unpermitted discharge
violationsHowever, the MOA states that "EPA will act as the
lead enforcement agency on all unpermitted discharge violations
..." which meet the criteria listed in Section JII.D. Section
III.D. lists repeat, flagrant violators, where EPA requests a
case or COE recommends that an administrative penalty action may
be warranted. As such, EPA has first refusal. COE may take the
action against the violator once EPA notifies that it will not
take action. However, as reported, we found that the regions
were not taking actions against what they viewed as the most
important unpermitted discharge violations but what the COE
viewed should be referred. We also noted that not all COE
districts were making referrals. Because EPA does not monitor
44
Audit MO. E1HWE0-04-029X
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lapter 3
forcement Program Is Not Controlling And Deterring Illegal Discharges
COE enforcement actions under the MOA and primarily enforces only
against the cases referred by the COE, the regions had no
assurance that they were cognizant of all significant unpermitted
violations within the context of the MOA.
Aaencv Comment
"The draft report's statement...that the 'MOA clearly divided
enforcement lead responsibility for unauthorized discharges
between EPA and [the Corps]' fails to recognize that the HOA
envisions that EPA will have the opportunity to take the
enforcement lead on unpermitted discharge violations falling
within the four listed categories, but that due to staffing
constraints and other factors, the EPA Regions would not be able
to take the lead on all cases falling within these categories and
that the Corps would continue to handle a substantial number of
unpermitted discharge violations."
OIG Evaluation
We recognized the program's staffing limitations and did not
recommend that OW take the lead in all these cases. We did
recommend that CM ensure that all violations subject to EPA's
lead under the enforcement MOA are timely referred by the COE.
The purpose of this, as pointed out in the report, was to
identify all significant violations that will yield the optimum
benefit or deterrence effect from EPA's limited enforcement
resources. Being able to pick-and-choose enforcement cases from
the entire population subject to EPA's lead would present an
enforcement program that would be more consistent as well as fair
and equitable. As far as the COE handling a substantial number
of unpermitted discharges, we see no problem with this as long as
they are not repeat, flagrant, violations in priority wetlands,
or in some other way "significant" that should be subjected to
EPA's administrative penalty authority.
Aaencv Comment
"As already stated above, it is EPA's position that EPA and the
Corps share Section 404 enforcement authority. Therefore, the
statement at the bottom of page 30 that unpermitted discharge
enforcement 'was, by statute, EPA's responsibility' is wrong.
Moreover, the statement of the Corps' position at the top of page
32 pre-dates the 1989 Enforcement MOA, and is inconsistent with
the Corps' practice over the past 15 years of enforcing against
unpermitted discharges, and with the fact that the courts have
not questioned the Corps' authority to enforce against such
violations."
45
Audit Mo. E1HWEO-04-0291
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Chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
OIG Evaluation
As stated previously, we found no statute that vested joint and
equal enforcement authority for unpermitted discharges to both
the COE and EPA. EPA now states that it is EPA's position that
EPA and COE share Section 404 authority. This contradicts OW's
previous statements that "the statute" vested this joint
authority. We can not conclude that EPA's position takes
precedent over statutory authorities and that the report's
conclusion is wrong. Also, we are unaware of any change in the
COE's position relative to enforcement authority. COE personnel
contacted on September 24, 1991, indicated that its regulations
at 33 CFR 326.2, that state that Section 404 enforcement
authority for unpermitted discharges is vested with the EPA
Administrator, are still effective and have not been changed
since the final rule was published in 1986. Even if the COE's
official position has changed since the 1988 GAO report,
interagency agreements cannot transfer statutory responsibility.
Finally, the COE's practice of enforcing against unpermitted
discharges for the past 15 years is based upon the 1976
enforcement MOA which was later revised in 1989 and is not based
on any statutory responsibility. Therefore, the COE's past
enforcement practices is not inconsistent with the report's
statement that EPA is statutorily responsible for Section 404
enforcement against unpermitted discharges. We do not challenge
the decision to jointly enforce against unlawful discharges under
the MOA. We only question managements position that the Agency
has no oversight responsibility.
Aaencv Comments
"The Office of Water agrees that some of the Regions could be
focusing more effort on attempting to negotiate field level
Enforcement MOAs with their respective corps districts."
OIG Evaluation
Considering the apparent benefit derived from the one field level
MOA negotiated to date, especially the significant increase in
COE referrals, additional agreements with other COE divisions or
districts would not only increase MOA compliance but provide more
stability and consistency to the overall enforcement program.
EPA SECTION 404 ENFORCEMENT ACTIONS DID NOT COMPLY WITH AGENCY
POLICY AND EFFECTIVELY DETER VIOLATIONS
The EPA enforcement actions against illegal Section 404
46 Audit NO. B1HWE0-04-029X
-------
t
hapter 3
forcement Program Is Not Controlling And Deterring Illegal Discharges
discharges were reactive and generally failed to comply with
interagency agreements and EPA's enforcement policy.
Specifically, the three regions included in our review did not:
(1) design enforcement programs to fulfill agency objectives and
comply with the enforcement MOA and EPA policy; (2) actively
enforce against solid waste wetland discharges under an MOA with
the COE; (3) follow-up on violator corrective actions to ensure
compliance with consent agreements; and (4) use available
resources to increase effectiveness of the enforcement program
through detection of Section 404 violations. Again, national
program managers provided very little definitive guidance and
direction. These deficiencies were directly attributable to
insufficient national program direction/guidance and regional
resources to properly implement the enforcement activity. As a
result, the regions' Section 404 enforcement programs did not
adequately accomplish the Agency's enforcement objectives, did
not comply with interagency agreements and EPA's enforcement
policy, and did not deter future violations.
Background
The 1988 Agency Operating Guidance instructed regions to focus
and intensify their Section 404 enforcement efforts on
unauthorized discharges in priority wetlands and to ensure that
significant violators were swiftly returned to compliance and
formal enforcement actions were taken against them. A
"significant violator" required an enforcement response. A
"significant violation" could represent an illegal discharge into
a wetland or other waters of the United States that: (1) was
included on a region's priority list; (2) would jeopardize the
habitat of an endangered species; (3) was specified under an
advanced identification as unsuitable for disposal; (4) was
included as part of an enforcement initiative to achieve broader
compliance through deterrence; (5) was performed by a person with
prior knowledge of Section 404 requirements; and/or (6) would
result in significant individual or cumulative adverse impacts on
regulated wetlands. For 1989 and 1990, the Agency Operating
Guidance continued to emphasize enforcement for priority
wetlands, but did not instruct the regions to focus on
"significant" violators. Instead, the regions were expected to
coordinate the specifics of enforcement actions with individual
COE districts under the MOA. In addition, regions were expected
to apply administrative penalties where warranted and consider
the use of criminal action against repeat violators. The regions
were told to strengthen the surveillance and monitoring component
of the enforcement program through their activities and
utilization of information and data from the COE and other
resource agencies.
47
Audit NO. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
Through omission, the 1989 and 1990 Agency Operating Guidance
left it up to each region to determine the types of enforcement
actions or areas to emphasize in its enforcement program.
However, the criteria for determining the lead enforcement agency
under the 1989 enforcement MOA provided for COE referrals of
violations similar to those defined as "significant violations1'
in the 1988 Agency Operating Guidance. Therefore, national
program emphasis on enforcement did not actually change from 1988
to 1990.
a. Regions' Enforcement Programs Reactive Rather Than Proactive
Without national program direction and measurable regional
commitments, the regions did not implement their enforcement
programs as an integral part of overall EPA and COE enforcement
to fulfill Agency objectives. Instead, the regions established
their own enforcement agendas which lead to programs with varied
emphases and less effective than that implied in the Agency
Operating Guidance. This occurred because OW did not provide
detailed guidance to the regions on accomplishing the enforcement
objectives identified in the Agency Operating Guidance. Also,
while the OW tracked statistics on enforcement actions taken
against significant violators (SPMS/STARS), OW did not use the
system to negotiate measurable commitments against which regional
enforcement performance could be evaluated. As a result,
comprehensive regional enforcement programs which deterred
illegal discharges and, where possible, remedied environmental
damage, were not accomplished.
Lacking national direction, Regions 4, 6, and 7 took different
approaches toward Section 404 enforcement. Region 7 ranked
enforcement as a low priority completing only two administrative
orders and referring only two violations to the Department of
Justice (DOJ) for civil action during our three-year audit
period. Region 4 and 6 had more active enforcement programs;
however, their enforcement actions primarily represented staff
reactions to violations detected and referred by COE under the
MOA.
Contrary to national program emphasis in the Agency Operating
Guidance, Region 7 expended over 60 percent of its program
resources on Section 404 public outreach strategic initiatives
and discounted the benefits of other program objectives,
including enforcement. However, based on a review of Region 7
records and interviews of COE district personnel, there were
illegal discharges occurring that should have been enforced by
Region 7 under the MOA, but were not. One primary COE district
48
Audit No. E1HWE0-04-0291
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E
'hapter 3
forcement Program Is Not Controlling And Deterring Illegal Discharges
informed us that they had stopped referring violations to Region
7 because of regional inaction on the referrals. The Region's
permit documentation showed a significant number of "after-the-
fact" permits issued. (After-the-fact permits were issued by the
COE to legalize an unauthorized discharge made without a Section
404 permit.) One COE district in Region 7 had a 20 percent
after-the-fact permit rate. Also, of the 68 permit applications
Region 7 identified as significant illegal fills in its permit
public notice database, 33 (49 percent) were for after-the-fact
permits.
While issuing after-the-fact permits does not necessarily mean
that a formal enforcement action should have been taken, the
number of after-the-fact permits issued was an indicator that
significant violations could exist and continued undeterred.
Some of these violations may have been repeat or flagrant
violations in priority wetlands which would qualify for an EPA
lead under the MOA. We were unable to identify all qualified
cases because Region 7 did not have a case tracking system to
monitor COE enforcement actions. However, with the number of
wetland discharges that were apparently occurring outside the
regulatory process, Region 7 should have taken a more active
enforcement role.
Regions 4 and 6 had more aggressive enforcement programs than
Region 7, but their enforcement approach was reactive not
proactive. The two regions screened referrals made by COE
districts and primarily addressed those cases for which COE
recommended penalties under Section 309(g) and solid waste
discharges or land clearing activities which the COE refused to
regulate under Section 404.4 The regions also reviewed notices
of enforcement action (violation letters) when submitted by COE
districts, direct complaints from the public, and potential
violations identified during EPA field trips for additional EPA
enforcement cases. On a limited basis, the regions also
requested the enforcement lead for unauthorized discharge
violations involving repeat or flagrant violators or minor
violations which came to their attention during these reviews.
However, the regions' actions were not the result of direct
enforcement planning and monitoring of COE enforcement decisions,
but a reaction to violations referred to the regions at the
discretion of the COE districts.
4 In July 1990, COE issued a Regulatory Guidance Letter on
land clearing under which COE Districts were to regulate these
activities.
49
Audit MO. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Mot Controlling And Deterring Illegal Discharges
By limiting their enforcement approach, the regions ignored the
real possibility that continual oversight and analysis of EPA and
COE enforcement initiatives might bring by identifying the types,
location, and frequencies of violations. Without formal planning
and program design, regional enforcement programs that deter and
reduce future violations and, where possible, remedy
environmental damage were not a reality and the number of
reported violations continued to grow. During our audit period,
reported Section 404 violations steadily increased and, as a
result, COE's backlog of reported violations increased. At the
end of FY 1990, COE documentation showed a backlog of 5,940
reported violations as opposed to the 4,482 case backlog at the
end of FY 1987, a 32.5 percent increase.
COE BACKLOG OF REPORTED SECTION 404
ENFoftCEIvteNT VIOLATORS
b. Regions' Enforcement Actions Were Not Effective
Based on our review of Section 404 enforcement programs and 39
enforcement actions in Regions 4, 6, and 7, the regions* did not
establish the necessary controls to implement a consistent
enforcement program against illegal Section 404 discharges in
accordance with the Agency's General Enforcement Policy and the
Enforcement MOA. Instead, regions developed their own
enforcement programs based on broad headquarters guidance and
little knowledge of the overall enforcement problem. As a
result, regional enforcement emphasis and results varied and
generally were not effective as a deterrent to future violations
and, therefore, protective of vulnerable wetlands.
Regional Enforcement Approach Inconsistent with MOA - Regions did
not implement proper controls (i.e., COE oversight) to ensure
50 Audit No. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
that EPA's basic enforcement responsibilities under the MOA were
fulfilled. As a result, the regions were not assuring consistent
and stringent enforcement against all repeat and flagrant
violations as established under the MOA.
Not only were the regions not actively identifying cases which
qualified for more stringent EPA enforcement under the MOA, but
were remanding back to COE cases referred for EPA action.
Because of lack of resources. Region 4 was forced to screen and
prioritize COE referrals pursuing only the worst violations and
remanding the remainder to the COE. For example, as a result of
a field level enforcement MOA, Region 4 staff estimated5 they
were receiving about 16 enforcement referrals per month from the
Jacksonville (Florida) COE district. However, resource
limitations permitted regional action on only 3 to 4 of the 16
referrals. The remaining cases were remanded back to the COE
district for action.
Region 4 personnel informed us that their COE districts feared
that EPA's returning cases to the COE would undermine district
enforcement because COE management would conclude that a case
must be weak if EPA elected not to take the lead. However, the
Region rationalized that COE actions on these illegal discharges
were more than EPA could accomplish with its limited resources.
Region 7 was also receiving COE referrals and taking no formal
action because of the Region's low priority for Section 404
enforcement. During the previous 12 months, Regional staff
estimated that the Region had received 25 COE referrals under the
MOA described by staff as problem cases. Most of the cases were
returned to the applicable COE districts for action. Region 7
had not issued any penalty orders as of June 1991.
Region 6 staff estimated that the Region received an average of
18 COE referrals annually. During our audit period, Region 6
returned two enforcement referrals to the COE for action. Our
follow-up on the two referral cases returned to the COE by Region
6 disclosed that the COE district took minimal or no action on
the cases. One violator was provided an after-the-fact permit
without any mitigation. The other case was still unresolved 24
months after it was referred to Region 6 and 49 months after the
violation was first reported to the COE.
s Regional estimates of COE enforcement referrals were used
because the regions maintained no referral log or other controls
to track receipt and actions on referrals.
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Audit NO. E1HWE0-04-0291
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Chapter 3
Enforcement Program Is Not Controlling And Deterring Illegal Discharges
One regional wetlands manager stated that little could be
accomplished by overseeing COE Section 404 enforcement to
identify additional cases subject to EPA lead. He estimated that
he would need three to five additional FTEs to adequately oversee
COE enforcement against unauthorized discharges and to identify
and pursue all those violations subject to referral. Without
adequate regional resources, serious violations requiring
administrative penalties or judicial action will continue to be
returned to the COE without EPA action. In addition, returning
cases qualified for EPA lead under the MOA without enforcement
action could discourage COE efforts and continue to display an
inconsistent enforcement approach to significant illegal
discharges. This condition existed in all three regions and will
continue to get worse as COE referrals increase.
Regional Programs Did Not Support Agency Policy - Regional civil
and criminal judicial referrals and administrative actions,
including penalty orders, did not always accomplish enforcement
program objectives. Civil and criminal actions have been
untimely with unnecessary delays in settlement. In addition,
administrative penalty orders (AOs with penalties) have had
little effect as a deterrent to future violations because
economic benefits attained by violators were not completely
eradicated by the enforcement action. In addition, case
resolution was usually slow, untimely, and did not necessarily
represent fair and equitable treatment of the regulated public.
General Enforcement Policy, GM-21, dated February 1984, governed
EPA's enforcement of illegal Section 404 discharges. The policy
established enforcement objectives for the: (1) fair and
equitable treatment of the regulated public; (2) swift resolution
of environmental problems; and (3) deterrence against future
violations. For the fair and equitable treatment of the
regulated public, the Agency's enforcement policy supported
consistent and flexible penalties. The consistent application of
the penalties was critical to preclude litigation and ensure
quick resolution of environmental problems. To achieve
deterrence, the EPA's General Enforcement Policy stated that both
the violator and the public must be convinced that Section 404
enforcement will place the violator in a worse position than
those who have complied. Permitting a violator to benefit from
noncompliance places those who have complied at a regulatory
disadvantage, thereby, creating a disincentive for compliance.
Under Section 309, anyone in violation of the Section 404 dredge
and fill provisions were subject to civil or criminal action, or
both and, as of February 1987, violators could be assessed
administrative penalties (up to $125,000) by EPA under Section
309(g) of the CWA in lieu of civil/judicial action.
52
Audit Mo. E1HWE0-04-
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tapter 3
iforcement Program Is Not controlling And Deterring Illegal Discharges
EPA enforcement activity prior to 1988 and for 1988 through 1990
(our audit period) for the three regions included in our review
is presented below:
Pre-1988Actions
1988-1990Actions
Region
AOs w/ Civil/Criminal
AOs Penalties Referrals
AOs w/
AOs Penalties
Referrals Under
Civil Criminal Invest.
4 1/8
6 21 3
7 0
0
0
0
2
2
0
49
20
2
12
6
0
3
5
2
2
2
0
9
22
9
1/ Region 4's enforcement activity increased dramatically subsequent
to our pilot audit of the Region '$ Section 404 program.
21 Region 6's wetlands data base listed 101 enforcement records;
however, 52 records represented support for COB enforcement
actions such as site visits, consultation with COE, etc. Only
49 actions represented direct EPA enforcement activities including
22 cases stiU under investigation.
Region 7's FY 1988 Self Evaluation Report recognized past Section
404 enforcement deficiencies and pledged a renewed enforcement
emphasis with six significant violations under investigation.
However, all six cases were closed by June 1990 because they had
become "too stale" to pursue. Staff at one major COE district in
Region 7 informed us that they no longer referred violations to
Region 7 because of the region's history of inaction. The
district had previously referred cases to Region 7, each
involving over 200 acres of wetlands that were cleared and
filled, that languished at the Region with no action. As shown
above, the Region had nine cases under investigation at the time
of our audit; however, on January 16, 1991, the Region could not
assure us that the nine proposed administrative actions would be
processed. The national program office had not been informed of
any enforcement actions pending at Region 7.
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The current enforcement activity in Regions 4 and 6 represent a
significant increase over prior years. However, without specific
knowledge of COE enforcement activity in each region and,
therefore, the ability to assess the overall enforcement problem,
the adequacy of this level of performance cannot be determined.
In addition, the quality of the reported enforcement
accomplishments often did not fulfill the objectives of EPA's
General Enforcement Policy. The regions generally avoided civil
and criminal actions and related penalties for Section 404
violators because of past DOJ disinterest in prosecuting these
cases. Region 4's past civil actions under Section 309 of the
CWA took years to prosecute and resulted in little benefit to the
Federal government. The two civil cases Region 4 initiated prior
to 1988, took nine and ten years to close. While all three
regions have had more recent civil and criminal experiences, the
cases still required significant regional resources and national
program commitment to obtain prosecution.
Once a case was recommended for judicial action, the Section 404
enforcement staff only provided support to EPA's Criminal
Enforcement/General Counsel staffs and/or the DOJ. Of the two
criminal referrals we reviewed in Region 6, one was processed
relatively fast - 18 months from violation discovery in May 1989;
to guilty verdict in October 1990. However, the second Region 6
criminal referral was still under review 35 months after
discovery in February 1988.
Because of the significant resources, delays, and Agency
commitment involved in civil and criminal actions, the regions
preferred to use administrative remedies, including EPA's
administrative penalty authority, to resolve the majority of
unpermitted discharge violations and related environmental
problems. However, administrative enforcement was also
inconsistent and sometimes controversial because EPA required
some significant violators to restore wetlands and pay penalties
while others went unpunished for similar acts due to alternative
COE actions such as after-the-fact permits or partial restoration
without penalty.
For example, most of the 15 Region 4 administrative actions
(issued between March 1985 and February 1988) we reviewed during
the pilot audit recommended full restoration. However, the
Region usually settled for much less. Of the 15 administrative
orders reviewed, five were essentially dropped (one violator
voluntarily restored wetland area), four were resolved through
consent orders, and six were still pending. Penalties were
nonexistent. The first penalty order was issued in February 1989
(two years after EPA was given penalty authority). However,
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administrative actions, including penalty orders, taken
subsequent to our pilot audit in 1988 and 1989 have been much
more aggressive and successful with higher initial penalty
assessments, many at the $125,000 statutory maximum.
Region 6 assessed lower penalties with final settlements
unnecessarily delayed, similar to Region 4's settlements we
reviewed during the pilot audit. For example, COE referred to
Region 6 a repeat violator who ignored after-the-fact permit
conditions and constructed numerous unauthorized channels and
boat slips for a proposed residential development. Region 6
required partial restoration under an administrative order, but
allowed the violator to keep in tack the majority of unauthorized
work. The violator was assessed a "lenient" $9,000 penalty under
a February 1989 order, however, the violator requested an
administrative hearing to contest the penalty which was never
conducted6. The Region 6 penalty order remained outstanding over
two years later. Based on our review, we concluded that
administrative action was not timely, unauthorized wetland
impacts that resulted from permit noncompliance remained with a
penalty outstanding, and the penalty calculation ignored the
economic benefit that accrued to the violator. As a result, the
action did not act as a deterrent by placing the violator in a
worse position than if he had complied.
In another Region 6 case, the COE allowed the violator to apply
for an after-the-fact permit. However, the violator continued to
fill the wetland without a permit and after a COE warning. The
COE subsequently denied the violator a permit and referred the
case to Region 6 for administrative penalty assessment. The COE
referral stated that the violator had accrued economic benefit,
was aware of the Section 404 requirements, and that compensatory
mitigation should be considered because restoration of the
impacted wetland might not be possible. However, Region 6 only
fined the violator $1,850 without any mitigation. According to
file documentation, the violator indicated that the property
needed for previously proposed compensatory mitigation was worth
far more than the fine. The Region thought the penalty was
sufficient to compensate for the environmental loss; however, the
COE did not. The COE personnel sympathized with EPA's resource
constraints, but stated that nominal enforcement undermines the
6 Violator later claimed financial hardship and the
Regional hearing officer put the case on hold. The Region
subsequently attempted to adjust the penalty to $3,500 but the
violator continued to refuse to pay any penalty. After a change
in Regional personnel, the case "fell through the cracks."
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regulatory program and wetland owners may decide to ignore
regulatory requirements and take their chances. In fact, this
same violator was subsequently under investigation for another
illegal discharge. Therefore, this EPA enforcement action failed
to advance the Section 404 regulatory effort and fulfill the
deterrent intent of EPA's general enforcement policy.
EPA's General Enforcement Policy indicates that the purpose of an
administrative penalty is to remove economic benefit and place
the violators in a worse position than if they had complied. The
examples previously cited and other enforcement actions we
reviewed during the audit did not always accomplish this
objective. Neither were the cases timely processed or fair and
equitable because substantial inconsistencies existed from case
to case and region to region. For the two Region 6 examples
above, the COE refused to permit the illegal discharges but the
Region's enforcement actions had the effect of legitimizing the
illegal fills with only minor concessions from the violators.
These actions would not convince the general public to comply
with Section 404 regulatory requirements.
c. Inadequate Enforcement Against Solid Waste Discharges
The national program office did not provide adequate direction to
the regions on how to resolve the environmental impacts of
unauthorized solid waste discharges into regulated wetlands.
Under an 1986 MOA7 with the COE, EPA agreed to take the lead in
permitting solid and semi-solid waste discharges and enforcing
against such unauthorized discharges into wetlands and other
United States waters under its Section 402, National Pollutant
Discharge Elimination System (NPDES) authority. However, our
audit in Regions 4, 6, and 7 disclosed that neither EPA
Headquarters or the regions had developed the procedures needed
to effectively coordinate the enforcement of these Section 404
violations using its Section 402 authority as agreed under the
MOA. As a result, most illegal Section 404 discharges of solid
waste reported to EPA went unenforced.
All three regions received COE referrals involving solid waste
discharges under the subject MOA. The regions* Section 404
programs made attempts to coordinate enforcement through the
Section 402 program but with little success. The regional NPDES
programs primarily regulated, through permits, point source
discharges of liquid wastes into U. S. waters from facilities
7 Regulation of Discharge of Solid Waste Under the CWA.
effective April 23, 1986.
56 Audit NO. E1HWE0-04-
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such as sewage treatment plants. While technically possessing
jurisdiction over the illegal point source discharges of solid
waste (a "pollutant"), the regional NPDES programs have
considered the use of its resources to pursue such wetlands
violations an inefficient use of Section 402 authority.
In one Region 4 case, the Section 402 program would not force the
removal of 47,000 cubic yards of wood chips from a seven acre
wetland because the violation lacked "substance" to warrant a
Section 402 enforcement action. Instead, the NPDES program
proposed to monitor the runoff (a liquid) from the wood chips
into an adjacent creek to assess the effect on water quality.
Meanwhile, seven acres of wetlands that could be restored were
left covered with four feet of wood waste. Subsequent to our
pilot audit, Region 4 successfully had the site cleared during
the owner's ordinary course of business and received the owner's
promise to allow the area to revegetate. The region used an
administrative order citing a Section 301 violation but the order
remained silent regarding its specific authority under Sections
404 or 402. Since the region's NPDES program had refused to
enforce under Section 402 against this illegal discharge and the
MOA with the COE precluded the use of Section 404 enforcement
authority, the violator could have refused to comply and the
Region would have had little recourse.
Solid waste discharges in wetlands is an issue that EPA
Headquarters needs to address. Both Regions 4 and 6 expressed
concern that no specific guidance was provided by 0W on how to
proceed with enforcement against such illegal discharges.
Meanwhile solid waste violations are continuing to be referred to
EPA by the COE with little recourse from the regions (see Chapter
4, page 71 for further details on Section 404 solid waste
discharges).
d. Inadequate Follow-up of Violator Corrective Actions
Regions did not routinely follow-up on consent decrees obtained
as a result of enforcement against Section 404 violations to
ensure that violators complied with corrective actions. Under
the enforcement MOA with the COE, the lead enforcement agency was
to ensure proper monitoring of any remedy, removal, compensatory
mitigation, or other corrective measure required under consent
decrees to determine that violations had been effectively
resolved. However, our file reviews in both Region 4 and 6
showed that follow-up on enforcement actions were not routinely
or effectively accomplished. Region 7 had only two
administrative actions during the audit period. Without
evaluating compliance, Regions 4 and 6 were not assured that
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enforcement actions adequately corrected the environmental damage
or acted as a deterrent to future violations.
In Region 6, the wetlands program staff could provide only
limited information on the status of corrective actions at some
sites. In Region 4 we found indicators of noncompliance as
reported in the pilot audit. Subsequent to the pilot audit,
Region 4 performed some follow-up on prior cases to ascertain
violator compliance. According to Region 4's wetlands staff,
problems were found particularly in the area of compensatory
mitigation where violators did not maintain the sites as required
in the consent decrees. However, Region 4 personnel believed
that further enforcement of these provisions was unlikely because
of the weak wording used in the old consent decrees. In the
future, Region 4 planned to systematically review cases for
compliance and carefully word enforcement conditions in consent
decrees.
Enforcement follow-up is important not only to determine initial
compliance with the administrative order, but to ensure long-term
compliance and success of the mitigative measures. Each region
should have a formal program for routine follow-up on prior
enforcement actions.
e. Detection of Violations Was A Low Regional Priority
The regions included in the audit did not routinely search for
unauthorized dredge and fill activities in regulated wetlands
using available methods such as aerial surveillance. Regions 6
and 7 made no provision for aerial surveillance. Region 4
recognized the need for detection and funded an aerial
surveillance activity. However, the funds were not effectively
used to identify existing or ongoing violations. Regional
managers' reasoned that since their Section 404 enforcement
programs could not handle the current enforcement workload being
generated from COE, FWS, NMFS, State agencies, and the*general
public, the active identification of additional unpermitted
discharges was counter-productive. Regional staff believed that
identifying additional violations would only be beneficial with
enough resources to handle the workload. However, wetlands
personnel agreed that aerial surveillance was the best method for
systematically identifying illegal dredge or fill discharges.
Starting in 1986, Region 4 did set aside contract funds to use
for aerial surveillance ($16,650 in 1988). However, a
coordinated schedule of surveillance flights was never developed
and about 50 percent of the funds allocated to the contracts each
year was not expended. In addition, some of the surveillance
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contract services that were used by the Region appeared to be for
transportation purposes, not surveillance. One Region 4 manager
explained that existing program workloads precluded routine
aerial surveillance by his limited staff. Therefore, Region 4's
plan was to reduce the amount of future extramural funds devoted
to aerial surveillance and attempt to negotiate interagency or
cooperative agreements with other Federal and State agencies for
aerial surveillance of wetlands in coordination with their
flights over priority wetland areas.
The COE previously used aerial surveillance for its Section 404
enforcement program, but in July 1988 the GAO reported (GAO/RCED-
88-110) that the COE had curtailed aerial surveillance due to
budget limitations. Without COE surveillance, the regions had no
alternative method to independently detect Section 404
violations. Both Region 4 and 6 had identified remote wetland
areas where they suspected unauthorized activities were
occurring. But with other enforcement obligations pending, the
coordinators believed they had no time to allocate for
surveillance. Without the advantage of aerial surveillance, the
COE and EPA became dependent on other Federal, State, or local
government entities and the general public to report suspected
violations.
Aaencv Comments On Inadequate EPA Enforcement Actions And PIG
Evaluation
Aaencv Comment
"The draft report fails to credit both Headquarters and the
Regional wetlands programs for the significant growth in wetlands
enforcement, which has been accomplished in a relatively short
timeframe and with a very limited field presence."
"For purposes of clarification, the explanation of after-the-fact
permits...is incomplete and fails to explain that issuance of an
ATF permit is appropriate where the discharge would have received
a Section 404 permit if an application had been submitted prior
to the discharge activity (the discharge complies with the
Section 404(b)(1) guidelines)."
"The draft report misconstrues the purpose and scope of the 1989
Enforcement MOA. It did not envision EPA enforcement against
'all repeat and flagrant violations1.... Nor could it since a
variety of factors must be weighed before EPA - or any Federal
agency - decides whether to exercise the enforcement discretion
provided by Congress. Also, the MOA did not envision that EPA
would accept all cases referred by the Corps for enforcement
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action; in fact, the MOA explicitly provided for those instances
where EPA would not accept referred cases."
"The draft report's assumption...that issuance of administrative
compliance orders (AO) seeking removal of the illegal discharge
and restoration of the wetlands have little deterrent effect
because of a failure to recoup all economic benefit is wrong
since such removal/restoration will generally eliminate any
permanent economic benefit accruing to the violator. Not only
will the violator generally not recoup any economic gain, but
they will have to incur the costs associated with the
removal/restoration required under the AO. Furthermore, this
approach generally yields significant environmental results."
"We disagree with the draft report's conclusion that the Regional
enforcement programs did not support Agency policy. We believe
that the Regions have been complying with the Section 404
administrative penalty policy, which became final in December
1990. Also, the discussion of Regional enforcement activity
fails to acknowledge that the various types of enforcement
responses differ with regard to complexity and the amount of time
needed for successful resolution."
"The discussion about recent enforcement trends in Regions 4 and
6...is especially troubling because all the facts indicate that
these two Regions have made substantial progress in a relatively
short amount of time, and yet the draft report persists in trying
to cast this success in a negative light."
