EPA-350-R-05-002
April 2005
** OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Semiannual Report
to Congress
October 1, 2004 - March 31, 2005
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EPA Inspector General
The Inspector General Act of 1978, as amended, requires the Inspector General to: (1)
conduct and supervise audits and investigations relating to programs and operations of the
Agency; (2) provide leadership and coordination, and make recommendations designed to
(a) promote economy, efficiency, and effectiveness, and (b) prevent and detect fraud and
abuse in Agency programs and operations; and (3) fully and currently inform the
Administrator and the Congress about problems and deficiencies identified by the Office
of Inspector General relating to the administration of Agency programs and operations.
We are catalysts for improving the quality of the environment and Government through
problem prevention and identification, and cooperative solutions.
Mission
Add value by promoting economy, efficiency, and effectiveness within EPA and the
delivery of environmental programs. Inspire public confidence by preventing and
detecting fraud, waste, and abuse in Agency operations and protecting the integrity of
EPA programs.
To find out more about the U.S. Environmental Protection Agency's
Office of Inspector General and its activities, visit our Web site at
http://www.epa.gov/oig
Cover photos: From top left: Air toxics monitoring samplers (courtesy EPA Web site); a coal-fired
electric utility (courtesy State of New York Web site); reservoir at Beaver Lake,
Nebraska (courtesy EPA OIG).
Printed with vegetable oil-based inks on 100% recycled paper (minimum 50% postconsumer)
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\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
INSPECTOR GENERAL
April 28,2005
SUBJECT: Office of Inspector General Semiannual Report to Congress
TO: Stephen L. Johnson
Acting Administrator
I am pleased to provide you with the Inspector General Semiannual Report to Congress for the 6-month
period ending March 31, 2005. Many of the reviews that we conducted during the semiannual period
provided recommendations to help the Agency achieve its mission of protecting human health and the
environment. This report summarizes the areas we reviewed, progress the Agency has made, and our
recommendations to help the Agency improve.
The Inspector General Act of 1978, as amended, requires that you forward this report within 30 days of
receipt to the appropriate congressional committees. In transmitting the report to Congress, the Act
allows you to enclose separately whatever additional comments you deem necessary, and specifies
certain information that should be included (see 5 USC App. 5(b)).
I will be happy to discuss, or provide additional information on, any of the items in this report.
Nikki L. Tinsley
(J
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Message to Congress
During this semiannual reporting period, two of our more important activities focused on
the efforts of the Environmental Protection Agency (EPA) to make air safe and healthy to
breathe, and to help improve homeland security.
We found that EPA senior management instructed Agency staff to develop a standard for
mercury that would result in a specific emission total for all coal-fired utilities, instead of
basing the standard on an unbiased determination. Regulating airborne mercury is critical,
because it ultimately can contaminate fish that we consume. We recommended that EPA
develop a new standard based on Clean Air Act requirements.
EPA needs to make additional efforts to identify areas of unhealthy air toxics
concentration. While EPA has made progress in establishing a monitoring network to help
develop control strategies for dealing with fine particulate matter, it still needs to ensure
that it implements controls at locations where it identifies the greatest health risks. Our
key concerns regarding Clean Air Act Title V operating permits are that EPA needs to
reduce factors that negatively affect permit clarity, as well as improve Title V guidance
and the Agency's overall oversight strategy.
Our Nation needs to remain ever vigilant in protecting its resources against terrorist
attacks. Our review of the BioWatch program indicates that EPA needs to increase its
oversight of sampling operations for detecting the release of biological agents. States
continue to complete source water assessments, analyzing existing and potential threats to
public drinking water, but several obstacles hinder their efforts. We found that water
utilities may require additional assistance in securing data from remote locations.
As a result of our investigative efforts, the president of a testing laboratory received 16
months in prison related to creating and submitting false and fraudulent environmental test
results, and an EPA environmental scientist was given an 18-month jail term after pleading
guilty to charges of accepting a bribe, conspiracy, and making a false statement. One
contractor entered into a $6.5 million settlement related to overtoiling, and another agreed
to pay more than $400,000 to settle overtoiling allegations.
EPA earned an unqualified opinion on its fiscal 2004 financial statements, and we did not
note any material weaknesses in internal controls and compliance. We noted multiple
reportable conditions that should be corrected, but we do not believe they represent
material weaknesses that would prevent the fair presentation of reliable statements.
Details on these and other issues are in this semiannual report, including the "Scoreboard"
on our own performance. We look forward to continuing to work with the Agency and
Congress, serving as a catalyst for improving the environment.
'M. L ป. LI_,_ U \l-f-
Nikki L. Tinsley
Inspector General
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Table of Contents
Highlights 1
Profile of Activities and Results 2
Significant OIG Activity 3
Air (helping to make air safe and healthy to breathe) 3
Water (ensuring that drinking water is safe and sources are protected) 9
Cross-Media (issues involving overlapping areas - includes homeland security) 10
Grants (improving EPA's use of assistance agreements) 13
Contracts (improving EPA's use of contracts) 16
Financial Management (improving the Agency's financial management) 18
Business Systems (improving the Agency's business processes and systems) 20
Public Liaison (addressing specific concerns of the public) 21
Investigations (investigating laboratory fraud, financial fraud, and computer crimes) 22
Congressional Requests (providing Congress with specific information) 26
Chemical Safety and Hazard Investigation Board 28
Other Activities 29
Statistical Data 34
Audit Report Resolution 34
Summary of Investigative Results 37
Scoreboard of Results 38
Appendices 39
Appendix 1 - Reports Issued 39
Appendix 2 - Reports Issued Without Management Decisions (Available Upon Request)
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Highlights
Mercury Rule Needs
Additional Analysis
EPA management instructed
staff to develop a mercury
standard based on a specific
emission total for coal-fired
electric utilities rather than an
unbiased determination (page 3).
EPA Financial Statements
Earn Unqualified Opinion
EPA earned an unqualified
opinion on its fiscal 2004
financial statements, and no
material weaknesses were noted
(page 18).
Obstacles Remain for
Source Water Programs
Several obstacles continue to
hinder EPA and State efforts
regarding source water
assessments and strategies
(page 9).
Bio Watch Oversight
Needs Improvement
EPA should increase oversight
of its BioWatch sampling
responsibilities to ensure
adherence to guidance on
detecting release of biological
agents (page 10).
EPA Can Enhance Air
Toxics Monitoring
Despite significant efforts, EPA
can do more to identify
unhealthy air toxics
concentrations, identify trends,
and assess strategies (page 4).
Remote Access Security
Needs Improvement
EPA's Web-Mail and
BlackBerry servers need to be
better configured to provide
secure remote access to the
Agency's network (page 20).
Lab President Sentenced
to Prison
The president of a laboratory
was sentenced to 16 months in
prison for charges related to
creating and submitting false and
fraudulent environmental test
reports (page 22).
EPA OIG Leading Joint
Effort on Grants
The EPA Inspector General is
leading a Domestic Working
Group of Federal, State, and
local auditors to develop a guide
to improve grants accountability
(page 29).
Contractor Enters Into
$6.5 Million Settlement
A contractor entered into a
$6.5 million settlement
agreement related to overtoiling
on Superfund and engineering
contracts (page 25).
EPA Needs to Compete
More Grants
EPA needs to enhance its policy
to increase competition for
assistance agreements
(page 13).
Two Suspended for
Accessing Internet Porn
Two EPA employees received a
30-day suspension for using
Government computers to
access pornographic Web sites
(page 23).
Response Action Contracts
Can Be Improved
EPA can improve the structure
of Response Action Contracts,
used to obtain professional
services related to Superfund
cleanup (page 16).
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Profile of Activities and Results
Audit Operations
Office of Inspector General Reviews
October 1, 2004 to
March 31, 2005
(dollars in millions)
Questioned Costs *
Total
Federal
Recommended Efficiencies *
Federal
Costs Disallowed to be Recovered
Federal
Costs Disallowed as Cost Efficiency
Federal
Reports Issued - Office of Inspector
General Reviews
Reports Resolved
(Agreement by Agency officials to
take satisfactory corrective actions) ***
$4.3
$4.2
$2.0
$0.8
$0.02
30
108
Audit Operations
Other Reviews
(Reviews Performed by Another Federal Agency
or Single Audit Act Auditors)
October 1, 2004 to
March 31,2005
(dollars in millions)
Questioned Costs *
Total
Federal
Recommended Efficiencies *
Federal
Costs Disallowed to be Recovered
Federal
Costs Disallowed as Cost Efficiency
Federal
Reports Issued - Other
EPA Reviews Performed by
Another Federal Agency
Single Audit Act Reviews
Total
Agency Recoveries
Recoveries from Audit Resolutions
of Current and Prior Periods
(cash collections or offsets to
future payments) **
$15.8
$5.4
$1.1
$0.9
$0.0
152
133
285
$0.4
Investigative Operations
October 1, 2004 to
March 31, 2005
(dollars in millions)
Fines and Recoveries (including civil) **** $7.0
Cases Opened During Period 99
Cases Closed During Period 79
Indictments/Criminal Informations/Complaints 10
Convictions 7
Civil Judgments/Settlements/Filings 2
Administrative Actions Against EPA Employees/Firms 50
Questioned Costs and Recommended Efficiencies
subject to change pending further review in audit
resolution process.
Information on recoveries from audit resolution is
provided by EPA Financial Management Division and is
unaudited.
Reports Resolved subject to change pending further
review.
Total includes actions resulting from joint investigations.
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Significant OIG Activity
Helping to make air safe and healthy to breathe
Mercury Rule for Utilities Needs Additional Analyses
Evidence indicated that EPA senior management instructed EPA staff to develop a
Maximum Achievable Control Technology standard for mercury that would result in
a specific emission total for all coal-fired electric utilities, instead of basing the
standard on an unbiased determination.
Coal-fired electric utilities represent the largest source of airborne mercury emissions in
the United States. Once airborne, mercury can be deposited in water and result in fish
contamination. Human consumption offish is the primary method of exposure to mercury,
which has been shown to cause neurological and fetal developmental problems.
Members of the Senate Environment and Public Works Committee requested that we
review EPA's development of its mercury rule. In January 2004, EPA proposed two
options for controlling mercury emissions: a control technology
standard and a performance-based cap-and-trade program.
EPA proposed a 34-tons-per-year target standard based on the
amount of mercury reductions expected to be achieved from
implementing nitrogen oxide and sulfur dioxide controls under a
separately proposed but related air rule. According to EPA
officials, the 34-ton target represented the most realistic and
achievable standard for utilities.
However, the 34-ton target was prescribed by EPA senior
management, and prior estimates were lower. Consequently, the
standard likely understates the average amount of mercury emission
reductions achieved by the top performing 12 percent of utilities, the
minimum level for the standard as required by the Clean Air Act.
Further, this standard, as proposed, did not provide a reasonable
basis for determining whether the control technology standard or the
cap-and-trade approach provides the better cost benefit.
Virginia Electric Power Company's coal-fired
plant at Mt. Storm, West Virginia. Source:
State of N ew Yo rk We b site.
The Agency's cap-and-trade proposal could have been strengthened to better ensure that
anticipated emission reductions would be achieved. Contrary to Agency and Executive
Order requirements, the proposal did not adequately address the potential for hot spots,
and EPA did not fully analyze the cost-benefit of regulatory alternatives or fully address
the rule's impact on children's health.
We recommended that EPA re-analyze mercury emissions data collected for the top
performing 12 percent of utility units to develop a Maximum Achievable Control
Technology floor. We also recommended that the Agency conduct a revised cost-benefit
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analysis, and that EPA strengthen its cap-and-trade proposal by more fully addressing the
potential for hot spots. Further, we recommended that the Agency conduct more in-depth
analyses of the regulatory alternatives and children's health impacts as required by
Executive Orders. The Agency's response to our report did not specifically address our
recommendations, but raised concerns about certain aspects of the report. EPA issued a
final rule on March 15,2005, opting to regulate coal-fired electric utilities under the cap-
and-trade option. The final rule addressed some of our concerns with the cap-and-trade
proposal by eliminating certain provisions; however, the rule did not include a specific
course of action for addressing the potential for hot spots.
(Report No. 2005-P-00003, Additional Analyses of Mercury Emissions Needed
Before EPA Finalizes Rules for Coal-Fired Electric Utilities, February 3, 2005)
EPA Can Enhance Air Toxics Monitoring
EPA has significantly increased its ambient (outdoor) air monitoring efforts and
funding since 2000, but additional effort can be made to identify areas of unhealthy
ambient air toxics concentration, identify national trends, and assess strategy
effectiveness.
The Clean Air Act identifies 188 air toxics. EPA
defines air toxics as pollutants "known or suspected to
cause cancer or other serious health effects or
adverse environmental effects," and has a goal to
reduce unacceptable health risks from air toxics for
95 percent of the population by 2020.
Although the Clean Air Act does not require a national air
toxics monitoring network to measure air toxics levels,
EPA as well as State and local agencies have recognized
the need for such a network. EPA recently established
23 national sites to assess ambient air toxics trends, and
State and local agencies have established over 300 fixed
ambient air toxics monitoring stations nationwide. Further, in 2004, EPA began awarding
grants to State and local agencies to conduct short-term, local-scale monitoring projects.
Additional efforts and improvements can be made. For example, there was little
association between the location of State and local monitors and census tracts (geographic
areas within a county) estimated to have high health risks from air toxics exposure. We
found that air toxics monitoring was conducted in only 5 of the 50 census tracts with the
highest cumulative cancer risk. We also identified inconsistencies in the sampling
Monitors in 50 Census Tracts with the Highest Estimated Cancer Risks
Photograph of several types of air samplers used in
ambientairtoxics monitoring. Source: EPA Web site.
Tracts with monitors
Tracts without monitors
Tracts in sample
Census Tracts
No.
5
45
50
Percent
10%
90%
100%
Population
No.
10,552
1 45,383
1 55,935
Percent
7%
93%
100%
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frequencies and quality assurance measures for national trend sites. Key barriers to
ambient air toxics monitoring included inadequate funding and lack of methods to monitor
certain air toxics.
We recommended that EPA develop a strategy for siting monitors in locations estimated to
present the greatest health risks. We also recommended actions for improving the
programmatic aspects of national trends sites, particularly with respect to quality
assurance, quality control, and data completeness. Further, we recommended greater
emphasis be placed on methods development for analyzing ambient air toxics
concentrations. The Agency generally agreed with our recommendations.
