EPA-350-R-09-002
February 2009
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Annual Performance Report and
Statistical Abstract Fiscal Year 2008
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This report was produced by the EPA Office of Inspector General,
Office of Congressional, Public Affairs and Management
(202) 566-0913
This report is available in hard copy from the
Office of Inspector General (Room 2104, EPA West)
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
To report fraud, waste, or abuse, contact the OIG Hotline:
OIG Hotline@epa.gov
1-888-546-8740
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Foreword and Overview
I am pleased to present the seventh Annual Performance Report of the U.S. Environmental
Protection Agency's (EPA) Office of Inspector General (OIG). This report presents statistical and
narrative summaries of OIG performance results for Fiscal Year (FY) 2008 compared to our FY 2008
Annual Performance Targets. It also presents cumulative OIG results for FYs 2003 through 2008
compared to the OIG Annual Performance Goals. Below is partial list of results and activities that are of
special interest in demonstrating progress, improvements, and performance toward the OIG strategic and
tactical goals achieved during FY 2008:
Identified over $97 million in EPA questioned costs, savings, and recoveries, which is a 186% return
on investment in the OIG.
Achieved 113% of the OIG's annual target for outcome actions taken in response to OIG
recommendations.
Continued to significantly improve productivity by realigning organizational resources and product lines
applying a greater proportion of staff resources to direct product production in areas of identified risk.
As a result, overhead costs decreased by 10% and timeliness of report production improved by 42%.
Initiated a comprehensive staffing program, consistent with congressional direction to further enhance
the OIG's workforce.
Over 90% of OIG products (without confidential information) are accessible electronically to the public.
100% of all OIG information technology systems have undergone security certification and accreditation.
Continued to assess OIG field operations and identify where efficiencies could be realized nationally.
Implemented a comprehensive Audit Follow-up program and reporting process in coordination with
the Office of Chief Financial Officer to strengthen the Agency Audit management process and build
audit follow-up into the Agency Federal Managers' Financial Integrity Act review process. The OIG
identified 98 unimplemented (non contract or grant) recommendations, with 32 being implemented
after their identification and reporting to the Agency.
Updated an Agency-wide risk assessment effort to identify vulnerabilities and opportunities for
operational savings and improvements to guide development of OIG strategy and plans.
Implemented a comprehensive internal quality assurance program, and updated the Project
Management Handbook to improve product quality, consistency, and timeliness.
Implemented an organizational-wide performance, project management, and time accountability system.
Initiated an Investigation Strike-Force to participate and lead detection, prevention, and protection of
EPA and federal interests in a national or regional emergency.
Conducted comprehensive reviews of OIG controls to ensure internal management integrity.
Reported on a new set of Agency Top Management Challenges and Internal Control Weaknesses for
Agency action.
Created a Forensics Audit Division to increase efforts to deter fraud, waste, and abuse particularly in
EPA's assistance agreements and contracts.
This report supplements, in greater statistical and narrative detail, the OIG summary performance
results presented in EPA's FY 2008 Performance Accountability Report available at
www.epa.gov/ocfopage. It also includes items required by the Government Performance and Results Act
specific to the OIG, such as financial summaries and management challenges, as well other relevant
measures of performance activity and accountability.
We rely upon our customers and stakeholders to inform us about the quality of our performance
while helping us identify and reduce areas of risk. Please do not hesitate to contact me for any reason, as
one of my personal goals is to build constructive relationships that promote the economic, efficient, and
effective delivery of EPA's mission.
Bill A. Roderick
Deputy Inspector General
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Table of Contents
About the EPA OIG 1
Vision, Mission, Goals 1
OIG Product and Service Lines for Strategic Areas of Performance 2
Planning Starts with the End in Mind; Then We Link Our Work to
Outcomes and Impacts 2
Performance Presented in a Hierarchy of Related Measures 2
Scoreboard of OIG Fiscal 2008 Performance Results
Compared to Annual Performance Goal Targets 3
OIG Strategic Cumulative Performance Results FYs 2003-2008 4
Performance Progress 4
Challenges 4
Summary of FY 2008 Performance Results by Product Line 6
Air 6
Water 6
Superfund/Land 7
Enforcement 8
Cross-Media 8
Public Liaison and Special Reviews 9
Assistance Agreements 9
Contracts 12
Forensics 13
Financial Management 13
Information Resources Management 14
Investigations 15
U.S. Chemical Safety and Hazard Investigation Board 16
OIG Enabling Support Programs 16
OIG Testimony 17
OIG Reported Key Agency Management Challenges 18
OIG Management Challenges 19
OIG FY 2008 Profile of Activities and Results 20
OIG FY 2008 Audit, Inspection, and Evaluation Report Resolution 21
OIG Reports with Unimplemented Recommendations by Program Office 22
OIG FY 2008 Budget and Resource Analysis Use and Allocation 23
OIG Financial Analysis of FY 2008 Fund Use and Carryover Balances 25
Historic Planned versus Actual Resources and Results FY 2005 to 2009 26
OIG Data Verification and Validation 27
Listing of OIG Reports, Timeliness, and Costs 28
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About the EPA OIG
Vision
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.
Goals
1. Contribute to Improved
Human Health and
Environmental Quality
Objectives
Influence programmatic
and systemic changes and
actions that contribute to
improved human health
and environmental quality.
Add to and apply
knowledge that contributes
to reducing or eliminating
environmental and
infrastructure security risks
and challenges.
Identify recommendations,
best practices, risks, and
opportunities to leverage
results in EPA programs
and among its partners.
2. Contribute to Improved
Business Practices and
Accountability
Objectives
Influence actions that
improve operational
efficiency and
accountability, resolve
public concerns and
management challenges,
and achieve monetary
savings.
Improve operational
integrity and reduce risk of
loss by detecting and
preventing vulnerabilities
to fraud, abuse, or breach
of security.
Identify recommendations,
best practices, risks,
weaknesses, opportunities
for savings, and operational
improvements.
3. Continuously Improve
OIG Products and
Services
Objectives
Improve the timeliness,
responsiveness, and value
of our products and
services to our clients and
stakeholders.
Apply technology,
innovation, leadership, and
skill proficiency for
motivated staff and highly
regarded products.
Align organization plans,
performance, measurement,
processes, and follow-up
for a cost-accountable
results culture.
Maximize use of available
resources.
Develop constructive
relationships to leverage
resources effectively and
foster collaborative
solutions.
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OIG Product and Service Lines for Strategic Areas of Performance
Performance
Evaluations
Air
Water
Land
Enforcement
Cross-Media
Special Review
Technology Audits
Financial/Information
Financial Statements
Assistance
Agreements and
Contracts
Forensic Audits
Risk Assessment/
Program Performance
Information
Technology
Investigations
Financial Fraud
Program Integrity
Employee Integrity
Laboratory Fraud
Computer Crimes
Public Liaison/
Analysis/Management
Legislation/Policy
Regulation Review
Public Inquiry/
Outreach
President's Council
on Integrity and
Efficiency
Audit Follow-up
Planning/Reporting
Resource/Financial
Management
Planning Starts with the End in Mind; Then We Link Our Work to Outcomes and
Impacts
All of our work is planned based on the anticipated contribution to influencing resolution of the Agency's major
management challenges, reducing risk, improving practices and program operations, and saving taxpayer dollars,
leading to positive human health and environmental impacts, and attaining EPA's Strategic Goals. We measure
the return on our investment by how efficiently our resources are converted into products, and how effectively our
products drive outcomes.