OIG Evaluation
We can only attest to the enforcement actions in regions included
in our audit. The increases in EPA enforcement actions from 1988
to 1990 for these three regions are included in the report. With
the exception of Region 7, there was a noticeable increase in
enforcement activity. However, Region 4 did not start-
concentrating on enforcement actions until after our arrival.
Region 6 claimed 101 enforcement actions over the three-year
period. However, as reported, under half (49) could be
considered enforcement cases with 20 of those currently under
investigation with no orders pending. So while there was an
increase over the period it was far from »significant.» Also,
based on our review, the quality of many actions taken were
questionable. Therefore, the increase in numbers of enforcement
actions did not necessarily equate to a more consistent and
effective enforcement program. Our review of enforcement actions
in the three EPA regions disclosed several deficiencies which are
covered in the report.
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An after-the-fact permit does not excuse the violation before the
permit was issued. We can not interpret what was envisioned by
the 1989 enforcement MOA but must rely on the written provisions
of the MOA which states that EPA will be the lead enforcement
agency against all repeat, flagrant violators, etc. By being the
lead agency, EPA should have the opportunity to enforce against
all repeat, flagrant violators, etc. The statement "...
consistent and flagrant violators ..." does not mean that every
case referred by COE or otherwise coming under its lead will
result in a formal EPA action. What we do state is that EPA
should be made aware or should make itself aware of "significant"
violations. Enforcement is a "discretion" and not all cases
warrant a formal enforcement approach. However, it should not be
so discretionary that significant violators go unpunished.
Enforcement consistency is not only important for its deterrent
effect but for the fair and equitable treatment of the regulated
public. This can be achieved only if the Agency ensures that all
significant violations are evaluated by the lead agency (EPA)
using uniform guidelines.
We recognize that removal and restoration may act as an
appropriate deterrent. However, as reported, we found cases in
Region 4 where full restoration was recommended but settlement
was for much less, dropped, or pending without further action.
The restoration of a degraded area can only be a deterrent and
beneficial if it is done.
From copies provided by regional enforcement coordinators, the
administrative penalty policy has been in draft and used since at
least September 1987. Our review showed a disparity in
enforcement approach between the regions, especially for
administrative penalties. Cases we reviewed and presented in the
report did not always remove economic benefit as a deterrent or
result in swift resolution of environmental problems. We do
acknowledge that various types of enforcement responses differ
with regard to the complexity and the amount of time needed for
successful resolution. However, the approach for implementing
those enforcement responses should not differ from region to
region.
OW states that Regions 4 and 6 have made substantial progress in
their Section 404 enforcement programs in a short period of time.
Again, OW is apparently relying on numbers of actions to evaluate
a region's enforcement program. However, success is relative and
these numbers do not indicate the quality, effectiveness, and
consistency of these actions which would be a better measure of
program effectiveness in meeting enforcement goals. Neither does
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it consider the growing enforcement problem as reported by the
COE. The adequacy of enforcement activity cannot be effectively
evaluated until there is an understanding of the overall
enforcement problem and OW defines what quality enforcement is
through internal program guidance and establishes measurable
commitments designed to accomplish program goals.
Aaencv Comment
••The issues surrounding regulation of solid waste discharges to
wetlands are not enforcement issues per se. but a broader
programmatic problem that merits resolution."
PIG Evaluation
Regulation of illegal solid waste discharges is an enforcement
issue. We agree that regulation of solid waste discharges into
wetlands involves broader issues across multiple programs;
however, the problem persists. The discharge of solid waste (a
pollutant) into waters of the U.S. without complying with the
permitting provisions of either Section 402 or 404 is unlawful
and comes under EPA's jurisdiction. EPA has consistently
maintained that solid waste discharges can be regulated under
404. However, since the COE makes the determination of a
"discharge" for Section 404 under its definition, which excludes
discharges for the purpose of waste disposal, and EPA, under an
MOA, agreed to enforce such discharges as Section 402 violations,
it is incumbent on EPA to ensure that these violations are
enforced and brought under compliance through Section 402, 404,
or any other mechanism available to the Agency. The "broader
programmatic problems" need to be resolved.
Aaencv Comment
"The Office of Water agrees that monitoring compliance with
administrative and judicial consent decrees is important. We
also agree that there is a need for carefully worded conditions
in consent decrees and that the Regions should place as much of
the burden as possible on the violator, as opposed to the Agency.
The failure of the Regions to focus on systematic monitoring of
unpermitted discharges is understandable given that they have
very limited staffs; learn about unpermitted violations from
private citizens, the Corps, and other Federal and state
agencies; and already know about more violations than those
limited staffs are capable of handling. Nevertheless, the
wetlands program agrees that this issue warrants further
examination."
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OIG Evaluation
No evaluation of these comments was necessary since Agency
basically agreed with report's conclusions.
CONCLUSION
EPA did not fulfill its statutory responsibility of ensuring that
appropriate enforcement actions were taken against illegal
discharge of pollutants into wetlands and other waters of the
United States. While we recognize that regional staffing
limitations adversely impacted the number of successful
enforcement actions initiated, the quality of enforcement actions
taken should be constant. We found that standards of quality and
consistency were not maintained in regional enforcement programs
which presented an inequitable, controversial enforcement
approach to the regulated public. The lack of specific national
program direction and measurable regional commitments to Section
404 enforcement also contributed to the regions' inadequate
enforcement implementation and controls to assure achievement of
program objectives.
Effective detection of Section 404 violations and successful
prosecutions and/or sanctions against violators, provide the best
deterrence and protection against future unauthorized discharges
into the wetlands environment. In addition, effective deterrence
can reduce the resources necessary to administer Section 404
enforcement responsibilities by addressing noncompliance before
it occurs. However, to achieve successful deterrence, the
potential wetlands developer must be convinced that any Section
404 violation will subject him to stringent enforcement actions,
including appropriate penalties, and that these actions will
place him in a worse position than those who have complied.
Recognizing that program resource limitations may not be resolved
by the Agency in the near future, it is incumbent upon EPA and
its regions to establish proper controls over both EPA and COE
Section 404 enforcement programs in order to: (1) assess and
resolve interagency enforcement problems; (2) effectively target
Federal enforcement initiatives; and (3) identify those
significant violations that will yield the optimum benefit or
deterrence effect from EPA's limited enforcement resources.
Without a proactive approach toward enforcement through oversight
of COE actions, consistent EPA reactions to its enforcement lead
responsibilities under the MOA, and strategic targeting of
limited enforcement resources, EPA's enforcement authority under
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the CWA will not serve as a successful deterrent to the
unregulated degradation and destruction of the nation's valuable
wetland resource.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Water
promulgate specific Section 404 enforcement guidance, obtain
meaningful regional commitments to enforcement objectives, and
establish adequate controls over regional enforcement activities
to ensure that regions properly implement comprehensive,
strategic enforcement programs that provide consistent,
substantive enforcement actions against illegal wetland
discharges consistent with EPA's enforcement authority and
responsibilities under the CWA. This should include:
- establishment of regional systems to monitor COE
enforcement actions to ensure: (1) COE actions comply
with interagency agreements and accomplish the Agency's
enforcement objectives, (2) all violations subject to EPA's
lead under the enforcement MOA are timely referred by the
COE and controlled and tracked by regional management (i.e.,
referral logs) for proper disposition, and (3)
identification of all substantive violations for EPA
enforcement that would provide maximum effectiveness for the
program's limited enforcement resources.
- assessment of appropriate administrative penalties to
deter future violations, reallocation of available resources
to Section 404 enforcement activities where possible, and
compliance of EPA's enforcement actions with the Agency's
General Enforcement Policy.
- establishment of national wetlands protection strategies
for regional enforcement programs that would provide
comprehensive oversight of the Federal Section 404
enforcement effort to (1) assess and resolve interagency
enforcement issues (through field level MOAs where
possible), (2) effectively target limited Federal
enforcement resources to priority wetlands and significant
violations, (3) identify substantial violations for Agency
enforcement that would provide the maximum deterrent effect
from EPA1s limited staff and program resources, and (4)
provide a consistent and equitable nationwide enforcement
program to the regulated public to include consistent
application of the administrative penalty authority between
regions.
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-requirements for enforcement follow-up and detection
initiatives that would incorporate compliance inspections to
determine violator compliance with the terms of
administrative, civil, and/or criminal actions and aerial
surveillance by EPA or other cooperating agencies to monitor
vulnerable wetland areas for unpermitted discharges.
The significant shortage of regional wetlands staff was reported
in our pilot audit report on Region 4's wetlands program (Audit
Report No. Elh7F8-04—0331-0100208, issued March 23, 1990).
Because of budget restraints over which the Agency has limited
control and because EPA has continued to increase allocations of
its limited resources to the wetlands protection effort, we have
included no recommendations concerning regional wetlands staffing
deficiencies and their effect on the Section 404 enforcement
initiatives. Further details on the wetlands staffing problem
and the Agency's efforts to improve program resources are shown
in the Background section in Chapter 1.
Agency Comments On Recommendations And PIG Evaluation
Agency Comment
"As already noted above, the Office of Water disagrees
with any suggestion that EPA should be monitoring Corps
enforcement actions.
"With regard to the remaining draft recommendations on
enforcement, as stated above, Headquarters has issued several
enforcement guidance documents to the Regions within recent years
and will respond as needed on follow-up issues."
OIG Evaluation
As we have previously stated, we found that statutory
responsibility for enforcement against unpermitted discharges is
vested with EPA and, therefore, it is incumbent upon EPA to
monitor the COE's implementation of its statutory authorities.
In addition, monitoring would produce a more effective EPA
enforcement program by assuring consistent approach for all
significant violations. The Regions would have the opportunity
to review violations received by the COE and make its own
determination of unlawful violations subject to EPA enforcement
lead. This would make EPA the decision-maker, as the Agency with
statutory authority, by allowing it to consistently select cases
that produce the most impact and effective use of its limited
program resources.
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OW offered no specific comments on the remaining recommendations
in Chapter 3.
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CHAPTER 4
SECTION 404 REGULATORY PROGRAM NEEDS BETTER CONTROLS.
GUIDANCE. AND INTERAGENCY COORDINATION TO
PROPERLY FULFILL STATUTORY RESPONSIBILITIES
Regional wetland programs did not: (1) maintain sufficient,
viable data on which to base Section 404 regulatory decisions;
(2) implement consistent, controlled approaches to Section 404
public notice reviews; and (3) properly exercise EPA's statutory
authorities related to jurisdictional determinations and
interagency disputes concerning Section 404 permitting. Limited
program resources restricted the effectiveness of regulatory
actions under the Section 404 program; however, the quality and
consistency of the Section 404 regulatory process could have been
enhanced through improved national and regional program controls
and guidance. National and regional program oversight was
minimal with national management providing only general Section
404 goals and objectives in annual Agency Operating Guidance with
minimum definitive guidance. Because regional regulatory
processes and use of statutpry authorities were inconsistent and
uncontrolled, important program responsibilities were not
effectively administered and regional permit review processes
were sometimes viewed by the COE and regulated public as
unpredictable and ineffective, occasionally placing EPA and COE
in adversarial roles.
BACKGROUND
Historically, regions have been instructed through the annual
Agency Operating Guidance to screen and review proposed Section
404 permits to effectively prevent or modify unacceptable wetland
discharges. During review of proposed permits (through public
notices), regions may make advisory comments to the COE on
proposed permits. Agency Operating Guidance recommended the use
of preapplication consultation with the permitting authority (COE
or delegated State), permit negotiation, and use of
scientifically sound, timely and well documented Section 404(g)
elevations and 404(c) veto ' actions as the national program's
regulatory approach. Regions were instructed to actively address
wetlands losses through the regulatory process and by invoking
Section 404(q) and 404(c) dispute resolution processes on
significant cases. The national program also emphasized the
1 Section 404(q) of the CWA and the MOA gives the EPA
Administrator the authority to elevate, within the COE, COE
district decisions on specific Section 404 permit approvals.
Section 404(c) gives the EPA Administrator the authority to
'•veto" COE permit approvals whenever an unacceptable, adverse
environmental impact is determined by EPA.
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Coordination
proactive use of EPA's jurisdictional and related authorities to
protect wetland areas. The overall program goal was to raise the
level of protection for wetlands, and other special aquatic
sites, by: (1) avoiding losses whenever there was a practicable
alternative; (2) preventing significant degradation; and (3)
achieving no net loss of wetlands and other special aquatic sites
where losses would result from unavoidable wetland discharges.
While the review of COE "dredge or fill" public notices remained
the primary emphasis of regional wetlands programs, national
program management never established measurable regulatory goals
and detailed guidance to ensure uniform and consistent regional
public notice review. Nether did program management obtain
measurable regional commitments to achieve the various objectives
of the public notice review process. Instead, the public notice
review was often driven by the individual initiatives of regional
program management or wetland scientists emphasizing individual
goals and priorities.
Nationally, the COE processed in 1989 approximately 5,400
individual Section 404 permit applications and authorized over
28,000 other dredge or fill actions under various general
permits. According to OWP workload factors for allocation of
regional program resources, 35 percent of Section 404 public
notices issued on proposed individual permits would require a
significant review, estimated at 50 staff hours per public
notice. Another 30 percent of public notices would require minor
reviews estimated at 8 staff hours each. The remaining 35
percent of public notices would require no detail review but a no
comment notification would be submitted to the COE. Based on the
OWP workload factors, the 5,400 proposed permits processed by the
COE in FY 1989 would require over 52 EPA FTEs nationwide to
perform the review of public notices.
Total Staff Total
Permits Bqmes. BOUCS
Significant Permits (35\)
Minor Permits (30%)
1,620
1,890
50
8
12,960
94,500
Other Permit Review Actions 1.890
JL
1.Q9Q
Total
5,400
59
109,350
(52.6 FTEs)
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With only 79.5 FTEs allocated to all elements of regional
programs in FY 1989, this analysis of permit review demonstrates
the severe shortage of wetland program resources, especially
considering other program workloads such as 404(c) actions
estimated to require 2,080 hours each, advanced identifications
consuming 3,160 hours each, and enforcement actions taking 200
hours or more to complete. Therefore, our evaluations of Section
404 public notice reviews performed in Regions 4, 6, and 7
disclosed that the percentage of permits reviewed by the regions
was much less than expected in OWP's workload analysis. Region 4
provided written comments on only 15 percent of the public
notices received while Regions 6 and 7 reviewed and commented on
26 and 23 percent, respectively.
The regional responses to proposed permits also varied reflecting
inconsistent management approaches to permit review. While
Region 6. and 7 placed high emphasis on public notice reviews,
Region 4 expended more staff time on enforcement and strategic
initiatives, in particular advanced identifications. However,
Region 4 took stronger stands on permits its staff found
unnecessary or undesirable.
Program management's ability to adequately assess the needs and
accomplishments of the public notice review process and make
related management decisions depends heavily on the quality of
information available on prior Section 404 permit actions. In
Regions 4, 6, and 7 reliable information on Section 404 program
activities was not properly maintained or given adequate
emphasis.
REGIONS DID NOT ADEQUATELY TRACK. MONITOR. AND REPORT PROGRAM
ACTIVITIES
National and regional program managers could not adequately
assess and measure program performance and program staff could
not maximize the effectiveness of public notice permit reviews
because regions did not maintain standardized, historical Section
404 permit and enforcement (see Chapter 3) data. Although EPA
management formally recognized the need for wetland databases,
neither nationwide nor adequate regional capabilities to
accurately track, monitor and report Section 404 activities have
been developed. Neither did program managers establish adequate
internal controls over existing information systems to ensure
that wetland program events were adequately documented and
recorded in a timely manner. As a result, program management and
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staff did not have access to valuable data essential for
effective direction and control of program operations, and for
making informed and timely decisions.
a. Need For Section 4 04 Management Information System Recognized
But Not Accomplished
Although a comprehensive management information system was
proposed by program management in 1985, for completion in 1987,
little was accomplished toward this goal. Instead, program
managers allowed regions to develop their own individual,
independent systems which resulted in inadequate, incompatible
computer-based systems containing inconsistent, inaccurate, and
incomplete data. Therefore, six years after a wetlands
management information system was proposed, little progress has
been made toward development of a consistent, comprehensive
wetlands information database on either a nationwide or regional
basis.
In the 1985 Draft Wetlands Protection Strategy, the Office of
Federal Activities (OFA) announced that a management information
system for wetlands permit tracking was nearing completion. OFA
recognized that: "Because of the large number of permit requests
and other actions in the Section 404 program, development of a
management information system is essential to assure efficient
program operation." OFA acknowledged a growing need for
comparable information and national statistics on the Section 404
program that could be provided through a uniform computerized
management information system.
OFA's proposed system was to track and monitor pending permit
applications requiring EPA comments, permit applications
previously commented upon but not yet issued, status of all
permit applications and permits which would have impact in areas
identified as priority wetlands, and the amounts of wetlands and
water acreage the Section 404 program had both protected and
permitted for development. The system was to provide program
managers a source for acreage, wetlands types, and specific
geographic locations being consistently impacted by dredge and
fill activities. This information would be used to measure the
program's success in protecting wetlands and maximize the use of
the program's limited resources by concentrating efforts in those
wetland areas most vulnerable to loss.
In the 1986 Agency Operating Guidance, OFA was committed to
provide the software and training needed to install a
computerized management information system in each region during
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FY 1987. However, this system never materialized. We were told
that the Regions were provided the software, but it proved to be
too complex for an effective application. OWP and regional
management told us that, while computerization of wetlands data
was encouraged, no formal guidance had been subsequently issued
or received on establishing a Section 404 management information
system.
Limited reviews of regional wetland information systems
implemented in Regions 4, 6, and 7 disclosed that these systems
did not meet the requirements OFA established for a national
system in 1985. While similarities existed in the types of data
collected in the regional systems, the systems were designed for
individual regional needs without consideration for requirements
of a unified, national Section 404 management information system.
The individual regional databases were not used for control and
management of the Section 404 program but rather as a simple log
to track receipt of the permit notices and to record data at the
conclusion of the process (if available). The primary system
objective was the annual "bean count" needed for reporting under
the Agency's management accountability system (SPMS/STARS or
OWAS) while other needed program information was not obtained.
For example, the 1977 amendments to Section 404 of the CWA added
the requirement for consideration of "cumulative impact" from
wetland discharges which EPA later made a condition of permitting
under the Section 404(b)(1) Guidelines. Cumulative effect was
critical to the public notice review process because wetland
impacts, regardless of size, could collectively alter a wetlands
ecology or function. However, the cumulative effect of past
permitting on wetland ecosystems and potential cumulative impact
of proposed permits while considered by regional staffs in the
permitting process could rarely be supported because neither the
regions nor the COE districts tracked and monitored all wetland
impacts or establish definitive criteria necessary to evaluate
cumulative effect. Evaluating wetland impacts on a permit by
permit basis without assessing cumulative effect contradicts
criteria in EPA's Section 404(b)(1) Guidelines for evaluating the
ultimate impact of proposed wetland discharges and is contrary to
requirements of the CWA to prevent wetland ecosystems from
declining to a point where extreme degradation or elimination
could result.
Without historical COE permitting data or advanced identification
studies, regions had to consider each proposed discharge within a
priority wetland individually rather than address the cumulative
impacts of such discharges. When commenting to the COE on
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proposed Section 404 permits, regions often claimed an
unacceptable adverse environmental impact which would preclude
permit issuance under the Section 404(b)(1) Guidelines.
However, only rarely could regional wetlands staffs successfully
demonstrate to the COE district's satisfaction an adverse
environmental impact, either isolated or cumulative.
Also, Regions 4, 6, and 7 generally ignored wetland impacts from
general permits in their review of specific permit proposals.
Assessing the cumulative effect of general permits is essential,
not only for their environmental impact but because general
permits must be reauthorized every five years under the CWA. In
the reauthorization process, the COE can revoke or modify a
general permit if it determines that the activities authorized
had more than a minimal adverse impact on the environment and,
therefore, would be more appropriately addressed by individual
permits. For the regions to effectively participate in this
reauthorization process, a system for collecting and tracking
general permit activities would be required; however, none of the
regions included in the audit collected or tracked general permit
data.
Currently, the COE has 26 nationwide general permits with
additional general permits authorized at the district level.
During 1990 alone, the COE categorized over 30,000 actions as
qualifying under a nationwide or regional Section 404 general
permit. Actions authorized under general permits could
constitute a significant cumulative impact on region's wetlands
without the benefit of public comment. Therefore, tracking these
activities to measure impact should be a priority. However, as
previously stated, Regions 4, 6, and 7 made no attempt to track
general permit activity. Therefore, the Regions had no means to
evaluate the cumulative environmental impact of these activities
or to estimate future impacts, if reauthorized.
While national program management did not ensure that the Regions
developed comprehensive, consistent information systems to track
and monitor permit and enforcement activity, it encouraged
regions to experiment with the Geographic Information System
(GIS). The GIS provides for the entry, storage, manipulation,
analysis, and display of geographic and other data in a common
area on computerized maps. Regions 4, 6, and 7 were all involved
in GIS projects. With the availability of ample historical data
on activities impacting specific wetland areas, the GIS system
could be very beneficial to the program in visualizing and
analyzing wetland impacts on a watershed basis or identifying
geographical areas showing increased permit activity or
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unauthorized fills needing more regulatory effort or proactive
initiatives. However, the use of the GIS for current wetland
analyses relies totally on accurate, complete historical
information on past wetland inventories and subsequent activities
(individual permits, general permits, 404(f) exemptions,
federally funded projects, and required mitigation) which the
regions have not maintained. While experimentation with the GIS
can be beneficial, OWP should put more immediate emphasis on
developing the management systems necessary to support such a
system and at the same time provide the information program
managers and staff currently need for effective program
operation.
b. Wetland Database Systems Lacked Controls and Contained
Incomplete/Inaccurate Documentation
Section 404 database systems maintained by Regions 4, 6, and 7
contained incomplete, inaccurate, and untimely data. The
regions' failure to include critical program information or to
input the information on a timely basis precluded the effective
use of the systems for program management or the day-to-day
performance of public notice permit reviews.
The primary deficiency in the databases was incomplete records.
For example, the three regional wetlands information systems
provided assigned data fields for tracking individual permit data
related to wetland acreage initially proposed for filling, the
acreage EPA recommended for filling, and the acreage the COE
actually permitted plus any mitigation acreage proposed,
recommended, and permitted. With this information, regional
program management would be able to assess COE's acceptance of
regional recommendations, the ability of EPA through the public
notice review process to impact permitting decisions, and the
amount of mitigation required to offset impacts. However, not
all public notices and resulting permits contained the detailed
acreage information and other data the regions wanted to track.
The form and content of public notices varied by COE district and
some districts were reluctant to provide final decision documents
and copies of COE permits. Therefore, regional database records
routinely contained vacant fields making any analysis of the data
totally unreliable and unusable for the intended purposes.
Also, wetlands information was not always recorded when received,
and a variety of data entry errors were evidenced during our
sample file review. Control over data assimilation and entry was
almost nonexistent. There were no edit checks in the system or
supervisory reviews of data input to prevent or detect data entry
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errors or ensure timely recording of data received. All
information systems, whether computerized or manual, require
adequate controls over recording and assimilating data to ensure
a reliable information base that will be beneficial to and
provide a basis for management analysis and related decisions.
In 1988, GAO reported (Audit Report GAO/RCED-88-110) COE's lack
of definitive data for evaluating the COE's Section 404
regulatory program and recommended that a data system be
developed to provide baseline information on the extent to which
Section 404 permits were protecting or resulting in the filling
of wetlands and otherwise restoring and maintaining the integrity
of the nation's waters. Subsequently, COE developed and
officially approved a computerized Section 404 information system
called the "Regulatory Analysis Management System (RAMS)" which
was designed to provide the baseline permitting information
recommended by GAO. We were told that about 10 COE Districts are
currently using the new system.
The COE's RAMS tracks much of the same information required in
the EPA regional databases and databases maintained by other
Federal resource agencies. The National Marine Fisheries
Service's computerized system has been accumulating permitting
data for coastal states, at least in its Southeast Region, since
1981. Fish and Wildlife Service also tracks permitting data.
However, these systems, like EPA's individual regional systems,
were developed independently and were not designed to be
interactive or compatible.
EPA's wetlands information needs correspond closely with much of
the data being recorded, tracked, and monitored in the systems of
these three agencies. Once the COE fully implements its RAMS
system, the systems data could be down loaded by EPA and the
other resource agencies for use in management of the individual
agency programs. Data sharing could also present the potential
for cost sharing which could reduce the individual program
expenditures of the user agencies.
Aaencv Comments On Inadequate Monitoring And Reporting Of Program
Activities And PIG Evaluation
Aaencv Comment
"Contrary to statements in the draft report, and as explained
below, Headquarters has issued programmatic guidance related to
Regional public notice review. Moreover, the criticism of
Headquarters for not obtaining 'measurable commitments' from the
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Regions is inconsistent with the goals of the STARS system and
the Agency1s current management approach."
OIG Evaluation
The Section 404(b)(1) Guidelines and the mitigation MOA with the
COE mentioned by CM relate to COE technical review and evaluation
of individual permit applications which are not directly relevant
to the findings in this Chapter. The related findings in this
Chapter involve establishing standards of performance for
regional internal permit review processes, regional monitoring
and reporting on public notice reviews, establishing control and
consistency in processing of public notice reviews to ensure the
most significant permit applications receive proper attention and
that comment deadlines and related requirements, as agreed to
with the COE, are met.
Agency Comment
"Statements in the draft report to the effect that the Regions
should be tracking general permit data is misplaced and
unrealistic in light of the fact that most general permit
discharges proceed without any notification to the Corps."
OIG Evaluation
Based on our interviews with COE district personnel and regional
staff, the COE is informed in advance of many general permit
discharges (for Nationwide 26, notification is required). The
COE reviews many other discharges to determine whether the
discharge qualifies under a general permit and so notifies the
general permittee on request. We were told repeatedly by
regional wetland staff that general permits in particular
Nationwide 26 could have significant adverse environmental
impacts and that prior discharges authorized under both
individual and general permits were not routinely considered when
evaluating proposed fills because the information was just not
available to them. The important issue here is not whether
general permits can be effectively tracked, but how can wetland
impacts be clearly evaluated without accurately maintaining
historical information on prior wetland discharges. Accumulating
information on wetland impacts was one of the goals of
establishing a wetlands management information system as
described by EPA's national program office in 1985. However,
although Regional systems provide for tracking impacts in
Regional databases, the systems are not compatible between
regions and the information was not adequately maintained. In
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addition, we mentioned general permits to establish that their
total impact cannot be effectively evaluated, as in the case of
the Nationwide General Permit 26, without having some tracking
mechanism.
Agency Comment
"The draft report's criticism that Regional databases contained
incomplete records is unfair to the extent that the Regions are
generally dependent upon the Corps to provide them with this data
and that, without Corps cooperation, it is unrealistic to expect
the Regions to be able to independently obtain all this data.1*
OIG Evaluation
Regional wetland database systems were established primarily at
the behest of Headquarters program management. If this
information was not available to regions, we can not understand
Headquarters emphasis on collecting such information in 1985 and
requesting that the regions, through SPMS, report wetland impact
information. In addition, our reviews in three regions found
that the COE usually supplied information in individual permit
actions either on the public notice or when requested; however,
we were told that the extent of cooperation depended on the COE
district involved. Regional staffs stated that the overriding
problem was that public notices were not consistent from one COE
district to another. The solution, which would resolve the
Agency's information requirements plus speed up its review of
public notices, would be to reach an agreement with the COE on a
national level for standardized permit information in Section 404
public notices. Information that wetlands staffs indicated was
routinely needed anyway for an accurate assessment of impacts and
for determining compliance with the Section 404(b)(1) Guidelines.
Aaencv Comment
"The Office of Water agrees with the draft report's suggestion
that EPA coordinate with the Corps on database development and
consider using the Corps' computerized information system, known
as the 'Regulatory Analysis Management System' (RAMS), once that
system is fully implemented by the Corps."
OIG Evaluation
The time to coordinate the sharing of database information is
during system development and implementation not once the system
is completely designed and implemented. Getting the necessary
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changes that may be required to enable EPA to use COE's RAMS data
collection once fully implemented could be difficult.
REGIONS DID NOT IMPLEMENT CONSISTENT/CONTROLLED PUBLIC NOTICE
REVIEW PROCESSES
The Agency's program objective of assuring that COE districts
administered their Section 404 permitting activities in
compliance with Section 404(b)(1) Guidelines was inadequately
planned and controlled by regional staffs. While review of COE
"dredge or fill" public notices received primary regional
emphasis, neither the national program nor Regions 4, 6, or 7
established a formal implementation plan for the public notice
review program element with detailed operating guidance to ensure
a uniform and consistent public notice review process. Instead,
regional public notice review processes were driven by
individual initiatives of regional wetland scientists and program
management, emphasizing individual goals and priorities. Without
an overall strategy and management direction, regional permit
review results, approaches, and recommendations were inconsistent
and sometimes contradictory. Consequently, EPA's regional permit
review process became viewed by the COE and regulated public as
unpredictable and ineffective.
a. No Formal Policies/Procedures for Public Notice Reviews
No formal system or process existed in any region visited for
prioritizing permit public notices received to assure that the
most significant projects, considering both size and functional
value, were selected for review. In addition, none of the
regions we visited had established regional guidance for the
public notice review process or developed a list of regional
wetlands prioritized by value and vulnerability (see Chapter 5),
as recommended by national program management, to be used in
selecting proposed projects for review. Instead, regional staffs
were left to determine what to review and what should receive
official comment.
Lacking defined policies, procedures, and priorities, wetlands
scientists were allowed to plan and implement their own wetlands
protection efforts. Decisions to review a permit, make a site
visit, coordinate with other agencies, provide written comment
with recommendations to the COE, initiate a 404(q) action, or
make a 404(c) determination, were all initiated at the wetland
scientist level.
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In Region 6, certain permit review "guidelines" were written, but
were limited to oil and gas exploration and the guidelines were
never formally approved by regional management. Region 6 also
prepared a public notice review checklist, but the checklist was
not widely used except as a training document and was considered
too time consuming by program staff. Regions 4 and 7 provided no
formal internal guidance other than a general classification
system for categorizing public notices by size but with no
consideration of wetland functions and values. Guidance on when
to implement the 404(q) dispute resolution process or the 404(c)
permit veto process was also informal. The Agency Operating
Guidance only provided that the regions "may" use these
authorities for "significant" cases. Overall, detailed operating
guidance designed to assist regional staff in performing a
consistent and effective public notice review and achieve program
objectives was nonexistent. Therefore, the effectiveness of a
region's oversight of COE implementation of Section 404(b)(1)
Guidelines in its permit program depended entirely on the
dedication of individual permit reviewers. Occasionally, this
resulted in scientists or regional program management talcing
positions on Section 404 permits that were not subsequently
supported by upper management. This situation wasted resources
and projected an unpredictable program image to the COE and
regulated public.