(Report No. 2005-P-00008, Progress Made in Monitoring Ambient Air Toxics, But
Further Improvements Can Increase Effectiveness, March 2, 2005)
Title V Air Permitting Program Needs Improvement
We identified concerns with five key aspects of Clean Air Act Title V operating
permits: permit clarity, statements of basis, monitoring provisions, annual
compliance certifications, and practical enforceability. Collectively, these
problems can hamper the ability of EPA, State and local regulators, and the
public to understand what requirements sources are subject to, as well as how
they will be measured, and to hold sources accountable for meeting applicable
air quality requirements.
Primary Benefits Expected From
Implementing Title V
Improve States' air pollution programs due
to better emissions inventories.
Provide resources through Title V fees.
Provide a vehicle for implementing the air
toxics and acid rain programs.
Improve enforcement.
Achieve faster compliance.
Require compliance certifications from
facility operators.
Include all the applicable regulatory
requirements in one document.
Provide regulatory certainty for sources.
Improve public participation.
In 1990, Congress enacted Federal clean air permitting
requirements designed to reduce violations and improve
enforcement of air pollution laws for the largest known sources
of air pollution. Known as Title V, this provision requires that all
major stationary sources of air pollutants obtain a permit to
operate. Title V applies to more than 17,000 sources.
Factors such as extensive use of incorporation by reference;
failure to fully cite applicable regulations; complex permit
format; and lack of detail in source requirements for testing,
monitoring, and reporting had a negative impact on permit
clarity. Also, vague permit language and insufficient
monitoring provisions limited the practical enforceability of
some permits. EPA's oversight and guidance of Title V
activities have resulted in some improvements, but areas for
further improvement remain, such as the need for more
prompt issuing of program evaluation reports for permitting
authorities.
Despite implementation problems, the Title V program has resulted in some significant
benefits. The inclusion of all relevant Clean Air Act requirements in one document has
enabled stakeholders to obtain the information needed to understand the applicable
requirements for major permitting sources, and to express their concerns. There is also
anecdotal evidence that, in some instances, emissions inventories are better, compliance
has been achieved more quickly, and emissions have been reduced.
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We made recommendations for EPA to, among other things, reduce the factors that
negatively impact permit clarity, improve national Title V guidance, actively identify
monitoring deficiencies in State implementation plans, and develop a comprehensive
Title V oversight strategy. The Agency agreed with some recommendations but disagreed
with others.
(Report No. 2005-P-00010, Substantial Changes Needed in Implementation and
Oversight of Title V Permits If Program Goals Are To Be Fully Realized, March 9,
2005)
Efforts to Measure Fine Particulate Matter Need Enhancing
EPA has made substantial progress in establishing a speciation monitoring network
to help develop fine particulate matter (PM25) control strategies, but still faces a
number of challenges in ensuring that the controls are implemented at the right
sources.
Determining the chemical make-up of a particle - know as speciation - is largely
accomplished through data generated by the speciation (ambient air) monitoring network.
Airborne particulate matter 2.5 microns or smaller in size (PM25) is composed of a
complex mixture of particles. Tens of thousands of premature deaths yearly are
associated with exposure to excess PM25 levels, and EPA estimates that by 2010
compliance with PM2 5 control strategies will cost industry more than $37 billion annually.
While the speciation network provides information for understanding the makeup and
origin of PM25, it does not fully assist in providing the data for EPA and the States to
(1) identify or quantify the chemical make-up of PM25 particles, (2) reliably trace particles
back to their source, or (3) account for chemical changes that occur after particles are
released into the atmosphere. Using available data, EPA and the States are beginning to
develop control strategies, but increased monitoring efforts are needed.
Developing control strategies is best approached though collaborative processes that use
emissions inventories, air quality modeling, and ambient air monitoring data. EPA's
speciation network will be vital for enabling States with PM2 nonattainment areas to
meet Clean Air Act requirements to develop control strategies and ensure that pollution
controls are implemented at the right sources. Otherwise, some facilities may install
unneeded controls; some needed controls may go uninstalled; and, ultimately, compliance
may be further delayed and more costly.
Only $0.8 million of the $43 million that EPA budgeted in 2004 for PM2 5 monitoring was
used to improve the capability to address uncertainties with PM2 particle origin.
According to some manufacturers and Agency officials, increased partnering between
EPA and monitor manufacturers may be needed to ensure air pollution controls are
implemented at the right sources.
We recommended that EPA increase its research on technologies that can more fully
identify the chemical make-up of PM25, account for atmospheric impacts on PM25, and
assay the resultant changes that occur to the composition of the particle. This includes
increasing opportunities for cooperation with the private sector to develop improved
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speciation monitors. The Agency disagreed with certain issues in our report, but indicated
our recommendations generally aligned with its current improvement efforts.
(Report No. 2005-P-00004, EPA Needs to Direct More Attention, Efforts, and
Funding to Enhance Its Speciation Monitoring Program for Measuring Fine
Paniculate Matter, February 7, 2005)
No Bias Found on World Trade Center Panel
We did not find evidence indicating that a peer review panel on EPA's draft
assessment of the health hazards caused by the collapse of the World Trade Center
towers was biased. However, we did find a basis for the perception that there
might be conflicts of interest and bias.
The seven-member panel selected by EPA included one panelist with an extensive history
of providing expert testimony and similar services for defendants in asbestos law suits.
and two panelists who had made prior public statements regarding the safety of the air
around the World Trade Center site. However, while these circumstances provided a
basis for the perception of conflict of interest or bias, we did not find any evidence of bias
or that the perceived biases and conflicts were so "direct and substantial" that any of the
panelists should have been excluded from the panel.
Nonetheless, EPA should have taken additional measures during the peer review selection
process to disclose the information about panel members upon which the allegations of
conflict of interest or bias were later made. We made a number of recommendations to
ensure that guidance in EPA's Peer Review Handbook will be fully followed. These
include EPA providing better oversight of peer review contracts, and the need for
supplemental guidance and training of peer review leaders. EPA agreed with our
recommendations and has taken or initiated corrective actions for all our
recommendations.
(Report No. 2005-S-00003, Review of Conflict of Interest Allegations Pertaining to
the Peer Review of EPA's Draft Report, "Exposure and Human Health Evaluation of
Airborne Pollution from the World Trade Center Disaster, " November 4, 2004)
Atlanta Zoning Change Did Not Require a State Implementation
Plan Revision
Our review of a hotline complaint did not find evidence that a zoning condition
change for an Atlanta, Georgia, redevelopment project would negatively affect the
ability of the State to attain the ambient air quality standards of its current State
Implementation Plan.
The Atlantic Steel project is a Brownfields redevelopment effort designated as a
transportation control measure in Georgia's State Implementation Plan. It is also a Project
XL effort that allows using innovative strategies to achieve environmental goals. A
complainant alleged that Atlanta changed provisions of the measure's zoning condition #4
without submitting a State Implementation Plan revision to EPA for approval. The zoning
change relates to limiting cut-through traffic in neighborhoods near the site.
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We found that the revised zoning condition replaces vague language with specific
prescribed actions and timetables, and the changes do not result in the State
Implementation Plan being "substantially inadequate" to attain standards. The changes to
zoning condition #4 do not appear to result in increased air emissions.
We found that EPA Region 4's oversight of the changes to the zoning condition were
generally adequate, although EPA could take further measures to increase the
opportunities for public involvement in the project. We made recommendations that would
result in further public involvement and EPA Region 4 agreed with those
recommendations.
(Report No. 2005-S-00005, Review of Changes to the Atlantic Steel Transportation
Control Measure, February 16, 2005)
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Water
Ensuring that drinking water is safe and sources are protected.
Source Water Programs Show Promise But Obstacles Remain
While States continue to make progress on completing source water assessments,
and many are developing and implementing source water protection strategies,
we identified several obstacles that are hindering efforts.
Through the Source Water Assessment Program, EPA
requires States to conduct source water assessments to
analyze existing and potential threats to public drinking water
quality. The Source Water Protection Program, a voluntary
program not mandated by statute, encourages States to
develop protection programs after completing the assessment
process.
While some States are using assessments to improve overall
drinking water protection programs, assessment use at the
local level is limited. EPA needs to help States leverage
resources to continue source water protection programs.
Beaver Lake, Nebraska, reservoir. Source: EPA
OIG.
To improve the success of Federal, State, and local source water protection programs, we
recommended that the Assistant Administrator for Water:
Issue a public statement to re-affirm that the Source Water Assessment and Protection
Programs are a priority for EPA.
Encourage States to target assessments not only to utilities but also to local
governments, councils, planners, building and zoning officials, and other stakeholders.
Provide guidance to States on how to leverage financial and technical resources from
other EPA programs, partners, and stakeholders.
Continue to improve cooperation and coordination between States and EPA assistance
contractors.
Work with regions and States to integrate environmental programs, and determine how
best to disseminate locally applicable best practices for contaminant source
management and motivation.
EPA generally agreed with our findings and recommendations and in many cases has
taken actions to address them.
(Report No. 2005-P-00013, Source Water Assessments and Protection Programs
Show Initial Promise, But Obstacles Remain, March 28, 2005)
Foradditional reports concerning water issues, please referto:
Page 10: "EPA Needs to Identify Impediments to Water Data Control System Security"
Page 26: "Impact of Increased Emphasis on Wet Weather Discharge Violations Considered"
Page 27: "Region 3 Oversight of Water Permits Reviewed"
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Cross-Media
Issues involving overlapping areas - includes homeland security.
EPA Needs to Improve BioWatch Oversight Efforts
EPA should increase oversight of its BioWatch sampling responsibilities to ensure
adherence to quality assurance guidance related to detecting the release of
biological agents.
BioWatch is an early-warning system designed to detect the release of biological agents in the
air. BioWatch is a "detect to treat" network intended to detect certain biological agents within
36 hours of release to allow time for response. The Department of Homeland Security
oversees the BioWatch program, but relies on EPA to support a crucial aspect of the program
- monitoring through collecting filter samples. EPA awards and manages cooperative
agreements to State and local air monitoring agencies that collect the filter samples.
BioWatch Costs (millions)
Fiscal
Year
2003
2004
2005
Approximate
Sampling Costs
$12
$13
$15*
Approximate
Total Costs
$40
$38
$129
Does not include funding to support enhancements
planned for 2005.
We found that EPA did not provide adequate oversight
of the sampling operations to ensure quality assurance
guidance was adhered to, potentially affecting the
quality of the samples taken. EPA completed a
technology assessment of the existing BioWatch
monitors, but also needs to be involved in assessing
alternative technologies that are more reliable, timely,
and less costly.
We also found that State and local consequence
management planning was incomplete. Insufficient planning was highlighted when a biological
agent was detected in a city in October 2003, although the incident was eventually found to
have been caused by naturally occurring circumstances and did not require action.
EPA should ensure that it fulfills all its BioWatch responsibilities, including oversight of
quality assurance activities. Further, although not a responsibility designated to EPA, the
Agency should work closely with its BioWatch partners to identify and test alternative
monitoring technologies that may result in improvements, and ensure local consequence
management plans are adequate. EPA agreed with our report.
(Report No. 2005-P-00012, EPA Needs to Fulfill Its Designated Responsibilities to
Ensure Effective BioWatch Program, March 23, 2005)
EPA Needs to Identify Impediments to Water Data Control
System Security
Water utilities may require assistance in securing Supervisory Control and Data
Acquisition (SCADA) systems.
SCADA is a technology commonly used by water utilities that allows a user to collect
data from sensors and control equipment, such as pumps, valves, and chemical mixers
located at remote locations. SCADA networks were developed with little attention paid to
10
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security. As a result, many SCADA networks may be susceptible to attacks and misuses.
Further, studies indicated that some water utilities may have spent little time and money
securing their SCADA systems.
Some areas and examples of possible SCADA vulnerabilities include operator errors
and corruption, unsecured electronic communications, hardware and software
limitations, physical security weaknesses, natural disasters, poorly written software, and
poor security administration. Vulnerabilities may allow a person of malicious intent to
cause significant harm. For example, in 2000, an engineer used radio telemetry to gain
unauthorized access into an Australian waste management system and dump raw
sewage into public areas.
We found several possible reasons why utilities have not successfully reduced or mitigated
identified vulnerabilities:
Current technological limitations may impede implementing security measures.
Companies may not be able to afford or justify the required investment.
Utilities may not be able to conduct background checks on existing employees.
Officials may not permit SCADA penetration testing.
Technical engineers may have difficulty communicating security needs to management.
To better enable water systems to secure their SCADA systems, we suggested that EPA
identify impediments preventing water systems from successfully reducing or mitigating
SCADA vulnerabilities, and take steps to reduce those impediments. We also suggested
that EPA track the effectiveness of SCADA security efforts.
(Report No. 2005-P-00002, EPA Needs to Determine What Barriers Prevent Water
Systems from Securing Known Supervisory Control and Data Acquisition (SCADA)
Vulnerabilities, January 6, 2005)
Ongoing Management Improvements Vital to EPA Stewardship
and Voluntary Programs
EPA should improve stewardship and voluntary program management by
identifying motivators and barriers to participation, regularly incorporating
stakeholder input into program operations, and effectively integrating these
programs into EPA's strategic planning processes.
EPA defines environmental stewardship as "behavior that includes, but also exceeds,
required compliance with environmental laws and regulations." EPA's stewardship and
voluntary programs are intended to motivate people to take beneficial environmental
actions that are not required by regulation. When combined with ongoing compliance
efforts, stewardship activities provide an additional approach that can achieve
environmental results beyond those achieved by compliance activities alone.
EPA has created a strategic goal that uses stewardship programs to achieve
environmental outcomes and offers ways for participants to move above and beyond
compliance. The Agency has also begun to develop a plan to improve stewardship and
voluntary program management. However, EPA needs to improve motivators and reduce
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Motivators and Barriers to
Stewardship Cited by Stakeholders
Interviewed by OIG
Motivators
Avoiding negative publicity
Cost savings
Keeping up with leaders
Consumer demands
Grants
Recognition and/or rewards
Strong organizational leadership
Avoiding legal threats
"Doing the right thing"
Barriers
Financial impacts
Voluntary standards becoming regulatory
requirements
Lack of program flexibility
barriers to program participation (see box for information
provided by stakeholders), and continue to incorporate
stakeholder feedback while planning, designing, and
implementing its voluntary programs.