Logic Model Example
Resources
Staff
Contracts
Technology
Training
Travel
Leadership
<
Products/
Services
Audits
Evaluations
Investigations
Special Analysis
Consulting
Legislation/
Regulation
Reviews
s
1 Outputs
Recommendations
Referrals to DOJ
Best Practices
Risks Identified
Management
Challenges
Identified
Intermediate
Outcomes
* Savings/
Recoveries
Process/Policy
Changes
Indictments/
Convictions
Certifications
Civil Judgments
Legislative/
Regulatory
Changes
Administrative
Action
Impact
Outcomes
Environmental
Risks Reduced
Improved
Efficiency
Examples of
Environmental
Improvement
Examples of
Health
Improvement
Operational Risks
Reduced
Efficiency Ratio
Cost/Activity
Effectiveness Ratio
Outputs/Impacts
Performance Presented in a Hierarchy of Related Measures
The Logic Model diagram above demonstrates how we "Start With the End in Mind" to align our organizational
factors of performance for achieving our strategic goals. The performance results in this report represent the ways
we measure value added along this continuum, both quantitatively and qualitatively, in relation to the resources
expended. Our annual performance and progress toward our strategic goals is demonstrated by the Scoreboard of
Results compared to the Annual Performance Goal Targets. Our long-term performance progress is demonstrated
by the charts comparing our results against our goal targets for Fiscal Years (FYs) 2003 to 2008.
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Scoreboard of OIG Fiscal 2008 Performance Results Compared to Annual
Performance Goal (APG) Targets
All results reported in Fiscal 2008, from current and prior year's work, are as reported in OIG Performance
Measurement and Results System, /GEMS and IGOR.
OIG FY 2008 Government Performance and Results
Act Annual Performance Targets Compared to Fiscal
2008 Results Reported
Supporting Measures
Goal: Contribute to Human Health and Environmental Quality Through Improved Business Practices,
Accountability, and Integrity of Program Operations
Environmental Improvements/Actions/Changes
Improvements in Business/Systems/Efficiency
Risks Reduced or Eliminated
Target: 334; Reported: 463 (139%)
1 Legislative/Regulatory Changes/Decisions
11 Environmental Policy, Process, Practice, Control
Change Actions
164 Management Policy, Process, Practice, Control
Changes, Actions
251 Certifications/Validations/Verifications/Corrections
4 Environmental/Mgt Risks Reduced/Eliminated
32 Recommendations Reported as Implemented,
Previously Identified Unimplemented by Follow-up*
Environmental and Business Recommendations,
Challenges Best Practices and Risks Identified
Target: 971; Reported: 616 (63%) «
11 Environmental Recommendations (forAgency/
stakeholder action)
476 Management Recommendations (for Agency/
stakeholder action)
11 Critical Congressional or Public Mgt. Concerns
Addressed
2 Best Environmental Practices Identified
9 Referrals for Agency Action
20 New FMFIA/A-123/Mgt Challenges/Risks Identified
1 Environmental Risks Identified
86 Unimplemented Recommendations Identified
Return on Investment: Potential Dollar Return as
Percentage (150%) of OIG Budget $52.3 Million
Target: $78.50 M; Reported: $97.3 M (186%)
(Dollars in Millions)
$ 13.9 Questioned Costs net EPA
$ 79.7 Recommended Efficiencies, Costs Saved (EPA)*
$ 3.7 Fines, Recoveries, Settlements
Criminal, Civil, and Administrative Actions
Reducing Risk of Loss/Operational Integrity
Target: 80; Reported: 84 (105%)
18 Criminal Convictions
21 Indictments/lnformations/Complaints
3 Civil Judgments/Settlements/Filings
42 Administrative Actions
Other (no targets established)
Sustained Monetary Recommendations and Savings
Achieved from Current and Prior Periods: $38.2 M
Sustained Environmental and Management
Recommendations for Resolution Action: 221
Reports Issued: 304
(Dollars in Millions)
$15.7 Questioned Costs Sustained
$22.5 Cost Efficiencies Sustained or Realized **
219 Sustained Management Recommendations
2 Sustained Environmental recommendations
57 OIG Produced Reports
247 Reports by Other Audit Entities with OIG Oversight
* reported by the Agency as implemented of those reported by the OIG as Unimplemented in 08-P-0200 report
* * includes $ 1.3 M efficiency identified and sustained prior to completion of audit, not in the resolution process
Met or exceeded goal target Did not meet goal target
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OIG Strategic Cumulative Performance Results FYs 2003-2008
This section demonstrates the EPA OIG annual progress in attaining its Strategic Performance Goals for
FY 2003 through FY 2008 in compliance with the Government Performance and Results Act (GPRA).
OIG performance can best be considered and evaluated over a period of several years rather than a single year.
A lengthy time lag may occur before the outcome actions can come to fruition and be substantiated.
Performance Progress
The OIG has exceeded three of its four annual performance goal targets during FY 2008 with the results
for two of the outcome targets being significantly exceeded. During FY 2008 many time-lagged actions
from current and prior years' recommendations have come to fruition. The OIG has also increased its
focus on identifying cost efficiencies through performance audits and program evaluations. Among the
results, the OIG identified questioned costs and efficiencies, totaling over $92 million and over $3 million
in fines, settlements, and recoveries. Also, EPA sustained over $38 million in OIG monetary
recommendations and savings from current and prior periods. During the fiscal year, the OIG improved
its overall efficiency and productivity despite a smaller workforce, by converting a number of overhead
staff and resources to direct product line functions, reducing the production cycle time, the amount of
resources required to perform OIG work, and the cost of overhead.
The OIG did not meet one of its annual goal targets in FY 2008 - the number of recommendations and
risks identified. This is an output goal originally increased over the previous year's target, consistent with
the OIG appropriated budget level and in anticipation of a significant staffing increase. As a result of
unanticipated delays in staffing, many planned assignments did not get completed, nor new ones started
that would have accounted for target level of recommendations and risks identified. This is an example of
how the OIG adjusts it targets to the funding levels, but cannot always meet its annual performance goal
targets due to the time delay and variable nature in applying OIG resources and subsequent recognition of
results.
The charts on the next page demonstrate that the OIG has exceeded its aggregate cumulative GPRA
targets for FYs 2003-2008. In the case of potential monetary benefits, the OIG identified over
$1.5 billion in questioned costs, cost efficiencies, fines, recoveries, and settlements compared to about
$0.3 billion in OIG budgets for the same period FY 2003-2008.
Challenges
During FY 2008, the OIG identified five issues as OIG-level weaknesses pertaining to: Communication
Equipment and Accuracy of Working Capital Fund Charges (new); Freedom of Information Act Requests (new);
Staffing (new); Organizational Structure (new); Product Timeliness and Quality.
The OIG is continuing to improve its information technology and data quality by applying new tools to
consolidate, integrate, or replace its many specific-use databases and systems. The OIG is improving its
product timeliness and quality by streamlining its processes and organizational structure. The OIG is also
implementing a follow-up improvement strategy including collaborative efforts with the Agency to
provide greater accountability for actions the Agency has agreed to take as a result of OIG
recommendations and understanding of the process for resolving OIG recommendations.