For example, in a COE beach renourishment project, Region 4
expended significant resources in an attempt to reduce the
proposed project's environmental impact. The project involved
pumping 980,000 cubic yards of sandy material from offshore to
expand the existing 1.45 mile beach 250 feet waterward (part of a
23.6 mile long Federally sponsored project). Region 4's
immediate environmental concern was for elevated levels of
turbidity on near shore water quality and coral patch reefs,
possible siltation and mechanical damage to offshore coral reefs,
and burial of several acres of limestone outcrops at tfite
shoreline (outcrops which provided habitat for juvenile fish and
recreational areas for divers). The Region's long-term concern
was for the precedent of this permit and the cumulative effect of
the future parts of this project, which if approved as designed,
would eventually destroy 147 acres of limestone outcrops along
the 23.6 miles of shoreline. Region 4 did not object to COE
rebuilding the beach but did object to the size of the COE
project as originally designed.
File reviews and interviews of Region 4 wetlands staff
established that significant staff and travel resources were
spent studying the project and attending meetings over a nine-
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month period, in addition, Region 4 spent $12,000 in extramural
funds evaluating long-term shoreline changes to support its major
contention that the COE had designed a project much bigger than
needed to replenish past beach erosion. When the COE decided
over the Region's objections to issue the permit, Region 4
requested COE elevation of the decision under Section 404(q)
citing M... an environmental issue of national importance", only
to have regional management later acquiesce to the COE's original
permit decision with minor modifications.
In this case and others, the regional wetland scientists and
programs lost credibility with the COE and other resource
agencies as a result of regional indecision or inaction. During
interviews at various COE districts and with FWS and NMFS
personnel, we received repeated complaints about EPA's
inconsistent approach to Section 404 dredge and fill projects.
The COE district and resource agency staffs identified Section
404 permits that EPA regions would adamantly oppose while other
similar projects would go apparently unnoticed. In Region 7, one
resource agency complained that quite often it would consider a
proposed project significant enough to comment, often
recommending denial, only to find out later that Region 7 did not
provide any objection. For example, a proposed conversion of an
existing 35-40 acre wetland into a recreational lake was opposed
by FWS because the Agency considered the existing wetlands to be
valuable. Region 7 ranked it a "major" project with high
environmental risk, however, staff did not submit any comments or
recommendations to the COE. Region 7 rarely made site visits as
part of its Section 404 public notice, permit review. Both the
COE and FWS personnel stated that EPA could not assess or
comprehend wetland values without making site visits. Also, in
all three Regions audited, there were many instances where the
regions steadfastly recommended permit denial to the COE only for
the permit to be issued over EPA's objection without the regions
invoking either the Section 404(q) dispute resolution process or
the Section 404(c) permit veto process. If a case was considered
significant enough by regional staff to expend the time and
resources to support a recommendation for permit denial then
EPA's dispute resolution authorities should have been pursued.
Otherwise, the resources expended were wasted. The failure of
the regions to present consistent positions on proposed permits
and then defend their positions apparently confused resource
agencies and the regulated public as to EPA's official wetlands
policy.
For example, our review of 354 Section 404 public notices
received by Region 4 during our pilot audit period disclosed that
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the Region issued comment letters on 55 (15 percent) of these
public notices. The Region recommended absolute permit denial in
25 cases (45 percent of comment letters), denial without project
modifications in 17 cases (31 percent), and project modifications
only in 13 cases (24 percent). Of the 25 denial recommendations,
the COE issued permits over Region 4's recommendations for
absolute denial in 11 instances, rejected 9 permit applications,
and 5 permit applications were withdrawn. No Section 404(q) and
Section 404(c) actions were initiated by the Region concerning
any of these projects.
b. Public Notice Review Process Not Supervised
Supervisory involvement in the public notice review process
usually did not begin until a comment letter on a proposed permit
was prepared by program staff for review. No routine oversight
of staff work existed at other critical decision stages in the
review process. For example, no documented evidence was found
of: (1) management oversight of public notice/site selection for
review and comment; (2) instructions for follow-up to assure
regional comments were adequately considered by the COE; or (3)
documentation of decisions to allow the COE to issue a permits
over regional objections without invoking the Agency's 404(q) or
404(c) authorities. In addition, there were no standardized file
documentation requirements for public notice reviews. Official
files varied not only between regions but between individual
reviewers. No basic requirements existed as to what should be
included in the public notice review file before it was
considered complete. Therefore, management had no documentation
to support many of the decisions made by individual staff members
or to evaluate program performance. From our file reviews, we
could not always determine what decisions were made during the
public notice review process or how regions arrived at their
decisions.
Aaencv Comments On Deficient Regional Public Notice Review
Processes And PIG Evaluation
Aaencv Comment
"The draft report's conclusion that there is a lack of
programmatic guidance on regional public notice review ignores
the fact that such review is guided by the principles set forth
in the Section 404(b)(1) Guidelines themselves. It also fails to
mention the EPA/Army Mitigation MOA, which was finalized in
February 1990 and provides a procedural framework for regarding
the level of mitigation needed to demonstrate compliance with the
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Guidelines. Moreover, Headquarters has established a Section 404
regulatory training course for Regional staff which addresses
Guidelines interpretation and related permit review issues."
PIG Evaluation
Section 404(b) (1) Guidelines and the mitigation MOA with COE are
basic to the evaluation of Section 404 permit applications.
However, their existence is unrelated to the finding which is the
regional internal public notice review processes. The finding
relates to the need for national guidance and controls in the
regional permit review process to ensure consistent use of
available authorities, proper review of significant permits,
compliance with MOA requirements on permit comments, followup on
recommended denials, etc. A staff training course would be a
good addition, but it alone will not correct the deficiencies
pointed out in this Chapter.
Aaencv Comment
"The Office of Water strongly disagrees with the draft report's
conclusion that Regions should be invoking Section 404(q) in
every case where a Regional recommendation of permit denial is
not accepted by the Corps. As explained below, such a conclusion
is indicative of a lack of understanding of the appropriate role
of Section 404(q) in the Section 404 permit review process and of
the resource-intensive nature of these actions."
OIG Evaluation
Regional staff explained to us the resource-intensive nature of a
404 (q) action. The report does not emphatically require the
invocation of Section 404 (q) each time a recommendation for
permit denial is not accepted by the COE. The report basically
states that EPA should not be routinely recommending permit
denial if it is not serious in its convictions that a significant
adverse environmental impact will result from a Section 404
discharge. At a minimum, denial recommendations should comply
with the requirements of the 404 (q) MOA so there is no question
as to EPA's resolve. We found examples of comment letters where
permit denial was recommended by a region based on substantial
environmental harm but the comment letters had inappropriate
signatures or were filed late. Other permit denial
recommendations complied with the 404 (q) MOA but with no apparent
follow-up. We concluded from our review that recommendations for
permit denial without the serious intent to invoke dispute
resolution or failing to comply with 404(q) requirements sends a
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message to the COE that the Agency either lacks resolve or
support for its position which ultimately wastes EPA and COE
resources with little benefit to the permitting process. It also
presents an unpredictable regulatory approach to the COE who may
not be able to distinguish when EPA is serious and when its not.
Therefore, cooperation in acceptance of EPA's permit
recommendations may be degraded. The report concludes that if
EPA only summits serious recommendations for denial, then a
404(q) would be invoked in every case and the COE would be aware
that rejection of EPA recommendations would be backed up with
404(g) or 404(c) actions.
INTERAGENCY DISPUTE RESOLUTION AUTHORITIES UNDER SECTION 404
RARELY USED BY REGIONS
Regions 4, 6, and 7 did not consistently and effectively exercise
authorities granted EPA under the Section 404((q) MOA2 with the
COE and provided under Section 404(c) of the CWA to resolve
disputes and override COE permit decisions where wetland losses
could be avoided, or reduced. Although the COE districts did
issue Section 404 "dredge and fill" permits over the objection of
EPA and other resource agencies, the regions generally elected
not to invoke their Section 404(q) authority to elevate the
permitting decision. Neither did the Regions initiate Section
404(c) determination actions in applicable cases to prevent or
restrict the proposed discharge. The regions were reluctant to
initiate Section 404(q) actions because, historically, these
actions had provided little benefit to the Agency and Section
404(c) actions because of the tremendous administrative process,
staff time, cost, and documentation required to support such
actions3. As a result, wetland areas were degraded or destroyed
through COE permitting contrary to the regional recommendations
to deny permits or modify "dredge and fill" projects. Because of
the regional reluctance to use Section 404(q) and Section 404(c)
authorities to support their permit recommendations, EPA's public
notice review process lost credibility and had little influence
on COE permitting decisions.
2 MOA, Elevating Permitting Decisions Within the COE under
Section 404(a) of the CWA. effective November 12, 1985.
3 Administrative processes required for Section 404(q) and
404(c) actions are describe in detail in Appendix V.
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Background
The objective for the Section 404 public notice review, as stated
in the Agency Operating Guidance, was to actively screen and
review proposed Section 404 permit applications, and COE civil
works projects and associated environmental assessment documents
to effectively prevent or modify unacceptable discharges.
Resolution of environmental concerns would be addressed initially
through preapplication consultation with the COE or applicant, or
through subsequent negotiation during the public notice review
process. When necessary, regions were expected to resolve
significant environmental problems through the dispute resolution
process outlined in the Section 404(q) MOA between COE and EPA or
use EPA's Section 404(c) authority to "override" COE permit
authority and prohibit or restrict the use of a wetland site for
discharge of dredged or fill material.
From the signing of 404(q) MOA in 1985 and the promulgation of
the Section 404(c) regulations in 1979, EPA has requested only 27
404(q) elevations and completed only 11 404(c) actions on an
estimated 150,000 permit applications received through January
1991. Although encouraged by national program management to use
404(q) elevations and 404(c) vetoes to prohibit or restrict
discharges causing significant environmental problems, our review
disclosed that Region 7 had never used these authorities and
Region 6 completed only one 404(c) action under court order in
1985 and used 404(q) elevation in one other case. Since 1984,
Region 4 has used Section 404(q) nine times and completed four
404(c) actions, section 404(q) elevations and 404(c) actions
were internally difficult to process because of stringent MOA
requirements and 404(q) actions rarely resulted in the COE
division overturning the district's decision. Therefore, Section
404(q) and 404(c) actions were not consistently used by the
regions. During FYs 1988 through 1990, Regions 4, 6, and 7
reported a total of 215 significant cases where the COE issued
permits over EPA recommendations for denial or substantial permit
modifications; however, Regions 4 and 6 only used 404(q)
authority four times and 404(c) authority once during the same
period.
a. Controls Needed to Ensure Follow-up on COE Permit Decisions
and Comment Letter Compliance With 404 fen Requirements
Regions had no formal requirements to follow-up on public notice
comments or recommendations to determine COE's permit decision
and regional comment letters on COE public notices usually did
not meet the 404(q) MOA's timeliness and signature requirements.
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To qualify for elevation under the EPA and COE 404(q) MOA, the
regions' comment letters must have been received by the COE
district within the comment period as established in the public
notice. Also, the letters must be signed by the Regional
Administrator or his designee (no less than a division director).
Our reviews in Regions 4, 6, and 7 indicated that program
management needed to establish adequate controls over public
notice review comments to the COE to ensure that appropriate
signatures were obtained, comment deadlines were met, or
extension requests were processed in accordance with requirements
in the Section 404(q) MOA. Also, controls were needed to ensure
that regions followed up on comments letters, especially where
permit denial was recommended, to document the COE's permit
decision so that 404(q) and 404(c) actions can be initiated when
appropriate.
Very few comment letters we reviewed qualified under the
signature requirement and the letters were sometimes provided
late. For example, in Region 7, the Regional Administrator had
not delegated his signature authority. All the comment letters
we reviewed were signed by the Section Chief and approximately 50
percent of those were not issued within the comment period. By
not adhering to the MOA requirements, the Regions were precluded
from exercising dispute resolution under 404(q). Even though
signature authority in Region 4 and 6 was at the division
director level, routinely obtaining signatures at this level was
impractical and many comment letters went out under inappropriate
signatures. In Region 6, we were told that the Division Director
would not sign a comment letter concerning less than 5 acres of
wetlands. Over half of the Region 6 public notices receiving
comment did not have the required signature even though notices
receiving comment were described as significant. Region 6
reported 63 instances in SPMS/STARS over FYs 1988 through 1990
where the COE issued permits over the Region's recommendation for
denial or permit modification.
Timely comments and extension requests with appropriate
signatures are critical because under the Section 404(q) MOA
EPA's Assistant Administrator for Water cannot make a 404(q)
referral (elevation) to the Assistant Secretary of the Army for
Civil Works if the initial comments do not comply with the MOA.
If Regions were commenting primarily on projects considered
significant by size and/or adverse environmental effect then
elevation rights under the MOA should be protected through proper
signatures and a timely response.
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EPA's 404(g) MOA requirements were more stringent than those
imposed by COE on the other resource agencies. Qualifying
signatures for the FWS were at the section chief level. EPA's
signature requirements made it difficult, at best, for regional
staffs to get elevation letters to the COE within normal public
notice timeframes. Since the 404(q) dispute resolution process
must be initiated at the Assistant Administrator level (see
Appendix V), there is no reason to have the comment letter
qualifications set higher for EPA than the other Federal resource
agencies. During regional file reviews, we noted where COE
Districts routinely identified whether resource agency comment
letters were in compliance with the MOA and documentation
indicated that letters not in compliance may not be given the
same consideration as those that complied.
None of the regions included in the audit systematically followed
up on permit comment letters to ascertain COE's final decision on
the permit. As a result, we found that the regions did not
always have knowledge or documentation of COE permitting even
when the regions recommended permit denial. For example, Region
6 could not document final action in 10 of 16 public notices they
commented on during the audit period. Since, under the 404(q)
MOA, COE districts are not required to notify the regions that it
intends to issue a permit over EPA objections when regional
comment letters do not comply with MOA requirements, the regions
cannot ensure that their recommendations were adequately
addressed without an adequate follow-up process.
b. Section 404(c) Actions Difficult to Process and infrequently
Used
Eleven Section 404(c) actions over a ten-year period appears to
be insignificant. With approximately 150,000 public notices
received during the ten-year period, only 11 404(c) actions
completed nationwide for projects with unacceptable wetland
impacts seems implausible. Especially, when our audit of Region
4's public notice review process showed that this Region alone
recommended absolute permit denial in 45 percent of its public
notice comment letters because of adverse environmental impact
and that two-thirds of all the permit applications receiving
comment, recommending denial or denial without significant
modification, were subsequently permitted over Region 4
objections. However, Region 4 was reluctant to use its 404(c)
authority because the action was so resource intensive. Regional
experience had shown that, under existing regulatory procedures,
a 404(c) action would take approximately one staff year to
complete. The large resource commitment required for just one
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action indicated the need for simplification and clarification of
the process.
Existing 404(c) regulations (40 CFR 231, dated October 9, 1979)
were considered by national and regional program management as
early as 1985 as vague with unclear criteria for implementation.
The regulations established lengthy and detailed procedural
requirements which prolonged the process. Therefore, in FY 1985
an Agency work group was established to develop revisions to the
regulations. Revision of 404(c) procedures was also mentioned in
the FY 1986 Agency Operating Guidance and, again, in October
1988, by the Director of OWP in a letter to Regional
Administrators. A recommendation for revision of 404(c)
procedures was included in our pilot audit report on Region 4's
wetlands program issued in March 1990. Although OW in its July
13, 1990 response to the recommendation indicated that Section
404(c) guidance was being developed to enhance coordination
between EPA Headquarters and the regions and that it would
continue to evaluate the need to revise the Section 404(c)
regulations, we found that no substantive action had been taken
to revise 404(c), regulations as of June 1991. While the need to
revise the regulations has been well recognized by wetland
program managers, EPA continues to operate under the burdensome
Section 404(c) regulations promulgated October 9, 1979.
As stated above, Region 4 recommended project denial 45 percent
of the time when commenting according to our permit sample.
After expending large amounts of time and money defending its
position, the Region frequently allowed the COE to issue the
permits without any apparent project modification. Not
consistently responding with 404(q) and 404(c) actions against
unacceptable permits reduced the impact of Region 4•s oversight
on the COE permitting process. We did not consistently find file
documentation to explain the Region's basis for not pursuing all
available authorities to preclude or reduce the impact' of
unacceptable permitting. Regions 6 and 7 recommended permit
denial less frequently than Region 4, nonetheless, the regions
rarely, if ever, used 404(q) and 404(c) authorities to address
unacceptable COE permitting practices.
For example in the beach renourishment example on page 60, the
COE rejected Region 4's recommendations and indicated that the
permit would be issued as designed. Region 4 responded by
requesting that the Assistant Administrator for Water initiate a
Section 404(q) elevation request to the Assistant Secretary of
the Army as authorized under the MOA. The 404(q) request was
signed by the Assistant Administrator for Water; however, the
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Army concurred with the COE district's original decision. Region
4 had already obtained much of the extensive evidence and
documentation needed for a Section 404(c) action to override the
COE1s permit decision. However, after spending $12,000 in
extramural funds to study the historical beach patterns in the
effected area; using an untold amount of staff and management
time over a six-month period; and expending limited travel funds;
the Region elected not to initiate a 404(c) action and the
project was allowed to proceed. We found no documentation to
explain the Region's decision not to proceed with the Section
404(c) action.
Our reviews in Regions 4, 6, and 7 revealed that the regions
generally tried to resolve conflicts with the COE on unacceptable
Section 404 permits informally by negotiating mitigation to
lessen wetland impact. For example, Region 4 management
contended that it was better to negotiate mitigation on 1,000
acres than to use the same resources to save 100 acres with a
Section 404(c) action. OWP recognized this problem in its 1989
mid-year review at Region 4:
We are concerned with an apparent management reliance,
in at least some cases, on the application of
compensatory mitigation as a substitute for a thorough
alternatives analysis to identify impacts which are
avoidable.
When asked about EPA criticism of some COE permit decisions, COE
personnel generally took the position that if a Region considered
a wetland area environmentally pertinent and disagreed with a COE
district permit decision, the Region had the authority to express
their concerns through formal comments, elevate the district's
decision as provided for under the 404(g) MOA, or prevent permit
issuance under EPA's Section 404(c) authority. Since the Regions
almost always elected not to take the preventative measures, the
COE districts perceived the Region's original opposition to
permit issuance as either lacking conviction or a sound
environmental basis. Therefore, the COE districts while
considering the Region's recommendations for project denial or
modification, did not take the threat of a 404(q) or 404(c)
action seriously.
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Aaencv Comments On Insufficient Use Of Section 404 (c) and 404 (g^
Authorities And OIG Evaluation
Aaencv Comment
"As with enforcement, the IG's office continues to misperceive
the appropriate role of EPA's Section 404(q) and (c) authorities
within the Section 404 program. These continue to be very
resource-intensive, high-visibility tools and initiation of
either Section 404(q) or (c) authority is likely to continue to
be infrequent, as compared to the number of permits being issued
by the Corps."
OIG Evaluation
We recognize that invocation of Section 404(c) and 404(q)
authorities will be infrequent in relation to permit issuances
because of limited program staff and because such authorities
should be reserved for the most serious environmental impacts.
However, our audits of regional permit reviews disclosed cases
where the regions expended substantial resources to support a
404(q) or 404(c) action because of perceived severe environmental
harm only to drop the action without explanation. Also, cases
were found where recommendations for permit denial were made on
the basis of unacceptable adverse environmental effects, but
404(q) and 404(c) actions were not pursued and reasons not
documented. We are not asking OW to do any more than was stated
in the Agency Operating Guidance: "... prohibition or restriction
of discharge sites under Section 404(c) where unacceptable
adverse environmental effects are projected" especially for those
cases defined as significant. According to the definition of a
"significant issue" in the FY 1988 Agency Operating Guidance for
SPMS/STARS reporting: "Significant signifies an EPA
recommendation for permit denial, or modification, or conditions"
and requires resolution to bring the discharge into compliance
with the Section 404(b)(1) Guidelines. Between 1988 and 1990 the
three regions reported in SPMS/STARS that the COE had issued
permits over their recommendations for denial or substantial
permit modifications in 215 "significant" cases. In these cases,
Agency resources used to document and support EPA's position were
essentially wasted without exercising the dispute resolution
process, or wasted the time of the COE because the EPA's original
position lacked substance. What we recommended in the report was
wnsistency.
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Aaencv Comment
"The draft report fails to indicate that, within recent years,
EPA has had increasing success with its Section 404(g) elevations
and the Corps, in response to such elevation requests, has been
increasingly willing to issue programmatic guidance reversing a
Corps District permit decision contrary to the Region's
recommendation. Moreover, recent Section 404(g) and (c) actions
have been effective in a broader programmatic sense by serving to
define issues of national significance."
OIG Evaluation
While recent successes are noted, the amount of such activity has
been limited compared with the apparent need. In conversations
with COE personnel over failing to deny or modify permits as
recommended by EPA, we were basically told that EPA has the
option to use its 404(q) and 404(c) authorities to stop any
undesirable action and since the regions elected not to use those
authorities, their original recommendations must have lacked
merit or conviction. COE should believe that every
recommendation made by EPA's regions has not only merit but
management support. As described in OIG comment 48 above, the
restrictions on using these authorities on a consistent basis are
regulatory not statutory.
Aaencv Comment
••The draft report's observation that few of the Regional comment
letters satisfy the signature and time requirements of the
Section 404(q) MOA is somewhat misplaced since the Regions
generally meet those requirements when commenting on permits for
which they are likely to seek elevation under the MOA."
OIG Evaluation
As stated above, EPA recommendations for permit denial or
significant permit modifications should not be arbitrarily made.
Any recommendation made by EPA, especially ones for denial or
major project modification, should be considered serious. We did
not find this to be consistently the case. In addition, CM
presented no facts to support their broad statement that all
serious permit recommendations comply with MOA requirements.
Aaencv Comment
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"For purposes of clarification, in our July 1990, comments on the
final Region 4 wetlands program audit, the Office of Water stated
that we would continue to evaluate the need to revise the Section
404(c) regulations. That process is ongoing, although a final
decision has not yet been made."
OIG Evaluation
Problems with the 404(c) regulations have been documented in the
program's literature since at least 1985 indicating the need for
revision. In fact, the 1988 Agency Operating Guidance indicated
that revised 404(c) regulations would be proposed. We~point out
in this chapter that the problems with the 404(q) and 404(c)
processes remain. Hence our recommendation for timely revision
of the 404(c) regulations and necessary modifications to the
404(g) MOA.
REGIONS DID NOT ALWAYS FULFILL JURISDICTIONAL RESPONSIBILITIES
Section 404 of the CWA gave EPA the ultimate responsibility for
jurisdictional determinations related to the identification of
wetlands, but limited staff forced EPA to allocate its
jurisdictional responsibility, except in special cases, to the
COE under an MOA. However, regional wetlands staffs did not
always fulfill their jurisdictional responsibilities or ensure
that the COE wetland identifications and delineation complied
with the interagency wetlands identification manual. In
addition, differing definitions of "dredge and fill" activities
caused interagency conflicts between EPA and the COE concerning
solid waste discharges and resulted in certain destructive
wetland discharges not being regulated under either Section 404
or 4024. As a result, wetlands, which EPA considered
jurisdictional, were significantly altered or destroyed without
review or permit.
Background
Historically, EPA and COE have often disputed the extent of
Section 404 jurisdictional authority. COE and EPA disagreement
over a jurisdictional determination prompted a 1979 legal opinion
from the U.S. Attorney General which stated that EPA had the
4 Section 402 of the CWA, National Pollutant Discharge
Elimination System (NPDES), regulates pollutants including solid
waste discharges into waters of the United States.
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ultimate authority to determine geographical jurisdiction under
the CWA. However, EPA did not possess the resources required to
make the jurisdictional determinations for over 5,400 individual
and over 28,000 general permit applications received by the COE
each year. As a result, EPA and the COE entered into a MOA in
1980 under which the COE was allocated authority to identify and
delineate jurisdictional wetlands, except in "special case"
designations by EPA, and to determine whether activities in
regulated wetlands represented a discharge of dredged or fill
material. In 1989 a joint agency wetlands delineation manual
(Federal Manual for Identifying and Delineating Jurisdictional
Wetlands, January 1989) was issued to resolve interagency
conflicts on Section 404 jurisdiction. Also, a new MOA5 was
negotiated between the COE and EPA to reflect the new policies on
jurisdictional determinations. Under the MOA, EPA was
responsible for monitoring COE's Section 404 jurisdictional
determinations to ensure that the COE's determinations complied
with EPA Guidelines.
Two inter-related jurisdictional determinations are made under
Section 404. The first determines Section 404 geographical
jurisdiction which is the identification and delineation of
specific areas that meet the criteria of a wetland. The second
establishes Section 404 jurisdiction over the activities
occurring in these identified wetland areas. If an activity
results in a "discharge of dredged or fill material" then Section
404 regulation applies unless the discharge is specifically
exempted under the Act. However, other non-exempt activities,
such as solid waste discharges, which may degrade or destroy
wetlands, have not been regulated by the COE under Section 404.
Instead, COE refers solid waste discharges under a 1986 MOA to
EPA for regulation under CWA, Section 402. However, regional
Section 402 staffs have been reluctant to regulate such
discharges.
a. Interagency Conflicts On Wetland Identification and
Delineation
5 MOA, Determination of the Geographic Jurisdiction of the
Section 404 Program and the Application of the Exemption Under
Section 404ft) of the CWA. effective March 20, 1989.
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GAO6 reported in 1988 that the COE and EPA sometimes delineated
wetland boundaries differently, resulting in wetland
determinations that could vary by thousands of acres. These
boundary differences affected the degree to which the COE assumed
Section 404 program jurisdiction in an area. GAO attributed this
condition to the different manner in which COE districts and
resource agencies delineated wetlands. We found this evidenced
in Regions 4 and 6 where large areas of pocosin and bottomland
hardwood jurisdictions were actively disputed. During our audit
period, Regions 4 and 6 had assumed responsibility for
jurisdictional determinations in these disputed areas under the
1980 MOA's "special case" provisions7.
The 1980 Section 404 jurisdictional MOA contained no specifics on
methodologies for delineating wetlands or definitive guidance on
activities that constituted a discharge of dredge or fill
material. As a result, EPA and COE continued to disagree over
some wetland determinations and the activities that should be
regulated under Section 404.
To eliminate Federal inconsistencies in Section 404
jurisdictional determinations, GAO, in the 1988 report,
recommended that the COE work with resource agencies to develop
consistent definitions and procedures for making wetland
determinations. Subsequently, during our audit period, EPA,
along with the COE, FWS, and the Soil Conservation Service (SCS)
agreed on a consistent approach for determining wetlands under
the jurisdiction of various related Federal programs, and adopted
a single manual as the technical basis for wetland identification
and delineation. Under the revised January 1989 Jurisdictional
MOA, the COE agreed to adhere to the new delineation manual.
Therefore, the special cases previously administered by Regions 4
and 6 under the 1980 MOA were not redesignated under the 1989
MOA.
Subsequently, there have been no special case areas designated or
6 Wetlands; The Corps of Engineers' Administration of the
Section 404 Program (GAO/RCED-88-110), U.S. General Accounting
Office, July 1988
7 Region 4 declared special case status for pocosin
wetlands in 19 North Carolina counties and bottomland hardwoods
in 72 counties in Kentucky, Mississippi, and Tennessee. Region 6
declared special status for in 129 counties/parishes in Arkansas,
Louisiana, Oklahoma, and Texas.
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planned in Regions 4, 6, and 7. While some jurisdictional
disputes have occurred, the disputes did not represent persistent
problems but isolated instances. Therefore, we concluded that
the joint delineation manual has substantially resolved the
interagency jurisdictional conflicts.
b. Inadequate Monitoring of COE Jurisdictional Determinations
Although EPA was statutorily responsible for delineation of
jurisdictional wetland areas under Section 404, none of the
regions audited had established adequate systems for monitoring
all COE geographic jurisdictional determinations to ensure that
these complied with the 1989 MOA and wetlands delineation manual.
The Regions relied primarily on their public notice review alone
to monitor COE geographic jurisdictional determinations.
However, public notices include only COE boundary determinations
for individual permits. They do not include COE determinations
that regulate a discharge under a general permit, exempt a
discharge under Section 404(f), or establish an area as having
"no geographic" jurisdiction.
Section IV. F. of the 1989 MOA, entitled "Compliance Tracking",
provides that copies of COE final geographic jurisdictional
determinations and related supporting documentation and files
shall be made available for inspection by the applicable EPA
Regional Administrator. Section IV also requires COE to notify
EPA of final "no geographic" jurisdiction and Section 404(f)
exemption determinations which are outside the public notice
process. However, according to Regional personnel, not all COE
districts in the regions furnished them jurisdictional
determination notices as required by the MOA. For example, in
Region 4, only 3 of 9 COE districts in the Region furnished EPA
jurisdictional determination notices. In addition, those COE
determination notices received were sporadic and normally for
specific permits and did not always contain sufficient
information to properly evaluate COE actions. Therefore, reviews
of COE district files, as authorized under Section IV of the MOA,
would be necessary to adequately monitor COE actions in these
cases. However, the regions generally had made no provision for
inspecting the jurisdictional determination files in COE district
offices. At the time of our audit in Region 4, the Region had
inspected the jurisdictional determination files in one of its
nine COE districts but only on a one-time basis. We found no
evidence of inspections of COE files during our reviews in
Regions 6 and 7. The only jurisdictional oversight performed was
during reviews of individual public notices.
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c. Disposal of Waste Into Wetlands Not Regulated
As with geographical determinations, interagency conflicts have
also resulted from differences in EPA's and COE's definition of a
•'discharge of dredged or fill material." This jurisdictional
definition is critical because it identifies those wetland
discharges that will be regulated under Section 404. Neither the
CWA nor related legislative history defined the term. EPA and
the COE were left with the task8 of determining what constituted
a regulated discharge under Section 404. COE subsequently
defined "dredge and fill" materials in 33 CFR 323; however, the
COE excluded pollutants and fill materials discharged primarily
for waste disposal. EPA disagreed with the COE's definition and
has consistently considered all "dredge and fill" discharges,
regardless of purpose, as Section 404 activities. Since the COE
was the permitting authority, the differing definitions created
situations where actions EPA considered jurisdictional under
Section 404 were not being regulated by the COE.
- Solid Waste Discharges Into Wetlands
In 1986, EPA and the COE entered into a MOA9 for controlling
solid and semi-solid wetland discharges for waste disposal
purposes. The MOA provided that EPA would normally take the lead
in permitting solid and semi-solid waste discharges and enforcing
against any related unauthorized discharges into wetlands under
Section 402. COE districts have generally followed this
agreement by referring unauthorized solid waste discharges to
Regions 4, 6 and 7; however, the regions have experience little
success in enforcing against such illegal discharges under
Section 402.
Even though EPA has maintained that solid waste discharges could
be regulated under Section 404, the regions have been reluctant
to pursue Section 404 enforcement actions in these cases, Region
4 on advice from regional counsel, because the MOA specifies that
these unauthorized discharges will be enforced under Section 402.
However, regional Section 402 programs have generally refused to
1 The Clean Water Act, Section 404 charged the Administrator
of EPA with the responsibility of developing guidelines
[404(b)(1) Guidelines] in conjunction with the Secretary of the
Army for implementing the Section 404 permitting program.
9 MOA, Regulation of Discharge of Solid Waste Under the
CWA. effective April 23, 1986.