The Agency also needs to fully implement internal
recommendations to strategically plan, coordinate, and manage
its voluntary programs, and develop a process to determine
how these programs will be integrated into EPA's mission,
strategic goals, and objectives. Further, EPA needs to
determine the best ways to measure program outcomes and
impacts, and identify which programs are most effective.
We recommended that EPA develop a statement outlining how
voluntary programs are expected to assist EPA, and develop
criteria, guidance, and an action plan to assess how voluntary
programs will be included in the revised Agency Strategic
Plan. EPA generally agreed with our recommendations.
(Report No. 2005-P-00007, Ongoing Management
Improvements and Further Evaluation Vital to EPA
Stewardship and Voluntary Programs, February 17, 2005)
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Grants
Improving EPA's use of assistance agreements.
EPA Needs to Compete More Assistance Agreements
Though EPA took a positive step in promoting competition by issuing Order 5700.5,
Policy for Competition in Assistance Agreements, the Agency needs to amend the
Order to further increase competition for assistance agreements.
At the recommendation of the Office of Inspector General (OIG), EPA issued
Order 5700.5, effective October 1, 2002, establishing criteria to promote competition to
the maximum extent practicable, including when competition for grants is needed and
the process for grant competition.
However, the Order overemphasized exemptions and justifications for not competing
assistance agreements. The Order applied to only $161 million of more than $835 million
of discretionary grants awarded in 2003. Program offices awarded many assistance
agreements noncompetitively, some of which seemed inconsistent with the Order's
requirements. As a result, EPA did not ensure that it awarded discretionary grants to the
most qualified recipients or for the most innovative projects, thus potentially diminishing
the Agency's efforts to accomplish its mission.
We recommended that EPA increase the number of assistance agreements subject to
competition by eliminating certain exemptions and a specific justification for certain
organizations. In January 2005, EPA replaced the original Order with EPA Order 5700.5A1.
The revised order included numerous procedural changes and incorporated many of our
recommendations. However, the Agency disagreed with key recommendations directed
at increasing the number of assistance agreements subject to competition. The Agency's
response to our recommendations is due by June 30, 2005.
(Report No. 2005-P-00014, EPA Needs to Compete More Assistance Agreements,
March 31, 2005)
EPA Adequately Competed Brownfields Grants
EPA's competition process for awarding Brownfields grants complied with the
requirements of the Small Business Liability Relief and Brownfields Revitalization
Act of 2002. However, EPA did not comply with Agency policy for performing cost
reviews.
EPA was required to award grants to eligible organizations that have the highest rankings
under the 10 criteria established in the Act, and EPA used these criteria to the extent they
were applicable.
EPA cost reviews, however, did not comply with Agency policy. EPA only had cost
review documentation for 4 of 24 grants we evaluated. In some cases, project officers
said the reviews were performed but not documented. For those reviews not performed,
the project managers thought someone else was responsible for performing them. As a
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result, EPA risked the possibility of reimbursing recipients for costs that were
unreasonable or unallowable. The Agency agreed with our recommendation to remind
project officers to document cost reviews.
(Report No. 2005-P-00009, Brownfields Competition Process for Awarding Grants
Complied With Act, March 7, 2005)
EPA Grant Recipient Lacks Documentation for $2 Million in
Reported Outlays
We questioned $2,009,473 of a grant recipient's reported outlays because the
recipient did not maintain the necessary documentation to fully support the
reported costs, as required by Federal regulations.
EPA awarded an $18,750,000 grant to the Health Effects Institute on November 14, 2000.
The recipient is an independent nonprofit corporation, located in Boston, Massachusetts,
chartered to conduct and evaluate research and testing related to the health effects of
emissions from motor vehicles and other environmental pollutants. This agreement was
intended to enable the recipient to identify and help the scientific community plan for new
research in air toxics, accountability, and the health effects of emerging fuels and
technologies.
The recipient did not maintain required documentation. Employee time sheets were not
used as the basis for charging labor and related costs to the grant. The recipient charged
travel and other costs to the grant without determining the allocable benefit of such costs.
We recommended that EPA obtain sufficient documentation to support the $2,009,473 or
disallow the costs from Federal grant participation. We also recommended that EPA take
steps to ensure the recipient addresses its financial management weaknesses.
The Health Effects Institute did not agree with our conclusions. The Institute stated that
it had only one final cost objective and all of its costs were allocable to the EPA grant.
This position is inconsistent with the Institute's accounting records, which identified two
cost objectives - one for the EPA grant and one for industry. Final determinations on
matters in this report will be made by EPA managers in accordance with established audit
resolution procedures.
(Report No. 2005-4-00054, Reported Outlays Under EPA Grant R828112-01 Health
Effects Institute, March 31, 2005)
EPA Grant Recipient Did Not Comply with $2 Million Matching
Requirement
Based on the results of a National Science Foundation (NSF) OIG audit, we
questioned the entire grant amount of $2 million because the recipient did not
meet its 100-percent match requirement, as stipulated in its grant agreement.
The NSF OIG performed an audit of the United States-Mexico Foundation for Science
(Foundation). As part of its audit, the NSF OIG reviewed EPA Grant No. XP989490-01.
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Region 9 awarded this grant, in the amount of $2 million, to the Foundation on
September 30, 1999.
The NSF OIG identified several significant non-compliance issues regarding grants
awarded to the Foundation by four Federal agencies, including EPA. As a result of these
findings, we questioned the entire grant amount of $2 million for the following reasons:
1. The Foundation did not meet its matching requirement. The Foundation was
supposed to provide $2 million in matching funds for its grant. The Foundation did not
provide any matching for the EPA grant, violating the terms and conditions of the grant.
According to EPA grant requirements, EPA had the right to reclaim the grant award if
the matching contribution was not made within one year of the U.S. contribution.
2. The Foundation did not have adequate financial management processes. The
NSF OIG identified numerous issues regarding the Foundation's financial management
processes, including a lack of written internal control policies and procedures for its
cost accounting system, lack of an adequate labor distribution system, lack of a process
to review and reimburse travel expenditures, and non-compliance with the single audit
provisions under Office of Management and Budget Circular A-133.
We issued the report to EPA Region 9, and recommended that Region 9 coordinate with
EPA's Grants Administration Division to require the Foundation to either meet its match
requirements or refund the $2 million to EPA, provide documentation demonstrating that
the Foundation has adequate financial management processes, and award no further
grants to the Foundation until these financial management deficiencies are corrected.
(Report No. 2005-P-00005, Audit of the United States-Mexico Foundation for
Science, February 4, 2005)
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Contracts
Improving EPA's use of contracts.
EPA Can Improve Response Action Contracts
EPA can improve the structure of Response Action Contracts to better protect the
Government's interests when it contracts for Superfund cleanups.
Response Action Contracts are Cost Plus Award Fee Level of Effort contracts used to
obtain professional Architect-Engineer, technical, and management services supporting
EPA's Superfund cleanup responsibilities.
EPA's current Response Action Contracts assign to EPA a disproportionate share of the
risk of cost overruns; expose EPA to the risk of loss of funds through litigation; limit
competition; and forego potential cost savings associated with other approaches to
contracting, such as Performance-Based Service Acquisition.
EPA regions do not consistently document the rationale used to decide whether to
contract directly or obtain services through an interagency agreement with the U.S. Army
Corps of Engineers. The Agency does not have a process to measure and disseminate
information on the U.S. Army Corps of Engineers' past performance in support of EPA.
Response Action Contracts
Expose EPA to:
Disproportionate share of risk of cost
overruns
Loss of funds through litigation
Limited competition
Loss of potential savings associated
with other contracting approaches
Evaluations of contractor performance were not documented timely
and consistently, which could prevent EPA and other Federal agencies
from considering contractors' past performance. Further, information
needed to evaluate results and make decisions was not always readily
available in the national automated database - the Remedial Action
Contract Management Information System - resulting in underutilization
of the system despite EPA spending about $1.5 million a year on it.
We recommended that EPA develop and implement a plan to increase
use of different contract types, require better documentation on all
source selection decisions, develop a method for holding contracting officers accountable for
conducting past performance evaluations timely and accurately, and conduct a cost-benefit
analysis to determine whether the Remedial Action Contract Management Information System
should be retained. EPA generally agreed with our recommendations.
(Report No. 2005-P-00001, Response Action Contracts: Structure and
Administration Need Improvement, December 6, 2004)
Contracting Systems Can Be Strengthened
EPA's Office of Acquisition Management has taken positive steps to achieve its
vision and goals related to contracting for Agency goods and services, but there
are opportunities for strengthening its management systems.
High performing organizations are those that have the necessary systems and processes
in place to achieve their missions. Positive steps taken by the Office of Acquisition
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Office of Acquisition
Management's Strategic Goals
Investing in our people
Providing business leadership
Optimizing business processes
Strengthening our link to the Agency
mission
Management included adequately communicating its vision and
strategic goals to employees and customers, focusing on
customers' needs, and emphasizing workforce development.
However, the Office needs to develop an action plan with
milestones for establishing measures and means of measuring
progress against its goals, complete workload and workforce
analyses, improve information in its Integrated Contracts
Management System regarding the quality and cost of its
services, and obtain data for measuring progress toward
achieving its vision of being the preferred business partner for all EPA contracts.
The Agency generally agreed with our recommendations related to establishing measures,
completing analyses, and capturing data.
(Report No. 2005-P-00006, Office of Acquisition Management Can Strengthen Its
Organization Systems, February 17, 2005)
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Financial Management
Improving the Agency's financial management.
EPA Earns Unqualified Opinion on Financial Statements
EPA earned an unqualified opinion on its fiscal 2004 financial statements.
However, in evaluating EPA's internal controls, we identified a number of
reportable conditions.
The Government Management Reform Act of 1994 requires an annual audit of EPA's
financial statements to help improve the Agency's financial management practices.
systems, and controls so that timely, reliable information is available.
We rendered an unqualified, or clean, opinion on EPA's statements for fiscal 2004,
meaning that they were fairly presented and free of material misstatement. However,
when evaluating EPA's internal controls, we identified a number of reportable conditions,
listed below. Although we do not believe they represent weaknesses that would cause
material misstatements of the financial statements' amounts, these reportable conditions
represent significant deficiencies in the design or operation of internal controls that, if not
addressed, could adversely affect the organization's ability to meet Office of Management
and Budget (OMB) objectives for financial reporting.
EPA's Quality Assurance Guide, which is the framework for implementing the
Agency's internal control program, does not reflect developments since 1995.
Despite improvements, regional calculations related to unearned revenue did not
include the proper amounts of cumulative disbursements, resulting in a $ 14 million
understatement of unearned revenue.
Finance offices were unable to record accounts receivable transactions promptly in the
Agency's accounting system - the Integrated Financial Management System (IFMS) -
due to other Agency offices' untimely submission of documentation. Further, we
identified $ 1,963,980 in unrecorded fines and penalties.
EPA did not promptly record $97,434 of marketable securities received from
companies in settling debts. Of the four accounting offices receiving debt settlements,
only one recorded receipt of these securities.
The Agency's process for recording contractor-held property acquisitions was
inadequate, resulting in acquisition values being understated in the accounting records
by $6.9 million. In addition, the Agency improperly accounted for $11.6 million of
Superfund contractor-held surplus property, resulting in misstatements in depreciation
and loss on disposal.
Obligations, amounting to $1,036,139, were not recorded in the proper accounting period.
At one region and a finance center, 10 out of 16 fiscal 2004 obligations tested were
incorrectly recorded in fiscal 2005.
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Agency staff developed and implemented financial applications for recording and
tracking grant and interagency agreement disbursements. However, staff did not
assess the risks these applications pose to Agency assets, personnel, and operations.
Additionally, staff did not ensure management controls were operating effectively by
testing security controls for these applications.
A general breakdown of security controls related to software changes occurred that
could undermine the integrity of IFMS software libraries and financial system data.
Because the Office of the Chief Financial Officer lacks updated systems
documentation, we continued to be unable to assess the adequacy of the application
control structure for automated input, processing, and output controls for IFMS.
The results of our tests did not disclose any instances where the Agency's financial
management systems did not substantially comply with the applicable Federal accounting
standard. However, we did identify instances of non-compliance that do not meet OMB's
definition of substantial non-compliance. Specifically, EPA did not comply with accounting
standards requiring it to provide full costs per output to management in a timely fashion,
continued to experience difficulties in reconciling intragovernmental transactions due to
some Federal entities not providing needed information, and still needed to establish a
background check program for non-Federal personnel accessing the accounting system.
We also found an instance of non-compliance related to reconciling EPA's Fund Balances
with Treasury.
During our audit, we found that the Hazardous Substance Superfund Trust Fund, managed
by the U.S. Treasury Bureau of Public Debt, transferred funds to EPA in excess of the
assets available to be transferred by $7.6 million in fiscal 2004. EPA's view is that the
shortfall will be covered by collecting cost recoveries and receiving interest income over
time. In our opinion, because cost recoveries have declined and the investment principal
upon which the interest is earned has steadily decreased, for the Superfund Trust Fund to
continue operations, any deficit and future financing will have to be covered almost
entirely by appropriations from the Treasury's general fund.
In its response to our draft report, the Agency generally concurred with our
recommendations and noted completing or planning a number of corrective actions.
(Report No. 2005-1-00021, Audit of EPA's Fiscal 2004 and 2003 Financial
Statements, November 15, 2004)
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DUSin6SS SVStGrT1S Improving the Agency's business processes and syste
Remote Access Security Needs Improvement
EPA's Web-Mail and BlackBerryฎ servers are not configured appropriately to
provide secure remote access to the Agency's network.
Remote access means connecting to EPA's data communications network from alternate
locations not directly connected to the network. Two key methods of attaining remote
access are through an Internet browser via Web-Mail or through a BlackBerry, which is a
wireless handheld device.
We found that 59 percent of the Web-Mail and BlackBerry
servers were not adequately configured or updated to mitigate
vulnerabilities. Also, several of the Agency's BlackBerry devices
were not adequately secured or monitored. We found devices that
did not have a password enabled, or had functionality that would
allow users to disable passwords. We also observed devices left
unattended in workstation cubicles. Consequently, confidentiality
and integrity of EPA data are at risk.
We made various recommendations to EPA. These included
establishing a requirement for all remote access systems to have
security monitoring and network vulnerability scanning, developing
standards that define authorized open ports and services for the
Web-Mail and BlackBerry servers' Operating System, and
conducting a risk assessment and establishing a process to consistently configure all
devices. EPA generally agreed to take sufficient corrective actions.