Below is a comparison of OIG Annual Performance Goals/Targets to Results for FYs 2003 to 2008
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APG 7 -Environmental and Business Recommendations and Risks from OIG Audits, Evaluations,
Inspections and Investigations
5000-
DFY2008
FY2007
FY2006
DFY2005
FY2004
FY2003
Targets
Results
APG 8: Environmental and Business Actions Taken and Risks Reduced from OIG Audit, Evaluation,
Inspection and Investigation Recommendations
DFY2008
FY2007
FY2006
DFY2005
FY2004
FY2003
Targets
Results
APG 7: OIG Questioned Costs, Efficiencies, Savings, Fines, Recoveries from OIG Audits, Evaluations,
and Investigations
$1,600-,-
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
DFY2008
FY2007
FY2006
DFY2005
FY2004
FY2003
Targets
Results
APG 7 -Criminal, Civil, Administrative Actions from OIG Investigations
DFY2008
FY2007
FY2006
DFY2005
FY2004
FY2003
Targets
Results
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Summary of FY 2008 Performance Results by Product Line
AIR
Performance Highlights
In the OIG report, Improvements in Air Toxics Emissions Data
Needed to Conduct Residual Risk Assessments, we found that
EPA's National Emissions Inventory (NEI) data indicate an
overall decline in air toxic emissions concurrent with
implementation of the maximum achievable control
technology (MACT) standards. Although NEI data reliability
is uncertain, it is reasonable to conclude that air toxics
emissions have decreased. EPA's review suggests that the
MACT program has played a role in these reductions. We
recommended that the Assistant Administrator for the Office
of Air and Radiation develop data quality objectives for using
NEI data in conducting residual risk assessments, and establish
requirements for State reporting of air toxics emissions data
and compliance monitoring information.
http://www.epa.gov/oig/reports/2008/20071031-08-P-0020.pdf
In the OIG report, EPA 's Office of Air and Radiation Needs to
Improve Compliance with Audit Followup Process, we found
that EPA had generally taken corrective actions to implement
the recommendations for the five air-related reports we
reviewed. However, documented evidence of completion of
agreed-to corrective actions was in the files for only 1 of 29
corrective actions. Upon reviewing additional information not
contained in the official files, we determined that corrective
actions had been completed for 26 of the 29 agreed-to
recommendations reviewed. EPA's three incomplete corrective
actions had not been implemented within 1 year, as stipulated
in EPA Manual 2750, and Office of Air and Radiation had not
notified the OIG of these delays. We recommend that the
Assistant Administrator of the Office of Air and Radiation
comply with EPA Manual 2750 by (1) biannually reviewing
audit management information for accuracy and completeness;
(2) completing the certification process for closing out reports;
and (3) maintaining a list of specific corrective actions taken.
We also recommended that EPA ensure that newly appointed
Audit Follow-up Coordinators receive audit management
training before taking over the position's roles and
responsibilities.
http://www.epa.gov/oig/reports/2008/20080212-08-P-0080.pdf
In the OIG report, More Action Needed to Protect Public from
Indoor Radon Risks, we found that nearly two decades after
passage of the 1988 Indoor Radon Abatement Act (IRAA),
exposure to indoor radon continues to grow. Efforts to reduce
exposure through mitigation or building with radon-resistant
new construction have not kept pace. Of 6.7 million new single
family detached homes built nationwide between 2001 and
2005, only about 469,000 incorporated radon-resistant features.
Of 76.1 million existing single family homes in the United
States in 2005, only about 2.1 million had radon-reducing
features in place. We recommended, and the Agency agreed,
that the Assistant Administrator for the Office of Air and
Radiation develop a strategy for achieving the long-term goal
of the IRAA that considered using the authorities authorized by
Congress or explain its alternative strategy. We also
recommended that EPA identify limitations to meeting the goal
to Congress and improve on measures to report program results.
http://www.epa.gov/oig/reports/2008/20080603-08-P-0174.pdf
WATER
Performance Highlights
In the OIG report, Innovative Techniques for State Monitoring
of Revolving Funds Noted, we found that only 59 percent of
the States reviewed identify the federal award information to
the recipient. EPA's Annual Performance evaluation should
include an evaluation of the States' subrecipient monitoring
procedures. We recommended that EPA require all States to
notify borrowers of federal award information to assure that
they can comply with the Single Audit Act, and include a
review of how States monitor borrowers as part of EPA's
annual review procedures.
http://www.epa.gov/oig/reports/2008/20080929-08-P-0290.pdf
In the OIG report, Despite Progress, EPA Needs to Improve
Oversight of Wastewater Upgrades in the Chesapeake Bay
Watershed, we found that EPA's Chesapeake Bay wastewater
treatment facilities risk not meeting the 2010 deadline for
nutrient reductions if key facilities are not upgraded in time. In
the 7 years since signing the Chesapeake 2000 Agreement,
EPA and its State partners have taken a number of steps to lay
the foundation for achieving the 2010 wastewater nutrient
reduction goals. Significant challenges include generating
sufficient funding and addressing continuing population
growth. EPA needs to better monitor progress to ensure needed
upgrades occur on time and loading reductions are achieved
and maintained. Otherwise, Bay waters will continue to be
impaired, adversely affecting living resources throughout the
ecosystem that supports commercial and recreational uses. We
recommended that EPA Region 3 Regional Administrator
work with the States to establish interim construction
milestones for priority facilities; monitor milestone and
financial funding progress for these facilities; and continue
efforts in developing effective and credible water quality
trading programs. We also recommend that the Regional
Administrator should have EPA and States continue to
evaluate industrial discharges and refine industrial nutrient cap
loads where appropriate. The Agency agreed with these
recommendations.
http://www.epa.gov/oig/reports/2008/20080108-08-P-0049.pdf
In the OIG report, Summary of Recent Developments in EPA 's
Drinking Water Program and Areas for Additional Focus, we
found that the Office of Ground Water and Drinking Water
(OGWDW) addressed all of the EPA OIG drinking water
program-related evaluation report recommendations made
from September 2003 to May 2007. OGWDW also took action
on prior report suggestions that include rule developments or
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revisions, performance measure development, drinking water
security, source water protection, capacity development,
sustainable infrastructure, underground injection control, logic
model development, State oversight, and analytical methods
development. No recommendations were made in this report.
http://www.epa.gov/oig/reports/2008/20080331-08-P-0120.pdf
In the OIG report, EPA Needs to Better Report Chesapeake
Bay Challenges, we found that despite many noteworthy
accomplishments by EPA's Chesapeake Bay partners, the Bay
remains degraded. This has resulted in continuing threats to
aquatic life and human health, and citizens being deprived of
the Bay's full economic and recreational benefits. Through its
reporting responsibilities, EPA could better advise Congress
and the Chesapeake Bay community that (a) the Bay program
is significantly short of its goals and (b) partners need to make
major changes if goals are to be met. Current efforts will not
enable partners to meet their goal of restoring the Bay by 2010.
We recommended in four prior reports that the Region 3
Regional Administrator address individual sector needs
(agricultural, developing lands, air deposition, and
wastewater). We also recommend that the Administrator
develop a strategy to further engage local governments and
watershed organizations to capitalize on their resources, tools,
authorities, and information to advance the mission of the
Chesapeake Bay.
http://www.epa.gov/oig/reports/2008/20080714-08-P-0199.pdf
In the OIG report, EPA Assisting Tribal Water Systems but
Needs to Improve Oversight, we found that EPA 's tribal
drinking water sample results in EPA files indicate that
drinking water supplies consistently met regulatory
requirements. Regional EPA staff also made correct
compliance decisions with sample results that tribal
community water systems (CWSs) provided. However,
internal control deficiencies existed in administering EPA's
oversight of tribal CWSs in two of the five regions we
reviewed. To varying degrees, tribal drinking water records in
four of the five regions were incomplete due to a failure to
maintain oversight of system operations and/or poor records
management. We recommend that the Assistant Administrator
for Water (1) establish national and regional tribal drinking
water program Standard Operating Procedures in coordination
with regional offices; (2) require Region 2 to submit a plan that
corrects deficiencies in how it currently implements its tribal
drinking water program, including those identified in this
report; and (3) direct regions to issue monitoring and reporting
violations, take appropriate enforcement actions against tribal
CWSs with health-based violations or who fail to monitor or
submit monitoring reports, and enter violations into the Safe
Drinking Water Information System. The Agency agreed with
our recommendations.