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enforce against these discharges because past emphasis of the
Section 402 program has been regulation of point source
discharges into surface waters. While the disposal of solid
waste into wetlands was recognized by EPA and the OW agreed under
the MOA to regulate such discharges under Section 402, the Agency
Operating Guidance for the Section 402 program made no reference
to 402 regulation or enforcement of unauthorized wetland
discharges. Neither did the Section 402 program have a
commitment under the management accountability system to address
unauthorized solid waste discharges into wetlands. Therefore,
when illegal solid waste wetland discharges were referred by the
Section 404 program, the Section 402 staffs considered these
discharges low priority and an ineffective use of Section 402
resources. As a result solid waste discharges, which have
significantly damaged or destroyed valuable wetland areas, have
not been effectively regulated by EPA.
In Region 7, the Section 404 program had as many as 20 solid
waste enforcement cases pending. Region 7's FY 1989 Midyear Self
Evaluation summarized the solid waste problem by stating that:
The issue of solid waste disposal is a troublesome one
in Region 7 as it is in all other Regions. We have
between 15 and 20 enforcement cases currently referred
to us which involve fill generally classified by the
COE as solid waste. ... we have been unable to reach
any comprehensive agreements with our COE Districts for
handling after-the-fact permits if required in
conjunction with an enforcement action in these [solid
waste] cases.
For example, based on Region 7 files, a COE district discovered
an unauthorized disposal of nonmetallic portions of shredded car
bodies ("auto shredder fluff*) into wetlands. The COE District
considered the fill to be solid waste as described under the MOA
and would not accept a Section 404 after-the-fact permit
application from the violator. As provided for under the MOA,
the violation was reported to Region 7 for appropriate
enforcement under Section 402. The Region's Section 404 Program
pursued regulation under Section 402. However, the Region's
Section 402 Program did not consider the sites an effective use
of its authority and resources. Superfund statutes were also
considered but tests of the surrounding sites disclosed no
hazardous substances. Regulation under RCRA was also determined
inappropriate because the fill was classified as a household
waste.
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Region 7 finally contacted the State Department of Natural
Resources but the State responded that its new solid waste law
did not exclude wetlands from being converted into a landfill.
Since the State did not have a wetlands protection statute or
water quality standards for wetlands, it could only regulate the
site as an unpermitted landfill. However, under a State
administrative order, the violator applied for a state landfill
permit which required dewatering and filling of the wetland area.
The COE district was subsequently petitioned by the State for a
determination as to whether the sites were still considered
regulated wetlands. The COE responded that the majority of the
area in question was wetlands and that the auto shredder fluff
was considered to be a homogeneous waste (as defined in the
EPA/COE MOA) which should be regulated by EPA or the State under
Section 402 of the CWA. COE added, however, that if there was a
placement of clean fill material over the solid waste to bring
the site into compliance with State solid waste regulations, a
regulated discharge would occur which would require authorization
under Section 404. The State was disturbed by the incongruous
nature of the COE determination and informed us during our review
that:
EPA and the COE had the opportunity years ago to resolve
these site conditions, but did nothing. COE didn't care
that trash was dumped in the wetlands for years, but now
they want to regulate our cleanup after we have spent
considerable time and effort to develop a corrective action
plan.
Region 6 had 9 solid waste enforcement cases pending at the time
of our audit. We found almost identical problems in Region 6's
regulation of such discharges as those found in Region 7. For
example, the COE, according to Regional files, was aware for over
a year of construction waste being deposited in wetlands without
a Section 402 or 404 permit. In this case, however, the State
had apparently authorized the landfill under State statutes
without considering the wetland impact. The COE district would
not regulate the discharge under Section 404 because it
represented solid waste disposal. The COE subsequently issued a
Section 404 cease and desist order when the landfill operator
later began to cap the ten-acre site.
In Region 4, we noted only a few COE enforcement referrals
involving regulatory actions for solid waste discharges; however,
these cases usually represented significant degradation or
destruction of wetlands. For instance, as previously cited in
Chapter 3, an illegal discharge of 47,000 cubic yards of wood
96
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napter 4
•gulatory Program Meeds Better Controls, Guidance, And Interagency
aordination
chips into seven acres of wetlands was referred to Region 4 by
the COE for regulatory action. The wetland had been forested but
the area had been cleared and the wetlands buried to a depth of
about four feet in wood chips. The COE concluded that the
wetlands were filled to dispose of waste and should clearly be
regulated under Section 402. Region 4 disagreed with the COE's
conclusion but took no enforcement action under Section 404
because of the MOA requirements. The case was referred to the
regional Section 402 program for enforcement but the Section 402
staff refused to take action because the violation lacked
"substance" even though a Region 4 Office of Regional Counsel
attorney concluded that Section 402, rather than Section 404, was
the most plausible statutory basis for enforcement.
- Secondary Discharges Resulting From Permitted Construction In
Wetlands
Our audit also disclosed Section 404 permitting of wetland fills
without first considering all the secondary discharges of the
proposed wetlands project (i.e., Section 402 point source
discharges). An OIG special review conducted in Region 10 10
disclosed where the COE demonstrated its intent to issue a
Section 404 permit to build a Federally funded fish hatchery
before completion of the necessary Section 402 review governing
the hatchery discharge. File reviews at Region 10 disclosed
considerable Regional concern over the ability to control
hatchery effluent under the proposed design. COE considered this
a Section 402 issue and not germane to the Section 404 permitting
process. In Region 6, Section 404 permits were issued to build
roads and drilling pads for oil and gas exploration without
considering the effect of drilling discharges. The COE districts
routinely refused to condition oil and gas Section 404 permits to
limit and control discharges of drilling mud and other
contaminants because under the HOA solid and semi-solid waste
discharges were an EPA responsibility under Section 402.
However, according to an OIG Region 6 special review11, EPA had
not adequately addressed these secondary discharges under Section
10 Special Review of Region 10 Employee Allegations on the
Prion's Handling of Air and Water Issues. Report No. EGaWG0-10-
0022-0400015, issued Hay 3, 1990.
11 Special Review Report! EPA Is Not Adequately Controlling
The Negative Impacts Of Oil and Gas Activities On Louisiana's
Coastal Wetlands. Report No. E1HWG9-13-9024-0400018, issued June
14, 1990.
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Regulatory Program Meeds Better Controls, Guidance, And Interagency
Coordination
402 individual or general (NPDES) permits (a general permit was
under consideration). As a result, secondary wetland impacts
from a project were not being adequately addressed before
issuance of a Section 404 permit authorizing construction.
Aaencv Comments On Noncompliance With Jurisdictional
Responsibilities And PIG Evaluation
Aaencv Comment
"The draft report's criticisms of Regional monitoring of Corps
jurisdictional determinations are unwarranted to the extent that
the Jurisdiction MOA did indeed envision that the Regions would
rely primarily on review of Corps public notices, which generally
provide sufficient information on wetland identification and
geographic jurisdiction. The Jurisdiction MOA itself provides
that, "to ensure that EPA is aware of determinations being made
for which notification is not forwarded through the public notice
process." the Corps should provide EPA with copies of all final
determinations of no geographic jurisdiction and of application
of a Section 404(f) exemption.
"We acknowledge the problems associated with EPA/Corps
disagreements regarding discharges of solid waste, and will
continue to try to work with the Corps and the EPA Section 402
program to resolve the issue."
OIG Evaluation
The report does not state that EPA should not rely on public
notices for monitoring COS jurisdictional determinations on
individual proposed permits and the MOA does imply that EPA will
use the public notice process for monitoring individual permit
determinations. However, as only partially quoted by CM, the moa
provides:
In order to track the DE's [COE District Engineer]
compliance with EPA guidance, the DE shall make his
files available for inspection by the RA at the
district office....
To ensure that EPA is aware of determinations being
made for which notification is not forwarded through
the public review process, the Corps will provide
copies to EPA of all final determinations of no
geographic jurisdiction and all final determinations
that an exemption under Section 404(f) is applicable.
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lapter 4
igulatory Program Meeds Better Controls, Guidance, And Interagency
»ordination
Contrary to OW's statement, the MOA does provide for EPA
monitoring and inspection of COE geographic jurisdictional
determinations and Section 404 notices do not include information
on "no geographic jurisdiction" determinations or Section 404(f)
exemptions since no permit would be involved in these decisions.
Also, according to regional staffs actually reviewing public
notices, the documents are not consistently prepared by COE
districts and do not always include the information needed to
adequately assess jurisdictional determinations.
CONCLUSION
Effective program implementation depends on adequate program
planning, management commitments to program objectives, and the
ability to accurately assess program accomplishments and failures
against commitments. However, OWP did not formally plan,
coordinate, and control the various regional public notice review
processes to ensure the implementation of an effective Section
404 regulatory process and accomplishment of program objectives.
In addition, the regions did not possess adequate program
resources and did not develop appropriate strategies,
operational guidance, and management controls to properly direct
their public notice review process and fulfill regional program
commitments and responsibilities as illustrated in this Chapter.
As a result, an unpredictable, inconsistent, and relatively weak
regulatory process existed in EPA's Section 404 program which did
not afford valuable wetland resources the effective protection
intended under the CWA.
Developing consistent regional approaches to public notice
reviews and effective use of related Section 404 authorities
would present a more predictable, congruous regulatory program to
the COE and the regulated public. The development and
implementation of an effective program is directly related to
management's access to reliable information. However, the Agency
has not developed a unified, reliable system for wetlands data.
Instead, regions are independently establishing incomplete and
inaccurate databases using incompatible systems that are poorly
controlled.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Water ensure
the implementation of a national unified, controlled approach to
public notice reviews that will maximize the use of EPA's
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Coordination
statutory authorities to achieve an effective Section 404
regulatory process that will promulgate consistent, predictable
regulatory actions for the COE and regulated public.
Specifically, this should include:
- establishment of regional controls over public notice
reviews and related comments/recommendations to ensure
effective and efficient use of available program resources.
- development of a uniform wetlands management information
system designed to track the basic program information
needed to assess program performance and evaluate permit
impacts, individually and cumulatively, on wetland
ecosystems. The system should be compatible and integrated
between regions and the COE RAMS system with adequate
database controls and standardized file documentation that
supports regional regulatory decisions.
- establishment of national direction and controls to ensure
effective accomplishment of EPA's jurisdictional
responsibilities and adequate oversight of COE
jurisdictional determinations made under the MOA. This
should also include the review of COE final geographic
determinations and related supporting documentation for
general permits, exempt discharges under Section 404(f), "no
geographic" determinations as well as individual permit
determinations.
- promulgation of formal guidance to the regions on the
required procedures for regulating solid and semi-solid
waste discharges into wetlands. This guidance should
specify when such discharges are to be regulated under
Section 402 and when regulation should occur under Section
404. Also, through Agency Operating Guidance and management
accountability systems, commit regional Section 402 programs
to enforcement against unauthorized solid waste discharges
into wetlands.
- negotiating revisions to the 404(q) MOA requirement that
comment letters be signed at no less than the Division
Director level to qualify for the dispute resolution
process. EPA should seek the same signature level as
required of other resource agencies.
- finalizing guidance on regional use of Section 404(q) and
404(c) authorities to ensure consistent and optimum
implementation in all regions and the fair and equitable
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gulatory Program Needs Better Controls, Guidance, And Interagency
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treatment of the regulated public (eg., when regions
recommend permit denial or significant project modification
and the COE intends permit issuance over regional
objections).
- negotiate with COE for inclusion of standardized permit
information in COE public notices to facilitate more
efficient and effective EPA permit review and tracking of
key permit data.
Aaencv Comments On Recommendations And PIG Evaluation
Agency Comment
"The Office of Water has no plans to establish "controls" over
public notice reviews. We have issued programmatic guidance
relating to public notice review and will continue to do so as
warranted. Currently, we are working with the Corps to develop
joint mitigation banking guidance."
OIG Evaluation
As previously stated, we believe CW misconstrued the focus of the
finding related to inadequate guidance on regional public notice
review processes. Based on our audit evidence, we continue to
conclude that additional regional guidance and controls related
to regional permit processing are needed to ensure consistent,
effective permit reviews, meaningful permit recommendations, and
compliance with applicable MOA requirements.
Agency Comment
"Consistent with the suggestion in the draft report, upon final
implementation of the RAMS system, we will work with the Corps
and consider adapting the system for use by EPA."
OIG Evaluation
ON accepted recommendation.
Agency Comment
"We do not believe that, at this time, any additional 'national
direction or controls' are needed with regard to the Jurisdiction
MOA, including EPA review of Corps jurisdictional and Section
404(f) determinations.
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Coordination
"Resolution of the issues surrounding regulation of solid waste
to wetlands requires the cooperation of the Corps and the EPA
Section 402 program. The Wetlands Division will continue its
efforts to work with both entities on this matter."
OIG Evaluation
These Off comments were previously addressed by OIG.
Aaencv Comment
"The Office of Water does not contemplate seeking revisions to
the Section 404(g) MOA signature requirements since, as stated
above, such requirements have not been problematic."
OIG Evaluation
The recommendation only proposes that the required signature
level for EPA comment letters be made equal with requirements
imposed on the other resource agencies. Lowering the signature
requirement for comment letters from the Division Director's
level would have no effect on management's control over the
actual elevation process. Elevations would still have to be
approved at the Assistant Administrator level. However, having
personnel at the section chief level (similar to FWS) authorized
under 404(q) to sign comments would mean that EPA's resolve in a
particular permitting situation could not be determined by who
signs the comment letter. That would mean that all EPA comments
would carry equal weight. Regional staff indicated to us that
this small change in the MOA would help them in their
negotiations with the COE over recommended permit modifications
and denials. Therefore, we continue to recommend the subject
change in the 404(q) MOA.
Aaencv Comment
"EPA has issued interim Section 404(q) procedural guidance which
is now in effect; EPA also is in the process of developing
Section 404(c) guidance."
OIG Evaluation
ON has or is in the process of taking the recommended action.
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CHAPTER S
STRATEGIC INITIATIVES WERE MOT EFFECTIVELY IMPLEMENTED TO
PRODUCE LONG-TERM IMPROVEMENTS IN WETLANDS PROTECTION
Limited by resources and insufficient national direction and
oversight the Regions did not: (1) identify and prioritize
wetlands as to value and vulnerability in order to target limited
program resources and inform the regulated public; and (2)
implement strategic initiatives within established program
guidelines as established by OWP. Therefore, the strategic
initiatives initiated by Regions 4, 6, and 7 during the audit
period did not target limited resources to the most valuable and
threatened wetlands within each region. Also, the Regions*
approaches toward strategic initiatives, specifically advanced
identification were generally inconsistent and unfocused, did not
demonstrate a leadership role in improving wetland protection
over the long run, and sometimes sent a negative message to other
government entities and the regulated public regarding EPA's
commitment to the preservation and restoration of the most
valuable wetlands experiencing continued conversion and
cumulative wetland losses.
BACKGROUND
Section 404 strategic initiatives was one of the three base or
core wetlands program elements established by the Agency. The
purpose of this program element was to develop more efficient and
effective program approaches to wetland regulation. The primary
strategic initiative utilized by the Section 404 program is
advanced wetland identification which identifies the suitability
of vulnerable wetland areas for dredge and fill activities and
informs the regulated public in advance of wetlands unsuitable
for dredge and fill discharges.
Section 404(b)(1) Guidelines in 40 CFR 230.80, effective March
23, 1981, authorized EPA, in conjunction with the COE, to perform
advanced identification studies; however, advanced identification
of vulnerable wetlands was not emphasized as a Section 404
program objective until FY 1987 when OWP instructed regions to
prioritize jurisdictional wetlands and utilize the established
priorities in implementing subsequent program activities
including advanced identification efforts. Advanced
identification studies were also emphasized as an essential
proactive wetlands protection approach in draft Headquarter's
guidance, EPA Strategy for Wetlands Protection under section 404
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Chapter 5
Strategic Initiatives Were Not Effectively Implemented
of the Clean Water Act, dated August 22, 19851. This guidance
indicated that the Section 404 program's effectiveness could be
improved by:
[using] ... EPA's statutory authorities to protect the most
important wetlands from the most significant impacts."
... anticipating and preventing wetland losses before the
permit request stage. By more clearly and consistently
anticipating significant threats to wetlands, EPA can
improve wetlands protection and also provide better guidance
to the regulated public.
On March 23, 1989, OWP proposed further guidance for performing
advanced identifications: Guidance To EPA Regional Offices On Th^
Use Of Advanced Identification Authorities Under Section 404 Of
The Clean Water Act (a draft which was never finalized). This
document emphasized that advanced identification was considered a
proactive approach to Section 404's permitting process.
While advanced identification was the focal point of OWP's
strategic initiatives, the 1988 and subsequent FYs operating
guidance also emphasized public information and outreach programs
with special emphasis on priority wetlands. The FYs 1989 and
1990 Agency Operating Guidance expanded the recommended strategic
activities to include other "strategic initiatives" such as
participation in comprehensive, natural resource planning
efforts, ecosystem/geographic initiatives (may include advanced
identification), targeted enforcement initiatives, public
education campaigns, or support of critical research and
development activities.
REGIONS DID NOT IDENTIFY AND PRIORITIZE THE MOST VALUABLE.
VULNERABLE WETLANDS
Regions 4, 6, and 7 did not formally identify and prioritize
their region's wetlands resources as requested by Headquarters
program management. Regional response to this Headquarters
guidance varied from region to region. Some regions solicited
input from the public and government agencies and compiled lists
of hundreds of wetlands that these sources believed were valuable
natural resources while other regions, including Region 6, did
not identify specific wetlands but only listed valuable wetland
1 This guidance was to supplement the FY 1987 Agency
Operating Guidance but was never finalized (see Chapter 2).
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kpter 5
tategic Initiatives Were Mot Effectively Implemented
types that were under significant development pressure. Region 4
prepared a wetlands inventory list which generally identified the
wetland types by State and the relative threats to each. Region
7 mapped major areas of wetlands within the Region. However,
none of the three regions included in the audit prioritized their
wetlands by value or vulnerability and then utilized these
wetland priorities for developing regional program implementation
and public outreach. Furthermore, none of the regions provided
any further guidance to regional permit reviewers on wetland
priorities. There were no regional listings or detailed strategy
which delineated wetland areas of specific concern because of
value or vulnerability; types of fills for which reviewers should
take particular notice; and recommended actions. In addition,
there was no apparent agreement between EPA and the COE on how
those wetlands or wetland types that were identified by the
regions would be treated for permitting purposes or even a
consensus on the value of these areas.
Background
A May 27, 1986, EPA Headguarters memorandum to the regions
detailed how the regions were to approach the development of
regional priority wetland lists. The memorandum emphasized that
preparation of the priority list was to include extensive
coordination with other Federal, State, and local agencies and
careful professional analysis by EPA staff. Each list was to
contain a background statement explaining each region's rational
for making its determinations, a list of specifically identified
wetlands or wetland types or areas, and a list of contributors
and references. The purpose was to focus the Section 404
program's limited resource on the protection of priority wetlands
(proactive approach) by concentrating efforts in those areas
through increased use of available authorities, including
advanced identification, Section 404(c) actions, and enforcement.
EPA Headquarters stressed that the list was not intended as a
basis for "writing off" the lower value wetlands but only to be
used as a planning tool to guide the Section 404 wetland
protection efforts. Prioritizing wetlands would, overall, make
each Region's regulatory response more objective, consistent, and
more predictable to the regulated sector while protecting the
most important wetlands from the most significant impacts. The
priority lists were to be made available to the general public in
early FY 1987.
However, our audit disclosed that Regions were reluctant to
prioritize wetlands. We were told that wetlands could be
inaccurately ranked since the functional values of various types
of wetlands were not yet fully developed by the scientific
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Strategic Initiatives Were Not Effectively Implemented
community. Regional staffs feared that those wetlands identified
as lower priority would be written off, not because they were
considered unimportant, but because the regions limited staff
would concentrate their efforts on the higher priority wetland
areas and would ignore the others which may be just as important
ecologically.
In addition, regional efforts to develop wetland priority lists
lacked the interagency coordination and evaluation necessary to
produce a consensus listing that would be accepted by other
regulatory agencies and the regulated public. While there were
some regional discussions with other interested agencies
concerning priority wetlands no consensus was obtained from the
other agencies. Without adequate collaboration and joint
acceptance of these lists by regulators and the regulated public,
they could not be used for a more structured and consistent
Section 404 effort nor could they be used by potential permittees
and others to identify wetlands and wetland areas requiring
careful analysis of dredge and fill activities. Consequently,
permit review, enforcement, and strategic initiatives continued
to be pursued case by case based solely on the program staffs'
knowledge and experience not necessarily focusing on the
protection of priority wetlands to make the regulatory process
objective, consistent, and predictable.
Subsequent to our pilot audit, Region 4 began the necessary steps
to prioritize its wetlands. The Region contracted to acquire
needed information on projected urban growth, and the expansion
of silviculture and agriculture in the Region. These
demographics coupled with available data on the value of
particular wetland systems developed internally and from other
sources such as: the Fish and Wildlife Service; state water
quality agencies; state game and fish agencies; state planning
and water resource agencies; and conservation groups, the Region
was able to identify priority wetland areas under intense
development pressures. However, this prioritizing was-initiated
solely for the purpose of targeting areas for future Region 4
advanced identifications. There were no immediate.plans to use
the priority list to direct other resources in reviewing public
notices or conducting enforcement actions. Also, while the COE
Districts and other resource agencies were asked to provide their
thoughts on high risk wetland areas, the final priorities will be
Region 4's. There was no provision made to get COE or other
agency concurrence to jointly emphasize the stringent regulation
of these valuable areas. Notwithstanding, this prioritizing
effort was a commendable beginning toward developing a dynamic
priority wetland system to guide all Region 4 wetland activities.
The Region expects to have its priority wetlands report entitled,
106
Audit NO. E1HWE0-04-029X
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*pter s
Categic Initiatives Were Not Effectively Implemented
"High Risk Geographic Areas Targeted for Wetlands ADID (advanced
identification)," completed and publicly available by September
30, 1991.
Identifying and publicizing the most vulnerable and valuable
wetlands in each region and developing a strategy for dealing
with the particular impacts on these priority wetlands will be
necessary to ensure effective wetland management. The Regions
have to get away from relying on a case-by-case review, driven by
the priorities established by individual permit reviewers and
their managers, for protecting the wetlands resource.
Aaencv Comments On Regional Prioritization of Wetlands And PIG
Evaluation
Agency Comment
"The introductory paragraph at the top of page 79 makes several
broad conclusions that are not supported by the subsequent
information in the draft report itself. For one thing, the
Regions did identify priority wetlands, based on value and
vulnerability, in accordance with the May 1986, Headquarters
memorandum. Second, the bold conclusion that 'the Regions'
approaches to strategic initiatives . . . sometimes sent a
negative message to other government entities and the regulated
public regarding EPA's commitment' to wetlands protection is not
substantiated in the draft report.
"We are concerned that IG staff misconstrued the intent of the
May 1986 memo on priority wetlands. Headquarters did not ask the
Regions to rank and categorize wetlands..., but instead to
identify and list priority wetland types and areas based on value
and vulnerability.
"This draft finding is incorrect. As the draft report itself
indicates, the Regions did identify priority wetlands.
Headquarters did not ask the Regions to rank and categorize
wetlands which, as the Regions themselves noted, would be a
difficult process.
NWe disagree with the statement..., to the effect that priority
wetlands lists, unless developed with 'adequate collaboration and
joint acceptance of these lists by regulators and the regulated
public,' were not very useful. These lists have strengthened the
Regions' ability to focus their wetland protection efforts, and
in fact were intended primarily to assist the Regions in setting
priorities for use of their limited staffs."
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OIG Evaluation
The regions we visited did not identify priority wetlands as
requested by EPA Headquarters. A May 27, 1986 memorandum from a
Headquarters wetlands manager to regional Section 404
coordinators stated:
In February, 1985, I requested that each Region identify and
list the most valuable and vulnerable wetlands located in
your region. ...Fundamentally, we should identify
geographic areas, wetland types and wetland impacts meriting
special attention. Then, we must focus more of our
authorities and resources on those areas and impact.
...The Regional priority lists identify the most important
and the most vulnerable wetlands in a region. Appropriate
application of these criteria will contribute to the most
effective allocation of limited Agency resources to wetlands
protection. In general wetlands on your lists should
clearly be among the most ecologically valuable and most
susceptible to conversion pressure.
.. .Preparation of the priority list will require extensive
contact with other Federal, State, and local agencies....
.. .The resulting document should be more than a simple
list....
...(2) Specifically identified wetlands: The more detailed
the lists the more helpful they will be. ...the list should
indicate those [wetlands] that appear to stand out as most
important and should state why.
As shown in the report, each region did produce some type of
wetlands list; however, the lists were inconsistent and did not
conform to the Headquarters requirements reflected above. Not
all of the regions solicited input from the public and other
government agencies in compiling wetland lists as requested by
Headquarters while others did. Region 6 identified wetland
types. Region 4 generally identified all of its wetlands types
by State and vulnerability but the Region did not identify its
most valuable and vulnerable wetland resources as requested by
Headquarters. Region 7 generally mapped large wetland areas in
the Region. Hone of the regions prioritized the value and
vulnerability of their wetlands and made these lists available to
the public as reflected in Headquarters guidance. In addition,
the lists as prepared fell short of helping .alert EPA, other
agencies and potential permittees concerning individual wetlands
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rategie Initiatives Were Not Effectively Implemented
and wetlands systems that will require especially careful
analysis before any permits can be granted" as stated in
Headquarters guidance. Neither could they be used to "focus"
authorities and limited resources on those valuable and
vulnerable areas.
Furthermore, if you require a region to identify its most
important wetland areas as to value and vulnerability, you are by
necessity prioritizing wetlands within the region. To prioritize
means -to rank." Also, EPA Headquarters requested that the
wetlands be identified as to type/function or to "categorize"
listed wetlands where possible. Since OW has problems with the
terms "ranking" and "categorize," we have substituted the term
prioritize for ranking and eliminated the term categorize from
the report altogether.
Headquarters guidance for preparing the list of priority wetlands
indicated that extensive contact and coordination with the public
and other government agencies would be necessary to make the list
a valuable tool for focusing resources. The guidance also
intended for the priority lists to be made available to the
general public in FY 1987. We agree that the lists have some
limited internal value; however, if other resource agencies
(especially the COE) said the public do not agree with EPA's
assessment of a wetlands value and vulnerability, then
intensified focus on the wetlands by EPA's program staff may have
minimal effect on the regulatory process and, therefore, reduce
the effectiveness of EPA's already constrained resources. We
agree that a purpose of the lists was to assist the regions in
setting priorities for use of their limited resources, but, as we
reported, the lists provided to us by the regions were of no use
for priority setting. For example, Region 6 told us (could not
find it in writing) that its reported priorities were bottomland
hardwood wetlands and coastal wetlands. A permit reviewer could
not prioritize his work based on such broad wetland categories.
The statement regarding the negative message sent to outside
agencies and the public regarding EPA's commitment to the most
valuable wetlands is supported by (1) the examples of deficient,
uncoordinated strategic initiatives cited in this Chapter, (2)
unaddressed outside requests for advanced identification
assistance, and (3) the COE's criticism of EPA's failure to use
available authorities to protect wetland areas once identified as
unsuitable for fill.
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STRATEGIC INITIATIVES NEEDED MORE NATIONAL GUIDANCE.
COORDINATION. AND OVERSIGHT
While OWP did provide guidelines for performing advanced
identifications and identifying other activities that would
qualify as strategic initiatives under annual performance goals,
OWP did not provide guidance on implementing the strategic
initiatives program element or establish specific goals and
objectives for such initiatives. Without adequate direction and
control, individual regional strategic initiatives did not appear
to fit an overall scheme or plan but, instead, tended to follow
the individual agenda of regional staff or management. In
addition, some advanced identifications appeared poorly planned,
coordinated, and controlled. As a result, not only did each
regions* commitment and approach toward strategic initiatives
vary, some individual actions did not meet program standards.
Background
By 1988, advanced identification was well established in Agency
Operating Guidance as the primary Section 404 proactive approach
to wetland regulation. Performance of advanced identifications
became an annual regional program commitment. While the national
program provided for some flexibility by allowing various
combinations of advanced identifications and other program
initiatives to count toward each region's SPMS/STARS commitments,
the regions argued that the advanced identification commitment
did not allow the regions to address other wetland problems while
seeking to meet national objectives. Therefore, for FY 1989,
national program management made the FY 1988 advanced
identification commitment even more flexible by establishing
"strategic initiatives" as a program element so that regions
could count a broader range of activities other than advanced
identifications against their program goals.
Activities recommended in the 1989 operating guidance as
strategic initiatives included: advanced identification; special
area management plans; other comprehensive or multi-objective
planning; intensive enforcement activity; significant
jurisdiction delineation; nonroutine public outreach and
education; significant active participation in a resource
planning activity of another agency; joint activity with a State,
tribal or local government; and wetland restoration and/or
enhancement. However, to qualify as a strategic initiative under
the region's SPMS/STARS commitment, each activity had to be a
major task comprising 10 percent or more of the region's wetlands
program resources and subject to OWP approval. At a minimum,
each strategic initiative would involve problem analysis,
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identification of goals for the targeted wetlands, evaluation of
options to achieve goals, an action plan to achieve the selected
option, implementation, and evaluation of results.
Strategic Initiatives Needed Control and Direction
The Agency's performance management system (SPMS/STARS), provided
for national program managers to develop definitive operating
guidance to implement long-term program strategies to include
strategic initiatives. However, as stated in Chapter 2, OWP has
never successfully issued any official long-term strategy and
related operational guidance for the Section 404 program.
Neither did OWP require regions to develop plans, with measurable
commitments, to guide their strategic initiatives. The only
direction regions received for implementing strategic initiatives
was the general objectives outlined in the annual Agency
Operating Guidance and a guidance document for advanced
identifications issued in 1989 (three years after advanced
identification was first emphasized in the Agency Operating
Guidance). The only measurable requirement placed on regions,
starting in 1988, was to perform a least one advanced
identification. In 1989 this was changed to a qualifying
"strategic initiative." As a result, regional commitments to the
strategic initiative program objective were varied and
inconsistent.
In the 1989 Agency Operating Guidance, OW recognized the
importance of senior management support for strategic initiatives
because these activities would require considerable amounts of
regional resources (staff and management time, travel funds, and
sometimes extramural funds for outside contracting). OW also
recognized the need to carefully target and plan the Regions'
initiatives. However, this realization was not followed by a
planning commitment in the form of an overall national or
regional strategy, or a region action plan for individual
initiatives with measurable objectives and controls. The only
control was to provide a brief summary of proposed strategic
initiatives for OWP's review and advance approval. However, this
requirement was not put in place until FY 1989.
During our reviews at Regions 4, 6, and 7, we found no evidence
of regional planning for strategic initiatives, including
advanced identifications, and how they were to benefit the
regions' Section 404 regulatory programs. In addition, from our
review of strategic initiatives proposed and performed (in
particular advanced identifications), regional commitments and
approaches varied depending on individual regional emphasis.
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As of November 20, 1990, the regions strategic initiatives were
summarized by an OWP report as follows:
Region 4 reported 12 advanced identifications in
process across the region, two areas in Florida
proposed for an advance 404(c), and an environmental
planning study underway in the Florida Keys.
Region 6 reported one completed advanced
identification, three additional advanced
identifications underway, and two planning initiatives:
one for Coastal Louisiana; another for a wetland area
on the Texas coast.