(Report No. 2005-P-00011, Security Configuration and Monitoring of EPA's Remote
Access Methods Needs Improvement, March 22, 2005)
A BlackBerry wireless handheld device.
Source: EPAOIG.
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Public Liaison
Addressing specific concerns of the public.
Reviews of 11 Cases Completed
During the semiannual reporting period, the Public Liaison staff completed reviews of
11 cases submitted to the Ombudsman and the OIG Hotline. The subject matter of the
allegations addressed included:
Air radiation standards and health effects at a Yucca Mountain, Nevada, storage and
disposal site;
Equitability of settlements in conjunction with the Casamalia Landfill, Santa Barbara
County, California;
Contamination of drinking water wells at Camp Lejeune, North Carolina;
Clean Air Act violations, EPA oversight of the Oklahoma Corporation Commission, and
an EPA employee conflict of interest;
Water pollution from a concentrated animal feeding operation in Gibson County,
Indiana;
Permitting of wastewater dumping into the Gulf of Mexico;
Diploma mills/unaccredited degrees;
Improper cleanup at underground storage tanks, Uniontown, Ohio;
Intimidation of an EPA employee assigned to Lindsay Light/DuSable Park Superfund sites;
Misuse of training funds by regional personnel; and
Misuse of travel funds by headquarters personnel.
Hotline Activity
The following EPA OIG Hotline activity regarding complaints of fraud, waste, and abuse
in EPA programs and operations occurred during the past semiannual period:
Inquiries and Complaints Received During Period
Issues Handled by EPAOIG
Complaints Open - Beginning of Period
Inquiries Addressed
Complaints Opened
Complaints Closed
Complaints Open - End of Period
Issues Referred to Others
EPA Program Offices
EPA Criminal Investigation Division
Other Federal Agencies
State/Local Agencies
Semiannual Period
(October 1,2004 -
March 31, 2005)
189
17
74
8
13
15
42
9
18
35
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Investigations
Investigating laboratory fraud, financial fraud,
and computer crimes.
Laboratory Fraud
Laboratory President Sentenced to Prison Term
On March 15, 2005, Edward V. Kellogg, President, owner, and Quality Control Officer of
Johnson Laboratories, Inc., New Cumberland, Pennsylvania, was sentenced in U.S.
District Court, Eastern District of Pennsylvania, to 16 months in prison, followed by
36 months of probation, and ordered to perform 80 hours of community service. Kellogg
was also ordered to pay restitution of $7,181 and a $3,400 special assessment.
On August 17,2004, following ajury trial, Kellogg was found guilty of 34 counts of mail
fraud. A May 2003 indictment charged that from May 1998 through July 2000, Kellogg
engaged in a scheme to defraud customers of Johnson Laboratories by creating and billing
customers for false and fraudulent environmental test reports.
Johnson Laboratories provided analytical testing of environmental samples, including
water and wastewater, to municipalities and commercial clients required to comply with
environmental laws and regulations administered by EPA. Among the tests prepared by
Johnson Laboratories were tests for volatile organic compounds (VOCs), a contaminant
whose presence in water is regulated by EPA. VOCs can contaminate drinking water,
and VOCs in wastewater may be discharged into rivers and streams, potentially affecting
fish, wildlife, and drinking water sources.
As the head of the business, Kellogg allowed environmental test results to be fraudulently
prepared and billed to customers. These test reports purported to contain the results of
VOC testing performed in accordance with EPA method 601/602, when in fact Kellogg
knew that this testing method had not been used. Instead, VOC testing had been
performed under the lesser inclusive EPA method 624. Johnson Laboratories did not have
the necessary laboratory instruments in operating condition to perform the tests in
accordance with EPA method 601/602 as reported to customers.
This investigation was conducted jointly with the EPA Criminal Investigation
Division, the Pennsylvania Attorney General's Office, and the Pennsylvania
Department of Environmental Protection.
Former General Manager Sentenced for Filing False Statement
under Clean Water Act
On March 3, 2005, Harry B. Still, Jr., former General Manager, Bay Minette Utilities Board,
Bay Minette, Alabama, was sentenced in U.S. District Court, Southern District of Alabama,
to 12 months probation and was ordered to pay a $3,000 fine and a $100 special assessment.
In November 2004, Still pled guilty to one count of filing a false statement under the Clean
Water Act. For the reporting period March 1,2004, to March 31,2004, Still filed a false
Discharge Monitoring Report with the Alabama Department of Environmental
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Management. This report denotes the levels of specific chemicals and contaminants in the
discharge from waste water treatment plants. Still reported the minimum pH (potential of
Hydrogen) level for the period was 6.0 standard units, the minimum pH level allowed, when
in fact the minimum pH level for the period was 3.3 standard units. In the same report, Still
reported the maximum nitrogen ammonia concentration was 6.9 milligrams per liter, when in
fact the maximum concentration for the period was 8.29 milligrams per liter.
This investigation was conducted jointly with the Federal Bureau of Investigation,
EPA Criminal Investigation Division, and Alabama Attorney General's Office.
Computer Crimes
Two Employees Suspended for Misuse of Government Computers
In two separate instances, EPA employees received 30-day suspensions for using
Government computers to access pornographic Web sites.
On February 14, 2005, an Office of Solid Waste and Emergency Response employee was
suspended for 30 days for inappropriately using EPA's computer network. An OIG
investigation developed evidence that the employee violated EPA Order 2100.3A1, Policy on
Limited Personal Use of Government Office Equipment, between August 2003 and June
2004, by accessing thousands of pornographic Web sites and images during the work day.
On March 15, 2005, a Region 5 employee was suspended without pay for 30 days as a
result of another OIG investigation. This investigation focused on the employee
repeatedly misusing his Government computer to access adult Internet sites and
downloading sexually explicit pictures, despite numerous reminders that using Government
equipment to access sexually explicit materials is prohibited.
Such misuse of Agency equipment negatively impacts productivity and potentially exposes
the EPA network and its users to risks from suspect Web sites. The OIG will continue to
work with EPA Information Security personnel to ensure the integrity of EPA's systems.
Cyberpirate Sentenced
On March 16, 2005, John Amorosi, Falls Church, Virginia, was sentenced to 24 months
probation and ordered to pay a $ 100 special assessment. In addition, Amorosi forfeited more
than 595 computer-related items. This sentencing follows his guilty plea in U.S. District Court,
District of Nevada, to one count of conspiracy to commit copyright infringement.
This sentencing, as well as numerous others, is a result of a 2-year-long undercover investigation
known as "Operation Bandwidth." The investigation focused on a software piracy group
dedicated to illegally reproducing and distributing copyrighted software, movies, and games over
the Internet. At least 18 members of the group were hackers who had illegally accessed EPA
computer systems to further the reproduction and distribution scheme, valued at approximately
$7.6 million. To date, 27 defendants have been convicted and 4 defendants are awaiting trial.
This investigation was conducted jointly with the Federal Bureau of Investigation
and the Defense Criminal Investigative Service.
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Technical Vulnerability Assessment Laboratory Provides Multiple
Benefits
The OIG continues to operate a Technical Vulnerability Assessment Laboratory (TVAL)
within the Office of Investigations. The TVAL is a cooperative effort involving the Office
of Investigations and the Office of Audit, and includes the EPA Office of Environmental
Information and EPA's information security community. Through sharing specialized
tools and expertise, the Agency is improving its information system security by assessing
its various networks for vulnerabilities and weaknesses. By performing the assessments
in-house, the Agency recognizes a cost savings on each assessment performed and gains
more expertise in the area of information system security.
During this semiannual reporting period, the TVAL supported 12 vulnerability
assessments. Among the systems assessed were the Agency payroll and travel systems,
as well as a complete assessment of a regional network of over 2,200 computers. Recent
assessment results disclosed various vulnerabilities, some at the severe or high level. As a
result of the assessments, the Agency immediately undertook corrective actions.
In addition to TVAL assessments, the TVAL has the capability to perform Penetration
Testing, a technique that is important to validate and verify findings and corrective actions.
It is through this cooperative effort that the OIG works with the EPA to improve
information security and identify those processes or actions that have negative impact.
Financial Fraud
Environmental Scientist Receives Prison Sentence
On February 2, 2005, Lawrence M. Fradkin, a former GS-15 Environmental Scientist with
the EPA Office of Research and Development, was sentenced in U.S. District Court,
Southern District of Ohio, to 18 months in prison, followed by 2 years probation. In
addition, Fradkin was ordered to pay $60,000 in restitution to EPA and a $300 special
assessment. This sentencing follows Fradkin's September 29, 2004, guilty plea to charges
of accepting a bribe, conspiracy, and making a false statement.
Fradkin was employed as the Federal Technology Transfer Coordinator at the Andrew W.
Breidenbach Environmental Research Center in Cincinnati, Ohio. In that position, Fradkin
oversaw multi-year, multi-million dollar cooperative agreements between EPA and outside
parties that promoted transferring environmental technology to the marketplace.
In late 2000, Fradkin urged a contractor to create a job under a contract he oversaw,
encouraged an acquaintance to apply for that job, and then encouraged the contractor to
hire the acquaintance for the $60,000-a-year job. Fradkin then demanded that the
acquaintance pay Fradkin $10,000 per year for his assistance in getting and keeping the
job. Fradkin also required the acquaintance to teach college courses and perform
personal work for him at his home for no compensation.
In the spring of 2002, Fradkin recommended that a contractor whose contract he oversaw
enter into a$160,000 subcontract with a university to develop a database which identified
EPA scientists and their areas of expertise for use by the private sector. Fradkin
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recommended that the university hire a particular person to develop the database. Fradkin
conspired with that person to defraud the Government of $60,000, of which Fradkin took
$30,000. Fradkin had developed the database on EPA time and sent it to the person, who
then submitted it to the university. Fradkin's fraud caused the EPA to pay the
subcontractor for a database that Fradkin developed on Government time.
Because of his Government position, Fradkin was required to annually submit an official
financial disclosure form to EPA, which also required disclosing any outside employment.
Fradkin admitted that from 1994 through 2002, he filed nine false disclosure forms in
which he failed to disclose his outside employment. The total amount of income from the
unreported outside employment was $147,284.
Contractor Enters into $6.5 Million Settlement
On March 15, 2005, Dehon, Inc., formerly known as Arthur D. Little, Inc. (ADL),
Cambridge, Massachusetts, entered into a $6.5 million settlement agreement with the
U.S. Attorney's Office for the District of Massachusetts, Civil Division, to settle claims
that ADL overtoiled the Federal Government on its contracts.
From 1990 to 2000, ADL inflated costs it charged to the Federal Government contracts
by improperly shifting costs uniquely associated with its commercial contracts onto
Federal contracts. The Defense Contract Audit Agency conducted an analysis of the
costs charged to Federal contracts and estimated that $13.9 million was overtoiled to
numerous Government agencies, including EPA, the Department of Defense, and the
Department of Energy. The EPA work involved Superfund and engineering activities.
In February 2002, ADL filed for relief under Chapter 11 of the U.S. Bankruptcy Code.
Payment of this settlement agreement will be in accordance with the terms and conditions
of the bankruptcy filing.
This investigation was conducted jointly with the Defense Criminal Investigative
Service.
Contractor Agrees to Pay $424,270 to Settle Overtoiling
Allegations
On December 9, 2004, Tetra Tech, Inc., Fairfax, Virginia, while admitting no
wrongdoing, agreed with the U.S. Attorney's Office for the Eastern District of Virginia,
Civil Division, to pay $424,270 to settle allegations that it overtoiled costs on its
Government contracts.
The investigation found indications that from 1995 through 2003, Tetra Tech overtoiled for
computer services and reproduction costs to numerous Federal contracts awarded by
EPA, the Department of Defense, and the Department of Energy. This overtoiling
occurred because Tetra Tech billed estimated rates that were in excess of the actual costs
for computer services and reproduction costs.
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RGOUGStS Providing Congress with specific Information.
Impact of Increased Emphasis on Wet Weather Discharge
Violations Considered
We could not conclusively support or refute EPA's claim that a decline in EPA
formal National Pollutant Discharge Elimination System (NPDES) clean water
enforcement actions has been compensated for by a diversion of NPDES resources
to wet weather discharge violations. We performed this review in response to a
congressional request regarding the decline of NPDES enforcement actions.
NPDES permits are issued to point source dischargers to control the levels of pollutants
entering surface waters; point source discharges include those coming from the traditional
large major facilities, such as municipal and
industrial wastewater treatment facilities, as
well as those associated with wet weather
issues. Wet weather pollution is the result of
excess water following rainfall. EPA is
responsible for ensuring that facilities comply
with NPDES permits.
We found that wet weather enforcement cases
require more resources than traditional NPDES
enforcement actions. Further, regions generally
said conducting enforcement actions against
combined sewer overflows/sanitary sewer
overflows require more resources than other types
EPA NPDES Enforcement Actions by Category
(All 10 Regions Reporting)
Actions
400 -
200 -
^**~^ \v
A. S ^\ *
m
^
F
Y1 999 FY2000 FY2001 FY2002 FY2003
ป Traditional Wet weather A Total
Data Source: Integrated Compliance Information System, 6/15/04.
of wet weather cases. Evidence suggests that EPA has shifted compliance and enforcement
staff from traditional NPDES program activities to work on wet weather issues.
We found that the annual number of EPA formal NPDES enforcement actions actually
increased slightly, rather than decreased, between fiscal years 1999 through 2003.
EPA NPDES Formal EnforcementActions by Category
Wet weather
Combined/Sanitary Sewer Overflows
Concentrated Animal Feeding Operations
Stormwater
Subtotal
Non-wet weather
All non-wet weather
Total
FY1999
75
63
225
363
626
989
FY2000
100
71
648
819
421
1,240
FY2001
57
34
293
384
385
769
FY2002
53
22
294
369
462
831
FY2003
70
41
430
541
485
1,026
Total
355
231
1,890
2,476
2,379
4,855
Source: OECA officials reported enforcement actions from Integrated Compliance Information System,
6/15/04; verified by EPA regions 7/30/04.
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However, the change was not uniform for the period, and a large increase occurred at the
beginning of the period, followed by a 1-year decline and then an increase in the last 2 years.