http://www.epa.gov/oig/reports/2008/20080916-08-P-0266.pdf
SUPERFUND/LAND
Performance Highlights
In the OIG report, Improved Controls Would Reduce
Superfund Clean-up Backlogs, we found that neither EPA nor
the New Jersey Department of Environmental Protection
(NJDEP) took actions needed to ensure progress at seven New
Jersey-led Superfund site clean-ups. We recommended that
the Region 2 Administrator direct staff to coordinate with
NJDEP officials the clean-up of specified sites more than 20
years old. Region 2 should assume lead status from New Jersey
for those sites where both agencies agree it would be beneficial
and develop Letters of Agreement for those sites. We also
recommend that the Assistant Administrator for Solid Waste
and Emergency Response, where appropriate, improve site
profiles in EPA's public Superfund Website to accurately
depict EPA and State actions taken to protect human health
and the environment. The Agency agreed with these
recommendations.
http://www.epa.gov/oig/reports/2008/20080602-08-P-0169.pdf
In the OIG report, EPA Needs to Track Compliance with
Superfund Cleanup Requirements, we found that in EPA's
Superfund information system, there were 3,397 active
Superfund enforcement instruments to ensure cleanups at
National Priorities List sites as of September 30, 2007. Yet,
EPA does not nationally compile or track data on substantial
non-compliance with the terms or requirements of these
instruments. We recommended that EPA track and monitor
substantial non-compliance by using and modifying, as
appropriate, the existing Superfund information system. We
also recommend that EPA establish enforceable response
actions to address contamination from the Muskego Landfill
Site. The Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080428-08-P-0141.pdf
In the OIG report, EPA Can Recover More Federal Superfund
Money, we found that EPA regions have recovered
$165 million of $294 million (56 percent) of the total
Superfund costs from the sites reviewed. Potentially
responsible parties at these sites have generally paid what they
have been billed. However, EPA has not recovered as much as
$129 million (44 percent) and has determined it will not
attempt to recover between $30 million and $90 million of this
amount. This indicates a potentially significant breakdown in
controls impeding future Superfund cost recovery. We
recommended that EPA (1) enhance cost recovery guidance for
all the regions, (2) implement mechanisms to support
calculating how efficiently it is recovering site costs and
tracking corrections, and (3) implement performance measures
to track how efficiently it is recovering these costs. The
Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080326-08-P-0116.pdf
In the OIG report, EPA Decisions to Delete Superfund Sites
Should Undergo Quality Assurance Review, we found that as
of September 2007, EPA had deleted 322 sites from the
National Priorities List. Among the eight sites we reviewed,
documentation for the Agency's decision to delete three sites
was not consistent with EPA guidance. The Agency's
decisions for two of these sites were also not consistent with
criteria specified by EPA guidance and not supported by data
and analysis. EPA did not ensure cleanup activities and goals
were complete and remedies were fully protecting human
health and the environment before deleting these two sites. We
recommended that EPA implement a national quality assurance
process that ensures deletion decisions meet criteria specified
by EPA guidance are supported. We also recommended actions
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to ensure better support for deletion decisions and oversight of
ongoing cleanup activities at the deleted sites we reviewed.
The Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080916-08-P-0264.pdf
In the OIG report, Making Better Use ofStringfellow
Super/and Special Accounts, we found that by FY 2010, EPA
Region 9 could reclassify, or transfer to the Superfund Trust
Fund, up to $47.8 million in special account funds for the
Stringfellow Superfund site, located near Glen Avon,
California. Reclassifying or transferring is consistent with EPA
guidance and would potentially allow $47.8 million to be
available for better use in Region 9's Superfund program or
elsewhere in the Nation. We recommended that the Region 9
Administrator reclassify or transfer to the Superfund Trust
Fund, as appropriate, $47.8 million of the Stringfellow special
accounts.
http://www.epa.gov/oig/reports/2008/20080709-08-P-0196.pdf
In the OIG report, Making Better Use of Superfund Special
Accounts in Region 8, we found that Region 8 can reclassify,
or transfer to the Trust Fund, approximately $8 million from
the special accounts for the Portland Cement site in Utah.
Construction was complete at the site in September 2006.
However, in 2005, the Region identified a portion of the
Portland Cement special accounts for reclassification. The
Region said that there will be minimal but undetermined future
costs for site maintenance at Portland Cement. These costs will
be paid from the $8.5 million balance. Region 8 can also
reclassify, or transfer to the Trust Fund, approximately $16,000
from four other special accounts. We recommended that the
Region 8 Administrator reclassify, or transfer to the Trust
Fund, $8 million of the Portland Cement special accounts and
approximately $16,000 from the four other interest-only
special accounts. The Agency agreed with these
recommendations.
http://www.epa.gov/oig/reports/2008/20080317-08-P-0102.pdf
In the OIG report, EPA Should Continue to Improve Its
National Emergency Response Planning, we found that EPA's
Emergency Response Business Plan did not disclose the basis
for EPA's resource estimates. Additionally, EPA management
stated they did not consider State and local resources in their
resource estimates because they believed they would be
working with the affected State and local governments in a
unified command structure. EPA considered past experience in
estimating the activities they would be asked to perform. Also,
EPA did not use existing data on chlorine storage volumes
because it was attempting to develop a national scenario
applicable to any chemical. We recommended that EPA revise
the Plan to incorporate the methodology and assumptions used
to develop all personnel and resource estimates, the rational for
the selection of the incidents of national significance, lessons
learned from past incidents, logistics of resource deployment,
and risk communications. We also recommend that EPA
should update key milestones and expand coordination with
other EPA offices and relevant federal agencies in revising the
Plan. The Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080109-08-P-0055.pdf
ENFORCEMENT
Performance Highlights
In the OIG report, EPA Has Initiated Strategic Planning for
Priority Enforcement Areas, but Key Elements Still Needed, we
found that EPA has instituted a process for strategic planning
in its national enforcement priority areas. EPA has developed
strategic planning guidance and a strategy template to facilitate
continual review and improvement of the strategies. However,
each of the plans is missing key elements to monitor progress
and accomplishments and efficiently utilize Agency resources.
All three strategies lack a full range of measures to monitor
progress and achievements. Two strategies lack detailed exit
plans. Additionally, EPA's combined sewer overflow strategy
does not address the States' key roles in attaining the strategy's
overall goal. The absence of these elements hinders EPA from
monitoring progress and achieving desired results in a timely
and efficient manner. We found that the Assistant
Administrator for Enforcement and Compliance Assurance
issue a policy that requires strategy documents for the priority
areas to include: a) a full range of performance measures; b)
exit plans; c) and the States' roles, where needed. We also
recommended EPA develop a cost-effective methodology for
measuring resource inputs in the national priorities.
http://www.epa.gov/oig/reports/2008/20080925-08-P-0278.pdf
CROSS-MEDIA
Performance Highlights
In the OIG report, Border 2012 Program Needs to Improve
Program Management to Ensure Results, we found that the
current organizational structure of the Border 2012 Program
allows it to achieve a collaborative relationship at the U.S.-
Mexico border and address environmental and public health
issues unique to the border region. The structure also creates
opportunities for stakeholder involvement from local, State,
and national groups while providing the program with the
ability to leverage diverse partners and create an effective
convening mechanism to discuss border issues. We also found
management controls that do not ensure project and program
results are documented or that the Border 2012 goals are
achieved. We recommended, and the Agency agreed to:
strengthen management controls to effectively demonstrate
program performance; develop a strategic plan, issue guidance
to better support program results, improve performance
measures, and develop criteria for determining what constitutes
successful completion of program goals.