Region 7 reported one advanced identification
(Rainwater Basin) and a variety of other activities
such as: a Central Flyway Master Plan; two
mitigation/restoration studies; two GIS projects, one
involving the Rainwater Basin; three public outreach
projects including a television documentary on the
Rainwater Basin, and a video for the agricultural
community. .
All three Regions were also involved in other activities which
could be considered valuable for the enhancement of state
programs, public outreach and education. However, we could not
attribute the strategic initiatives and other outreach activities
to a well-devised plan but, more realistically, to a take-it-as-
it-comes environment. As shown above, the regions' approaches to
implementing the advance planning (strategic initiative) program
were very divergent lacking a common scheme. Now that regions
have more flexibility under the strategic initiative commitment
the inconsistencies will become more acute. For instance,
Regions 6 and 7 program management stated they were not
considering any advanced identification studies for the near
future contrary to national program emphasis on such sttidies.
However, without a formal strategy and performance commitments to
direct the regions approach, this was an elective decision. In
contrast, Region 4 with a separate Section 404 planning unit has
a long-term commitment to an aggressive advanced identification
program starting five new advanced identifications since our
pilot audit for a total of 12 since 1988. However, without
national direction and control, Region 4's, advanced planning and
related resource commitment depends entirely on Regional
management support for the initiatives.
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Agency Comments On Need For More National Guidance On Strategic
initiatives And OIG Evaluation
Agency Comment
'•The draft report appears to contradict itself by stating.. .that
Headquarters failed to 'provide guidance on implementing the
strategic initiatives program element,• and then...stating that
the Regions 'did not always comply with national guidance for
advanced identification. . . .1"
OIG Evaluation
Contrary to OW's comment, there is no contradiction in the report
related to inadequate guidance for strategic initiatives. There
is guidance for advanced wetlands identification. However,
strategic initiatives are much broader in scope than advanced
identifications as shown in the report. Advanced identification
is just one activity under the strategic initiatives program
element although it is an important part of this element.
Therefore, we continue to conclude that guidance for implementing
and measuring the broad scope of activities under the strategic
initiatives element was inadequate.
jRnVANCED IDENTIFICATIONS NEED TO BE ADEQUATELY PLANNED.
rOPRDINATED. AND CONTROLLED TO ENSURE EFFECTIVENESS AND
rOMPLIANCE WITH GUIDANCE
Since we concentrated our detailed review on advanced
identifications, we could not conclude as to the effectiveness or
propriety of all strategic-type activities performed in Regions
4, 6, and 7. However, the advanced identifications we reviewed,
while possibly beneficial, did not always comply with national
guidance for advanced identification and may not have been the
best use of scarce regional resources.
Our review of 15 strategic initiatives, including 12 advanced
identification studies, in Regions 4, 6, and 7 disclosed evidence
of poor planning/performance and/or noncompliance with national
guidance for advanced identifications. The studies were not
initiated as part of an overall plan on a priority wetlands basis
related to value and vulnerability, but represented individual
regional reactions to outside organizations and staff
recommendations based on their individual program knowledge and
experience. However, in 10 of the 12 advanced identifications we
reviewed there were apparent questions as to the value and
vulnerability of the study areas, extent of COE and community
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support, and study objectives. Therefore, the majority of the
these regional strategic actions appeared not to comply with the
advanced identification guidance being poorly planned and
coordinated with goals inconsistent with the stated purpose of a
strategic initiative according to Agency Operating Guidance,
"... to improve levels of protection for wetlands and/or other
critical aguatic habitats on a broad scale."
The purpose of advanced identification was to specify wetland
areas in advance of a permit application as suitable or
unsuitable for fill to aid regulators and the regulated public
through advance notice of wetlands subject to Section 404
restrictions. This advance notification would reduce permit
applications and facilitate permit processing where appropriate.
Identifying valuable and vulnerable wetlands to the general
public would also preclude large investments in specific wetland
sites subject to Section 404 restrictions and the unknowing
destruction of valuable wetlands. In addition, advanced
identifications were to provide a database addressing wetland
values arid functions for the study area, increased public
knowledge and participation in the Section 404 permitting
process, and improved coordination between the permitting
authority (COE), EPA, and affected States regarding wetland
issues.
OWP's advanced identification guidance2 also stressed the
importance of site selection (targeting), setting study goals
(planning), and interagency coordination. Site selection was to
take into consideration: (1) the ecological and societal values
of the wetlands; (2) the vulnerability of the wetland from
filling or other degrading activities; and (3) the
administrative, interagency coordination, and/or community
relations factors that could affect the ability of the region to
complete the advanced identification study. Goals established
for each advanced identification were not to be generic but
specific goals for the wetlands under study such as development
of regulatory actions (e.g., advance Section 404(c) actions),
initiation of State or local regulations to protect wetlands, or
the development of a public outreach program. Because advanced
identifications required the participation of the COE (or State
permitting authorities), OWP guidance stated that no substantial
work should begin on any advanced identification until the
2 Guidance to EPA Regional Offices On the Use Of Advanced
Identification AuthorItiea Under Section 404 Of The Clean Water
Act (draft), March 23, 1989
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ategio Initiatives Were Not Effectively Implemented
applicable COE district formally agreed to the proposed study
with the understanding that a joint public notice would be issued
at completion of the study.
Some of the 12 advanced identifications we reviewed in Regions 4,
6, and 7 did not clearly comply with OWP's standards for
targeting, planning, and coordination for such studies. For
example, in Region 6, an advanced identification was initiated at
the request of the Fish and wildlife Service (FWS) who indicated
the subject wetlands was under potential development pressure and
contained valuable wildlife habitat. The COE district
subsequently declined to participate because it did not consider
the study area currently threatened. Therefore, the study did
not qualify under OWP guidelines for site selection and
interagency coordination. Also, the stated goals were very
general: "Delineate the wetlands, conduct special studies [avian,
fisheries, recreation], conduct Wet II functional analysis
[wetland delineation]." The requirement for specific goals
specified in OWP guidance was never formalized. As a result,
Regional management expended substantial program resources on an
advanced identification study without first gaining COE support
and assurance that a final joint public notice would be issued.
Without the permitting authority's cooperation and support, the
studies findings will not provide the benefits intended in OWP
guidance.
After a five-year Region 7 advanced identification study
involving, approximately 54,000 acres of valuable wetlands that
remained in an extremely important river complex, EPA and the COE
issued a public notice identifying around 34,000 of the remaining
acres as unsuitable for fill. However, the Region proposed to
use the results of the advanced identification study as a public
information document only. COE staff involved were critical of
the Region because it would not proactively using its 404(c) veto
authority to protect the most valuable areas identified in the
study. COE staff encouraged that EPA's Section 404(c) authority
be used more effectively once areas are identified as
"unsuitable** for fill. Advance 404(c), in the COE District's
opinion, could greatly reduce the workload of COE and the other
resource agencies while providing greater protection to wetlands.
As reported in Chapter 4, however, the Regions found it difficult
to take 404(c) actions against proposed individual permits when
significant environmental impacts were anticipated. To initiate
a 404(c) action in advance of a permit application was described
by Regional staff as an unrealistic possibility. Although the
authority does exist, regulatory requirements all but prevent its
use. We were told that the main obstacle was the regulatory
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requirement that owners of record be mailed public notices. This
would require a search of property records which could be very
resource intensive. For an area like the 34,000 acres identified
in the Region 7 study, providing personal notification of wetland
designations and planned public hearings could be a massive
undertaking.
While Region 7 refrained from using advance 404(c) to protect the
most valuable wetland areas, the Agency was encouraging its use
and underlining the proactive benefits of advance 404(c) to the
section 404 program. As EPA explained when it issued the final
Section 404(c) regulations, advance protection under 404(c)
... will facilitate planning by developers and
industry. It will eliminate frustrating situations in
which someone spends time and money developing a
project for an inappropriate site and learns at an
advance stage that he must start over. In addition,
advance prohibition will facilitate comprehensive
rather than piecemeal protection of wetlands.
The 1989 draft advanced identification guidance document
continued to promote the use of 404(c) for basically the same
reasons.
If the COE district was anticipating that Region 7 would use its
404(c) authority proactively, there was a need to better
coordinate with the COE to formalize study objectives in advance
so each participants' goals and objectives were realized. Also,
if there was an expectation by OWP that Regions pursue the use of
advance 404(c) during advanced identifications then additional
management direction and possible modification of restrictive
provisions in the 404(c) regulations may be warranted.
In contrast, on one Region 4 advanced identification which was
near completion, the COG district and the Region could not agree
on the content of the final joint public notice. In this case,
the COE district was reluctant to specify the wetland areas as
unsuitable for fill. The COE district initially agreed to
participate in the Region's study and to issue a joint public
notice. However, the study did not have community support from
the beginning of the project and the COE subsequently became
concerned about adverse public reaction to the final document.
As indicated, COE support is essential to maximize the
effectiveness and value of advanced identifications. However,
some COE Districts were more willing to cooperate than others.
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Generally, we found that COE districts refused to participate in
advanced identification studies because the respective regions
lacked commitment toward COE's regulatory interests, i.e.,
regions were reluctant to commit to specific objectives, such as
general permits, or using its 404(c) authority before initiating
the study which would have the effect of reducing COE's
regulatory burden. Other districts were reluctant to designate
areas and set them aside as more valuable as required under
advanced identification criteria. Also, contributing to the
coordination problem between regions and COE districts was the
COE's Section 404 planning program, the Special Area Management
Plan (SAMP), authorized under the 1980 amendments to the Coastal
Zone Management Act and COE's Regulatory Guidance Letter (RGL 86-
10).
Because the SAMP process was labor intensive, the RGL encouraged
district engineers to participate in a SAMP study only if the
wetland area was environmentally sensitive and under strong
development pressure and the proposed study was sponsored by a
State or local agency, included public involvement and concluded
with a definitive regulatory product.
Advanced identification while having similar objectives as a
SAMP, do not always provide a regulatory product or have a
sponsoring local agency. Therefore, EPA's advanced
identification guidance conflicts with basic COE guidance for
proactive wetlands planning. While both EPA and COE recognized
the importance of proactive initiatives, the separate guidance
sometimes resulted in the COE and EPA wanting wetlands planning
but on different levels. Recently, COE districts in Region 6
have shown a reluctance to participate in advanced identification
initiatives that designate wetland areas as suitable or
unsuitable for fill unless Region 6 agrees up front to some type
of resulting regulatory product [eg., general permits, advanced
404(c), etc.]. Without this commitment, some COE districts seem
determined to emphasize their SAMP process and avoid the Region's
advanced identification studies.
The benefits of proactive wetlands identification and planning,
as a tool to reduce the problems associated with the traditional
permit-by-permit review, will not be realized without interagency
coordination and cooperation. Also, advanced identification
projects need to be adequately controlled to ensure they meet
Agency standards, especially during the initial targeting,
planning, and coordinating phase of the review, and, therefore,
provide the maximum effectiveness for the resources expended.
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Agency Comments On Need For Better Planning. Coordination. And
Control For Advance Wetland Identifications And PIG Evaluation
Agency Comment
"Contrary to the statement..., Region 7 has issued a public
notice proposing to designate wetlands within the Rainwater Basin
as suitable or unsuitable for fill and thus will be fulfilling a
basic objective of the ADID approach."
OIG Evaluation
We agree with OW's comment on the Region 7 advanced
identification. The cited public notice was issued and this
notice did identify areas as suitable and unsuitable for fill.
Region 7's comments on the position papers addressed this
discrepancy in the draft report. However, the comments were not
received in time to be adequately addressed prior to issuance of
the draft report. We have made changes in the report to reflect
this information.
CONCLUSION
Because of ever-increasing conversion and development of the
nation's wetlands and Federal budget restraints, EPA may never
attain the program resources necessary to properly regulate
wetland degradation and destruction on an individual permit
basis. Strategic initiatives, especially advanced identification
studies, were intended to improve EPA's protection of wetlands
through delineating for the regulated public, large wetland areas
as suitable or unsuitable for dredge and fill activities so that
EPA could more effectively focus its limited Section 404
resources on the most valuable and vulnerable wetlands. The
program's past regulatory emphasis on individual permit reviews
was resource intensive, represented a nearsighted approach, and,
as program management recognized, may not have necessarily
afforded the best protection of our most valuable wetland
resources. If EPA is to maximize wetland protection with
continued limited resources, the Agency will have to approach
wetlands protection on a larger scale than permit-by-permit
reviews. This can only be accomplished through identifying the
most valuable and vulnerable wetland resources and delineating
those areas within these priority wetlands as suitable or
unsuitable for permitting. This approach could reduce the number
of permits and allow EPA to intensify its regulation of areas
where permitting will continue. Therefore, it is incumbent upon
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i
program management to establish long-term goals for proactive
wetland initiatives and then control and direct regional
accomplishments in a consistent, expeditious attainment of these
goals to ensure a viable wetlands protection program for the
future.
As wetlands planning initiatives evolve and public knowledge of
the process grows, the Regions will begin to get increased
requests from individuals, local governments, corporations, and
conservation/environmental groups to conduct advanced
identifications and other planning initiatives as encountered in
Regions 4 and 6. Increased interest will make it more and more
difficult for the Regions to evaluate the merit of these
proposals without needed information to assess wetland values and
vulnerability. In addition, a strategy based on risk will be
necessary not only to prioritize planning initiatives but direct
their implementation.
For 1992, OW has proposed a watershed management approach to
protect and maintain water quality and preserve wetland values
and functions over large geographic areas. This will require a
watershed assessment of wetland value possibly through advanced
identification or other strategic initiatives. Since 1986, the
Section 404 program has emphasized large ecosystem strategic
initiatives similar to OW's watershed management approach.
However, regional accomplishments of the large ecosystem
initiatives, as with other Section 404 strategic initiatives,
have been limited in scope. Unless the Agency provides adequate
control and direction to the watershed initiative along with
sufficient program resources and regional commitments, the
watershed approach will, most likely, not achieve any more
success in protecting wetlands than the Section 404 program1 s
current proactive initiatives.
^COMMENDATIONS
We recommend that the Assistant Administrator for Water establish
measurable national goals and definitive program guidance for
regional Section 404 strategic initiatives, obtain substantive
regional commitments to these goals, and provide sufficient
national oversight and direction to ensure, consistent attainment
of these goals. Specific recommendations include:
- ensure that the regional programs properly identify and
prioritize their wetland areas and adequately coordinate
with the permitting authority (COE or delegated State) for
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agreement on a priority wetland list for use in targeting
the program's limited resources in regulatory and proactive
elements of the Section 404 program.
- negotiate a strategic initiative MOA(s) with the COE, on a
national or field level basis, to establish methods of
interagency cooperation on specified proactive initiatives
and agreement on the effective use and integration of
advanced identification and SAMP processes to improve
protection of the most valuable and vulnerable wetlands and
enhance the regulatory process.
- ensure that regions initiate future advanced
identifications in accordance with national guidelines and
in close coordination with the COE on site selection,
objectives, and individual agency responsibilities in order
to maximize the effectiveness of these resource intensive
studies. These studies should optimize the use of EPA's and
COE's available regulatory authorities and public/State
participation to include general permitting for suitable
dredge and fill areas and Section 404(c) action to protect
the most valuable/unsuitable areas.
- provide the necessary follow-up and direction to ensure
that regions accomplish approved strategic initiatives on a
consistent and timely basis in accordance with national
program goals and objectives.
Agency Comments On Recommendations and PIG Evaluation
Aaencv Comment
"We believe it is inappropriate for EPA to proceed independently
with regards to wetlands ranking in light of the recent White
House announcement that the Administration will be establishing
an interagency technical panel on wetlands categorization.M
PIG Evaluation
The recommendation only requested that the program prioritize
wetlands for the purposes previously provided in Headquarters
guidance. If program management wishes to delay action until the
interagency technical panel on wetland categorization has
concluded its study, we have no objections. We can resolve the
recommendation based on Headquarters intent that the recommended
action will be taken when the technical panel concludes its work.
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Agency Comment
"At this time, the Office of Water has no plans to negotiate an
MOA on ADID with the Corps at the national level."
OIG Evaluation
ON disagrees with this recommendation but gives no reason for its
objection. Based on the problems noted during the audit with COE
cooperation on advanced identification studies, the pressing need
for advanced planning initiatives to identify valuable and
vulnerable wetland areas needing protection, and the need to gain
COE support for these determinations in the permitting process
indicates that a national MOA would be the most simple, effective
method of resolving this problem. The COE should also have a
mutual interest in resolving this problem because advanced
identifications, COE's special area management plans (SAMP), and
other Section 404 planning initiatives have the potential to
provide regulatory relief. With the COE and EPA possessing
mutual goals and objectives in wetlands planning, the two
agencies should confer on how to jointly proceed in prioritizing
and accomplishing the same planning initiatives that each often
ends up doing alone. However, we have added the option of
negotiating field level agreements with the COE for advanced
identification cooperation to the recommendation to provide more
flexibility to program management.
Agency Comment
"We agree that the Regions should initiate ADID projects in
accordance with existing national guidance and that Headquarters
should ensure that ADIDs are consistent with such guidance."
OIG Evaluation
ON basically agreed with recommendation.
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Appendix I
COMMENTS FROM THE ENVIRONMENTAL PROTECTION
AGENCY. OFFICE OF WATER
'HP AFT IG REPORT - OFFICE OF WATER COMMENTS1
I. introduction
A. Audit Purpose
* The initial statement of the purpose and scope of Section
404 of the Clean Water Act is misleading, section 404 is not
limited to regulating activities in wetlands. It establishes a
permit program to regulate the "discharge" of "dredged and fill
material" into all "waters of the United States," which include
but are not limited to "wetlands."
(1) We have revised the report to reflect Section 404's intent
to regulate all U.S. waters, including wetlands.
* According to recent wetlands trends data, the annual rate
of wetlands loss stated in the draft report is too high. The
current loss rate is approximately 300,000 acres per year.
(2) During our review of various wetland articles, reports,
congressional testimony, etc., we came across various
estimates of annual wetland loss ranging from 300,000 to
500,000 acres. We elected to use the most common reference
of 300,000 to 450,000. ON does not clearly identify the
source of its revised estimate. However, since CM believes
that 300,000 acres is a better appraisal of wetland losses,
we have revised the report accordingly.
B. Background
* The description of Section 404 enforcement authorities
(top of page 1) is incorrect. As explained in more detail below,
the statute gives EPA and the Corps joint authority to enforce
against unauthorized Section 404 discharges.
(3) Our review of the CWA did not provide a reference supporting
OW's position that EPA and COE have joint statutory
responsibility to enforce against unauthorized Section 404
discharges. We agree that Section 309(g) of the CWA does
give both the COE and EPA (over delegated state programs)
administrative penalty authority over permit violations.
However, Section 404 only refers to COE enforcement against
permit violations with section 404 (n) emphasizing that:
"nothing in this section shall be construed to limit the
1 The Office of Water transmittal letter which accompanied
these official comments is located at the end of this appendix.
, 123 Audit NO. E1HWE0-04-0291
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Appendix I
Comments From the Environmental Protection Agency, Office of Water
authority of the Administrator to take action pursuant to
section 309 of this Act." Section 301, in concert with
Section 309, gives EPA the statutory authority to enforce
against unlawful (unpermitted) Section 404 discharges and we
found no statute reference that gave the COE joint
enforcement authority for such illegal activities as stated
in OW's comments. To the contrary, COE's own regulations at
33 CFR, Part 326.2 emphasize EPA's responsibility by stating
that: "As EPA has independent enforcement authority under
the Clean Water Act for unauthorized discharges, the
district engineer should normally coordinate with EPA to
determine the most effective and efficient manner by which
resolution of a section 404 violation can be achieved." The
COE did agree, under the Enforcement MOA, to enforce against
unpermitted discharges on EPA's behalf, but we have found no
instance where the COE has recognized statutory
responsibility for such enforcement actions. As reported,
we maintain that EPA has independent statutory authority
and, therefore, sole responsibility for ensuring effective
enforcement against illegal Section 404 discharges.
* In the short discussion of wetlands loss, the attempt to
distinguish between direct conversions by physical alteration, on
the one hand, and wetlands degradation through chemical
contamination, on the other hand, should be clarified to state
that only direct conversions involving discharges are regulated
under Section 404.
(4) We agree and have added a footnote to the report to clarify
this fact.
* Contrary to the statement at the bottom of page 5, EPA's
wetlands program encompasses more than implementing the Agency's
Section 404 authorities and responsibilities. The Wetlands
Division - and previously, the Office of Wetlands Protection -
has an entire branch devoted to protecting wetlands through
nonregulatory approaches.
(5) We could not locate the draft audit report statement
corresponding to OW's reference or a statement that would
have initiated the CM response. Therefore, no OTG
evaluation could be presented.
Improvement Needed in Management Direction, Control, and
Accountability
* We disagree with the statement at the top of page 13
that "EPA's organizational accountability . . . holds each
Regional Administrator accountable for accomplishing national
program objectives as established by EPA Headquarters program
offices." The Administrator himself has said that the Regional
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Appendix I
ffnimiiaritB From the Environmental Protection Agency. Office of Water
Administrators work for him and for the President, not for the
program offices.
(6) According to 40 CFR 1.61: "Regional Administrators are
responsible to the Administrator, ... for the execution of
the Regional Programs of the Agency ...." However, this
subpart continues by outlining one of the Regional
Administrators' responsibilities as "Accomplishing national
program objectives within the Regions as established by the
Administrator, Deputy Administrator, Assistant
Administrators [emphasis added], Associate Administrators,
and Heads of Headquarters Staff Offices." EPA's program
offices, through the Administrator, established program
objectives, goals, and performance measures through the
Agency Operating Guidance. Therefore, Regional
Administrators are accountable to the Administrator for the
accomplishment of the national program objectives and goals
as established by the program offices and presented in the
annual Agency Operating Guidance. The CFR reference and
other revisions were added to clarify this issue.
A. Background
* The three Section 404 program areas (permit review,
enforcement, and strategic initiatives) identified in the draft
report are important elements of EPA's wetlands protection
program, but by no means the only components of our program.
(7) The draft report did not state that permit review,
enforcement, and strategic initiatives were the only
elements of the EPA's Section 404 program. The report only
stated that these were readily recognized as three essential
program elements by ONP and identified as "basic" in
documents such as the Agency Operating Guidance and
continually emphasized by management throughout the audit
period. Because these activities were either based on
statutory or regulatory requirements and identified by
management as "basic" to any regional wetlands program, we
elected to limit the scope of our review to these three
elements. We recognize that there are other components of
the Cf7 program, however, we chose to concentrate our efforts
on program activities that could not be considered elective.
B. IG Draft Finding - Wetlands Program Lacks Measurable Program
coals. Staff Commitments, and National Guidance for
Twmlementing Program Objectives
* By criticizing Headquarters for failing to set
definitive, measurable goals or measurable commitments for the
Regional wetlands programs, the draft report is promoting a
management philosophy that is at odds with the Administrator's
and Deputy Administrator's management approach and goals.
, 125 Audit No. E1HWEO-04-0291
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Appendix I
Comments From the Env< ^"mental Protection Agency* Office of water
(8) We were not aware of any new management philosophy until our
exit conference when a November 1, 1989 memorandum and task
force report were brought to our attention. We subsequently
reviewed these documents and found that they present similar
concepts as those we are recommending in this report. The
memorandum and task force report document concepts such as:
putting program accountability into strategic planning;
making the management accountability systems convey a strong
sense of the Administrator's priorities; creating a more
meaningful balance between performance and the quality of
products; continuing to develop joint targets or estimates
of each Region's activity levels in support of national
program objectives: and tracking key program activities.
Therefore, none of the information provided by the Regions
or OWP and now eluded to by CM supports OW's statement that
measurable commitments are not required under current
management philosophy. In addition, none of the information
provided to us by the Regions or OWP support OW's statement
that measurable commitments were ever established for the
Section 404 program in the areas of public notice review or
enforcement. There were regional reporting requirements
under SPMS/STARS or (MAS but no established
targets/commitments with the exception of advanced
identification. Regions negotiated an FY 1987 target level
of performance for advanced identification which continued
under the strategic initiative element which was introduced
in FY 1989.
Also, nowhere in the draft report did we state that program
accomplishments should be evaluated exclusively on the level
of program activity. We stated, consistent with the
SPMS/STARS guidance, that commitments should be measurable,
whether numerically or qualitatively, and designed to assure
the achievement of established program goals and objectives.
The intent was to establish a quality program designed to
consistently use authorities to accomplish statutory as well
as environmental objectives. However, the definization of
what constitutes a "quality" national and regional program
and the establishment of definitive, measurable goals within
such a defined program is essential in measuring any
functions effectiveness and to ensure the best use of Agency
resources in accomplishing program goals and objectives.
Without such management controls, regional programs are left
to establish their own priorities and goals which may lead
to program operations that are inconsistent with national
program goals and objectives. While some flexibility can be
included in the system, the approach of total regional
flexibility directly contradicts the intent of the FMFIA
which required the establishment of management controls to
ensure accomplishment of program objectives. In addition,
the Agency's SPMS/STARS management accountability system
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Appendix I
Comments Prom the Environmental Protection Agency. Office of water
emphasized the importance of commitments whether they are
quantifiable outputs, deadlines associated with a specific
product, or some other means of measuring accomplishment
toward achieving pre-established program goals and
objectives. Negotiating meaningful commitments and
measuring accomplishment of those commitments is the primary
control within the management accountability system
(SPMS/STARS or ON AS) .
Off's position that establishing measurable commitments for
the wetlands program is contrary to current management
philosophy contradicts what is being done in other Agency
programs. Other Agency programs, including other water
programs, make reference to targets (measurable commitments)
in the FY 1992 Agency Operating Guidance. Until a level of
performance was established in FY 1987, limited progress had
been made toward performing advanced identifications. If
establishing meaningful goals and objectives with
commitments to measure program effectiveness is not
considered a valid control mechanism under current
management philosophy, then the SPMS/STARS systems will have
no real function or purpose for evaluating the Section 404
program. The FY 1992 measures for Section 404 enforcement
demonstrates the inadequacies of the Wetlands SPMS/STARS in
evaluating progress toward accomplishment of program
objectives: , The FY 1992 enforcement objective is to
"Enforce the Section 404 program to improve rates of
compliance with program requirements." While this is a
necessary goal, the performance measures in STARS include
reporting only the numbers of regional actions taken,
referred, and resolved and these statistics will not
demonstrate achievement of the goal to improve rates of
compliance. Only evaluating current rates of noncompliance
(illegal activities) and demonstrating reductions in this
level of noncompliance will indicate accomplishment of that
goal. As recommended by the Deputy Administrator in the
November 1, 1991 memorandum and as we recommend, Region and
Program officials should develop joint targets or estimates
of each Region's activity levels necessary to support and
eventually achieve national program objectives and goals.
ON's remarks concerning the use of "bean counting" conflicts
with its later statements that lack of "bean counting",
i.e., measurable goals and staff commitments, has increased
the program's success as evidenced by the increase in
Section 404 enforcement actions from a low of 63 in FY 1987
to 146 in FY 1990. Such evidence of success appears to be
the same bean counting ON takes exception to. The numbers
do not reflect the quality and consistency of the actions
taken. As stated in the report, our audit in three regions
found that enforcement actions were generally inconsistent
and ineffective. In addition, the memorandum and task force
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Comments From the Environmental Protection Agency. Office ef Wator
study which CM indicated represented the new management
philosophy was dated November 1989. An FY 1990 policy
cannot effect 3 to 4 prior years of enforcement actions.
Furthermore, according to the chart included in OW's
response, enforcement actions increased from 63 in 1987 to
120 (almost 100 percent increase) in FY 1988 when, according
to OW, "bean counting" was still in effect. Between FYs
1988 and 1989, enforcement actions increased by only 30 or
25 percent over 1988 and actually decreased in 1990.
Finally, the Section 404 program staff increased over 82
percent (from 85 to 155 FTEs) between 1988 and 1991. This
would also impact the number of enforcement actions
initiated. Therefore, we can not conclude, as CM has done,
that "bean counting" was unsuccessful and that the lack of
measurable program goals and regional commitments
contributed to the increase in Section 404 enforcement
actions.
* We strongly disagree with the summary conclusion (page
14) that a lack of definitive, measurable program goals and
Regional commitments resulted in inconsistent program
implementation, no assurance of an effective and efficient
program, and inadequate budgetary support. To the contrary, the
draft report appears to ignore the fact that, prior to FY 1989,
Headquarters did establish "definitive, measurable goals" and
obtain "measurable commitments for regional wetland operations."
However, this "bean counting" approach proved to be unsuccessful,
given the need for flexibility in a program that required very
limited regional staffs to address a wide variety of
responsibilities and environmental challenges.
(9) See OIG comment (8).
* The draft report fails to credit Headquarters for the
various "program" guidance documents and memoranda of agreement
that have been developed in recent years, some of which have been
issued jointly with the Corps. The Corps has also issued its own
program guidance documents, known as Regulatory Guidance Letters,
with input from and review by the EPA wetlands program.
(10) We disagree. The draft report cites all of the MOAs between
EPA and COE in effect and the guidance applicable to the
various report topics. These documents were not all
specifically referenced in Section B, Chapter 2, because
they did not relate to the needs of a long-term overall
program operating plan with specific guidance for use by the
Regions in designing programs to accomplish individual
program objectives.
OW does not list the -various program guidance documents and
memoranda- we -failed to credit" to the program. However,
since the start of this audit, we have tried to get a
128 Audit MO. E1HWE0-04-0291
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ffammanfcs From the Enviyenmantal Protection Agency* Office of Water
comprehensive list of program guidance for the regional
wetlands programs. We were told that a listing was not
available. We subsequently found guidance references in
reviewing various documents and during interviews at OWP and
the regions. OWP had at least two opportunities to review
the criteria we were using for this audit. First, when we
provided a copy of our audit guide listing various guidance
we would use in Regions 6 and 7. Again, after completion of
regional fieldwork when we asked OWP staff to review the
criteria (guidance) we were using. There were no
recommended additions other than one document recently
finalized on calculating administrative penalties and
another on referring cases to DO J. These documents were not
relative to findings in Chapter 2. Also, program
management's input into COE's regulatory guidance, was not
an objective of our audit and has little relationship to
this finding concerning Agency guidance for internal program
operations.
* The draft report, at the bottom of page 17, incorrectly
states that Headquarters has never obtained measurable
commitments from Regional program management, with the exception
of strategic initiatives. As explained above, prior to FY 1989,
Headquarters set targets for both enforcement actions and advance
identification (ADID) projects.
(11) See comment (8).
* The SPMS/STARS data on enforcement (bottom of page 18),
is meaningful and significant as a measure of the continuing
increase in EPA Section 404 enforcement activity nationwide. It
is inappropriate to compare the number of EPA enforcement
resolutions for FY 1990 to the number of Corps backlogged cases;
the trend of increased enforcement resolutions is a more
significant fact.
(12) ON does not state why this comparison is inappropriate and
we see no reason for not using the comparison. In our
opinion, the comparison demonstrates that while the
enforcement program shows growth, there was a growing
problem with Section 404 compliance.
* For purposes of clarification, the statistics accumulated
in SPMS/STARS are no longer used to help determine Regional
resource allocations.
(13) The SPMS/STARS statistics were used to allocate regional
resources during our audit period and, therefore, we
conclude that no change to the report is warranted.