The continuous, significant shift of resources toward addressing wet weather cases over
the last 5 years has not been matched by a corresponding increase in wet weather
enforcement actions, as would be expected based on EPA's assertion. However, we
could neither prove nor disprove EPA's 2003 assertion due to a lack of staffing data and
the fact that other potential explanations may exist for the absence of a correlation,
including a lag between resource inputs and enforcement actions and a possible increase
in non-enforcement-related activities by EPA staff.
(Report No. 2005-S-00001, Congressional Request Regarding EPA Clean Water
Enforcement Actions, October 18, 2004)
Region 3 Oversight of Water Permits Reviewed
As a result of a congressional request, we gathered specific information on EPA
Region 3's oversight of the NPDES permit program.
Since 1972, the NPDES permit program has controlled water pollution by regulating point
sources that discharge pollutants into United States waters. In most cases, authorized
States administer the program and EPA oversees State implementation.
According to information in the Permit Compliance System, from October 1, 2002, to
August 9, 2004, Region 3 and States in that region inspected 3,729 permittees and took
205 enforcement actions. However, States do not report all of their actions in the system.
Region 3 Inspections and Enforcement Actions (October 1, 2002, to Augusts, 2004)
Type of
Source
Major
Minor
Total
Inspections
Conducted
by Region 3
375
97
472
Conducted
by States
1,107
2,150
3,257
Total
1,482
2,247
3,729
Enforcement Actions
Taken by
Region 3
47
11
58
Taken by
States
59
88
147
Total
106
99
205
Source: EPA Permit Compliance System
In Region 3, multiple people within the Water Division manage grants, and project officers
rely on Division technical staff to obtain some of the reports States should submit and
inform project offices if the staff is having problems with a State. The region also
conducts joint evaluations with States on grant work plans.
Region 3 uses various tools for overseeing States, including (a) reviewing information in
the Permit Compliance System, (b) making quarterly calls with States, (c) carrying out
Federal inspections and enforcement actions, and (d) reviewing State programs.
(Report No. 2005-S-00002, Congressionally Requested Review of EPA Region 3 's
Oversight of State National Pollutant Discharge Elimination System Permit
Programs, October 29, 2004)
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Chemical Safety and Hazard Investigation Board
The U.S. Chemical Safety and Hazard Investigation Board (CSB) was created by the
Clean Air Act Amendments. The Board's mission is to investigate accidental
chemical releases at facilities, to report to the public on the root causes, and to
recommend measures to prevent future occurrences.
In fiscal 2004, Congress designated the EPA OIG to serve as the Inspector General
for the CSB. As a result, the EPA OIG has the responsibility to audit, evaluate,
inspect, and investigate CSB's programs, and to review proposed laws and
regulations to determine their potential impact on CSB's programs and operations.
This includes an annual audit of CSB's financial statements.
Chemical Safety and Hazard Investigation Board Earns
Unqualified Opinion on Financial Statements
CSB earned an unqualified opinion on its fiscal 2004 financial statements. The statements
were found to be presented fairly, in all material respects, and in conformity with
applicable standards. Further, no material weaknesses involving the internal controls over
financial reporting were noted, nor were any instances of noncompliance with certain
provisions of laws and regulations noted.
The EPA OIG contracted with an independent accounting firm to audit CSB's financial
statements. We reviewed the firm's report and related documentation, and found no
instances in which the firm conducting the audit did not comply, in all material respects,
with generally accepted auditing standards.
For fiscal 2004, CSB reported a net cost of operations totaling $8.3 million. For that year,
the CSB reported completing four full investigations, two case study reports, and two
safety bulletins. The CSB reported as its most significant achievement a recommendation
for New York City to modernize the control of hazardous materials under its 86-year-old
municipal fire code, and the City indicated it plans to overhaul its fire code. The CSB
recommendation followed its 18-month investigation of a chemical accident in Manhattan
where at least 36 people were injured when hazardous chemicals - improperly mixed in
the basement of a commercial building - exploded.
The entire report is located at CSB's website at:
httD://www.csb.gov/legal affairs/docs/CSB%20fV%202004%20Financial%20Audit.Ddf
28
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Other Activities
EPA Inspector General Leads Intergovernmental Effort to
Address Grants Accountability
On behalf of the Comptroller General's Domestic Working Group, Inspector General
Nikki Tinsley is leading a group of Federal, State, and local auditors that is developing a
guide to improve grants accountability.
"With nearly $400 billion of the United States' budget going to grant programs, it is
absolutely essential that these dollars deliver the intended results. That has not always
been the case in the past," Tinsley said.
The guide is being designed to help financial and program executives improve grant
accountability and will include examples of practices that benefit organizations. Auditors from
20 Federal agencies, 4 States, and 2 local agencies have joined together on this project.
In 2003, $385 billion, or one-sixth of the Federal budget, was provided as grants to State and
local governments alone. Audit organizations routinely identify weaknesses in how agencies
manage grants and recipients use funds. During 2004, Inspectors General from six Federal
agencies identified grant issues among their agencies' top management challenges.
EPAOIG Leads Project to Establish Electronic PCIE Library
As the Chair of the President's Council on Integrity and Efficiency (PCIE) Government
Performance and Results Act (GPRA) Roundtable, the EPA OIG led a project to
establish an electronic library of OIG Policies, Procedures, Strategic Plans, and
Performance Reports from across the Inspector General community. The purpose of the
library is to create an easily accessible resource for sharing policies, processes, rules,
approaches, and best practices that could improve operational efficiency of the whole
community by reducing duplication of effort and improving products.
The Inspector General Internet Webmaster began converting submissions from OIGs into
Portable Document Format (PDF) files for posting and set up the library by the following topics:
General Administration/Operations (Human Resources Management, Fiscal Resources
Management Equipment/Facilities/Information Technology, Training, Planning/
Reporting, Organizational Structure)
Audit/Evaluation
Inspections/Special Reviews
Investigations
General (Hotline, Semiannual Report, Congressional and Public Outreach, PCIE
Legislation/Regulation Review, Quality Assessments, Other)
Strategic Plans and Performance Reports
This project is an example of how the Inspector General community is sharing its
resources for greater efficiency.
29
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Inspector General Stresses Collaborative Efforts During Various
Presentations
Inspector General Nikki Tinsley made a number of presentations during the past
semiannual period about the OIG's work to strengthen the Agency's ability to protect the
environment. A common theme during these presentations was how various organizations
can work together to achieve common goals.
At the Pacific Northwest Intergovernmental Audit Forum, "Collaborating for
Improved Accountability," held in October 2004, Tinsley spoke on the topic,
"Government Works Better When We Work Together: Thoughts on Federal, State,
and Local Collaboration." Tinsley stressed that EPA is better able to meet its goals
when it works with State and local governments, as well as other Federal agencies.
"In doing our work and in trying to review the effectiveness of EPA programs, we
noted that we cannot focus solely on EPA because EPA is not the only player in
environmental protection," Tinsley said. EPA is only a "small fish in a big pond"
when protecting the environment, she said, pointing out that over 30 Federal
organizations and all 50 States are also involved, as well as thousands of local
governments and private companies. The Inspector General emphasized that
organizations need to become more partnership-based and results-oriented. "We at
EPA OIG have found that we can be most effective in our oversight role when we
work with auditors from other Federal agencies and with State and local auditors."
On October 28,2004, Tinsley participated in a bipartisan workshop on congressional
oversight, organized by the Congressional Research Service and sponsored by House
Rules Chairman David Dreier. This workshop was designed to provide training to House
Members and professional staff to assist them in their congressional oversight duties. In
her presentation, "The Role of the Inspector General in Congressional Oversight," Tinsley
talked about how Inspectors General contribute to good government, and detailed some of
the significant accomplishments of the Inspector General community. Tinsley also noted
how Inspectors General can assist congressional staff in their oversight responsibilities by
sharing their program knowledge and by delivering direct briefings and testimony on
agency or departmental problems. Finally, Tinsley focused on the recent work of the EPA
OIG that responded to requests from Congress.
Related to the need for people to have the necessary tools to accomplish their goals,
Tinsley discussed some of tools being developed by the EPA OIG at a presentation,
"Performance Management: Technology Makes It Real," given in November 2004 at
the Government Technology Conference. Tinsley focused on how methodologies,
metrics, processes, and systems can be used to monitor and manage an organization's
performance. Technologies can allow staff to better track and evaluate the progress
being made. Technology also allows organizations to quickly react to unexpected
changes in business conditions and improve predictability in results. At the EPA OIG,
Tinsley said it is important for the organization to be able to serve as a role model and
be able to demonstrate results. Tinsley discussed some of the information technology
improvements being made at the EPA OIG, and in particular how the OIG is working to
integrate its various systems to improve overall effectiveness and efficiency. The
Inspector General also talked about the importance of performance measurement and
the various steps the OIG is taking.
30
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At the first "Pathways to Success Forum," held by the Department of Defense Inspector
General in December 2004, Tinsley shared her experiences as the EPA Inspector
General. Tinsley emphasized that "Job #1" for the EPA OIG is to serve as a "catalyst for
improving the environment." OIG goals include contributing to improved environmental
and human health and improved business practices and accountability. The OIG strives to
be results oriented; to respond quickly to customer needs; and to provide accurate,
complete, clear, and concise products. Tinsley stressed the need for organizations to be
adaptable, flexible, and achievement-oriented. The Inspector General pointed out that for
any organization to succeed, it needs to make a commitment to provide its people with the
tools and training necessary to meet organizational goals. She stressed that continuous
learning is important - there is always something new to learn.
In another presentation, "Management of Grants and Achieving Results," on February
10, 2005, at the George Washington University Law School, Tinsley highlighted a
specific effort in which the EPA OIG is working with other audit organizations to help
improve Federal management of grants. Tinsley is leading the Domestic Working
Group Grant Accountability Project, in which auditors from 20 Federal agencies, 4
States, and 2 local agencies are working together to prepare a guide that identifies
lessons learned and useful practices to help ensure grant funds are properly used and
achieve desired results. At EPA, where more than $4 billion in grants is given out
each year, Tinsley noted major issues of concern include grants not being competed,
pre-award activities not being adequately performed, and a lack of EPA oversight of
grant recipients. Tinsley pointed to instances in which the EPA OIG worked with
auditors at the State level to improve State management of grants.
Staff Share Expertise
EPA OIG staff members have been requested as presenters for national and regional
conferences and training events.
Michael Binder, Acting Assistant Inspector General for Planning, Analysis and Results,
was a key presenter at the Mid-Atlantic Intergovernmental Audit Forum in Gettysburg,
Pennsylvania, on the topic "Performance Measurement: From Theory to Practice." In
this presentation, Binder described the application of the Logic Model linking outcome
goals to intermediate outcomes, outputs, activities, and resources. By describing the
various kinds of measures applicable at each level, the presentation demonstrated how
ratio and correlation analysis can determine relationships, unit costs, elasticity, and return
on investment. Binder emphasized that intermediate outcome measures are the drivers of
impact outcomes, which are measured as a matter of value in the eyes of the customer,
client, and stakeholder. Binder has been a requested speaker at five recent Regional
Intergovernmental Audit Forum Training Conferences.
Other presentations by Binder included a presentation titled "Involving Stakeholders in the
Planning and Selection of Performance Measures" at the Annual Environmental
Performance Summit, a presentation at the 2005 National Performance Summit for
Inspectors General and Government Auditors titled "Sharpening Effective Performance
Measures for Offices of Inspector General," and a second presentation at that same
training conference titled "Getting Results from Audit Reports Through Effective
Communication Strategies."
31
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Holly Sage, an Office of Program Evaluation water issues specialist in the EPA OIG's
New York office, made a presentation on key drinking water issues at the 2005 Source
Water Protection Symposium of the American Waterworks Association, held in
January 2005. Based on information collected during an OIG review, Sage discussed
State approaches and progress on source water assessment completion, State concerns
on how EPA is measuring success of the program, and problems with balancing public
availability of assessment information with drinking water security. The Association is
the largest organization of water professionals in the world, and about 200 people
attended the annual conference. The objective of the conference was to bring together
representatives from the drinking water community (water utilities, Government
agencies, researchers, educators, and environmental groups) to discuss current issues in
source water protection.
Investigators from the EPA OIG staffed an information booth at the 111th Annual
International Association of Chiefs of Police Convention, held in November 2004. The
booth showcased the work done by the Office of Investigations, focusing on its mission of
battling fraud, waste, and abuse in EPA-funded programs and operations. Staff discussed
ways in which they can help participants in dealing with environmental issues.
In March 2005, Michael Rickey, EPA OIG Director for Assistance Agreement Audits,
made a presentation at EPA Region 5's Tribal General Assistance Program Conference.
EPA, through this program, provides general assistance grants to Indian tribal
governments and intertribal consortiato build capacity to administer environmental
regulatory programs on Indian lands. The presentation, titled "Inside Tips for a Successful
Inspector General Audit," identified common audit findings and suggestions for preventing
deficiencies. The presentation emphasized the need to create and maintain the
documentation required to support grant expenses.
Legislation and Regulations Reviewed
Section 4 (a) of the Inspector General Act requires the Inspector General to review
existing and proposed legislation and regulations relating to the program and operation of
EPA and to make recommendations concerning their impact. The primary basis for our
comments are the audit, evaluation, investigation, and legislative experiences of the OIG,
as well as our participation on the President's Council on Integrity and Efficiency.
During the reporting period, we reviewed 25 proposed changes to legislation, regulations,
policy, and procedures that could affect EPA. We also reviewed drafts of Office of
Management and Budget Circulars, program operations manuals, directives, and
reorganizations. Details on several items follow.
Proposed EPA Order, Protecting Personal Information: We commented that
information requested, maintained, or disseminated by the OIG during the conduct of, or
reporting on, an official audit, evaluation, or investigation, should be exempt from this
EPA Order. Unless otherwise protected by the Privacy Act, we often report the names
of individuals in our Semiannual Report to Congress, which is available to the public on
our Internet Web site. We also commented that in addition to reporting unauthorized
access to and/or an inappropriate disclosure of personal information to the Privacy Act
Officer, they should also report these to the OIG through the Hotline.
32
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Proposed Revision to EPA Order 5700.5, Policy for Competition in Assistance
Agreements: We commented that the policy should require assistance agreement
reviewers and approvers to document that they do not have any conflicts of interest. We
suggested adding a paragraph that requires all persons (both Federal and non-Federal)
involved in the review/approval process to sign a certificate that they do not have a
conflict of interest. We also made a number of other comments to both strengthen and
clarify sections of the proposed revision.