http://www.epa.gov/oig/reports/2008/20080903-08-P-0245.pdf
In the OIG report, Voluntary Greenhouse Gas Reduction
Programs Have Limited Potential, we found that the set of
voluntary Greenhouse Gas (GHG) programs we reviewed use
outreach efforts to recruit program partners and reduce GHG
emissions. We also found the greatest barriers to participation
were the perceived emission reduction costs and reporting
requirements; and that it is unlikely these voluntary programs
can reduce more than 19 percent of the projected 2010 GHG
emissions for their industry sectors. From this, we determined
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that if EPA wishes to reduce GHG emissions beyond this
point, it needs to consider additional policy options. We
recommended that EPA review emission reduction cost
analyses annually and update as needed. For programs that
recruit and enroll participants, EPA should adopt written
partnership agreements that require stronger data quality
provisions and details on how Confidential Business
Information will be handled. For programs that do not recruit
and enroll participants, EPA should develop a policy or
procedure that specifically identifies how these voluntary GHG
programs link their reported outcomes to program efforts.
http://www.epa.gov/oig/reports/2008/20080723-08-P-0206.pdf
PUBLIC LIAISON AND
SPECIAL REVIEWS
Performance Highlights
In the OIG report, A Region 5 Penalty Reduction Was
Unjustified and Undocumented, we found that EPA Region 5
Regional Counsel's decision to reduce a civil penalty of
$110,000 against Minnesota Metal Finishing, Inc. (MMF) to
$85,000 was unjustified. Further, the Regional Counsel's basis
for the reduction was not documented. Regional Counsel relied
on information in an internal Office of Regional Counsel
memorandum. EPA did not have current reliable financial
information to justify the decision nor a complete
understanding of the owner's prior relationship with the
company. We recommended that Region 5's Regional
Administrator direct the Regional Counsel and the Land and
Chemicals Division Director to document their rationale for
reducing the amount of MMF's penalty, and properly
determine and document all future penalty decisions. We also
recommend that the Regional Administrator direct Regional
Counsel and the Director to follow through on hiring staff who
can provide the necessary financial and accounting expertise to
understand and assess a violator's financial health. The
Agency has already directed staff to properly document in the
future, and has begun the process to hire a civil investigator
and attorney to ensure future penalties are properly calculated
and documented. However, we do not consider Region 5's
plans for documenting the MMF penalty rationale to be
sufficient. Further, Region 5 needs to clearly define the
difference between an ability-to-pay memorandum and a
bottom-line settlement amount.
http://www.epa.gov/oig/reports/2008/20080929-08-P-0291.pdf
In the OIG report, Corrective Actions Were Generally
Implemented at Stauffer Chemical Company Super fund Site,
Tarpon Springs, Florida, the OIG evaluated the actions taken
by EPA Region 4 staff in response to a June 2004 OIG report
concerning the Stauffer Chemical Company Superfund site.
We reviewed six sites to determine if recently-started site
investigations included work to identify the presence and
impact of karst. Although three of the six sites are not in karst-
prone areas, three sites are so located. Earlier studies at these
three sites had not evaluated the potential impact of karst.
More recent studies are addressing the karst issue.
http://www.epa.gov/oig/reports/2008/20080916-08-P-0264.pdf
In the OIG report, Follow-up Review on Progress at Escambia
Treating Company Superfund Site, Pensacola, Florida, we
found that EPA Region 4 implemented all but one of our prior
report recommendations. Although Region 4 indicated it had
provided electronic files containing the site administrative
record to Citizens Against Toxic Exposure (GATE), an
environmental group, CATE's current president said the
organization did not receive any compact disks (CDs) from the
Region. Also, the Region was unable to locate any evidence
(e.g., copy of transmittal letter) that it had submitted the CDs
to GATE. We recommended that EPA Region 4 provide copies
of the updated administrative record CDs to GATE. The
Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080714-08-P-0200.pdf
ASSISTANCE AGREEMENTS
Performance Highlights
In the OIG report, National Caucus and Center on Black Aged,
Inc., Incurred Cost Audit of Eight EPA Cooperative
Agreements, we found that for the eight cooperative
agreements EPA awarded to the recipient to administer the
Senior Environmental Employment (SEE) Program, outlays
reported in Quarterly Financial Status Reports as of September
30, 2007, were presented fairly, in all material respects.
However, we did find that the recipient did not clearly disclose
its allocation methods in its indirect cost proposals. The
recipient charged employee leave costs to grants
disproportionately to the amount of time employees spent on
each assistance agreement. We recommended that EPA's
Grants and Interagency Agreements Management Division
require the recipient to:
Revise its cost policy statement to clearly disclose the
basis for allocation of costs, the costs being allocated, the
intermediate cost pools used, and whether the costs are
allocated individually or as a pool;
Have the revised proposals submitted to its cognizant
federal agency; and use a more equitable method for
allocating employee paid absences to agreements.
http://www.epa.gov/oig/reports/2008/20080925-08-l-0277.pdf
In the OIG report, EPA Actions Should Lead to Improved
Grants Accountability, we found that EPA implemented the
corrective action plan it prepared in response to the September
2005 OIG report on grant accountability. In the 2005 report,
we recommended that EPA establish a process to measure
project officer, supervisor, and manager performance against
grants management requirements. EPA established a process
for measuring project officer performance, including
quantitative performance measures such as the average number
of days to transmit funding recommendations and the number
of baseline monitoring activities for active awards. EPA's
actions should lead to improvements in managing assistance
agreements. EPA stated that it will continue to work with the
grants management community to ensure that grants
accountability is a focal point in managing assistance
agreements.
http://www.epa.gov/oig/reports/2008/20080924-08-P-0276.pdf
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In the OIG report, Passaic Valley Sewerage Commissioners -
Unallowable Costs Claimed Under EPA GrantXP98237601,
we found that Passaic Valley Sewerage Commissioners
(grantee) claimed $2,385,634 for pre-award costs under Grant
XP98237601 that were incurred prior to the grant award and
thus were unallowable under the grant administrative
conditions and Office of Management and Budget Circular A-
87. The federal share of the unallowable pre-award costs was
$1,312,099. We recommended that the EPA Regional
Administrator, Region 2, recover $1,312,099, the federal share
of the unallowable pre-award costs.
http://www.epa.gov/oig/reports/2008/20080806-08-2-0226.pdf
In the OIG report, Oglala Sioux Single Audits - Corrective
Actions Taken but Improvements Needed in Resolving Costs,
we found that EPA Region 8 continues to take actions to
resolve the internal control findings in the single audit reports.
Region 8 identified Oglala Sioux Tribe (OST) as high risk,
requested a corrective action plan, and reviewed OST
accounting documentation. However, Region 8 did not monitor
implementation of the corrective actions in the Agency's
Management Audit Tracking System (MATS) until all actions
were completed. We recommend that the EPA Region 8
Regional Administrator:
Track the remaining corrective action that OST has not
implemented in MATS, or submit a revised corrective
action plan to the OIG for evaluation.
When resolving the FY 2004 and future single audits,
(1) obtain sufficient supporting documentation from the
grantee's official accounting system to support resolving
questioned costs, (2) fully reconcile the supporting
documentation to the costs that were claimed, and
(3) recover any unsupported costs from the grantee.
http://www.epa.gov/oig/reports/2008/20080728-08-P-0213.pdf
In the OIG report, Village ofWellsville, Ohio - Ineligible Costs
Claimed Under EPA GrantXP97582801, we found that the
Village of Wellsville (grantee) did not meet the Title 40 Code
of Federal Regulations Part 31 requirements for financial
management. In particular, the grantee did not have support for
required matching costs and received grant funds it never
expended. As a result, EPA will need to recover $1,241,591
under Grant XP97582801. The grantee also made two
improper procurements for engineering services, and did not
maintain acceptable procurement or contract administration
systems. Further, the grantee did not conform to the terms and
conditions of its grant. Therefore, EPA should classify the
Village of Wellsville as a high risk grantee. We recommended
that the Regional Administrator, EPA Region 5:
Recover the $1,241,591 in questioned costs.