129 Audit No. E1HWE0-04-0291
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CommAwts From the Env^ronwental Protection Agency, Office of Water
C. IG Draft Finding - Wetlands Program's FMFIA
Implementation inconsistent With CG Standards and OMB Policy
* The draft report unfairly criticizes the wetlands
program's implementation of FMFIA requirements since the IG's
office itself has apparently approved our FMFIA documentation,
although it apparently has also acknowledged that there is an
Agency-wide problem in this area. Moreover, we disagree with the
conclusion that the wetlands program has not sufficiently
implemented the STARS system since, as stated above, our approach
comports with existing Agency management philosophy and has
produced positive results.
(14) We have no knowledge or evidence that OIG has ever
specifically reviewed and approved FMFIA implementation for
the Section 404 wetlands program. CM did not provide a
source of support for this statement.
OW also disagrees that the wetlands program has never
sufficiently implemented the STARS management accountability
system since the program's approach agrees with current
Agency management philosophy [against "bean counting"]. We
found no such management philosophy documented in the
criteria and requirements for the SPMS/STARS management
accountability system for our audit period and CM provided
no adequate. documentation of such a philosophy. Therefore*r
we continue to conclude that CMP had not implemented the
management accountability system as recommended bv Agency
procedures. In addition, establishment of program goals
that can be measured by quality, as well as quantity, as
stated in the report, does not necessarily entail "bean
counting- as CM contends. Furthermore, OW states that
eliminating "bean counting" has produced positive results.
The example of the success of this management philosophy
emphasized by OW is the increase in EPA enforcement actions
between FYs 1989 and 1990. As previously stated this
appears to be "bean counting* in itself and provides no
measurement of the quality of the actions or their ability
to accomplish program goals and objectives (also see Comment
8 above).
* The draft report (s determination that annual program
evaluations should emphasize Regional weaknesses is inconsistent
with modern management theory, which provides that people are
motivated by positive feedback.
(15) FMFIA requires related program controls/evaluations to
Identity internal control weaknesses and resolve such
weaknesses to protect Government resources from fraud,
waste, and abuse and ensure accomplishment of program
objectives.
* Contrary to statements in the draft report, Regions did
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rftwiiinnfg Prom the Envirftwinanfcal Protection Aaencv. Office of Water
initiate changes and redirect priorities in response to the
annual program evaluations undertaken by Headquarters.
(16) Our audit of three Regions disclosed that annual program
evaluations did not identify some weaknesses and some
identified were not corrected. While changes may have been
made in regional emphasis, we could not attribute the shift
to the annual evaluations or subsequent changes in
requirements under the management accountability system.
Since OW provided no specifics as to sources or other
evidence to support their statement, we have no basis for
changing the report's conclusion.
* There is no stated basis for the draft report's
conclusion, at the top of page 23, that Headquarters'
characterization of Region 4 as the "most active and effective
Region" in using Section 404(c) "was based exclusively upon the
number" of Region 4 actions in relation to other Regions. This
"hypothesis" ignores the fact that, under Section 404(c), the
Region submits a recommended Section 404(c) determination to
Headquarters, and that Headquarters thoroughly reviews the
Regional recommendation and administrative record and then
develops, a final determination for signature by the Assistant
Administrator for Water accepting, rejecting, or revising the
Regional recommendation.
(17) The purpose of the example was to demonstrate that the mid-
year report was making an assessment on the quantity not
necessarily the quality of the actions taken. Without
additional information provided, management can not
effectively use the mid-year program evaluations to verify
the accuracy, consistency, or quality of reported actions.
* For purposes of clarification, a reference to Region 6
ADID efforts (page 23) incorrectly equates Corps support in an
ADID project with a definitive impact on the permitting process.
Irrespective of Corps participation, ADID designations are never
"binding" on the Corps for the purpose of acceptance or denial of
a permit application. Despite this fact, these ADID efforts may
have had other positive results, such as fostering cooperation
and coordination between the relevant federal, state, and local
agencies.
(18) The report does not state that no benefits are derived from
an advance wetland identification or any other well planned
initiative without COE participation. However, considering
that advance Identifications are resource Intensive, COE
participation would be crucial to maximize the effectiveness
of the resources involved. Although COE participation in an
advance identification study does not bind the COE to the
study's conclusions regarding Section 404 permitting, COE's
cooperation would have more of an effect on future
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Appendix I
Comments From the Environmental Protection Agency. Office of Watar
permitting decisions than any study performed exclusive of
COE involvement. Hence, the requirement in 40 CFR 230.80
and CMP guidance on advanced identification which require
joint COE participation.
* Contrary to the statement at the top of page 24, Region 7
management has changed its approach to wetlands protection. For
example, the Region has increased its Section 404 enforcement
efforts.
(19) OW provided no documentation or statistics to support this
statement. Our audit in Region 7 disclosed no substantial
change in management's approach to wetlands protection.
Although we were told that the Region had nine COE referrals
"under review" for possible enforcement action, we were
informed in June 1991 that no enforcement action had been
taken.
D. IG Draft Recommendations
* For the reasons stated above, the wetlands program
opposes the recommendation that we establish measurable goals and
obtain Regional staff commitments.
(20) This position is contrary to the purpose of the SPMS/STARS
management accountability systems. Without goals related to
program objectives that are measurable in quality and/or
quantity, there is no basis for evaluating the consistency,
efficiency, or effectiveness of regional programs. This
results in insufficient management controls to assure the
accomplishment of management objectives as required by the
FMFIA and CG standards for internal controls. Therefore,
our recommendation related the establishment of measurable
program goals and commitments remains unchanged, (see also
comment 8)
* As noted above, the program has developed program
guidance, although this fact is not well-documented in the draft
report. Moreover, EPA cannot always commit to develop future
programmatic guidance documents ourselves since we frequently
need to work jointly with the Corps to develop "effective"
programmatic guidance for the Section 404 program.
(21) During the audit we identified all the program guidance
related to EPA's Internal program operations as provided by
CMP and the Regions. This guidance is referenced as
appropriate throughout the report. CM alludes that certain
program guidance issued by EPA Headquarters was not
recognized in the draft report, but Off presented no
specifics as to what this unrecognized guidance consists of.
The recommendation was for developing long-term (internal)
guidance and plans (strategies) in conjunction with the
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Appendix 1
rommnnfrs Prom the Environmental Protection Agency, Office of Water
Regions to implement a wetlands program designed to
accomplish program objectives. We see no requirement for
joint interagency coordination to produce such internal
program guidance as recommended by the report. Therefore,
our recommendation remains as stated in the draft report.
* We are willing to examine the adequacy of our
implementation of the FMFIA internal control process, and in
particular, will consider adding our SPMS/STARS measures and
annual program evaluations to that process.
(22) Although Off has indicated that positive actions will be
taken on improving the FMFIA process, the inclusion of the
SPMS/STARS measures will have little effect without first
establishing meaningful annual program goals and commitments
in such systems.
* The office of Water also agrees that there should be
regular reviews of the Regional wetlands programs, although not
necessarily on an annual cycle.
(23) No comment necessary. CW fundamentally accepted the
recommendation
frll. EPA'8 Section 404 Enforcement Program is Not controlling and
Deterring Illegal Discharges into Priority Wetlands
A. Criteria
* The draft report demonstrates a continuing
misunderstanding of Section 404 enforcement on the part of the
IG's office. The statute gives both EPA and the Corps authority
to enforce Section 404; the Corps' authority is not derived from
an EPA delegation.
(24) Off's response states that "the statute* gives both the COE
and EPA the authority to enforce Section 404. We are not
sure to what statute Off references. Section 404 only
provided for the COE to enforce against permit violations
not unpermitted discharges. There are no other enforcement
authorities provided in Section 404, Section 309 provides
EPA (over delegated state programs) and COE with joint
authority to enforce against permit violations, section
301, in concert with enforcement authorities under Section
309, provides EPA with enforcement responsibility for
unpermitted discharges. We could not find a CtiA reference
that gave the COE any enforcement authority for illegal
discharges. (also see comment 3). Therefore, the COE's
authority for enforcement against unpermitted discharges can
not be statutorily derived and can only be based on the
enforcement MOA between the COE and EPA. The report's
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Comments From the Environmental Protection Agency. Office of Wat-oy
criteria regarding statutory responsibility for enforcement
against unpermitted discharges agrees with COE's
understanding of this authority. As pointed out by GAO in
its 1988 report and by COE in its response:
...the Clean Water Act vests the Administrator of
EPA with enforcement authority for unpermitted
discharges, not the Secretary of the Army, who is
empowered to enforces against permit violations.
Current COE regulations at 33 CFR 326.2, also state that
unauthorized discharges are EPA's independent
responsibility. In addition, we did not indicate in the
report that EPA "delegated" its authority to COE but said
that it was "allocated" through the joint MOA.
* Similarly, the Enforcement MOA, as first negotiated in
1976 and later revised in 1989, is intended as a mechanism for
ensuring that this joint enforcement authority is efficiently and
effectively implemented, under the terms of the 1989 Enforcement
MOA, EPA is lead enforcement agency for what it views as the most
important unpermitted discharge violations.
(25) As stated in the MOA, its prime goal was to strengthen the
Section 404 enforcement program by using the expertise,
resources and initiative of both agencies in a manner which
is effective and efficient in achieving the goals of the
Off A. The MOA established an "allocation of enforcement
responsibilities." However, as explained above (comment
number 3), EPA has independent statutory authority for
unauthorized discharges. The Agency may allocate its
authority for enforcing against such illegal discharges
under the MOA but not its overall statutory responsibility
for a viable enforcement program.
CW also states that the 1989 enforcement MOA provided the
mechanism for implementing the joint enforcement authority
and under the terms of the MOA, -EPA is lead enforcement
agency for what it views as the most important unpermitted
discharge violations." However, the MOA states that »EPA
will act as the lead enforcement agency on all unpermitted
discharge violations ..." which meet the criteria listed in
Section III.D. Section III.D. lists repeat, flagrant
violators, where EPA requests a case or COE recommends that
an administrative penalty action may be warranted. As such,
EPA has first refusal. COE may take the action against the
violator once EPA notifies that it will not take action.
However, as reported, we found that the regions were not
taking actions against what they viewed as the most
important unpermitted discharge violations but what the cog
viewed should be referred. We also noted that not all COE
districts were making referrals. Because EPA does not
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Appendix I
comments From the Env* T-ontnarital Protection Agency* Office of Water
monitor COE enforcement actions under the MOA and primarily
enforces only against the cases referred by the COE, the
regions had no assurance that they were cognizant of all
significant unpermitted violations within the context of the
MOA.
* Since each Agency has independent enforcement authority,
both EPA and the Corps are responsible for effectively enforcing
Section 404, and it is not EPA's job to "oversee" the Corps'
enforcement efforts, although we agree that coordination between
the two agencies is important. The Office of Water is concerned
that the IG's office, in an attempt to address perceived
deficiencies in the Corps' enforcement program, is instead
attempting to place even greater demands on the Regional wetlands
programs, with a potential for increasing inefficiency.
(26) The CWA provides only EPA with authority to enforce against
unpermitted discharges (see comment 3). Therefore, since
EPA is statutorily responsible it would be incumbent upon
the Agency to monitor the enforcement process against
unpermitted discharges to ensure proper implementation of
EPA's statutory authority. It appears that OW is attempting
to avoid this responsibility by stating that COE shares
statutory enforcement authority over all Section 404
violations, permitted and unpermitted.
If the COE wishes to assist EPA in its enforcement efforts
through an interagency agreement, we support this
interagency cooperation. However, if there are deficiencies
in COE's enforcement of unpermitted violations, it would be
incumbent on EPA to assure effective enforcement. In
addition, either through field level MOA's or some other
means, EPA needs to ensure that significant violators are
routinely referred to EPA so its part of the enforcement
agreement is consistently implemented. This does put
greater demands on EPA's regions, but the enforcement of
unlawful discharges is EPA's statutory responsibility.
* The draft report fails to credit Headquarters with
issuance of two important, wetlands enforcement guidance
documents, which were finalized and distributed to the Regions
during FY 1991: Section 404 administrative penalty guidance
issued jointly with the Office of Enforcement; and joint EPA/Army
judicial enforcement guidance.
(27) Our audit period included wetland program operations for FYs
1988 through 1990. Therefore, any guidance issued after the
end of our audit period or completion of the audit fieldwork
may not be cited in the report. We reviewed the two
guidance document referenced by CM, but found they had
little relevance to the issues addressed in the draft
report. The referenced documents related to calculation of
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Appendix I
Pnnimants From the Environmental Protection Agency. Office of
administrative penalties and the types of cases to be
referred to DOJ.
B. IG Draft Finding - Insufficent Oversight of and Coordination
With the Corps on MOA Enforcement Actions
* The draft report's emphasis on EPA monitoring of Corps
enforcement is misplaced. EPA and the Corps have joint and
equal enforcement authority. It is not EPA's role to determine
whether Corps enforcement is "properly fulfilling EPA's statutory
responsibility to deter [unpermitted violations] (bottom of page
28)."
(28) Again, CM reiterates that EPA and COE have joint and equal
enforcement authority against Section violations without
citing any statute that gives such equal authority over
unpermitted discharges.
* Under the discussion of "Case Notification and
Consultation," (page 30) there is a reference to Corps failure to
"request consultation on potential enforcement actions as
prescribed in the MOA and required under [Corps] regulations." We
are unclear as to exactly what consultation process the draft
report is referring to.
(29) The Enforcement MOA, paragraph IIIc instructs: "In all cases
the COE will provide EPA a copy of its violation letters and
EPA will provide the COE copies of its 308 letters and/or
309 administrative orders. These communications will
include language requesting the other agency's views and
recommendations on the case," In addition, COE regulations
at 33 CFR, Part 326.2 (Policy) states: "As EPA has
independent enforcement authority under the Clean Water Act
for unauthorized discharges, the district engineer should
normally coordinate with EPA to determine the most effective
and efficient manner by which resolution of a section 404
violation can be achievedThis is the consultation
process we refer to in the report.
* The draft report's statement (bottom of page 30) that the
"MOA clearly divided enforcement lead responsibility for
unauthorized discharges between EPA and [the Corps]" fails to
recognize that the HOA envisions that EPA will have the
opportunity to take the enforcement lead on unpermitted discharge
violations falling within the four listed categories, but that
due to staffing constraints and other factors, the EPA Regions
would not be able to take the lead on all cases falling within
these categories and that the Corps would continue to handle a
substantial number of unpermitted discharge violations.
(30) F/e recognized the program's staffing limitations and did not
recommend that OW take the lead in all these cases. F/e did
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Appendix X
commAwts From the Env^ ronmgntal Protection Agency* Office of wata
based upon the 1976 enforcement MOA which was later revised
in 1989 and is not based on any statutory responsibility.
Therefore, the COE's past enforcement practices is not
inconsistent with the report's statement that EPA is
statutorily responsible for Section 404 enforcement against
unpermitted discharges. We do not challenge the decision to
jointly enforce against unlawful discharges under the MOA.
We only question managements position that the Agency has no
oversight responsibility.
* Contrary to the statement in the middle of page 32, it
is inappropriate to direct EPA to impose upon the Corps a
requirement that they conduct their enforcement program so as to
meet EPA program objectives.
(32) The draft report never stated that EPA should or could
impose its enforcement policy on the COE. We conclude that
EPA should monitor the COE's implementation under the MOA to
enhance its own enforcement efforts. EPA needs to devise an
enforcement approach that ensures national objectives are
met through a combined enforcement effort. If situations
arise where COE's enforcement methods are not accomplishing
program objectives or meeting enforcement standards, EPA has
the option to take the lead for a particular case or a class
of cases.
* The second complete paragraph on page 32 also suggests a
misunderstanding of the role of wetlands restoration in EPA's
wetlands enforcement program. Restoration of the illegally
filled wetland is a primary enforcement goal. Contrary to the
discussion in the draft IG report, this goal frequently can be
achieved by requiring a violator to remove illegal fill and
restore the wetland; in many cases, it will not take years to
achieve such restoration. In addition, removal/restoration
eliminates the possibility of permanent gain accruing to the
violator as a result of the illegal activity, as well as
maximizing environmental results.
(33) We recognize that restoration is a primary enforcement goal
and, in many cases, it will not take years to achieve
restoration. However, in other cases it will. Also, we
recognized in the report that removal and restoration may
put a financial burden on the violator, however, the result
is still a degraded wetland which may never fully recover.
Off makes a blanket statement that restoration eliminates any
permanent gain by the violators, but this would have to be
determined on a case by case basis. Without oversight of
COE's actions, EPA can only speculate that requiring removal
and restoration or issuing after-the-fact permits was the
appropriate action to take and that the violator was indeed
placed in a worse position than those who complied. EPA's
own penalty guidance recommends that the Regions quantify
138 Audit NO. E1HWE0-04-0291
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Appendix I
rrt|w«>pfii prom the Environmental protection Agency, Office of Water
any economic benefit obtained from the violator's failure to
obtain the appropriate permit before discharging. An after-
the-fact permit does not excuse the violation. As EPA's
General Enforcement Policy states: "... allowing a violator
to benefit from noncompliance punishes those who have
complied placing them at a competitive disadvantage
which creates a disincentive for compliance. Failure to
remove economic benefit at a minimum might encourage
developers and other applicable parties to illegally
discharge and risk detection. Therefore, it is incumbent on
ON to ensure that enforcement inequities do not occur. If
enforcement authority is inconsistently applied, the
Agency's program is at risk of being viewed as arbitrary
and, as pointed out in EPA's General Enforcement Policy,
could result in increased litigation which will make it more
difficult to gain swift resolution of the environmental
problems.
* The Office of Water agrees that some of the Regions
could be focusing more effort on attempting to negotiate field
level Enforcement MOAs with their respective corps districts.
34) considering the apparent benefit derived from the one field
level MOA negotiated to date, especially the significant
increase in COE referrals, additional agreements with other
COE divisidns or districts would not only increase MOA
compliance but provide more stability and consistency to the
overall enforcement program.
C. IG Finding - EPA Section 404 Enforcement Actions Did Not
Comply with Aaencv Policy and Effectively Deter Violations
* The draft report fails to credit both Headquarters
and the Regional wetlands programs for the significant growth in
wetlands enforcement, which has been accomplished in a relatively
short timeframe and with a very limited field presence.
(35) We can only attest to the enforcement actions in regions
included in our audit. The increases in EPA enforcement
actions from 1988 to 1990 for these three regions are
Included in the report. With the exception of Region 7,
there was a noticeable increase in enforcement activity.
However, Region 4 did not start concentrating on enforcement
actions until after our arrival. Region 6 claimed 101
enforcement actions over the three-year period. However, as
reported, under half (49) could be considered enforcement
cases with 20 of those currently under investigation with no
orders pending. So while there was an increase over the
period it was far from "significant." Also, based on our
review, the quality of many actions taken were questionable.
Therefore, the increase in numbers of enforcement actions
did not necessarily equate to a more consistent and
139
Audit Ho. B1HWB0-04-0291
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Appendix I
pommant-^ From the Envir""manfcal Protection Agency. Office of
effective enforcement program. Our review of enforcement
actions in the three EPA regions disclosed several
deficiencies which are covered in the report.
* For purposes of clarification, the explanation of
after-the-fact permits (page 37) is incomplete and fails to
explain that issuance of an ATF permit is appropriate where the
discharge would have received a Section 404 permit if an
application had been submitted prior to the discharge activity
(the discharge complies with the Section 404(b)(1) guidelines).
(36) An after-the-fact permit does not excuse the violation
before the permit was issued (see comment 33).
* The draft report misconstrues the purpose and scope of
the 1989 Enforcement MOA. It did not envision EPA enforcement
against "all repeat and flagrant violations" (middle of page 39) .
Nor could it since a variety of factors must be weighed before
EPA - or any Federal agency - decides whether to exercise the
enforcement discretion provided by Congress. Also, the MOA did
not envision that EPA would accept all cases referred by the
Corps for enforcement action; in fact, the MOA explicitly
provided for those instances where EPA would not accept referred
cases.
(37) We can not interpret what was "envisioned" by the 1989
enforcement MOA but must rely on the written provisions of
the MOA which states that EPA will be the lead enforcement
agency against all repeat, flagrant violators, etc. By
being the lead agency, EPA should have the opportunity to
enforce against all repeat, flagrant violators, etc. The
statement "... consistent and flagrant violators ..." does
not mean that every case referred by COE or otherwise coming
under its lead will result in a formal EPA action. What we
do state is that EPA should be made aware or should make
Itself aware of "significant" violations. Enforcement is a
-discretion- and not all cases warrant a formal enforcement
approach. However, it should not be so discretionary. that
significant violators go unpunished. Enforcement
consistency is not only important for its deterrent effect
but for the fair and equitable treatment of the regulated
public. This can be achieved only if the Agency ensures
that all significant violations are evaluated by the lead
agency (EPA) using uniform guidelines.
* The draft report's assumption (bottom of page 40) that
issuance of administrative compliance orders (AO) seeking removal
of the illegal discharge and restoration of the wetlands have
little deterrent effect because of a failure to recoup all
economic benefit is wrong since such removal/restoration will
generally eliminate any permanent economic benefit accruing to
the violator. Not only will the violator generally not recoup
140
Audit Mo. E1HWE0-04-0291
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Appendix X
pnimiantg Prom the Env
-------
Appendix I
commwTifcs From the Environmental Protection Agency. Office of wat»y
and OW defines what quality enforcement is through internal
program guidelines and meaningful commitments for
accomplishing program goals and objectives.
* The reference, at the top of page 43, to inconsistent
enforcement action ignores the fact that, in some situations, it
may be appropriate to seek restoration and a penalty from a
violator, while in other cases, it may be equally appropriate to
issue an ATF permit or seek partial restoration without a
penalty, but possibly with mitigation.
(41) Me agree. However, in the cases we reviewed (some of which
are presented in the report), the enforcement actions taken
did not always appear to be appropriate given the
circumstances. Consistency is the main issue and we found
that enforcement actions varied greatly in approach and
result from region to region.
* The issues surrounding regulation of solid waste
discharges to wetlands are not enforcement issues per sef but a
broader programmatic problem that merits resolution.
(42) Regulation of illegal solid waste discharges is an
enforcement issue. We agree that regulation of solid waste
discharges into wetlands involves broader issues across
multiple programs; however, the problem persists. The
discharge of solid waste (a pollutant) into waters of the
U.S. without complying with the permitting provisions of
either Section 402 or 404 is unlawful and comes under EPA1 s
jurisdiction. EPA has consistently maintained that solid
waste discharges can be regulated under 404. However, since
the COE makes the determination of a HdischargeM for Section
404 under its definition which excludes discharges for the
purpose of waste disposal, and EPA, under an MOA, agreed to
enforce such discharges as Section 402 violations, it is
Incumbent on EPA to ensure that these violations are
enforced and brought into compliance through Section 402,
404, or any other mechanism available to the Agency. The
"broader programmatic problems- need to be resolved.
* The Office of Water agrees that monitoring compliance
with administrative and judicial consent decrees is important.
We also agree that there is a need for carefully worded
conditions in consent decrees and that the Regions should place
as much of the burden as possible on the violator, as opposed to
the Agency.
(43) No comment necessary.
* The failure of the Regions to focus on systematic
monitoring of unpermitted discharges is understandable given that
they have very limited staffs; learn about unpermitted violations
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Appendix I
comments From the Environmental Protection Agency* Office of Water
from private citizens, the Corps, and other Federal and state
agencies; and already know about more violations than those
limited staffs are capable of handling. Nevertheless, the
wetlands program agrees that this issue warrants further
examination.
(44) No comment necessary.
D. IG Draft Recommendations
* As already noted above, the Office of Water disagrees
with any suggestion that EPA should be monitoring Corps
enforcement actions.
(45) As we have previously stated, we found that statutory
responsibility for enforcement against unpermitted
discharges is vested with EPA and, therefore, it is
incumbent upon EPA to monitor the COE's implementation of
its statutory authorities. In addition, monitoring would
produce a more effective EPA enforcement program by assuring
consistent approach for all significant violations. The
Regions would have the opportunity to review violations
received by the COE and make its own determination of
unlawful violations subject to EPA enforcement lead. This
would make EPA the decision-maker, as the Agency with
statutory Authority, by allowing it to consistently select
cases that produce the most impact and effective use of its
limited program resources.
* With regard to the remaining draft recommendations on
enforcement, as stated above, Headquarters has issued several
enforcement guidance documents to the Regions within recent years
and will respond as needed on follow-up issues.
(46) Off offered no specific comments on the remaining
recommendations in Chapter 3.
Section 404 Regulatory Program Meeds Better Controls, Guidance,
and Interagency coordination to Properly Fulfill Statutory
Responsibilities
A. Background
* Contrary to statements in the draft report, and as
explained below, Headquarters has issued programmatic guidance
related to Regional public notice review. Moreover, the
criticism of Headquarters for not obtaining "measurable
commitments" from the Regions is inconsistent with the goals of
the STARS system and the Agency* s current management approach.
143 Audit NO. E1HWE0-04-0291
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Appendix I
comwiAwfra From tha Environmental Protection Agency. Office of Watai;
(47) OW indicates that the report incorrectly states that EPA
Headquarters had not issued programmatic guidance on
Regional public notice review. However, the Section
404(b)(1) Guidelines and the mitigation MOA with the COE
mentioned by CM relate to COE technical review and
evaluation of individual permit applications which are not
directly relevant to the findings in this Chapter. The
related findings in this Chapter involve establishing
standards of performance for regional internal permit review
processes, regional monitoring and reporting on public
notice reviews, establishing control and consistency in
processing of public notice reviews to ensure the most
significant permit applications receive proper attention and
that comment deadlines and related requirements, as agreed
to with the COE, are met.
* The data on page 52 on the number of Section 404
individual permit applications (5,400) and the number of other
actions authorized under general permits (28,000) conflict with
national Corps data and should be reevaluated. Also, the draft
report underestimates the amount of staff time needed to complete
a Section 404(c) action. We believe that a Section 404(c) action
takes at least 5,000 hours to complete.
(48) COE permit actions, individual and general, were taken from
a compilation of applicable COE Regulatory Reports for FY
1989. Based on these COE reports, the numbers in our draft
report are correct. OW did not provide the source of COE
national data referred to in their response or the correct
statistics according to their source. In addition, CM
provided no support or source for the 5,000 staff hours
cited as needed to complete Section 404(c) actions. The
2,080 hours cited in the report was taken from the Wetlands
Protection Workload Model for FY 1990 (draft) - the latest
information made available to us for our audit period. We
have not been provided any additional documentation that
would support OW's 5,000 hour estimate.
We were informed during our review that the large amount of
time it takes to implement a 404(c) action, whether 2,080 or
5,000 hours, was generally caused by the lengthy -and
detailed procedural requirements of the 404(c) regulations.
It seems unrealistic that Congress intended to make it this
difficult for EPA to impose a protective authority provided
to protect sensitive areas from dredge or fill activities
when determined to be cause an unacceptable adverse effect.
The only statutory requirements in Section 404(c) were that
the Administrator (1) before making the unacceptable impact
determination, consult with the Secretary of the Army, and
(2) set forth in writing and make public his findings and
reasons for making any determination under this subsection.
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Audit Mo. E1HWE0-04-0291
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grom the Environmental Protection Agency* Office of Water
If the process is cumbersome, it is due to the Agency's
regulations not the statute.
B. IG Draft Finding - Regions Did Not Adequately Track.
ytonitor. and Report Program Activities
* Statements in the draft report to the effect that the
Regions should be tracking general permit data is misplaced
and unrealistic in light of the fact that most general permit
discharges proceed without any notification to the Corps.
(49) Based on our interviews with COE district personnel and
regional staff, the COE is informed in advance of many
general permit discharges (for Nationwide 26, notification
is required) . The COE reviews many other discharges to
determine whether the discharge qualifies under a general
permit and so notifies the general permittee on request. We
were told repeatedly by regional wetland staff that general
permits in particular Nationwide 26 could have significant
adverse environmental impacts and that prior discharges
authorized under both individual and general permits were
not routinely considered when evaluating proposed fills
because the information was just not available to them. The
important issue here is not whether general permits can be
effectively tracked, but how can wetland impacts be clearly
evaluated without accurately maintaining historical
information on prior wetland discharges. Accumulating
information on wetland impacts was one of the goals of
establishing a wetlands management information system as
described by EPA's national program office in 1985.
However, although Regional systems provide for tracking
impacts in Regional databases, the systems are not
compatible between regions and the information was not
adequately maintained. In addition, we mentioned general
permits to establish that their total impact cannot be
effectively evaluated, as in the case of the Nationwide
General Permit 26, without having some tracking mechanism.
* The draft report's criticism that Regional databases
contained incomplete records is unfair to the extent that the
Regions are generally dependent upon the Corps to provide them
with this data and that, without Corps cooperation, it is
unrealistic to expect the Regions to be able to independently
otytain all this data.
(50) Regional wetland database systems were established primarily
at the behest of Headquarters program management. If this
information was not available to regions, we can not
understand Headquarters emphasis on collecting such
information in 1985 and requesting that the regions, through
SPMS, report wetland impact Information. Jn addition, our
reviews in three regions found that the COE usually supplied
145 Audit No. E1HWE0-04-0291
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Comments ronmenta 1 Protection Agency, Office of Water
information in individual permit actions either on the
public notice or when requested; however, we were told that
the extent of cooperation depended on the COE district
involved. Regional staffs stated that the overriding
problem was that public notices were not consistent from one
coe district to another. The solution, which would resolve
the Agency's information requirements plus speed up its
review of public notices, would be to reach an agreement
with the COE on a national level for standardized permit
information in Section 404 public notices. Information that
wetlands staffs indicated was routinely needed anyway for an
accurate assessment of impacts and for determining
compliance with the Section 404(b)(1) Guidelines.
* The Office of Water agrees with the draft report's
suggestion that EPA coordinate with the Corps on database
development and consider using the Corps* computerized
information system, known as the "Regulatory Analysis Management
System" (RAMS), once that system is fully implemented by the
Corps.
(51) The time to coordinate the sharing of database information
is during system development and implementation not once the
system is completely designed and implemented. Getting the
necessary changes that may be required to enable EPA to use
COE's RAMS data collection once fully implemented could be
difficult.
C. IG Draft Finding - Regions Did Not Implement
Consistent/Controlled Public Notice Review Processes
* The draft report's conclusion that there is a lack of
programmatic guidance on regional public notice review ignores
the fact that such review is guided by the principles set forth
in the Section 404(b)(1) Guidelines themselves. It also fails to
mention the EPA/Army Mitigation MOA, which was finalized in
February 1990 and provides a procedural framework for regarding
the level of mitigation needed to demonstrate compliance with the
Guidelines. Moreover, Headquarters has established a Section 404
regulatory training course for Regional staff which addresses
Guidelines interpretation and related permit review issues.
(52) Section 404(b)(1) Guidelines and the mitigation MOA with COB
are basic to the evaluation of Section 404 permit
applications. However, their existence is unrelated to the
finding which is the regional internal public notice review
processes. The finding relates to the need for national
guidance and controls in the regional permit review process
to ensure consistent use of available authorities, proper
review of significant permits, compliance with MOA
requirements on permit comments, followup on recommended
denials, etc. A staff training course would be a good
146 Audit NO. E1HWE0-04-0291
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ftanmitg From the Envlr""m«nfcai Protection Agency, Office of Water-
addition, Jbut it alone will not correct the deficiencies
pointed out in this chapter.