Proposed Delegation to Enter into Direct Implementation of Tribal Cooperative
Agreements Authority: We commented that, in general, we could not support
delegating authority to award any type of financial assistance (grants, cooperative
agreements, loans, or loan guarantees) to anyone who is or could be associated in any
manner with the recommendation or selection of an assistance recipient. Consequently,
we could not support redelegating award authority from the Regional Administrators to
Office Directors, or their equivalent, because it might violate the fundamental internal
control - separation of duties. In some EPA regions, Office Directors are in the chain of
command for evaluating and selecting assistance recipients. Our concern would be the
same for all Regional Administrator delegations to award money.
33
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Statistical Data
Audit Report Resolution
Status Report on Perpetual Inventory of Reports in Resolution
Process for Semiannual Period Ending March 31,2005
Report Category
A. Forwhich no management
decision was made by
October 1,2004**
B. Which were issued during
the reporting period
C. Which were issued during
the reporting period that
required no resolution
Subtotals (A + B - C)
D. Forwhich a management
decision was made druing
the reporting period
E Forwhich no management
decision was made by
March 31 , 2005
F Reports for which no
management decision was
made within 6 months
of issuance
No. of
Reports
107
315
150
272
108
164
59
Report Issuance
($ in thousands)
Questioned
Costs
$53,200
9,638
2
62,836
3,173
59,663
50,983
Recommended
Efficiencies
$3,581
3,104
0
6,685
240
6,445
3,581
Report Resolution Costs
Sustained
($ in thousands)
To Be
Recovered
$1 ,307
361
0
1,668
1,668
As
Efficiencies
$20
20
20
** Any difference in number of reports and amounts of questioned costs or recommended efficiencies
between this report and our previous semiannual report results from corrections made to data incur
audit tracking system.
Status of Management Decisions on Inspector General Reports
This section presents statistical information as required by the Inspector General Act of
1978, as amended, on the status of EPA management decisions on reports issued by the
OIG involving monetary recommendations. As presented, information contained in Tables
1 and 2 cannot be used to assess results of reviews performed or controlled by this office.
Many of the reports were prepared by other Federal auditors or independent public
accountants. EPA OIG staff do not manage or control such assignments. Auditees
frequently provide additional documentation to support the allowability of such costs
subsequent to report issuance.
34
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Table 1 - Inspector General-Issued Reports with Questioned Costs for Semiannual Period
Ending March 31, 2005 (dollar value in thousands)
Report Category
A. For which no management decision was made
by October 1 , 2004 **
B. New reports issued during period
Subtotal (A +B)
C. For which a management decision was made
during the reporting period
(i) Dollar value of disallowed costs
(ii) Dollar value of costs not disallowed
D. For which no mangaement decision was made
by March 31 , 2005
Reports for which no management decision was made
within 6 months of issuance
Number of
Reports
53
59
112
38
25
13
74
34
Questioned
Costs *
$53,200
9,638
62,838
3,175
1,668
1,507
59,663
50,983
Unsupported
Costs
$7,660
4,649
12,309
453
0
453
11,856
7,660
Questioned costs include the unsupported costs.
Any difference in number of reports and amounts of questioned costs between this report and
previous semiannual report results from corrections made to data in our audit tracking system.
Table 2 - Inspector General-Issued Reports with Recommendations that Funds Be Put to Better
Use for Semiannual Period Ending March 31, 2005 (dollar value in thousands)
Report Category
A. For which no management decision was made by October 1, 2004*
B. Which were issued during the reporting period
Subtotal (A + B)
C. For which a management decision was made during the
reporting period
(i) Dollar value of recommendations from reports that were
agreed to by management
(ii) Dollar value of recommendations from reports that were not
agreed to by management
(iii) Dollar value of non-awards or unsuccessful bidders
D. For which no management decision was made by March 31 , 2005
Reports for which no management decision was made
within 6 months of issuance
Number of
Reports
5
4
9
1
1
1
0
8
5
Dollar
Value
$3,581
3,104
6,685
240
20
220
0
6,445
3,581
Any difference in number of reports and amounts of funds put to better use between this report and
previous semiannual report results from corrections made to data in our audit tracking system.
35
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Audits with No Final Action as of March 31, 2005, That Are Over 365 Days Past OIG Report
Issuance Date
Audits
Program
Assistance Agreements
Contra ctAudits
Single Audits
Financial StatementAudits
Total
Total
33
40
21
30
1
125
Percentage
26.4%
32.0%
16.8%
24.0%
0.8%
100.0%
36
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Summary of Investigative Results
Summary of Investigative Activity During Period
Cases open as of September 30, 2004
Cases opened during period
Cases closed during period
Cases pending as of March 31 , 2005
202
99
79
222
Investigations Pending by Type as of March 31, 2005
Contract
Assistance Agreement
Employee Integrity
Program Integrity
Comupter Crime
Laboratory Fraud
Other
Total
Superfund
14
1
3
3
0
12
0
33
Management
21
38
30
28
17
43
12
189
Total
35
39
33
31
17
55
12
222
Results of Prosecutive Actions
Criminal Complaints
Criminal Indictments/ Informations
Convictions
Civil Judgments / Settlements / Filings
Fines and Recoveries (includes civil)
Prison Time
Probation
Community Service
1
9
7
2
$7,001 ,076
58 months
144 months
80 hours
Personnel and Administrative Actions
Suspensions
Debarments
Voluntary Exclusions
Compliance Agreements
Suspensions (Employee)
Removals / Terminations (Employee)
Other Administrative Actions
Total
Repayments
8
7
3
8
4
2
18
50
$219,630
37
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Scoreboard of Results
Scoreboard of Results: At Mid-Year (March 31, 2005) Compared
to Fiscal 2005 Annual Performance Goal Targets
Strategic Goal; With Government Performance and
Results Act Annual Performance Goals Compared
to Fiscal 2005 Results Reported
Supporting Measures
Goal 1. Contribute to Improved Human Health and Environmental Quality
Environmental Improvements/Actions/Changes
Target: 45
Reported: 14 (31%)
Environmental Risks Reduced or Eliminated
Target: 23
Reported: 15 (65%)
Environmental Recommendations, Best Practices,
Risks Identified
Target: 95
Reported: 55 (58%)
0 Legislative changes/decisions
4 Regulatory changes/decisions
9 EPA policy, process, practice changes
1 Examples of environmental improvement
0 Best environmental practices implemented
9 Environmental risks reduced/eliminated
1 Certifications/validations/verifications
5 Critical Congressional/public issues
addressed
39 Environmental recommendations
11 Environmental best practice identified
5 Environmental risks identified
Goal 2. Contribute to Improved Agency Business Practices and Accountability
Return on Investment: Potential dollar return as
percentage of OIG budget ($50.5 million)
Target: $75.8 million (150%)
Reported: $30.4 million (40%)
Criminal, Civil, and Administrative Actions Reducing
Risk of Loss/Operational Integrity
Target: 80
Reported: 69 (86%)
Improvements in Business/Systems/Efficiency
Target: 102
Reported: 123 (121%)
Recommendations, Best Practices, Challenges
Identified
Target: 240
Reported: 447 (186%)
(dollars in millions)
$ 20.1 Questioned costs
$ 3.1 Recommended efficiencies, costs saved
$ 7.2 Fines, recoveries, settlements
7 Criminal convictions
10 Indictments/informations/complaints
2 Civil judgments/settlements/filings
50 Administrative actions
4 Policy process, practice, control changes
1 Corrective actionson FMFIA/mgt. challenge
6 Best practices implemented
1 03 Certifications/validations/verifications
3 Allegations disproved
6 Critical Congressional or public mgt.
concerns addressed
433 Recommendations
6 Best practices identified
0 FMFIA/management challenges identified
8 Referrals for OIG orAgency Action
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Appendices
Appendix 1 - Reports Issued
The Inspector General Act requires a listing, subdivided according to subject matter, of each report issued
by the office during the reporting period. For each report, where applicable, the Inspector General Act
also requires a listing of the dollar value of questioned costs and the dollar value of recommendations that
funds be put to better use.
Questioned Costs
Report Number Title
PERFORMANCE REPORTS
2005-P-00001 Response Action Contracts
2005-P-00002 Homeland Security: SCADA
2005-P-00003 Development of the Proposed MACT for Utility Units
2005-P-00004 PM 2.5 Network Design
2005-P-00005 AA - United States-Mexico Foundation of Science (NSF-OIG)
2005-P-00006 High-Performing Organization Components of 0AM
2005-P-00007 State Stewardship
2005-P-00008 Air Toxics Implementation
2005-P-00009 AA - Brownfields Grants - Awarding
2005-P-00010 Evaluation of CAA Title V Operating Permit Quality
2005-P-00011 Remote Access Servers & Configuration Management
2005-P-00012 Evaluation of EPAs Participation in the BioWatch Program
2005-P-00013 Source Water Assessments and Protection
2005-P-00014 AA-Implementation of 2002 Competition Policy
TOTAL PERFORMANCE REPORTS = 14
ASSISTANCE AGREEMENT REPORTS
2005-4-00054 AA Health Effects Institute Audit - Cost Claimed
TOTAL ASSISTANCE AGREEMENT REPORTS = 1
SINGLE AUDIT REPORTS
2005-3-00001 City of Cleveland
2005-3-00002 City of Cleveland
2005-3-00003 City of Cleveland
2005-3-00004 City of Mason City
2005-3-00005 State of Alabama
2005-3-00006 South Fork Band Council
2005-3-00007 State of Florida
2005-3-00008 State of Montana
2005-3-00009 State of Texas
2005-3-00010 Government of Guam
2005-3-00011 State of West Virginia
2005-3-00012 Research Foundation of the City Foundation of New York
2005-3-00013 University of Massachusetts
2005-3-00014 Akiak Native Community
2005-3-00015 Lake Michigan Air Directors Consortium
2005-3-00016 Otoe-Missouri Tribe of Indians
2005-3-00017 Traditional Council of Togiak
2005-3-00018 La Jolla Band Of Indians
2005-3-00019 United Water Conservation District - FY 2003
2005-3-00020 Northeast States for Coordinated Air Use Management, Inc.