Require the grantee to re-bid both engineering contracts
with Dallis Dawson and Associates in accordance with
federal regulations.
Require the grantee to strengthen its accounting and
procurement systems to meet the requirements of Title 40
Code of Federal Regulations Part 31.
Classify the Village of Wellsville as a high risk grantee,
and apply special conditions to this and future awards until
improvements are made to the accounting and procurement
systems.
http://www.epa.gov/oig/reports/2008/20080721-08-2-0204.pdf
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In the OIG report, Canaan Valley Institute, Inc., Incurred Cost
Audit of Five EPA Cooperative Agreements, we found that
EPA awarded five cooperative agreements to Canaan Valley
Institute (recipient) to provide further enhancements to the
Mid-Atlantic Highland's environment and economic
sustainability, and continued support for the Highland action
plan. We also found that with the exception of the questioned
costs discussed below, the outlays reported in the recipient's
Federal Cash Transaction Reports and Financial Status Reports
present fairly, in all material respects, the allowable outlays
incurred in accordance with the terms and conditions of the
agreements and applicable laws and regulations. We
questioned $3,235,927 of the $6,686,424 in reported net
outlays because the recipient reported unallowable outlays for
indirect, contractual, and in-kind costs. Specifically, the
recipient:
Claimed indirect costs without approved indirect rates;
Did not credit back to the agreements all program income;
Did not demonstrate that it performed cost analysis of
contracts;
Reported costs for services outside of the scope of one
agreement;
Did not comply with terms and conditions of contracts; and
Used EPA funds to match another federally-funded
cooperative agreement.
We recommended that the EPA Director, Grants and
Interagency Agreements Management Division, and/or the
Regional Administrator, Region 3 recover questioned outlays
of $3,218,661 unless the recipient provides sufficient
documentation to support the related reported costs in
accordance with federal regulations. EPA should require the
recipient to prepare and submit its indirect cost rate proposals
for negotiation using the accrual method, and disclose the
direct allocation methodology. The recipient should credit
$17,266 in program income to the agreements. The recipient
needs to ensure that cost and pricing analyses are performed
and documented as part of its contract procurement process.
We also recommended that EPA direct the recipient to revise
its subrecipient monitoring program to require technical reports
from its subrecipients, in addition to financial reports that are
already required. The recipient should also time its
subrecipient payments to ensure the funds are expended timely
by its subrecipients.
http://www.epa.gov/oig/reports/2008/20080519-08-4-0156.pdf
In the OIG report, Improvements Needed to Ensure Grant
Funds for U.S.-Mexico Border Water Infrastructure Program
Are Spent More Timely, we found from FYs 2005 to 2007,
EPA took actions to implement timeframes for Border
Program projects, reduce the scope of projects, and reduce
unliquidated obligations of projects. However, EPA needs to
make additional changes to the process it uses to manage the
funds Congress appropriates for water infrastructure
improvements along the U.S.-Mexico Border. Region 6 Border
Program grant work plans did not include specific projects,
measures, milestones, or costs associated with projects. The
work plan for EPA Region 9's FY 2006 grant included total
cost of projects, but did not include sufficient detail about how
much the grant funded for the projects. We recommend that
EPA:
Require project planning and design be completed before
awarding grant funds for construction.
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Develop a plan to fund other projects with the unobligated
funds.
Prepare work plans that contain required project
information.
http://www.epa.gov/oig/reports/2008/20080331-08-P-0121.pdf
In the OIG report, City of Bad Axe, Michigan - Unallowable
Costs Claimed Under EPA GrantXP98578301, we found that
the City of Bad Axe (grantee) purchased two parcels of land
totaling $51,297 without obtaining prior approval as required
by federal regulations. The grantee also paid an engineering
firm $211,143 to design a water treatment facility but did not
use the design. As a result, EPA needs to recover $262,440
under Grant XP98578301. We recommended that the Regional
Administrator, EPA Region 5, recover the unallowable land
purchase and design costs totaling $262,440.
http://www.epa.gov/oig/reports/2008/20080227-08-2-0095.pdf
In the OIG report, Borough ofCarteret, New Jersey -
Unallowable Costs Claimed Under EPA GrantXP9824 7001,
we found that the Borough of Carteret, New Jersey (grantee),
did not meet the Title 40 Code of Federal Regulations Part 31
requirements for financial management systems. Based on
directions from EPA, the grantee claimed $1,360,429 in costs
for reimbursement for work that was not within the scope of
the original project. The grantee also claimed up to $214,962
in unallowable pre-award costs. The final Financial Status
Report did not accurately reflect the project's cumulative total
outlays. The grantee also incurred additional project costs that
EPA has not reviewed for eligibility and could have been
claimed. We recommended that the Regional Administrator,
EPA Region 2:
1. Sustain the questioned costs of $1,575,391, consisting of:
a. $1,360,429 in out-of-scope project costs.
b. $214,962 in unallowable pre-award costs.
The Region can consider amending the grant period or the
scope of work during the resolution of questioned costs.
2. Request that the grantee provide a revised final Financial
Status Report that reflects the actual amount of cumulative
total outlays.
3. Review unclaimed costs of $1,286,668 for potential
eligibility.
http://www.epa.gov/oig/reports/2008/20080220-08-2-0084.pdf
In the OIG report, Framework for Developing Tribal Capacity
Needed in the Indian General Assistance Program, we found
that EPA's purpose for Indian General Assistance Program
(IGAP) grants is to help tribes develop environmental
programs, and over 70 percent of tribes have met at least one
of EPA's strategic goals for improving human health and the
environment in Indian country. However, only 12 percent of
tribes are implementing federal environmental programs. Many
tribes have not developed long-term plans that describe how
they will build environmental capacity to operate their
environmental programs. Six of 27 reviewed tribes that have
received funding for more than 5 years had activities limited to
outreach, training, and meetings; how the activities will lead to
implementing environmental programs is unclear. This
situation has occurred because EPA has not provided a
framework for tribes to follow or adapt as they develop their
capacity to implement environmental programs. As a result, it
is not clear whether IGAP funding will result in tribes being
able to operate their own environmental programs. EPA has
awarded $455 million in IGAP funds since 1992. We
recommend that the Assistant Administrator for Water:
Require the American Indian Environmental Office to
develop and implement an overall framework for achieving
capacity, including valid performance measures for each
type of tribal entity, and provide assistance to the regions
for incorporating the framework into the IGAP work plans.
Require regions to (a) negotiate with tribes to develop
environmental plans that reflect intermediate and long-term
goals, (b) link those plans to annual IGAP work plans, and
(c) measure tribal progress in meeting plans and goals.