* For purposes of clarification, the Corps beach
nourishment project described on page 60 did not impact wetlands,
but instead sandy beaches and coral patch reefs.
(53) We agree. Beaches and coral reefs are U.S. waters under
Section 404 and not within the regulatory definition of a
"wetlandWe have reworded the report to accurately
describe the resource.
* The Office of Water strongly disagrees with the draft
report's conclusion that Regions should be invoking Section
404(q) in every case where a Regional recommendation of permit
denial is not accepted by the Corps. As explained below, such a
conclusion is indicative of a lack of understanding of the
appropriate role of Section 404(q) in the Section 404 permit
review process and of the resource-intensive nature of these
actions.
(54) Regional staff explained to us the resource-intensive nature
of a 404(q) action. The report does not emphatically
require the invocation of Section 404(q) each time a
recommendation for permit denial is not accepted by the COE.
The report basically states that EPA should not be routinely
recommending permit denial if it is not serious in its
convictions that a significant adverse environmental impact
will result from a Section 404 discharge. At a minimum,
denial recommendations should comply with the requirements
of the 404 (q) MOA so there is no question as to EPA's
resolve. We found examples of comment letters where permit
denial was recommended by a region based on substantial
environmental harm but the comment letters had inappropriate
signatures or were filed late. Other permit denial
recommendations complied with the 404 (q) MOA but with no
apparent follow-up. We concluded from our review that
recommendations for permit denial without the serious intent
to invoke dispute resolution or failing to comply with
404(q) requirements sends a message to the COE that the
Agency either lacks resolve or support for its position
which ultimately wastes EPA and COE resources with little
benefit to the permitting process. It also presents an
unpredictable regulatory approach to the COE who may not be
able to distinguish when EPA is serious and when its not.
Therefore, cooperation in acceptance of EPA's permit
recommendations may be degraded. If EPA only summits
serious recommendations tor denial, then a 404 (q) would be
invoked in every case and the COE would be aware that
rejection of EPA recommendations would be backed up with
404(q) or 404(c) actions.
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Appendix I
PfMnmnBtq From tha Environmental Protection Agency. Office of
D. IG Draft Finding - Interagency Dispute Resolution
Authorities Under Section 404 Rarely Used bv Regions
* As with enforcement, the IG's office continues to
misperceive the appropriate role of EPA's Section 404(g) and
(c) authorities within the Section 404 program. These continue
to be very resource-intensive, high-visibility tools and
initiation of either Section 404(g) or (c) authority is likely to
continue to be infreguent, as compared to the number of permits
being issued by the Corps.
(55) We recognize that invocation of Section 404(c) and 404 (q)
authorities will be infrequent in relation to permit
issuances because of limited program staff and because such
authorities should be reserved for the most serious
environmental impacts. However, our audits of regional
permit reviews disclosed cases where the regions expended
substantial resources to support a 404(q) or 404(c) action
because of perceived severe environmental harm only to drop
the action without explanation. Also, cases were found
where recommendations for permit denial were made on the
basis of unacceptable adverse environmental effects, but
404(q) and 404(c) actions were not pursued and reasons not
documented. We are not asking Off to do any more than was
stated in the Agency Operating Guidance: "... prohibition or
restriction of discharge sites under section 404(c) where
unacceptable adverse environmental effects are projected"
especially for those cases defined as significant.
According to the definition of a "significant issue" in the
FY 1988 Agency Operating Guidance for SPMS/STARS reporting:
"Significant signifies an EPA recommendation for permit
denial, or modification, or conditions" and requires
resolution to bring the discheurge into compliance with the
Section 404(b)(1) Guidelines. Between 1988 and 1990 the
three regions reported in SPMS/STARS that the COE had issued
permits over their recommendations for denial or substantial
permit modifications in 215 -significant" cases, in these
cases, Agency resources used to document and support EPA's
position were essentially wasted without exercising the
dispute resolution process, or possibly wasted the time of
the COE because the EPA's original position lacked
substance. What we recommended in the report was
consistency.
* The draft report fails to indicate that, within recent
years, EPA has had increasing success with its Section 404(q)
elevations and the Corps, in response to such elevation requests,
has been increasingly willing to issue programmatic guidance
reversing a Corps District permit decision contrary to the
Region's recommendation. Moreover, recent Section 404(q) and (c)
actions have been effective in a broader programmatic sense by
serving to define issues of national significance.
148 Audit MO. E1HWE0-04-0291
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Appendix I
From the Environmental Protection Agency. office of water
(56) While there may have been recent successes, the amount of
such activity has been limited compared to the apparent
need. In conversations with COE personnel over failing to
deny or modify permits as recommended by EPA, we were
basically told that EPA has the option to use its 404(q) and
404(c) authorities to stop any undesirable action and since
the regions elected not to use those authorities, their
original recommendations must have lacked merit or
conviction. COE should believe that every recommendation
made by EPA's regions has not only merit but management
support. As described in OIG comment 48 above, the
restrictions on using these authorities on a consistent
basis are regulatory not statutory.
* The draft report's observation that few of the Regional
comment letters satisfy the signature and time requirements of
the Section 404(q) MOA is somewhat misplaced since the Regions
generally meet those requirements when commenting on permits for
which they are likely to seek elevation under the MOA.
(57) As stated above, EPA recommendations for permit denial or
significant permit modifications should not be arbitrarily
made. Any recommendation made by EPA, especially ones for
denial or major project modification, should be considered
serious. We did not find this to be consistently the case.
In addition, CW presented no facts to support their broad
statement that all serious permit recommendations comply
with MOA requirements.
* For purposes of clarification (see page 66), in our July
1990, comments on the final Region 4 wetlands program audit, the
Office of Water stated that we would continue to evaluate the need
to revise the Section 404(c) regulations. That process is ongoing,
although a final decision has not yet been made.
(58) Problems with the 404(c) regulations have been documented in
the program's literature since at least 1985 indicating the
need for revision. In fact, the 1988 Agency Operating
Guidance indicated that revised 404(c) regulations would be
proposed. We point out in this chapter that the problems with
the 404 (q) and 404(c) processes remain. Hence our
recommendation for timely revision of the 404(c) regulations
and necessary modifications to the 404 (q) MOA.
E. IG Draft Finding - Regions Did Not Always Fulfill
Jurisdictional Responsibilities
* The introductory and background discussions under this
draft finding contain some inaccurate information. EPA does have
the ultimate authority to determine the scope of "waters of the
United States,M but not necessarily of "discharges of dredged or
fill material.M The 1980 MOA covered geographical jurisdiction
149
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Appendix I
CnmmwfifrB From the Environmental Protection Agency. Office of Watay
determinations only and not determinations of the existence of a
"discharge." The Section 404(b)(1) Guidelines contain the
environmental criteria that the Corps must apply when deciding
whether to issue a permit. Thus, the statement on page 68 that
Corps wetlands identifications and delineations should comply
with the Guidelines is wrong, as is the statement at the top of
page 69 that the purpose of both Geographic Jurisdiction MOAs is
to have EPA monitor Corps jurisdictional determinations to ensure
compliance with the Guidelines.
(59) We agree that incorrect jurisdictional authority has been
implied and that the wetland delineation manual should be
the basis for wetland identification rather than Section
404(b) (1) Guidelines. Changes have been made in the report
to reference the correct guiding document. However, as
recognized under the 1989 MOA, EPA does have a monitoring
responsibility for COE jurisdictional determinations.
* The draft report's criticisms of Regional monitoring of
Corps jurisdictional determinations are unwarranted to the extent
that the Jurisdiction MOA did indeed envision that the Regions
would rely primarily on review of Corps public notices, which
generally provide sufficient information on wetland
identification and geographic jurisdiction. The Jurisdiction MOA
itself provides that, "to ensure that EPA is aware of
determinations being made for which notification is not forw«|-^^
through the public notice process." the Corps should provide EPA
with copies of all final determinations of no geographic
jurisdiction and of application of a Section 404(f) exemption.
(60) The report does not state that EPA should not rely on public
notices for monitoring COE jurisdictional determinations on
individual proposed permits and the MOA does imply that EPA
will use the public notice process for monitoring individual
permit determinations. However, as only partially quoted by
CM, the MOA provides:
In order to track the DE's [COE District Engineer]
compliance with EPA guidance, the DE shall make his
files available for inspection by the RA at the
district office....
To ensure that EPA is aware of determinations being
made for which notification is not forwarded through
the public review process, the Corps will provide
copies to EPA of all final determinations of no
geographic jurisdiction and all final determinations
that an exemption under Section 404(f) is applicable.
Contrary to Off's statement, the MOA• does provide for EPA
monitoring and inspection of COE geographic jurisdictional
determinations and Section 404 notices do not include
150
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\
Appendix X
rvuMHAwfcM Prom the Env< ronmental Protection Agency* Office of Water
information on "no geographic jurisdiction" determinations
or Section 404 (f) exemptions since no permit would be
involved in these decisions. Also, according to regional
staffs actually reviewing public notices, the documents are
not consistently prepared by COE districts and do not always
include the information needed to adequately assess
jurisdictional determinations.
* We acknowledge the problems associated with EPA/Corps
disagreements regarding discharges of solid waste, and will
continue to try to work with the Corps and the EPA Section 402
program to resolve the issue.
(61) See OIG comments (42).
F. IG Draft Recommendations
* The office of Water has no plans to establish "controls"
over public notice reviews. We have issued programmatic guidance
relating to public notice review and will continue to do so as
warranted. Currently, we are working with the Corps to develop
joint mitigation banking guidance.
1 (62) As previously stated, we believe OW misconstrued the focus
j of the finding related to inadequate guidance on regional
! public notice review processes. Based on our audit
evidence, we continue to conclude that additional regional
guidance and controls related to regional permit processing
are needed to ensure consistent, effective pexrmit reviews,
meaningful permit recommendations, and compliance with
applicable MO A requirements.
* Consistent with the suggestion in the draft report, upon
final implementation of the RAMS system, we will work with the
Corps and consider adapting the system for use by EPA.
(63) Off accepted recommendation. See OIG comment (51) .
* We do not believe that, at this time, any additional
"national direction or controls" are needed with regard to the
Jurisdiction MOA, including EPA review of Corps jurisdictional
and Section 404(f) determinations.
(64) See OIG comment (60).
* Resolution of the issues surrounding regulation of solid
waste to wetlands requires the cooperation of the Corps and the
EPA Section 402 program. The Wetlands Division will continue its
efforts to work with both entities on this matter.
(65) See OIG comment (42).
151 Audit NO. B1HWE0-04-0291
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Appendix I
gninmBtifa From Env* T-owtnantal Protection Agency, Office of Watay
* The Office of Water does not comtemplate seeking
revisions to the Section 404(g) MOA signature requirements since,
as stated above, such requirements have not been problemmatic.
(66) The recommendation only proposes that the required signature
level for EPA comment letters be made equal with
requirements imposed on the other resource agencies.
Lowering the signature requirement for comment letters from
the Division Director's level would have no effect on
management's control over the actual elevation process.
Elevations would still have to be approved at the Assistant
Administrator level. However, having personnel at the
section chief level (similar to FWS) authorized under 404(q)
to sign comments would mean that EPA's resolve in a
particular permitting situation could not be determined by
who signs the comment letter. That would mean that all EPA
comments would carry equal weight. Regional staff indicated
to us that this small change in the MOA would help them in
their negotiations with the COE over recommended permit
modifications and denials. Therefore, we continue to
recommend the subject change in the 404(q) MOA.
* EPA has issued interim Section 404(q) procedural guidance
which is now in effect; EPA also is in the process of developing
Section 404(c) guidance.
(67) No comment necessary. OW has or is in the process of taking
the recommended action.
V. strategic Initiatives Were Mot Effectively Implemented to Produce
Long-Term Improvements in Wetlands Protection
* The introductory paragraph at the top of page 79 makes
several broad conclusions that are not supported by the
subsequent information in the draft report itself. For one
thing, the Regions did identify priority wetlands, based on value
and vulnerability, in accordance with the May 1986, Headquarters
memorandum. Second, the bold conclusion that "the Regions'
approaches to strategic initiatives . . . sometimes sent a
negative message to other government entities and the regulated
public regarding EPA's commitment" to wetlands protection is not
substantiated in the draft report.
(68) The three regions we visited did not identify priority
wetlands as requested by EPA Headquarters. A May 27, 1986
memorandum from a Headquarters wetlands manager to regional
Section 404 coordinators stated:
In February, 1985, I requested that each Region
identify and list the most valuable and vulnerable
wetlands located in your region. .. .Fundamentally, ve
152
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Appendix I
fVMimmnts From the Environmental Protection Agency. Office of Water
should identify geographic areas, wetland types and
wetland impacts meriting special attention. Then, we
must focus more of our authorities and resources on
those areas and impact.
...The Regional priority lists identify the most
important and the most vulnerable wetlands in a region.
Appropriate application of these criteria will
contribute to the most effective allocation of limited
Agency resources to wetlands protection. In general
wetlands on your lists should clearly be among the most
ecologically valuable and most susceptible to
conversion pressure.
.. .Preparation of the priority list will require
extensive contact with other Federal, State, and local
agencies....
...The resulting document should be more than a simple
list....
...(2) Specifically identified wetlands: The more
.. detailed the lists the more helpful they will be.
...the list should indicate those [wetlands] that
appear to stand out as most important and should state
why.
As shown in the report, each region did produce some type of
wetlands list; however, the lists were inconsistent and did
not conform to the Headquarters requirements reflected
above. Not all of the regions solicited input from the
public and other government agencies in compiling wetland
lists as requested by Headquarters while others did. Region
6 Identified wetland types. Region 4 generally identified
all of its wetlands types by state and vulnerability but the
Region did not identify its most valuable and vulnerable
wetland resources as requested by Headquarters. Region 7
generally mapped large wetland areas in the Region, None of
the regions prioritized the value and vulnerability of their
wetlands and made these lists available to the public as
reflected in Headquarters guidance. In addition, the lists
as prepared fell short of helping "...alert EPA, other
agencies and potential permittees concerning individual
wetlands and wetlands systems that will require especially
careful analysis befoxre any permits can be grantedm as
stated in Headquarters guidance. Neither could they be used
to *focus- authorities and limited resources on those
valuable and vulnerable areas.
The statement regarding the negative message sent to outside
agencies and the public regarding EPA's commitment to the
most valuable wetlands is supported by (1) the examples of
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Appendix I
Comments From the Environmental Protection Agency. nffjee af y
deficient, uncoordinated strategic initiatives cited in this
Chapter, (2) unaddressed outside requests for advanced
identification assistance, and (3) the COE's criticism of
EPA's failure to use available authorities to protect
wetland areas once identified as unsuitable for fill.
A. Background
* The draft report incorrectly states that Headquarters
identified Section 404 strategic initiatives as one of only three
essential wetlands program elements. As stated above, there are
certainly more than three "essential elements" to EPA's Section
404 program, which includes both the Section 404 regulatory
program and nonregulatory protection approaches.
(69) Wetlands program and annual operating guidance has
consistently identified permit review, enforcement, and
advanced identification (subsequently changed to strategic
initiatives) as the Section 404 program's base or core
program elements along with other "nonregulatory"
activities. However, these three activities are the primary
Section 404 responsibilities reflected in the Clean Water
Act, codified in regulations, and established in regional
programs. Base or core program elements would represent
those elements essential to performance of statutory or
regulatory responsibilities. Therefore, we can not
understand CW's objection the terms "essential elements."
However, we are willing to change the report to reflect base
or core program elements rather than "essential."
* We are concerned that IG staff misconstrued the intent of
the May 1986 memo on priority wetlands. Headquarters did not ask
the Regions to rank and categorize wetlands (page 81), but
instead to identify and list priority wetland types and areas
based on value and vulnerability.
(70) If you require a region to identify its most important
wetland areas as to value and vulnerability, you are by
necessity prioritizing wetlands within the region. To
prioritize means "to rank." Also, EPA Headquarters
requested that the wetlands be identified as to
type/function or to "categorize" listed wetlands where
possible. Since CW has problems with the terms "ranking"
and "categorize," we have substituted the term prioritize
for ranking and eliminated the term categorize from the
report altogether.
B. IG Draft Finding - Regions Did Not Identify and Priority
the Most Valuable. Vulnerable Wetlands
* This draft finding is incorrect. As the draft report
154
Audit No. E1HWE0-04-029X
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Pftwuianta From the EnvirfTunantai protection Agency* Office of Water
itself indicates, the Regions did identify priority wetlands.
Headquarters did not ask the Regions to rank and categorize
wetlands which, as the Regions themselves noted, would be a
difficult process.
(71) This comment has already been addressed in OIG's response
above [see OIG comment at (68)J,
* We disagree with the statement, at the top of page 82, to
the effect that priority wetlands lists, unless developed with
"adequate collaboration and joint acceptance of these lists by
regulators and the regulated public," were not very useful.
These lists have strengthened the Regions' ability to focus their
wetland protection efforts, and in fact were intended primarily
to assist the Regions in setting priorities for use of their
limited staffs.
(72) As stated above, Headquarters guidance for preparing the
list of priority wetlands indicated that extensive contact
and coordination with the public and other government
agencies would be necessary to make the list a valuable tool
for focusing resources. The guidance also intended for the
priority lists to be made available to the general public in
FY 1987. We agree that the lists have some limited internal
value/ however, if other resource agencies (especially the
COE) and the public do not agree with EPA's assessment of a
wetlands value and vulnerability, then intensified focus on
the wetlands by EPA's program staff may have minimal effect
on the regulatory process and, therefore, reduce the
effectiveness of EPA's already constrained resources. We
agree. that a purpose of the lists was to assist the regions
in setting priorities for use of their limited resources,
but, as we reported, the lists provided to us by the regions
were of no use for priority setting. For example, Region 6
told us (could not find it in writing) that its reported
priorities were bottomland hardwood wetlands and coastal
wetlands. A permit reviewer could not prioritize his work
based on such broad wetland categories.
B. IG Draft Finding - Strategic Initiatives Needed More
National Guidance. Coordination, and Oversight
* The draft report appears to contradict itself by stating
on page 83 that Headquarters failed to "provide guidance on
implementing the strategic initiatives program element," and then
on page 86 stating that the Regions "did not always comply with
national guidance for advanced identification. ..."
(73) Contrary to OW's comment, there is no contradiction in the
report related to inadequate guidance for strategic
initiatives. There is guidance for advanced wetlands
identification. However, strategic initiatives are much
155 Audit NO. E1HWE0—04-0291
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Appendix I
Cowm»ri»,s From the Environmental Protection Agency. Office of
broader in scope than advanced identifications as shown in
the report. Advanced identification is just one activity
under the strategic initiatives program element although it
is an important part of this element. Therefore, we
continue to conclude that guidance for implementing and
measuring the broad scope of activities under the strategic
initiatives element was inadequate.
C. IG Draft Finding - Advanced Identifications Need to be
Adequately Planned. Coordinated, and Controlled to Ensure
Effectiveness and Compliance with Guidance
* Contrary to the statement on page 88, Region 7 has issued
a public notice proposing to designate wetlands within the
Rainwater Basin as suitable or unsuitable for fill and thus will
be fulfilling a basic objective of the ADID approach.
(74) We agree with OW's comment on the Region 7 advanced
identification. The cited public notice was issued and this
notice did identify areas as suitable and unsuitable for
fill. Region 7's comments on the position papers addressed
this discrepancy in the draft report. However, the comments
were not received in time to be adequately addressed prior
to issuance of the draft report. We have made changes in
the report to reflect this information.
D. IG Draft Recommendations
* We believe it is inappropriate for EPA to proceed
independently with regards to wetlands ranking in light of the
recent White House announcement that the Administration will be
establishing an interagency technical panel on wetlands
categorization.
(75) The recommendation only requested that the program
prioritize wetlands to fulfill the purpose as previously
provided in Headquarters guidance. If program management
wishes to delay action until the interagency technical panel
on wetland categorization has concluded its study, we have
no objections. We can resolve the recommendation based on
Headquarters intent that the recommended action will be
taken when the technical panel concludes its work.
* At this time, the Office of Water has no plans to
negotiate an MOA on ADID with the Corps at the national level.
(76) cm disagrees with this recommendation but gives no reason
for its objection. Based on the pzroblems noted during the
audit with COE cooperation on advanced identification
studies, the pressing need for advanced planning initiatives
to identify valuable and vulnerable wetland areas needing
protection, and the need to gain COE support for these
156
Audit Mo. E1SWE0-04-029X
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Appendix X
f!ftiBiw«Tifca Prom the Envi ronmental Protection Acrencv. Office of Water
determinations in the permitting process indicates that a
national MOA would be the most simple, effective method of
resolving this problem. The COE should also have a mutual
interest in resolving this problem because advanced
identifications, COE's special area management plans (SAMP),
and other Section 404 planning initiatives have the
potential to provide regulatory relief. With the COE and
EPA possessing mutual goals and objectives in wetlands
planning, the two agencies should confer on how to jointly
proceed in prioritizing and accomplishing the same planning
initiatives that each often ends up doing alone. However,
we have added the option of negotiating field level
agreements with the COE for advanced identification
cooperation to the recommendation to provide more
flexibility to program management.
* We agree that the Regions should initiate ADID projects
in accordance with existing national guidance and that
Headquarters should ensure that ADIDs are consistent with such
guidance.
(77) No comment necessary. CW agreed with recommendation.
VI. Appendices
A. Appendix II - Glossary. The following definitions should be
deleted from the glossary:
(78) OW provided many changes to the definitions for terms
included in Appendix II as presented below. We agree with
some of the comments but not all. However, since we do not
consider these terms and definitions as a significant
contribution to the message of the report, we have removed
the terms and definitions from the glossary.
* Bottomland Hardwoods - This seems largely irrelevant to
the findings and discussion in the draft report, which does not
focus on wetland types. Moreover, it is unclear why the glossary
as drafted defines only two wetland types, bottomland hardwoods
and pocosins.
* Consent Decree - Since this is a general legal term
specific to neither wetlands nor the Section 404 program, we
suggest removing it from the glossary. If it is retained,
it needs to be clarified to explain that, in a judicial context,
such a decree is an agreement of the parties made under the
sanction of the court, but is not the result of a judicial
determination. Such decrees are not limited to judicial actions,
but also occur in the administrative arena, such as consent
decrees resolving administrative penalty actions without going to
hearing.
157
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yr<— +*"» FnvlronmenUl Protection Agency, Office of Water
* Functional Wetland - This definition should be eliminated
since it contains incorrect information and because we believe it
is unnecessary to draw a distinction between "functional"
wetlands and wetlands as defined later in the glossary.
* Pocosin - See comments above regarding bottomland
hardwoods.
* Regulatory or Regulatory Statutes - This term is a
misnomer and should be deleted. To our knowledge, there is no
such thing as a "regulatory statute." Moreover, neither statutes
nor regulations are unique to wetlands protection.
* Section 309 - This does not necessitate a separate
definition. Moreover, as indicated in our comments on the
Enforcement discussion, the explanation of enforcement is
incorrect.
* Section 404 - Similarly, this does not necessitate a
separate definition, especially given that Appendices III and IV
define Section 404, its various provisions, and EPA and Corps
statutory responsibilities. For the same reason, the following
terms should also be deleted from the glossary: Section 404(c);
Section 404 Enforcement; and Section 404 Permits.
* Section 404 Jurisdiction - This does not necessitate a
separate definition. However, if it is retained, it should be
clarified to state that only activities involving a "discharge"
of dredged or fill material are regulated under Section 404.
Moreover, it would be useful to include the definition of
"geographical jurisdiction" (see comments below) here.
* Section 404(g) - This does not necessitate a separate
definition. However, if it is retained, it needs to be revised
to correctly reflect the statutory language, which directs Army
to enter into agreements with EPA and other appropriate agencies
for the purpose of minimizing duplication, paperwork, and delays
in permit issuance.
* Water Recharge Area - This definition appears irrelevant
to the issues covered by the draft report.
* Wetland Conversion - This definition, as well as the
definition of "wetland degradation" do not draw a sufficient
distinction between destruction through physical conversion
contrasted with degradation through chemical contamination.
* Wetland Discharge - See comments below under "Dredge and
Fill."
158 Audit NO. E1HWE0-04-0291
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ftppowdlx I
comments Prom the Environmental Protection Agency. Office of water
The following definitions need clarification as explained
below:
* Administrative Order - This should be termed
"administrative compliance order" and defined as a formal
enforcement response authorized pursuant to Section 309(a) of the
clean Water Act under which EPA (and not the Corps) orders the
violator to cease any ongoing unauthorized discharge and, where
appropriate, to remove unauthorized discharge material and/or
otherwise restore the site.
* Administrative Penalty - This is another formal
enforcement mechanism authorized under the Clean Water Act.
Section 309(g) gives EPA and the Corps authority to assess civil
administrative penalties not to exceed $125,000 per violation for
unauthorized discharges in violation of Section 404.
* Advance Identification - The definition should reference
the regulatory authority, which is 40 CFR Part 230.80; also, the
regulations themselves do not restrict ADID projects to
"vulnerable" wetland areas.
* After-the-Fact Permits - The definition should specify
that such permits are only to be issued in those situations where
the discharge complies with the Section 404(b)(1) Guidelines, and
that the permit' authorizes the discharge from the date of
issuance only, but does not cure the period of violation prior to
issuance of the permit.
* Cease and Desist Order - This is more than a
"notification" and is not issued by EPA. It is a formal
enforcement response issued by the Corps and generally directs an
alleged violator to cease any further discharges. Such an order
can also direct removal and/or restoration of the violation site.
Moreover, contrary to the definition in the draft report,
"dredging" is not regulated by Section 404.
* Compensatory Mitigation - We recommend subsuming this
definition in the definition of "mitigation," and revising it as
provided below.
* Dredge or Fill - Dredged material and fill material are
each separate terms that are defined differently in the Section
404 regulations. Dredged material is defined as material that is
excavated or dredged from waters of the United-States. Fill
material is defined as any "pollutant" which replaces portions of
the "waters of the U.S." with dry land or which changes the
bottom elevation of a water body for any purpose. Given the
significance of the term, there should be a separate definition
of "discharge of dredged or fill material," which the regulations
define as the addition of dredged material or fill material into
waters of the United States.
. 159 Audit NO. E1HWE0-04-0291
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Appendix X
prom tl»« Environmental Protection Agency. Office of Wafcay
* Ecosystem/Ecological Function - This definition should be
revised to delete the discussion of "ecological function," which
is inaccurate and misleading.
* Geographical Jurisdiction - Again, this definition is
inaccurate and somewhat misleading. Geographic jurisdiction
deals with whether an area is a wetland within the three-
parameter regulatory definition and whether such wetland, or an
open water area, constitutes a "water of the United States"
within the meaning of the Clean Water Act. Jurisdictional
wetlands include "adjacent" wetlands and isolated wetlands where
the destruction or degradation of such wetlands could affect
interstate commerce.
* Mitigation - The definition should be clarified to
explain that mitigation refers to undertaking all appropriate and
practicable measures to minimize harm to the aquatic ecosystem.
Under the Guidelines, mitigation options must be considered in
the following sequence: avoidance; minimization; and
compensation, which includes on-site or off-site wetlands
restoration, creation, or enhancement.
* Permitting Authority - This needs to be revised to
acknowledge that a state may also be the permitting authority if
they have assumed the Section 404 program.
* Practicable Alternative - The explanation should be
placed in context by stating that the Guidelines include a
"practicable alternatives" test under which a permit must be
denied if there is a practicable alternative to the proposed
discharge. In defining the term "practicable alternative," it is
preferrable to use the exact regulatory definition found at
Section 230.10(a)(2) of the Guidelines themselves.
* Section 404(b)(1) Guidelines - The explanation should be
clarified to state that the Corps* decision regarding whether to
issue or deny an individual permit is based on the Guidelines anfl
the Corps' public interest review.
* Wetland - The exact regulatory definition need's to be
included in the glossary. As presently drafted, there is no
reference to "normal circumstances."
B. Appendix III - Federal Response Under the Clean Water Act
Wetlands Destruction.
* Turning to the last sentence in the first paragraph on
page 100, when Congress enacted Section 404 in 1972, it did not
do so with the two stated purposes explicitly in mind. Moreover,
as stated above, Section 404 regulates more than activities in
wetlands and covers all waters of the U.S.
160 Audit No. E1HWEO-04-0291
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Appendix I
ry>^mn«nfcs From the Env* rnnwantal Protection Aoencv. Office of Water
* The note at the middle of page 101 is incomplete and
should be revised to be consistent with Section 404(f)(2).
* The explanation of enforcement starting with the
discussion of Section 404(s) at the bottom of page 101
misconstrues EPA and Corps Section 404 enforcement authority and
should be revised consistent with the numerous comments above on
enforcement.
(79) We made changes/additions to this Appendix in accordance on
OW's comments where considered appropriate.
C. Appendix IV - EPA and COE Section 404 Responsibilities
* The first sentence under "Dredge and Fill Permitting"
(page 103) is inaccurate since EPA and the Corps jointly
implement Section 404. The Corps handles the day-to-day
administration of the permit program, reviews applications, and
decides whether to issue or deny permits.
* The discussion at the middle of page 103 incorrectly
defines the public interest review. It does not consist of
balancing input from various sources, but instead, as correctly
described at the bottom of page 103, involves balancing the
impacts of the proposed discharge on the values listed in the
regulations.
* The discussion of general permits at the bottom of page
103 should also indicate that certain nationwide permits require
predischarge notification to the Corps.
* The top of page 104 needs to be clarified to state that a
permit cannot be issued unless the discharge complies with the
Guidelines and is in the public interest.
* In the discussion of general permits at the middle of
page 104, the reference to "individual applications for general
permit consideration must be qualified by the COE district," is
very confusing since the existence of an applicable general
permit means that the discharge can proceed without first
submitting an individual permit application. Thus, this
discussion needs to be clarified.
* The discussion of enforcement at the bottom of page 104
and top of page 105 needs to be revised consistent with previous
comments regarding the basis and scope of corps enforcement and
the intent and purpose of the enforcement MOA.
* The last sentence in the enforcement discussion on page
105 needs to be clarified. It is EPA's position that EPA and the
Corps each have the authority to assess administrative penalties
for unpermitted discharges, as well as permit violations.
161
Audit NO. 81HWB0-04-0291
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Appendix I
Comments From the Environmental Protection Agency. Office of Wafc«^
Moreover, Section 309(g) explicitly refers to assessment of
penalties only and does not explicitly authorize corrective
measures.
* On page 106, the last sentence under the discussion of
the Guidelines needs to be modified to clarify that EPA's
determination of unacceptable adverse impact as part of a Section
404(c) veto action can take into consideration compliance with
the Guidelines.
* The discussion of geographic jurisdiction at the top of
page 107 needs some clarification. The Attorney General's
decision was issued in 1979 and stated that EPA has final
authority for determining the scope of "waters of the United
States" for purposes of the applicability of the entire Clean
Water Act, including Section 404. The discussion on the
jurisdiction MOA need not discuss the previous agreement, but
instead should explain the 1989 MOA which also covers the 404(f)
exemptions.
* The discussion of enforcement at the top of page 108 is
inaccurate and unclear. The reference to "administrative orders"
should specify Section 309(a) as opposed to 309(g) orders, both
of which-would be applicable to anv unauthorized discharge. The
reference to EPA's historical use of "administrative orders" is
totally inaccurate. Issuance of Section 309(a) orders is
certainly not limited to serious violations, but occurs in
situations where EPA seeks to get timely removal of an illegal
discharge. The reference to Section 404(s) is inaccurate and
redundant given the earlier discussion of Corps enforcement
authority.