2005-3-00021 Hampshire College-FY 2003
2005-3-00022 Metropolitan WaterDistrictofSouthern California
2005-3-00023 San Juan Pueblo
2005-3-00024 Southern Appalachian Mountains Initiative
2005-3-00025 Confederate Tribes of the Colvi lie Reservation
2005-3-00026 State of Alabama
2005-3-00027 Republic of Palau
2005-3-00028 Public Health Institute
2005-3-00029 Public Health Institute
2005-3-00030 Clark Atlanta University
Final Report
Issued
06-DEC-04
06-JAN-05
02-FEB-05
07-FEB-05
04-FEB-05
17-FEB-05
17-FEB-05
02-MAR-05
07-MAR-05
09-MAR-05
22-MAR-05
23-MAR-05
28-MAR-05
31-MAR-05
31-MAR-05
07-OCT-04
07-OCT-04
07-OCT-04
07-OCT-04
07-OCT-04
07-OCT-04
18-OCT-04
18-OCT-04
18-OCT-04
20-OCT-04
19-NOV-04
19-NOV-04
19-NOV-04
19-NOV-04
19-NOV-04
19-NOV-04
19-NOV-04
09-DEC-04
15-DEC-04
16-DEC-04
16-DEC-04
16-DEC-04
22-DEC-04
22-DEC-04
22-DEC-04
28-DEC-04
28-DEC-04
28-DEC-04
28-DEC-04
28-DEC-04
Ineligible Unsupported
Costs Costs
$164,746
$50,463
$102,865
$449,964
$83,266
$30,596
$2,287
$32,394
$2,000,000
Recommended
Efficiencies
Unreasonable (Funds Be Put
Costs To Better Use)
$2,000,000
$2,009,473
$2,009,473
$0
$0
$113,846
$0
$0
$0
39
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Questioned Costs
Report Number
2005-3-00031
2005-3-00032
2005-3-00033
2005-3-00034
2005-3-00035
2005-3-00036
2005-3-00037
2005-3-00038
2005-3-00039
2005-3-00040
2005-3-00041
2005-3-00042
2005-3-00043
2005-3-00044
2005-3-00045
2005-3-00046
2005-3-00047
2005-3-00048
2005-3-00049
2005-3-00050
2005-3-00051
2005-3-00052
2005-3-00053
2005-3-00054
2005-3-00055
2005-3-00056
2005-3-00057
2005-3-00058
2005-3-00059
2005-3-00060
2005-3-00061
2005-3-00062
2005-3-00063
2005-3-00064
2005-3-00065
2005-3-00066
2005-3-00067
2005-3-00068
2005-3-00069
2005-3-00070
2005-3-00071
2005-3-00072
2005-3-00073
2005-3-00074
2005-3-00075
2005-3-00076
2005-3-00077
2005-3-00078
2005-3-00079
2005-3-00080
2005-3-00081
2005-3-00082
2005-3-00083
2005-3-00084
2005-3-00085
2005-3-00086
2005-3-00087
2005-3-00088
2005-3-00089
2005-3-00090
2005-3-00091
2005-3-00092
2005-3-00093
2005-3-00094
2005-3-00095
2005-3-00096
2005-3-00097
2005-3-00098
2005-3-00099
2005-3-00100
2005-3-00101
2005-3-00102
2005-3-00103
Title
Karuk Tribe of California - FY 2002
National Asian Pacific Center on Aging
Columbia University -FY 2003
Consortium for Plant Biotechnology Research, Inc. - FY 2002
Bayview Water and Sewer District - FY 2003
National Indian Health Board - FY 2002
Illinois Institute of Technology -FY 2002
Quinault Indian Nation -FY 2003
Rensselaer Polytechnic Institute - FY2004
Logan/Todd Regional Water Commission - FY2003
Senior Service America, Inc. - FY 2003
Asa'Carsarmiut Tribal Council- FY 2002
Picayune Rancheria of the Chukchansi Indians - FY 2000
Morehouse School of Medicine
Louden Tribal Council - FY 2003
Blue Lake Rancheria -FY 2002
City of El Paso -FY 2003
University of Rochester - FY 2003
City of Newark -FY 2002
City of Joplin-FY 2003
Council of Athabacan Tribal Government - FY 2003
Walker River Paiute Tribe - FY 2002
Las Vegas Pauite Tribe -FY 2003
Cuyapaipe Band of Mission Indians - FY 2003
Energy Coordinating Agency of Philadelphia - FY 2003
City of Lamoni - Lamoni Municipal Utilities - FY 2003
Southeastern States Air Resources Managers, Inc. - FY 2003
California Institute ofTechnology- FY 2003
Aqua Caliente Band of Chaulla
The Tides Center -2002
The Tides Center
Contra Costa Water District
State of Nebraska
University of Arkansas for Medical Sciences
Louisville & Jefferson County Metropolitan Sewer District
United Keetowah Band of Cherokee Indians in Oklahoma
University of Maine
Osage Tribal Council-FY 2003
Water Environment Research Foundation
State of Illinois
Water Environmental Research Foundation - FY2003
Marine Biological Laboratory
Town of Bethel
America's Clean Water Foundation
State of Maryland
State of Hawaii, Department of Health
Commonwealth of Pennsylvania
Wayne State University - FY 2003
City ofToledo-FY 2003
Calu met City-FY 2003
Northwestern University - FY 2003
Sauk- Suiattle Indian Tribe - FY 2002
City of Dixon-FY 2003
Hoonah Indian Association - FY2002
Pueblo of Tesuque-FY 2002
Mescalero Apache Tribe - FY 2002
City of Clinton -FY 2002
City of Huntsville-FY 2003
Eastern Band of Cherokee Indians - FY 2003
San Juan Pueblo -FY 2003
Choctaw Nation of Oklahoma - FY 2002
Choctaw Nation of Oklahoma - FY 2003
County of Chautauqua - FY 2003
Brown University -FY 2003
National Safety Council and Related Entities
Pawnee Nation of Oklahoma
Pawnee Nation of Oklahoma
Dover, Eoyta, St. Charles Sanitary District - FY 2002
Owens Valley Indian Water Commission - FY 2003
Yankton Sioux Tri be -FY 2002
Three Affiliated Tribes -FY 2002
City of East Helena -FY 2003
Confederate Tribes of the Goshute Reservation - FY 1999
Final Report
Issued
28-DEC-04
28-DEC-04
30-DEC-04
30-DEC-04
30-DEC-04
30-DEC-04
30-DEC-04
30-DEC-04
30-DEC-04
30-DEC-04
04-JAN-05
04-JAN-05
04-JAN-05
06-JAN-05
07-JAN-05
10-JAN-05
10-JAN-05
11-JAN-05
11-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
13-JAN-05
31-JAN-05
31-JAN-05
14-JAN-05
14-JAN-05
14-JAN-05
18-JAN-05
18-JAN-05
20-JAN-05
24-JAN-05
25-JAN-05
25-JAN-05
25-JAN-05
25-JAN-05
25-JAN-05
25-JAN-05
27-JAN-05
27-JAN-05
28-JAN-05
07-FEB-05
08-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
09-FEB-05
15-FEB-05
18-FEB-05
18-FEB-05
18-FEB-05
18-FEB-05
23-FEB-05
23-FEB-05
23-FEB-05
23-FEB-05
23-FEB-05
24-FEB-05
25-FEB-05
25-FEB-05
25-FEB-05
Ineligible Unsupported
Costs Costs
Unreasonable
Costs
Recommended
Efficiencies
(Funds Be Put
To Better Use)
$7,777
$319,763
$313,260
$14,895
$145,000
$100,000
$159,622
$117,562
$94,982
$399,635
$39,312
$98,564
$31,960
$96,933
$240,628
$500
$11,532
40
-------
Questioned Costs
Report Number Title
2005-3-00104 Michigan Department of Environ mental Quality
2005-3-00105 City of Detroit - FY 2003
2005-3-00107 Sokaogon Chippewa Community -FY 2003
2005-3-00108 Picayune Rancheriaofthe Chuckchansi Indian Tribe- FY2003
2005-3-00109 Santa Barbara County Air Pollution Control District - FY 2003
2005-3-00110 Northway Village Council- FY2002
2005-3-00111 Kickapoo Traditional Tribe of Texas - FY 2001
2005-3-00112 Picayune Rancheria of the Chukchansi Indian Tribe
2005-3-00113 Blackfeet Tribe of the Blackfeet Indian Reservation
2005-3-00114 North Lawrence Water Authority - FY 2003
2005-3-00115 City of Clarksburg - FY 2003
2005-3-00116 Pit River Tribe-FY 2003
2005-3-00117 South Fork Band Council - FY2001
2005-3-00118 Ekwok Village Council- FY2002
2005-3-00119 University of Alabama (Tuscaloosa)-FY 2003
2005-3-00120 City of Choteau - FY 2003
2005-3-00121 Town of Hennessey-FY 2003
2005-3-00122 Cocopah Indian Tribe
2005-3-00123 Gas Technology Institutes Gas Research Institute
2005-3-00124 Chilkoot Indian Association - FY2001
2005-3-00125 Sac and Fox Nation of Missouri - FY 2003
2005-3-00126 City of Westlake - FY 2003
2005-3-00127 Association of Metropolitan Sewerage Agency - FY 2003
2005-3-00128 Clark County - FY 2003
2005-3-00129 University of Louisville - FY 2003
2005-3-00130 SRI International-FY 2003
2005-3-00131 State of New Mexico Environmental Department
2005-3-00133 Massachusetts Water Pollution Abatement Trust
2005-3-00134 National Academy of Science - FY 2002
2005-3-00135 Southwest Research Institute-FY 2003
TOTALSINGLEAUDIT REPORTS = 133
DIG ISSUED CONTRACT REPORTS
2005-1-00016 ICF Consulting Labor Floorcheck CY 2003
2005-1-00088 ICF Consulting Group - FY2000 Incurred Cost Audit
2005-4-00002 E&E Billing System Review - Region 9
2005-4-00006 Old Southington Landfill CERCLA Claim No 3
2005-4-00009 Waste Management - Elizabethtown Response Claim #1
2005-4-00043 Ecology & Environment Revised Disclosure Statement Review
2005-4-00044 Ecology & Environment Revised Disclosure Statement Review
2005-4-00049 ICF Consulting Revised Home Office Disclosure Statement No 3
2005-4-00050 ICF Consulting Revised Segment Disclosure Statement No 8
TOTAL DIG ISSUED CONTRACT REPORTS = 9
DCAA CONTRACT REPORTS
2005-1-00001 Eastern Research Group - FY2002 Incurred Cost
2005-1-00002 Foster Wheeler Environmental Corp - FY2002 Incurred Cost
2005-1-00003 Matrix Environmental & Geotech Svcs. - FY2002 Incurred Cost
2005-1-00004 Dynamac Corporation - FY2002 Incurred Cost
2005-1-00005 RS Information Systems, Inc. - FY2000 Incurred Cost
2005-1-00006 IT Group - FY2002 Incurred Cost
2005-1-00007 Shaw E & I (formerly IT Group) - FY 2002 Incurred Cost
2005-1-00008 SRI International - FY2003 Incurred Cost
2005-1-00009 Environmental Restoration, LLC- FYE12/31/2002 Incurred Cost
2005-1-00010 COM Federal Programs Corp. - FY99 Incurred Cost
2005-1-00011 COM Federal Programs Corp. - FY2000 Incurred Cost
2005-1-00012 Shaw E&l (formerly IT Group) - FY 2002 Incurred Cost
2005-1-00013 Earth Technology Remediation Service - FY 2001 Incurred Cost
2005-1-00014 TetraTech EMI - FY2002 Incurred Cost
2005-1-00015 Sanford CohenS Associates-FY 2001 IncurredCost
2005-1-00017 URS Corporation - FY2000 Incurred Cost
2005-1-00018 Alpha-GammaTechnologies, Inc.-PreawardPR-HQ-04-11304
2005-1-00019 Roy F. Weston - FY 1997 ARCS Closeout 68-W9-0057
2005-1-00020 Weston Solutions-Subc Terra Kleen Resp. Grp. Term, for Conv.
2005-1-00022 TetraTech EMI (TTEMI) - CAS 408 Compensated Personal Absence
2005-1-00023 Shaw E & I (formerly IT Group) - FY 2002 Incurred Cost
2005-1-00024 TetraTech FosterWheeler(TTFW)-FY2004 Accounting System
2005-1-00025 Midwest Research Institute - FY 2004 MAAR 13 Purch Exitst/Cons
2005-1-00026 Shaw E & I - FY 2004 Accounting/Control Labor Costs
2005-1-00027 E2, Inc. - Preaward PR-HQ-04-112304
2005-1-00028 TechLaw Inc. - FY2002 Incurred Cost
Final Report
Issued
03-MAR-05
03-MAR-05
07-MAR-05
07-MAR-05
07-MAR-05
08-MAR-05
08-MAR-05
08-MAR-05
08-MAR-05
08-MAR-05
08-MAR-05
09-MAR-05
09-MAR-05
09-MAR-05
09-MAR-05
09-MAR-05
09-MAR-05
10-MAR-05
10-MAR-05
10-MAR-05
10-MAR-05
11-MAR-05
11-MAR-05
11-MAR-05
11-MAR-05
24-MAR-05
28-MAR-05
29-MAR-05
30-MAR-05
30-MAR-05
28-OCT-04
25-MAR-05
19-OCT-04
28-OCT-04
10-NOV-04
28-FEB-05
28-FEB-05
23-MAR-05
23-MAR-05
06-OCT-04
06-OCT-04
06-OCT-04
07-OCT-04
07-OCT-04
12-OCT-04
12-OCT-04
13-OCT-04
13-OCT-04
15-OCT-04
15-OCT-04
18-OCT-04
18-OCT-04
19-OCT-04
22-OCT-04
03-NOV-04
03-NOV-04
04-NOV-04
08-NOV-04
15-NOV-04
17-NOV-04
18-NOV-04
26-NOV-04
26-NOV-04
30-NOV-04
03-DEC-04
Ineligible Unsupported
Costs Costs
Unreasonable
Costs
$65,756
Recommended
Efficiencies
(Funds Be Put
To Better Use)
$9,540
$176,139
$2,880,211
$158,728
$158,7280
$40,979
$1,026
$13,651
$31,174
$18,400
$2,400
$73,562
$50,515
$4,170
$992,436
$8,533
$14,344
$31,189
$639,496
$0
$0
$24,484
$24,484
$123,652
$737,624
41
-------
Report Number
2005-1-00029
2005-1-00030
2005-1-00031
2005-1-00032
2005-1-00033
2005-1-00034
2005-1-00035
2005-1-00036
2005-1-00037
2005-1-00038
2005-1-00039
2005-1-00040
2005-1-00041
2005-1-00042
2005-1-00044
2005-1-00045
2005-1-00046
2005-1-00047
2005-1-00048
2005-1-00049
2005-1-00050
2005-1-00051
2005-1-00052
2005-1-00053
2005-1-00054
2005-1-00055
2005-1-00056
2005-1-00057
2005-1-00058
2005-1-00059
2005-1-00060
2005-1-00061
2005-1-00062
2005-1-00064
2005-1-00065
2005-1-00066
2005-1-00067
2005-1-00068
2005-1-00069
2005-1-00070
2005-1-00071
2005-1-00072
2005-1-00073
2005-1-00074
2005-1-00075
2005-1-00076
2005-1-00077
2005-1-00078
2005-1-00079
2005-1-00080
2005-1-00083
2005-1-00084
2005-1-00085
2005-1-00086
2005-1-00087
2005-1-00089
2005-2-00001
2005-2-00003
2005-2-00004
2005-2-00005
2005-2-00006
2005-2-00007
2005-2-00008
2005-2-00009
2005-2-00010
2005-2-00011
2005-2-00012
2005-2-00013
2005-2-00014
2005-2-00015
2005-2-00016
2005-2-00017
2005-2-00018
Title
Garcia Consulting (c/o Stanley Assoc) - FYE 3/31 /2001 1/C
Bionetics Corp - FYs 5/1/96 thru 4/30/01 Final CACS 68-W6-0027
Tetra Tech Foster Wheeler (TTFW) - FY 2004 Paid Voucher Review
Mega Tech, Inc. - FY2002 Incurred Cost
URS Corporation - FY 1999 Supplemental RAG 68-W9 -8228
Black & Veatch Special Projects Corp. - FY 1999 ARCS 68-W9-0055
DPRA, Inc. - Paid Vouchers Review
Alpha-Gamma Technologies Inc. - FY2000 Incurred Cost
Black & Veatch Special Proj. Corp. - FY 2000 RAG 68-W5-0004
FEV Engine Technology- FYE 12/31/2003 Incurred Cost
Gruzen Samton - FYE 12/31/2003 Incurred Cost
KBM Group, Inc. - FY2002 Incurred Cost
Limno-Tech, Inc. - FYE 3/31/2004 Incurred Cost
Wilson Environmental - FYE 12/31/2003 Incurred Cost
Tetra Tech Foster Wheeler (TTFW) - FY 2004 Compensation System
Process Applications, Inc. -Accounting System
Tetra Tech, Inc. - FY2000 Incurred Cost
COM Federal Program Corp. - FY2001 RAG 68-W5-0022
Syracuse Research Corporation - FY 2002 Incurred Cost
SAI C Company 6 - FY 2003 Incurred Cost
SAI C Company 1 - FY 2003 Incurred Cost
CH2M Hill Companies, Ltd. - CAS 403 Home Office Allocation
CH2M Hill, Group Mgmt (Former I&E) - FY 2004 Revised CAS D/S
Eastern Research Group - FY2005 CAS 410
CH2M Hill Inc. - FY2004 Accounting System
Acurex Environmental Corp c/o ARCADIS &- FY2002 Incurred Cost
Alpha-Gamma Technologies Inc. - Financial Capability Review
Computer Based Systems - FY 2001 Incurred Cost
Shaw E & I - FY 2004 Revised Disclosure Statement
Shaw E & I - FY 2004 Revised Disclosure Statement
Computer Based Systems c/o Titan Syst. - FY 2002 Incurred Cost
HazardousS Medical Waste Services- FY 2001 Incurred Cost
Morrison Knudsen Corporation - FY2000 Incurred Cost
Tetra Tech, Inc. - FY2001 Incurred Cost
SoBran, Inc. - CFYE 9/30/03 Incurred Cost
SAIC - FY 2004 Company 9 - Accounting for Insurance Cost
SAIC - FY 2004 Company 6 - CAS D/S Review
SAI C - FY 2004 Company 9 - Accounting for Cost of Deferred Comp
Advanced Tech Sys Inc. - FY 2000 1/C
SAI C - FY 2004 Company 9 - CAS Noncompliance
COM Federal Program Corporation - FY2002 Incurred Cost
Tetra Tech EMI - FY2004 Budget Sys & Financial Controls Audit
Tetra Tech EMI (TTEMI) - Purchasing System Review
Systems Research & Applications - Rev CAS Disclosure Statement
ManTech Environ mental Technology Inc. - FY2002 Incurred Cost
Westat Inc. - FY 1998 Incurred Cost
SciComm, Inc. - FY 2001 Incurred Cost
ManTech (METI) - Disclosure Statement Revision 6
DCT, Inc. - FY 12/31/2003 Incurred Cost
EC/R Incorporated - FY 2002 Incurred Cost (Rept in 9/15/05)
Integrated Laboratory Sys - FY 2002 Incurred Cost (Rept in 4/05)
Clean Air Vehicle Technology Center - FY 2003 (9 mos.) Inc. Cost
Shaw E & I (formerly IT Group) - FY 2003 Incurred Cost
Indus Corporation - FY 1 2/31/2002 Incurred Cost
Tetra Tech, Inc. (A&E Division) - Cost Impact Proposal
EG&G Automotive Research - FYE 12/31/2002 Incurred Cost
COM Federal Programs Corp. - FY2001 Incurred Cost
Raven Ridge Resources Inc. - FY2000 Incurred Cost
Indus Corporation - FY 1 2/31/2001 Incurred Cost
Resource Applications, Inc. - FY 2002 Incurred Cost
Environmental Management & Support - FY 2002 Incurred Cost
EERGCc/o GE Energy & Envl - FY 2002 Incurred Cost
EGG, Inc.- FY 1999 Incurred Cost 2
Gram, Inc. - FY2000 Incurred Cost
Gram, Inc. - FY2001 Incurred Cost
Gannett Fleming Environ Engineers, Inc. - FY 2002 Incurred Cost
Weston Solutions Inc. (Roy F. Weston) - FY 2000 RAG 68-W7-0026
Kemron Environmental Svcs - FYs 3/25/02-5/31/20 03 Incur. Cost
Transcontinental Enterprises, Inc. - FY2002 Incurred Cost
Process Applications, Inc. - Preaward PR-CI-0 4-10925
Gruzen Samton Architects - FYE 12/31/2002 Incurred Costs
Weston Solutions Inc. - FY 2001 RAG Closeout 68- W7-0026
Shaw E & I - FY2004 Purchases Existence & Consumption
Final Report
Issued
06-DEC-04
09-DEC-04
09-DEC-04
10-DEC-04
10-DEC-04
13-DEC-04
15-DEC-04
17-DEC-04
17-DEC-04
20-DEC-04
20-DEC-04
28-DEC-04
28-DEC-04
28-DEC-04
28-DEC-04
28-DEC-04
05-JAN-05
06-JAN-05
06-JAN-05
10-JAN-05
10-JAN-05
10-JAN-05
10-JAN-05
10-JAN-05
10-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
13-JAN-05
13-JAN-05
13-JAN-05
19-JAN-05
19-JAN-05
21-JAN-05
27-JAN-05
27-JAN-05
28-JAN-05
28-JAN-05
28-JAN-05
31-JAN-05
02-FEB-05
04-FEB-05
08-FEB-05
08-FEB-05
15-FEB-05
15-FEB-05
15-FEB-05
17-FEB-05
22-FEB-05
25-FEB-05
02-MAR-05
03-MAR-05
11-MAR-05
17-MAR-05
24-MAR-05
30-MAR-05
15-OCT-04
20-OCT-04
21-OCT-04
08-NOV-04
19-NOV-04
06-DEC-04
09-DEC-04
10-DEC-04
10-DEC-04
13-DEC-04
15-DEC-04
17-DEC-04
17-DEC-04
17-DEC-04
28-DEC-04
12-JAN-05
13-JAN-05
Recommended
Questioned Costs Efficiencies
Ineligible Unsupported Unreasonable (Funds Be Put
Costs Costs Costs To Better Use)
$873
$377,077
$11,862
$14,277
$37,070
$5,954
$7,016
$38,492
$4,000
$20,292
$34,054
$19,281
$15,423
$45,741
$56,149
$240,262
42
-------
Questioned Costs
Report Number
2005-2-00019
2005-2-00020
2005-2-00021
2005-2-00022
2005-2-00023
2005-2-00025
2005-2-00026
2005-4-00001
2005-4-00003
2005-4-00004
2005-4-00005
2005-4-00007
2005-4-00008
2005-4-00010
2005-4-00011
2005-4-00012
2005-4-00013
2005-4-00014
2005-4-00015
2005-4-00016
2005-4-00017
2005-4-00018
2005-4-00019
2005-4-00020
2005-4-00021
2005-4-00022
2005-4-00023
2005-4-00024
2005-4-00025
2005-4-00026
2005-4-00027
2005-4-00028
2005-4-00029
2005-4-00030
2005-4-00031
2005-4-00032
2005-4-00033
2005-4-00034
2005-4-00035
2005-4-00036
2005-4-00037
2005-4-00038
2005-4-00039
2005-4-00040
2005-4-00041
2005-4-00042
2005-4-00045
2005-4-00046
2005-4-00047
2005-4-00048
2005-4-00051
2005-4-00052
2005-4-00053
Title
Shaw E & I - FY 2004 Labor Floorcheck - MAAR 6
Advanced Technologies Systems Inc. - FY 2004 Floorcheck
Colder Associates - Agreed Upon Contract No. 6 8-D5-0059
FEV Engine Technology - MAAR 13 Material Review
SciComm, Inc. - FY 2000 Incurred Cost
Perrin Quarles Associates - FYE 12/31/2003 Incurred Cost
Weston Solutions, Inc. (Roy F. Weston) - FY 1999 ARCS 68-W9-0057
Matrix Environmental & Geotech Svcs - FY 2004 Floorcheck
COM Federal Programs Corp. - FY 1999 Incurred Cost
EC/R Inc. - FY2003 Floorcheck
Alpha Gamma Technologies Inc. - FY 2003 Floorcheck
Eastern Research Group - FY2003 CAS 410
Eastern Research Group - FY2003 CAS 403
Midwest Research Institute (MRI) - FY 2004 Floorcheck MAAR 6
Shaw E & I - FY 2004 Subcontract Monitoring
Shaw E & I - FY 2004 Accounting System as of 5/24/2004
Alpha-Gamma Technologies Inc. -Accounting System Review
Perrin Quarles Associates, Inc. - FY 2004 Floorcheck
Process Applications, Inc. - Financial Capability Review
TetraTech Inc. - CAS 418 Compliance
Arcadis Geraghty & Miller - MAAR 6
Shaw E & I - FY 2004 CAS 409 Deprec of Tangible Capital Assets
Shaw E & I - FY 2004 CAS 410 Alloc of Bus Unit G&A Expenses
Shaw E & I - FY 2004 CAS 414 Cost of Money
Shaw E & I - FY 2004 Acctg for IR&D Cost CAS 420
MetcalfS Eddy Inc. -CAS 41 8
CH2M Hill Inc (INC) - Labor System Follow-Up Audit
SAIC-FY 2004 MAAR 13 -Purchase Existence/Consumption
SAIC- FY2004 Financial Capability Review
Transcontinental Enterprises, Inc. - Floorcheck
FEV Engine Technology Labor - Floorcheck
ECR Incorporated - FY 2005 Floorcheck
Foster Wheeler Environ Corp. - FY 2003 CAS 403
DPRA, Inc. - Financial Capability Assessment
FEV Engine Technology- Financial Capability Review
Foster Wheeler Environmental Corp. - FY2003 CAS 409
Eastern Research Group - FY2005 CAS 403
Battelle-OCEO -Accounting & Control of Labor
Foster Wheeler Environ Corp. (FWENC) - FY 2004 MAARs 5,7,20
Foster Wheeler Environ Corp. (FWENC) - FY 2004 Other Direct Cost
Foster Wheeler Environ Corp. (FWENC)- FY 2004 MAAR 16
Foster Wheeler Environ Corp. (FWENC)- FY 2004 MAARs2,4,9,14,19
Foster Wheeler Environ Corp. (FWENC)- FY 2004 MAAR 12
Tetra Tech Foster Wheeler (TTFW) - FY 2004 CAS 4 1 0
Foster Wheeler Environ Corp. (FWENC)- FY 2004 MAAR 17
Foster Wheeler Environ Corp. (FWENC)- FY 2004 MAAR 15
Foster Wheeler Environ Corp. (FWENC)- FY 2004 MAARs8,10,18
DCT, Inc. -Floorcheck
Cadmus Group Inc. - CAS 410 Compliance Audit
Neptune & Company Inc. - Accounting System
TetraTech, Inc. -CAS 420
Systems Research & Applications Corp. - CAS 404
Cadmus Group Inc. - CAS 418 Compliance Audit
Final Report
Issued
13-JAN-05
21-JAN-05
02-FEB-05
04-FEB-05
14-FEB-05
23-MAR-05
28-MAR-05
14-OCT-04
19-OCT-04
20-OCT-04
20-OCT-04
05-NOV-04
05-NOV-04
16-NOV-04
22-NOV-04
02-DEC-04
03-DEC-04
09-DEC-04
30-DEC-04
06-JAN-05
06-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
12-JAN-05
18-JAN-05
21-JAN-05
31-JAN-05
31-JAN-05
31-JAN-05
11-FEB-05
14-FEB-05
17-FEB-05
17-FEB-05
17-FEB-05
22-FEB-05
22-FEB-05
22-FEB-05
23-FEB-05
23-FEB-05
23-FEB-05
24-FEB-05
24-FEB-05
25-FEB-05
25-FEB-05
25-FEB-05
02-MAR-05
08-MAR-05
09-MAR-05
17-MAR-05
23-MAR-05
28-MAR-05
30-MAR-05
TOTAL DCAA CONTRACT REPORTS = 152
FINANCIAL STATEMENT REPORTS
2005-1-00021 2004 Agency Financial Statements Preparation and Reporting
TOTAL FINANCIAL STATEMENT REPORTS = 1
SPECIAL REVIEW REPORTS
2005-S-00001 Clean Water Compliance
2005-S-00002 AA - Region 3 NPDES Program
2005-S-00003 Conflict of Interest Allegation - WTC Peer Review
2005-S-00004 Ecology & Environment Revised Disclosure Statement Review
2005-S-00005 Changes to Atlantic Steel TCM - Hotline Case
TOTAL SPECIAL REVIEW REPORTS = 5
TOTAL REPORTS ISSUED = 315
15-NOV-04
18-OCT-04
28-OCT-04
04-NOV-04
17-DEC-04
15-FEB-05
Ineligible Unsupported
Costs Costs
Recommended
Efficiencies
Unreasonable (Funds Be Put
Costs To Better Use)
$1,925,336
$0
$0
$4,964,275
$0
$4,648,969
$24,484
$1,101,538
$2,002,296
$2,002,296
$3,103,834
43
-------
OIG Mailing Addresses and Telephone Numbers
Headquarters
Environmental Protection Agency
Office of Inspector General
1200 Pennsylvania Ave. NW (2410T)
Washington, DC 20460
(202)566-0847
Atlanta
Environmental Protection Agency
Office of Inspector General
61 Forsyth Street, SW
Atlanta, GA 30303
Audit: (404) 562-9830
Investigations: (404) 562-9857
Boston
Environmental Protection Agency
Office of Inspector General
One Congress Street, Suite 1100
Boston, MA 02114-2023
Audit: (617) 918-1470
Investigations: (617) 918-1481
Chattanooga
Environmental Protection Agency
Office of Inspector General
1110 Market Street, Suite 301
Chattanooga, TN 37402
Investigations: (423) 240-7735
Chicago
Environmental Protection Agency
Office of Inspector General
77 West Jackson Boulevard
13th Floor (IA-13J)
Chicago, IL 60604
Audit: (312) 353-2486
Investigations: (312) 353-2507
Cincinnati
Environmental Protection Agency
Office of Inspector General
26 West Martin Luther King Drive
Cincinnati, OH 45268-7001
Audit: (513) 487-2360
Investigations: (312) 353-2507 (Chi.)
OIG Public Liaison Hotline
Address
U.S. Environmental Protection Agency
Office of Inspector General Hotline
1200 Pennsylvania Ave. NW (249IT)
Washington, DC 20460
Fax
202-566-2549
E-mail
OIG_Hotline@epa. gov
Offices
Dallas
Environmental Protection Agency
Office of Inspector General (6OIG)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-273 3
Audit: (214) 665-6621
Investigations: (214) 665-2790
Denver
Environmental Protection Agency
Office of Inspector General
999 18th Street, Suite 300
Denver, CO 80202-2405
Audit: (303) 312-6872
Investigations: (303) 312-6868
Kansas City
Environmental Protection Agency
Office of Inspector General
90 IN. 5th Street
Kansas City, KS 66101
Audit: (913) 551-7878
Investigations: (312) 353-2507 (Chi.)
Los Angeles
Environmental Protection Agency
Office of Inspector General
P.O. Box 826
La Miranda, CA 90627-0826
Investigations: (714) 521-2189
New York
Environmental Protection Agency
Office of Inspector General
290 Broadway, Room 1520
New York, NY 10007
Audit: (212) 637-3080
Investigations: (212) 637-3041
Philadelphia
Environmental Protection Agency
Office of Inspector General
1650 Arch Street, 3rd Floor
Philadelphia, PA 19103-2029
Audit: (215) 814-5800
Investigations: (215) 814-5820
Research Triangle Park
Environmental Protection Agency
Office of Inspector General
Mail Drop N283-01
Research Triangle Park, NC 27711
Audit: (919) 541-2204
Investigations: (919) 541-1027
Sacramento
Environmental Protection Agency
Office of Inspector General
80II Street, Room 264
Sacramento, CA 95814
Audit: (916) 498-6530
Investigations: (415) 947-4500 (SF)
San Francisco
Environmental Protection Agency
Office of Inspector General
75 Hawthorne St. (IGA-1)
7th Floor
San Francisco, CA 94105
Audit: (415) 947-4521
Investigations: (415) 947-4500
Seattle
Environmental Protection Agency
Office of Inspector General
1200 6th Avenue, 19th Floor
Suite 1920, M/S OIG-195
Seattle, WA 98101
Audit: (206) 553-4033
Investigations: (206) 553-1273
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