* The discussion of Section 404(c) at the middle of page
108 should be clarified to state that the authority may be used
in advance of any permit application or in response to a Corps
decision to grant a particular permit application.
(80) We made changes/additions to this Appendix in accordance on
OW's comments where considered appropriate.
D. Appendix V - EPA Procedures for Section 404 fa) and 404^)
Actions
* In the first paragraph at the top of page 109, the third
sentence should indicate that such notification is required only
if the Regional Administrator (RA) has objected to the permit.
* The discussion at the bottom of page 110 should be
clarified to state that the RA must notify both the Corps and the
applicant of the intent to issue a public notice for the proposed
determination. Also, in addition to failure to commit to
corrective action within 15 days, the public notice can also
162
Audit No. E1HWE0-04-029X
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ftppepflix I
From the Envi ronmantal Protection Agency. Office of Water
issue if the applicant has failed to demonstrate that no
unacceptable adverse effects will result from the proposed
discharge. The reference to one staff year for each Section
404(c) action applies to Regional aspects of such an action.
(81) We made changes/additions to this Appendix in accordance on
OW's comments where considered appropriate.
163 Audit Mo. E1HWB0-04-0291
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p A \
&
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
SEP 2 0 1331
OFFICE OF
WATER
MEMORANDUM
SUBJECT: Draft Audit Report, Audit No. E1HWEO-04-0291
EPA's Implementation and Management of the Wetlands
Program
Thank you for the opportunity to review and provide comments
on the draft audit report on EPA's Implementation and Management
of the Wetlands Program. While I recognize and appreciate the
time and effort expended by your staff to undertake the audit, i
am very concerned that many of the draft findings are based on
misconceptions about EPA's wetlands program in general, and the
Clean Water Act Section 404 regulatory program in particular. in
addition, many of the draft findings and recommendations appear
to be inconsistent with recent Administrator/Deputy Administrator
management directives. Moreover, I am concerned that the draft
report ignores many of the wetlands program "successes" achieved
within recent years. An overview of my various concerns about
the draft report is provided below, followed by more detailed
comments on the draft findings and recommendations. I strongly
urge you to review these comments carefully and revise these
draft findings and recommendations accordingly.
At the outset, it is important to recognize that EPA's
wetlands program encompasses both the Clean Water Act Section 404
regulatory program and nonregulatory approaches to wetlands
protection. This latter aspect is virtually ignored in the draft
report, even though Headquarters and the Regions continue to
spend an increasing amount of time and effort on nonregulatory
protection activities.
The draft report also fails to acknowledge that the Section
404 program is jointly implemented by two agencies, EPA and the
FROM:
LaJuana S. Wilcher
Assistant Administrator
TO:
Kenneth A. Konz
Assistant Inspector General for Audit
164
Audit NO. E1HWE0-04-029X
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Appendix I
r»/%miBantg From the Environment*! Protection Aqencv, Office of Water
Army Corps of Engineers (Corps). The Corps is the predominant
field-level agency because of its role as permitting authority,
as well as a larger field presence and resource base, and EPA
plays an important supporting role in program administration.
Within recent years, the two agencies have made great
strides in strengthening their working relationship, which has
led to more efficient and effective implementation of the Section
404 program. Nevertheless, neither agency has total control over
all aspects of program policy and implementation.
The draft report's finding that "improvement [is] needed in
management direction, control, and accountability" is especially
troubling because it is premised on a management philosophy that
is inconsistent with current Agency policy and also because it
ignores the quantitative and qualitative successes of the
Agency's wetlands program over the last six years. In a November
1989 memorandum to all EPA employees, entitled "Improving EPA's
Management Systems," the Deputy Administrator announced a number
of changes to existing management systems. These old systems
tended to emphasize numbers of actions over the quality of, and
the results obtained from, these activities. According to the
Deputy Administrator, this approach "often conflicts with the
generally perceived need for flexibility to address variations in
the complexity and severity of environmental problems . . . ."
The key themes to these improvements include:
* ensuring that our systems recognize complexity, quality,
and environmental benefit in our assessments of Agency
performance; and
* increasing flexibility for Agency managers to focus
limited resources on activities with greatest impact.
Even prior to this Agency-wide change, the wetlands program
in FY 1989 initiated changes in our approach to tracking Regional
commitments and accomplishments. A new strategic initiatives
measure was established and the enforcement measures were changed
to eliminate Regional commitments to a specified number of
enforcement actions, as well as to delete an explicit reference
to "significant violators." These changes were intended to
provide the Regions with maximum flexibility to address priority
Regional wetlands problems while still seeking to meet national
objectives. Not only is this approach consistent with the
Agency's existing management systems and current management
philosophy, it also produced positive results. As the draft
report itself acknowledges at the bottom of page 18, "[i]f the
1990 enforcement resolution activity was compared to 1988 . . • ,
the increase was significant." In light of these two factors, we
strongly disagree with the draft report's finding that the
wetlands program lacks adequate management control and
accountability.
165 Audit Ho. E1HWE0-04-0291
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Appendix I
Comments From the Environmental Protection Agency. Office of wa-fcoy
The draft report's findings and recommendations on the
wetlands program's implementation of EPA's Section 404
enforcement responsibilities perpetuate many of the same
misperceptions contained in the Region 4 audit report about EPA's
role in wetlands enforcement and the goals of our enforcement
program. The Clean Water Act gives EPA and the Corps joint
authority to enforce against violations of Section 404. It is
EPA's position that each agency has authority to enforce against
unpermitted discharges and against discharges in violation of
permit conditions. Moreover, the Corps has been enforcing
against unpermitted discharges for many years, and the courts
have not challenged the Corps1 authority to do so. Given this
statutory scheme, EPA believes that it is important to coordinate
its enforcement efforts with those of the Corps. However, it is
not our job to "oversee" Corps implementation of its enforcement
responsibilities, nor would that be an efficient use of our
limited resources.
In addition, the draft report seems intent on ignoring the
Agency's progress in developing and implementing a nationwide
Section 404 enforcement presence. As illustrated in the attached
graph, since 1985 the Regions have increased significantly the
number of Section 404 enforcement actions initiated and resolved.
Not only have these actions sent a message to the regulated
community and others that EPA is serious about enforcing the
requirements of Section 404, but they also have produced tangible
environmental benefits by resulting in the restoration of
illegally filled wetlands or, where that was not feasible,
requiring compensatory mitigation in the form of restoration of
other degraded wetlands or creation of new wetlands. The draft
report also fails to credit Headquarters with two valuable
wetlands enforcement guidance documents that were finalized and
distributed to the Regions in FY 1991: Section 404 administrative
penalty guidance, which was issued jointly with the Office of
Enforcement; and joint EPA/Army Section 404 judicial enforcement
guidance.
Turning briefly to the final two sections of the draft
report, as with enforcement, the report continues to overstate
the appropriate role of Sections 404 (q) and (c) in the Section
404 program, as well as EPA's ability to utilize these sections
more frequently. In addition, the draft report ignores the
various guidance documents and other tools developed by
Headquarters related to the regional permit review process. The
final section on Advance Identification underestimates the value
of Regional efforts to develop wetland priority lists, which have
assisted many of the Regions in focusing on the more valuable
and/or vulnerable wetlands.
166
Audit MO. E1HWE0-04-0291
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Appendix I
/vmimants From the Epvirowmantai Protection Agency. Office of Water
Again, thank you for the opportunity to review the draft
audit report on the wetlands program. As indicated above, more
detailed comments are attached. In closing, I strongly encourage
you to carefully consider these comments as you develop a final
report.
Attachments
cc: Greer C. Tidwell, Region IV
Robert E. Layton, Jr., Region VI
Morris Kay, Region VII
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168
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Appendix II
GLOSSARY OF ACRONYMS AND ABBREVIATIONS
ACRONYMS/ABBREVIATIONS
AO
Administrative Order
CFR
Code of Federal Regulations
CG
U.S. Comptroller General
COE
Army Corps of Engineers
CWA
Clean Water Act, as amended
DOJ
Department of Justice
EPA
Environmental Protection Agency
FMFIA
Federal Manager's Financial Integrity Act
FTE
Full Time Equivalent
FWS
Department of Interior's Fish and Wildlife Service
FY
Fiscal Year
GAO
General Accounting Office
GIS
Geographical Information System
GM-21
EPA's General Enforcement Policy
MOA
Memorandum of Agreement
NMFS
Department of Commerce's National Marine Fisheries
Service
NPDES
National Pollutant Discharge Elimination System (CWA
Section 402)
OIG
EPA Office of Inspector General
OFA
EPA Office of Federal Activities
OMB
Office of Management and Budget
OW
EPA Office of Water
OWAS
Office of Water Accountability System
OWP
EPA Office of Wetland Protection
SAMP
COE Special Area Management Plan
SPMS
Strategic Planning Management System
STARS
Strategic Targeted Activities for Results System
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170 Audit MO. E1HWE0-04-0291
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Appendix III
FEDERAL RESPONSE UNDER THE CLEAN WATER ACT TO WETLAND DESTRUCTION
As developmental pressures on wetlands increased for agriculture
and silviculture production, highways, residential and commercial
building sites, ports, marinas, parking lots, and other
industries, Congress acted to limit the disposal of dredged or
fill material into navigable waters under the October 18, 1972
amendments to the Federal Water Pollution Control Act, Public Law
92-500 (thereafter called the Clean Water Act). These amendments
are commonly known as Section 404 of the Clean Water Act (CWA).
The purpose of section 404 was to control the unnecessary
destruction of wetland resources and bring about a degree of
coordination between the various agencies involved in wetlands
conservation - the Department of Interior's Fish and wildlife
Service, the Department of Commerce's National Marine Fisheries
Service, the EPA, the Army Corps of Engineers, and various state
agencies.
Section 404 originally had only three subsections:
404 (a) authorized the Secretary of the Army to issue permits
for discharges of dredged or fill material into navigable
waters at specified disposal sites, after notice and
opportunity for public hearing;
404(b) provided that disposal sites must be specified
through application of guidelines developed by EPA in
conjunction with the Army, unless an economic impact on
navigation or anchorage exists; and
404(c) authorized EPA to restrict or prohibit disposal in
any area, including one previously specified for disposal,
if EPA determines that the discharge of dredged or fill
material would have an "unacceptable adverse effect on
municipal water supplies, shellfish beds and fishery areas
(including spawning and breeding areas), wildlife, or
recreational areas".
In 1977 Congress amended Section 404 and added following
subsections:
404(e) which authorized the Army to issue general permits
for any category of activities having minimal adverse
effects on the environment;
404 if) which exempted certain activities from this
legislation including:
1. Normal farming, silviculture, and ranching
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Appendix III
Federal Response Under the Clean Water Act To Wetland Destruction
practices (as part of established operations);
2. Maintenance, including emergency reconstruction of
recently damaged parts, of currently serviceable
structures such as dikes, dams, levees, and
similar specified structures;
3. construction or maintenance of farm or stock ponds
or irrigation ditches or the maintenance (but not
construction) of drainage ditches;
4. Construction of temporary sedimentation basins on
a construction site which does not include
placement of fill material into waters of the
United States; and
5. Construction or maintenance of farm or forest
roads or temporary roads for moving mining
equipment if best management practices are
followed.
(Note: These exemptions did not apply if the discharge was
part of an activity whose purpose was to bring an area of
the waters of the United States into a use to which it was
not previously subject);
404(q) which established procedures for transferring
permitting authority to the states over all waters except
navigable waters below the mean high water mark in tidal
areas and the ordinary high water mark in freshwater areas
and adjacent wetlands;
404 fal which established requirements for agreements between
the COE and other agencies, including EPA, directed toward
minimizing duplication, paperwork, and delays in permit
issuance;
404 fr^ which exempted discharges of dredged or fill material
as part of a Federal project specifically authorized by
Congress; and
404 fs^ which authorized the Army to take civil action
against permit violators.
section 404 does not have a provision for enforcement against
unpermitted discharges. Under subsection 301(a), however, the
discharge of dredged or fill material without a permit was
declared unlawful and EPA was given authority under Section 309
172
Audit NO. E1HWE0-04-Q29X
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Appendix III
Federal Response Pnder the Clean Water Act To Wetland Destruction
to take civil action against unauthorized dischargers.
The last amendment to the CWA was Public Law 100-4 passed on
February 4, 1987. This amendment added Subsection 309(b) to the
CWA, which gave EPA administrative penalty authority over
unauthorized discharges. This provision provides for an
administrative penalty not to exceed $125,000 for unpermitted
discharges.
173
Audit MO. E1HWE0—04-0291
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Appendix III
Federal Response Pnder the Clean Water Act To Wetland DeBtruo^ft^
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174 Audit No. E1HWS0-04-0291
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Appendix IV
EPA AND GOE SECTION 404 RESPONSIBILITIES
Several Federal agencies have roles in implementing the Section
404 program. This participation extends from commenting on
various types of permits to the detection of unpermitted
activities and enforcement of permit requirements. EPA and COE
roles in Section 404 activities are summarized below:
ARMY CORPS OF ENGINEERS RESPONSIBILITIES
The COE has responsibility for the development and maintenance of
the nation's waters and related land resources, including
construction and operation of projects for navigation, flood
control, shore and beach restoration and protection, hurricane
and flood protection, hydroelectric power production, water
supply, water quality control, fish and wildlife conservation and
enhancement, and outdoor recreation.
Dredge or Fill Permitting
The COE is the primary Federal agency1 responsible for the day-
to-day regulation of wetlands development under Section 404.
Section .404 authorizes the COE to issue or deny permits for the
discharge of dredged or fill materials into U.S. waters. The
decision whether to approve a permit and, if so, the conditions
under which it will be authorized, is determined by evaluating
input from many sources such as the resource agencies,
individuals, organizations, and states, among others. This
process is referred to as the public interest review and is
conducted simultaneously with the 404(b)(1) guideline evaluation.
The COE receives approximately 11,000 to 12,000 permit
applications each year. Tens of thousands of other discharges
are covered by general permits issued on a regional or nationwide
basis. The activities covered under the general permit umbrella
do not require individual permits as long as the discharger
complies with the standard conditions issued by the COE. Some
general permits require predischarge notification to the COE.
The COE must consider many factors during its public interest
review, including wetland values, conservation, economics,
aesthetics, general environmental concerns, historic values, fish
and wildlife values, flood protection, land use, navigation,
recreation, water supply, water quality, energy needs, safety,
food production, and, in general, the needs and welfare of the
public. The COE is required to consult with EPA and the other
resource agencies and to give full consideration to their
recommendations in evaluating a permit application. Although the
1 Under Section 404(g), states may assume responsibility
for issuing permits in certain waters under their jurisdiction in
accordance with criteria developed by EPA.
175 Audit Mo. B1HWEO-04-0291
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EPA And COE Baftt*-on 404 Responsibilities
comments are advisory, they can be used as a basis for modifying,
conditioning, or denying a permit. However, a permit cannot be
issued unless the discharge complies with the 404(b)(1)
Guidelines and determined by the district engineer to be in the
public interest.
COE districts and division engineers have authority to issue
alternate types of permits such as letters-of-permission and
regional general permits. Letters-of-permission may be issued in
lieu of individual permits where, in the opinion of the district
engineer, the proposed work would be minor, not have significant
individual or cumulative impact on environmental values, and not
be expected to encounter appreciable opposition. In such
situations, the proposal is coordinated with concerned agencies
and adjacent property owners who might be effected by the
project, but the general public is not notified.
General permits, which cover activities it has identified as
being substantially similar in nature and causing only minimal
individual and cumulative environmental impacts, may also be
issued. This could include activities such as placement of
navigational aids and bank stabilization. These permits may
cover a limited geographical area, a particular region of the
country, or the nation. Processing the initial general permits
includes a public notice period and the opportunity for public
hearings. General permits are approved for a period of five
years. Some general permits require predischarge notification
with individual applications qualified by the COE district. Non-
qualifying applications are processed through the regular permit
review process. COE regulations, 33 CFR 330.5, include 26
nationwide general permits.
Dredge or Fill Enforcement
The COE is primarily responsible for violations of permit
conditions, but through an MOA with EPA, COE has also been
involved in enforcement actions regarding unpermitted discharges.
EPA has statutory responsibility for the enforcement against
unauthorized wetland discharges by persons failing to obtain the
required permit.
On January 19, 1989, EPA entered into a revised MOA with the COE
concerning Federal enforcement of Section 404 unpermitted
discharge violations. The original agreement had been in place
since 1976. The basic premise of the new agreement is to
establish a framework for effective Section 404 enforcement with
very little overlap. The investigating agency, either the COE or
EPA, will determine if a violation exists. The investigating
agency will also determine whether the COE or EPA qualifies as
the lead enforcement agency.
The COE acts as lead enforcement agency for all permit violations
176 Audit Mo. E1HWE0-04-0291
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Appendix IV
epa And COE Section 404 Responsibilities
and unpermitted discharges which do not meet the MOA criteria for
forwarding to EPA. EPA acts as the lead enforcement agency where
the unpermitted activity involves repeat or flagrant violators.
EPA also takes the lead where a previously specified category of
cases or a particular case is requested. The COE can also defer
the lead to EPA when an administrative penalty action is
warranted or when the COE, either in the case of a unpermitted
discharge or a permit condition violation, elects not to take
enforcement action. The lead agency determines the appropriate
enforcement response taking into consideration any views provided
by the other agency.
When COE district engineers become aware of an unauthorized
activity, they issue cease-and-desist orders to stop the activity
if it is still in progress and then investigate the circumstances
involved. If adverse impacts occur that would require corrective
measures to protect life, property, or a significant public
resource, the district engineer can administratively order
remedial measures and decide later whether legal action is
necessary. For those cases that do not require legal action and
for which restoration is not in order, the district engineer will
accept application for "after-the-fact" permits, which must
undergo the same public interest review process described for
individual permits. However, an after-the-fact permit
application shall not be accepted until resolution has been
reached through an appropriate enforcement response as determined
by the lead agency; e.g., administrative, legal or corrective
action has been completed, or a decision has been made that no
enforcement action is to be taken. Legal action, civil or
criminal, is considered appropriate when violations are willful,
repeated, flagrant, or of substantial environmental impact and
when it is considered essential to the establishment or
maintenance of a viable permit program. Persons convicted under
civil or criminal referrals to the U.S. Attorney are subject to
fines and imprisonment. EPA has sole statutory authority to
issue administrative penalties for unpermitted discharges and,
under this authority, can impose corrective measures and monetary
penalties up to $125,000 for unauthorized fill activities.
ENVIRONMENTAL PROTECTION AGENCY'S RESPONSIBILITIES
EPA has primary roles in several aspects of the Section 404
program including development of environmental guidelines,
prohibition of discharges with unacceptable adverse impacts,
state assumption of Section 404 permitting, establishment of
Section 404 geographical jurisdiction, and determination of
Section 404(f) exemptions. Section 404 enforcement authority is
shared between EPA and the COE.
177
Audit No. E1HWE0-04-0291
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Appendix IV
EPA And COE paction 40* Responsibilities
Development of 404(bWll Guidelines
Subsection 404(b) of the CWA states that the COE should specify a
disposal site for dredged or fill material through application of
guidelines developed by the Administrator of EPA in conjunction
with the Secretary of the Army. EPA first published interim
guidelines on September 5, 1975, for the purpose of providing
guidance to be applied in evaluating proposed discharges into
navigable waters. The guidelines were finalized and published on
December 24, 1980, and appear in CFR, Title 40, Part 230.
A fundamental precept to the guidelines is that dredged or fill
material shall not be discharged into the aquatic ecosystem
unless it can be demonstrated that the discharge will not have an
unacceptable adverse impact, either individually or in
combination with known or probable impacts of other activities
affecting the ecosystem. In addition, no discharge shall be
permitted if there is a practicable alternative to the proposed
discharge which would have less adverse impact on the aquatic
ecosystem. Where the activity is not water dependent,
practicable alternatives are presumed to be available, unless
clearly demonstrated otherwise. Discharges shall also be
prevented if it: causes or contributes to violations of any
applicable state water quality standards; breaches any toxic
effluent standard; jeopardizes the existence of an endangered or
threatened species; violates requirements to protect a marine
sanctuary; or causes or contributes to significant degradation of
waters of the United States. Even if allowable under the
guidelines, all appropriate and practicable steps should be taken
to minimize potential adverse impacts on the aquatic ecosystem.
During a 1981 regulatory reform review, the COE questioned
whether EPA guidelines were mandatory or advisory. The Office of
Management and Budget reviewed the issue and concluded that the
guidelines should be treated as mandatory.
There have been disagreements between EPA and the COE over
implementation of the guidelines. However, the COE has the
responsibility for determining conformance. EPA is not empowered
to veto a permit for failure to comply with the guidelines, but
may consider compliance when making a determination of
unacceptable adverse impact.
Jurisdiction of the Section 404 Program
Since Section 404 did not specifically state which administrative
agency had ultimate authority in determining the jurisdictional
scope of Section 404, the COE and EPA often disagreed over
jurisdictional decisions that were made. The controversy was put
to rest when the U.S. Attorney General concluded that Congress
intended to confer upon the EPA Administrator final
administrative authority to make jurisdictional determinations
178
Audit Mo. E1HWEO-04-0291
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Appendix IV
epa And COB Section 404 Responsibilities
concerning the scope of waters of the United States.
Since EPA lacked the staff to make routine field jurisdictional
determinations for all dredge and fill applications, EPA and the
COE signed a MOA regarding Section 404 jurisdiction on April 23,
1980. Under the agreement COE's district engineers were
authorized to make final jurisdictional determinations for permit
and enforcement situations without consultation with EPA. EPA
retained the authority to identify "special case" areas where the
environmental consequences of jurisdiction are significant. EPA
makes jurisdictional determinations in these designated areas.
On January 19, 1989, EPA and the COE signed a revised MOA on
geographic jurisdiction to replace the 1980 agreement.
State Delegation of the Section 404 Program
Section 404(g) of the CWA proposed the rationale and criteria for
state assumption. The intent was to delegate to the states
jurisdictional authority over dredge and fill projects in all
waters except those used to transport interstate or foreign
commerce2. Dredge and fill permitting activities in the exempted
waters would remain with the Army COE.
EPA was charged with overseeing state delegation. EPA first
promulgated state program regulations in May 1980. The
regulations were criticized for having rigid and excessive
regulatory guidelines. States complained about excessive
reporting requirements and a general lack of program flexibility.
As a result, EPA removed the 404(g) regulations from the
consolidated permit regulations and reformatted them in April
1983. Revised state assumption regulations were finalized on
July 6, 1988.
Enforcement of Section 404
Discharge of a pollutant into waters of the United States
without a permit is unlawful under Section 301(a). EPA
enforcement options for Section 404 are addressed in Section 309
of the CWA. EPA may issue an administrative order under Section
309 for any unpermitted discharge of pollutants which is a
violation of Section 301. Historically, EPA has confined the use
of its enforcement authorities to serious violations when the COE
was either slow to act, or when EPA wished to take the lead.
Section 404 (s) gives the COE authority to enforce permit
3 Waters used in interstate and foreign commerce include
areas shoreward to the ordinary high water mark, or to the mean
high water mark (waters subject to the tides ebb and flow), or
higher high water mark on the west coast, including wetlands.
179 Audit No. E1HWE0-04-0291
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Appendix IV , . .
EPA And COE flection 404 Responsibilities
violations including commencement of civil actions, temporary or
permanent injunctions, and civil fines.
Section 404(c) Authority to Restrict or Deny Permits
The COE may issue a permit, after consultation with the public
and Federal/state resource agencies, even if EPA or the other
interested agencies comment adversely. In this case, EPA's
Administrator is authorized to prohibit the specification of a
discharge site, or restrict its use, by following Section 404(c)
procedures. Such action may be initiated if the Administrator
determines that the discharge would have an unacceptable adverse
effect on fish and shellfish areas, municipal water supplies, and
for wildlife or recreation areas. The action may be taken in
advance of a planned discharge, while the permit is being
evaluated, or even after the issuance of a permit. Once Section
404(c) is evoked, the action may not be overridden under Section
404(b)(2) which allows the COE to make some permit decisions
based on economic impact of the site on navigation and anchorage.
180
Audit Mo. E1HWE0-04-0291
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Appendix V
EPA PROCEDURES FOR SECTION 404(dl AND 404(cl ACTIONS
The COE is not bound to change or deny a Section 404 permit based
on adverse comments and may issue a permit over the resource
agencies' objections. If the COE district engineer concludes
that a proposed project is in the public interest and complies
with the Section 404(b)(1) guidelines, he may issue the permit
over the EPA region's objections or issue it without conditioning
the permit as specified by EPA. However, if a region has
objected to permit issuance in accordance with the 404(g)
Memorandum of Agreement, the COE must notify the region of its
intent to issue. The Regional Administrator has 7 days from
notification to request that the COE district not issue a Notice
of Intent Letter until the Regional Administrator has had the
opportunity to discuss the permit with the division engineer. If
a discussion does not take place within 14 days of the Regional
Administrator's request, the district engineer may proceed to
issue the permit.
Once the Notice of Intent Letter is issued, the EPA region's next
course of action is to request that the COE district's permit
decision be reviewed at a higher level in the COE as authorized
under Section 404(q) of the CWA.
Prior to 1982, an objecting resource agency could easily elevate
a COE district permit decision to a higher COE authority. In the
mid and late 1970's, the threat of elevation of a district
engineer's decision was usually sufficient to result in
modification, withdrawal or denial of a permit application for
environmentally unacceptable projects. However, in 1981, the
President's Task Force on Regulatory Relief targeted the Section
404 program for reform. As a result, the COE issued new
regulations with the intent to expedite the permit issuing
process. The 1985 404(q) MOA1 was a direct result of this
reform.
Under the MOA, the Assistant Administrator for Water has 20 days
to make an elevation request to the Department of the Army. A
review will be requested only if:
(1) there has been insufficient interagency coordination at
the COE district and division levels including a
procedural failure to coordinate or a failure to
resolve stated EPA concerns regarding compliance with
Section 404(b)(1) guidelines; or
(2) significant new information has been developed which
was not previously available; or
1 Elevating Permitting Decisions Within the COE Under
Section 404(q) of the CWA, 11/12/85.
181 Audit NO. E1HWEO-04-0291
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Appendix V
EPA Procedures For Section 404(g) And 404(c) Actions
(3) the project raises environmental issues of national
importance requiring policy level review.
To be eligible for referral, the EPA region must have followed
all requirements in the MOA. For example, regional comment
letters including recommended permit denial letters, letters
recommending project modification, or requests for extensions of
the comment period, must be signed by the applicable Regional
Administrator or his specified designee and received by the
applicable COE district during the initial comment period
specified in the public notice.
Within 15 days of the Assistant Administrator's request, the
Assistant Secretary of the Army (Civil Works) will decide whether
or not the permit decision will be made at a level higher than
the district engineer. The Assistant Secretary has the sole
discretion to grant such requests. For any permit where EPA has
invoked the 404(q) referral procedures and the Army subsequently
concludes to issue a permit that does not meet all of EPA's
objections, the Assistant Administrator for Water will be so
notified in writing. In such cases, the permit will not be
issued for ten days to allow EPA time to exercise its Section
404(c) determination authority. If EPA initiates a 404(c)
action, the permit will be withheld until the 404(c) proceeding
is concluded and a final EPA determination is made.
Under Section 404(c), the EPA Regional Administrator may initiate
a proposed determination to prohibit, withdraw, or restrict
disposal of dredged or fill material into waters of the United
States if the discharge could have unacceptable adverse effects
on municipal water supplies, shellfish beds and fishery areas
(including spawning and breeding areas), wildlife, or recreation
areas. The Regional Administrator must notify the COE district
and the applicant of his intent to issue a public notice for the
proposed determination. If within 15 days the EPA region has not
received a commitment to take corrective action or the applicant
has failed to demonstrate that no unacceptable adverse effects
will result from the discharge, the Regional Administrator issues
the public notice. The ensuing Section 404(c) decision process
includes data collection and analysis, consultation with the
applicant and the COE, and the opportunity for public comment and
hearings. It normally takes about one EPA staff year for each
404(c) action. Within 15 days after the expiration of the
comment period, the Regional Administrator must either withdraw
the proposed determination or forward to the EPA Administrator a
recommended determination and the administrative record for
review. Within 30 days the Administrator must review the
proposal, consult with the COE, and provide the Section 404
permit applicant another chance to take corrective action.
Notwithstanding, the Administrator must make a final decision
affirming, modifying, or rescinding the recommended determination
within 60 days from receipt of the Regional Administrators
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Appendix V
epa Procedures For Section 404(g) And 404(c) Actions
affirming, modifying, or rescinding the recommended determination
within 60 days from receipt of the Regional Administrators
recommended determination. The EPA Administrator's decision
constitutes final agency action under Section 404(c).
Section 404(q) elevations and 404(c) determinations are important
to the Section 404 program because they serve as a stopgap
measure against permitting unacceptable or avoidable dredge and
fill activities in vulnerable wetlands.
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184
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Appendix VI
PRIOR AUDIT REPORTS AND SPECIAL REVIEWS
PRIOR AUDIT REPORTS
~ Wetlands: Region 4 Implementation and Management of the
Section 404 Wetlands Program. EPA Office of Inspector General,
Audit Report Number Elh7F8-04-0331-0100208, issued March 23,
1990.
- Wetlands; The Corps of Engineers' Administration of the
Section 404 Program. U.S. General Accounting Office, Audit Report
Number GAO/RCED-88-110, issued July 28, 1988.
- Wildlife Management: National Refuge Contamination Is
Difficult To Confirm and Clean Up. U.S. General Accounting
Office, Audit Report Number GAO/RCED-87-128, issued July 17,
1987.
- EPA's 1989 Federal Managers1 Financial Integrity Act
Activity. EPA Office of Inspector General, Audit Report Number
E1LMF0-04—0012-0100357, issued June 22, 1990.
SPECIAL REVIEWS
- Special Review of EPA Region 10 Employee Allegations on the
Region's Handling of Air and Water Issues. EPA Office of
Inspector General, Report Number EGaWGO-10-0022-0400015, issued
May 3, 1990.
~ Special Review Report: EPA is Not Adequately Controlling the
Negative Impacts of Oil and Gas Activities on Louisiana's Coastal
Wetlands. EPA Office of Inspector General, Report Number E1HWG9-
13-9024-0400018, issued June 14, 1990.
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186
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REPORT DISTRIBUTION
Appendix VII
office of Inspector General
Inspector General (A-109)
EPA Headquarters
Assistant Administrator for Water (WH-556)
Assistant Administrator for Enforcement (LE-133)
Associate Administrator for Regional Operations (A-101)
Director, Office of Wetlands, Oceans, and Watersheds
(WH-556F)
Comptroller (PM-225)
Agency Follow-up Official (PM-208)
Office Of Congressional Liaison (A-103)
Office of Public Affairs (A-107)
Grants Administration Division (PM-216)
Region 4
Regional Administrator, Region 4
Director, Water Management Division
Region 6
Regional Administrator, Region 6
Director, Environmental Services Division
Region 7
Regional Administrator, Region 7
Assistant Regional Administrator for Policy and Management
External
General Accounting Office
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