Revise how IGAP funding is distributed to tribes to place
more emphasis on tribes' prior progress, environmental
capacity needs, and long-term goals.
http://www.epa.gov/oig/reports/2008/20080219-08-P-0083.pdf
In the OIG report, City of Elizabeth, New Jersey - Excess
Clean Water State Revolving Funds Claimed, we found that
the City of Elizabeth, New Jersey (grantee) claimed and was
reimbursed under its Clean Water State Revolving Fund loan
$335,232 in excess of actual costs incurred, contrary to the
requirements of Title 40, Code of Federal Regulations, Section
35.3155 (d)(2). The grantee initially paid for all project
construction costs using its internal service funds, and was
reimbursed with draws from either the State loans or from the
EPA grant. The grantee did not associate all reimbursements
with contract invoice payments. The over reimbursement was
associated with a State of New Jersey loan that was 50-percent
funded from the Clean Water State Revolving Fund. These
funds could have been made available for use by other
potential loan recipients.
http://www.epa.gov/oig/reports/2008/20080123-08-2-0062.pdf
In the OIG report, Unallowable Federal Funds Drawn on EPA
Grant No. XP98247201 Awarded to the Wayne County Water
and Sewer Authority, New York, we found that the Wayne
County Water and Sewer Authority (grantee) claimed and was
reimbursed for preaward costs of $276,268 that are
unallowable under federal regulations and the grant terms and
conditions. As a result, EPA will need to recover $151,947
under Grant No. XP98247201. The grantee's financial
management system does not provide accurate information to
ensure costs are claimed in accordance with federal
regulations. We found four instances of inaccurate disclosures.
As a result, we had no assurance that the costs were not being
claimed more than once or that the grantee was complying
with the funding or matching requirements for the various
funding sources. We recommend that the Regional
Administrator, EPA Region 2:
1. Obtain recovery of $151,947 in unallowable preaward costs
under Grant No. XP98247201.
2. Require the grantee to reconcile costs claimed for each of
the sources of funding to ensure that financial reports are
accurate and costs claimed in accordance with grant
requirements.
http://www.epa.gov/oig/reports/2008/20071217-08-2-0045.pdf
In the OIG report, Village ofLaurelville, Ohio - Unallowable
Costs Claimed Under EPA GrantXP97'579701, we found that
the Village ofLaurelville (grantee) did not maintain an
acceptable financial management system in accordance with
11
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federal regulations to support drawdown requests submitted to
EPA for $278,448 in grant funds. Therefore, we are
questioning the entire $278,448 that the grantee has drawn
down. The grantee claimed costs of $207,476 that were not
allowable under federal regulations and grant conditions.
These costs were associated with pre-award expenses,
repayment of a loan and interest, a garage extension, office and
maintenance equipment, and consultant fees. We are also
questioning costs the grantee claimed of $5,018 for an
ultraviolet disinfection system that was not installed as of
August 2007. We recommended that Regional Administrator,
EPA Region 5:
1. Require the Village of Laurelville to (a) repay the $207,476
in questioned federal funds drawn; (b) install the ultraviolet
disinfection system or repay the $5,018 of federal costs
claimed for the system; and (c) develop an adequate
accounting system to support the remaining $65,954 of federal
funds drawn. If this cannot be accomplished, the Region
should recover the funds.
2. Provide documentation to support matching costs. If the
grantee cannot provide sufficient documentation, costs claimed
will need to be revised.
3. Classify the Village of Laurelville as a high risk grantee in
accordance with Title 40, Code of Federal Regulations, section
31.12, and apply special conditions on all future awards.
http://www.epa.gov/oig/reports/2008/20071205-08-2-0039.pdf
In the OIG report, Millions of Federal Dollars Remain for
Colonias Projects, we found that nearly 10 years after EPA
Region 6 awarded the last Colonias Wastewater Treatment
Assistance Program (CWTAP) grant to the Texas Water
Development Board, $78 million still has not been spent. The
Region has taken some positive steps to address unliquidated
obligations in the CWTAP, such as working with the Board to
establish a schedule for using the remaining funds. However,
Region 6's oversight of the program has been hindered because
work plans lacked project details and operating agreements did
not specify corrective actions. We recommended that the
Regional Administrator for Region 6:
1. Amend the workplans and/or operating agreements for the
open CWTAP grants to include specific projects, schedules,
and dollar amounts.
2. Develop and implement a policy, similar to what is
contained in the Office of the Chief Financial Officer's 2007
EPA Policy for the U.S.-Mexico Border Program, which
specifies a process for taking corrective actions when projects
are delayed.
http://www.epa.gov/oig/reports/2008/20080623-08-P-0184.pdf
In the OIG report, EPA Should Continue Efforts to Reduce
Unliquidated Obligations in Brownfields Pilot Grants, we
found that EPA had not consistently implemented a national
policy or process that provides reasonable assurance that
Brownfields grant funds will be spent in a timely manner. EPA
Headquarters has not provided specific guidelines on when
grants should be terminated, nor has it defined inadequate
progress for grant performance. Regions have generally
allowed time extensions when grantees requested them. We
recommended that the Assistant Administrator for the Office
of Solid Waste and Emergency Response establish a process
for reviewing non-performing grants, and develop procedures
for terminating and deobligating funds from those grants. We
also recommended the term "insufficient progress" in relation
to the grant assessment; and regions deobligate remaining
funds for 21 grants that are scheduled to end by September 30,
2008. The Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080916-08-P-0265.pdf
In the OIG report, Followup on Information Concerning
Super fund Cooperative Agreements with New York and New
Jersey, we found that EPA Region 2 had deobligated $7.3
million from four of the six sites in New York and New Jersey
cited for cooperative agreements identified in an earlier report.
Remaining funds obligated for the Burnt Fly Bog, Combe Fill
South, and Syncon Resins agreements are expected to be used
for ongoing work at the sites. The amounts deobligated differ
from the amounts identified in our prior report because
additional funds were no longer needed for the Ellis Property
site agreement, and because New York made final drawdowns
on the New York Multi-Site agreement. Since the remaining
funds obligated under the agreements are expected to be used
for ongoing work, we are not requesting that EPA take
additional corrective actions at this time.
http://www.epa.gov/oig/reports/2008/20080304-08-2-0099.pdf
CONTRACTS
Performance Highlights
In the OIG report, EPA Can Improve the Awarding of
Noncompetitive Contracts, we found that EPA's most recent
competition report made several recommendations to
strengthen EPA's competition practices, and improve
compliance with the Federal Acquisition Regulation and EPA
policy. For example, we identified Justifications for Other than
Full and Open Competition (JOFOCs) that were not approved
at the appropriate level, including two of seven that were not
approved by the Competition Advocate. Eight of 15 JOFOCs
we reviewed were not prepared in accordance with federal
requirements. We also identified two noncompetitive
procurements in which market research could have been
improved. By increasing competition, the government saves
taxpayer money, improves contractor performance, and curbs
fraud. We recommended that the Assistant Administrator for
the Office of Administration and Resources Management:
Document in each contract file the circumstances why the
JOFOC was not approved at the appropriate level and the
corrective actions taken.
Revise the Approval Matrix in the Acquisition Handbook to
require that contracting staff one level above the
Contracting Officer review and approve all JOFOCs to
ensure they include required elements.
Ensure that internal controls designed to identify JOFOCs
for sole source procurements over $550,000 requiring the
Competition Advocate's approval are developed and
properly implemented.
The Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080630-08-P-0186.pdf
In the OIG report, EPA Should Further Limit Use of Cost-Plus-
Award-Fee (CPAF) Contracts, we found that EPA has paid
contractors nearly $16 million in award fees over the past 10
12
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years on the nine contracts reviewed. EPA has no assurance
that the use of CPAF contracts facilitates a higher level of
performance than other types of contracts. EPA CPAF
contracts generally contain performance indicators tied to the
Agency's mission. We found five contracts that contained a
base fee percentage higher than the 3 percent allowed. The
high base fees were provided because of a lack of knowledge
by EPA employees regarding the regulation and an oversight
by Headquarters. We recommended that EPA further limit the
use of CPAF contracts by revising the Contracts Management
Manual to require that a cost-benefit analysis be conducted
prior to awarding a CPAF contract. In instances when CPAF
contracts are used, we recommend that EPA better document
the basis for decisions to substantiate the performance ratings
given. EPA should also modify its contracts to bring them into
compliance with the EPA Acquisition Regulation to avoid the
future overpayment of base fees.
http://www.epa.gov/oig/reports/2008/20080226-08-P-0093.pdf
FORENSICS
Performance Highlights
In the OIG report, Response Action Claim No. 4, Submitted by
United Technologies Corporation and The Town of
Southington for the Old Southington Landfill Super fund Site,
Southington, Connecticut, we found that the claimed costs for a
Preauthorized Mixed Funding Claim were:
Related to tasks authorized in the Preliminary Decision
Document;
Supported by vendor invoices or other documentation
from the provider of services;
Paid by the claimant; and
Allowable, reasonable, and allocable in accordance with
provisions of Title 48, Code of Federal Regulations,
Subpart 31.2 - Contracts With Commercial Organizations.
We recommended that the EPA accept the claim as perfected
and reimburse the claimant.
In an OIG report on costs claimed by a Superfund Technical
Assistance and Response Team contractor, we found that:
The contractor improperly billed for labor costs of
employees who did not meet the minimum contract
requirements.
No subcontractor met the minimum contract requirements
for education and training.
The contractor billed for employees who were not
approved at the time the labor costs were incurred.
The contractor improperly billed for employees who did
not complete required Basic Incident Command System
Level 200 training.
Although our review only covered 1 year of the 5-year
contract, we found the Agency was billed $440,000 in
ineligible labor and subcontract costs.
FINANCIAL MANAGEMENT
Performance Highlights
In the OIG report, Agreed-Upon Procedures on EPA 's Fiscal
Year 2008 Third Quarter Financial Statements, we found that
the financial statements generated by the OIG:
Agreed with EPA's FY 2008 third quarter Financial
Statements for the Consolidated Balance Sheet,
Consolidated Statements of Net Cost and Changes in Net
Position, Combined Statement of Budgetary Resources
and Statement of Custodial Activity, Statement of
Changes in Net Position for Earmarked Funds, and
Consolidated Statement of Net Cost by Goal.
EPA's FY 2007 post-closing instructions do not agree
with EPA's Year End Closing Table and Treasury's
Closing Instructions.
The first, second, and the third quarter FY 2008 Report of
General Ledger Balance by Treasury Symbol beginning
balances were different for seven budgetary accounts. The
Agency stated these beginning balance changes were due
to the child agencies. The adjustments in accounts 4221
and 4251 are for the differences we found in the first
quarter stemming from the U.S. Department of Health and
Human Services. The other adjustments were to move
Child Trial Balances from reimbursable to direct.
Therefore, Total Obligations Incurred shows no activity
for unfilled customer orders. Other than line 3 (Budgetary
Authority) on the Combined Statement of Budgetary
Resources there is no financial statement impact.
As a result of our performance of the agreed-upon procedures,
no recommendations were made for this assignment.
http://www.epa.gov/oig/reports/2008/20080930-08-2-0309.pdf
In the OIG report, Follow-up on Audit of Undistributed Site
Costs Finds Corrective Actions Not Complete, we found that
EPA initiated some corrective actions in response to our prior
report on undistributed site costs, but did not complete them.
Also, EPA did not maintain accurate information in MATS.
Management control weaknesses contributed to a breakdown
in the audit follow-up process. EPA did not document formal
work assignments, monitor audit follow-up activities,
communicate follow-up status among program offices and
obtain follow-up agreements, and document work completion.
Since EPA did not complete the corrective actions, its financial
management and environmental protection efforts could be
impacted. We recommended that EPA make formal work
assignments, document the assignments, and hold assignees
accountable. EPA also needs to monitor audit follow-up
activity, communicate among program offices, document work
progress, and elevate future disagreements for resolution. We
also recommend that EPA resolve an interagency agreement
redistribution problem and redistribute interagency agreement
costs of $4.9 million, including $1.8 million in additional costs
recorded after May 12, 2006, and redistribute $2.8 million
cooperative agreement costs to the correct general and site
specific identifiers.
http://www.epa.gov/oig/reports/2008/20080825-08-P-0236.pdf
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In the OIG report, Fiscal Year 2007 and 2006 Financial
Statements for the Pesticides Reregistration and Expedited
Processing Fund (FIFRA), we rendered an unqualified opinion
on EPA's Pesticides Reregistration and Expedited Processing
Fund Financial Statements for Fiscal Years 2007 and 2006. We
recommended that the Assistant Administrator for Prevention,
Pesticides, and Toxics Substances, along with the Chief
Financial Officer, provide reliable information on
accomplishments for reregistration and amendment actions
under FIFRA Performance Measure Two. EPA did not have
effective controls to ensure data accuracy. The Agency agreed
with our findings and recommendations.
http://www.epa.gov/oig/reports/2008/20080708-08-l-0194.pdf
In the OIG report, Fiscal Year 2007 and 2006 Financial
Statements for the Pesticide Registration Fund (PRIA), we
rendered an unqualified opinion on EPA's Pesticide
Registration Fund Financial Statements for Fiscal Years 2007
and 2006, meaning that they were fairly presented and free of
material misstatement. The Agency was in substantial
compliance with the statutory decision time frames. We did
not note any instances involving operations that we consider to
be a significant deficiency or noncompliance issue. However,
we will continue to disclose a significant deficiency
concerning documentation of the current accounting system
and its automated application controls until EPA implements
the planned replacement automated accounting system.
http://www.epa.gov/oig/reports/2008/20080505-08-l-0149.pdf
In the OIG report, Audit of EPA 's Fiscal 2007 and 2006
(Restated) Consolidated Financial Statements, we rendered an
unqualified opinion on EPA's Consolidated Financial
Statements for FYs 2006 and 2007 (restated). We
recommended to the Office of Chief Financial Officer one
material weakness with EPA's Implementation of the
"Currently Not Collectible" policy for accounts receivable that
caused a Material Understatement of Asset Value and led to
the restatement of the FY 2006 financial statements. Further,
we noted the following six significant deficiencies:
EPA did not properly compute an allowance for doubtful
accounts.
EPA needs to improve internal controls in recording and
accounting for accounts receivable.
Key applications do not meet federal and EPA information
security requirements.
Access and security practices over critical information
technology assets need improvement.
EPA needs to improve controls over the Integrated
Financial Management System Suspense Table.
EPA did not maintain adequate documentation for
obligating accounting adjustments.
The Agency agreed with our findings and recommendations.
http://www.epa.gov/oig/reports/2008/20071115-08-l-0032.pdf
INFORMATION RESOURCES
MANAGEMENT
Performance Highlights
In the OIG report, Management of EPA Headquarters Internet
Protocol Addresses Needs Improvement, our contractor found
that EPA's Federal Information Security Management Act
(FISMA) processes used to assign and track IP addresses
within EPA Headquarters in Washington, DC, need
strengthening to enforce accountability. Vulnerability testing
of the EPA Headquarters network identified 391 Internet
Protocol (IP) addresses with high-risk and/or medium-risk
vulnerabilities. Although Enterprise Desktop Solutions
Division (EDSD) personnel conducted research to identify the
Program Offices responsible for the IP addresses, EDSD could
not identify the offices responsible for 273 of the IP addresses.
As a result, 18 high-risk vulnerabilities exist where the
responsible EPA offices could not be contacted to remediate
the risks. We recommended that EPA:
Take immediate action to address all identified network
security weaknesses and start risk mitigation actions to
reduce the risks from the remaining 18 unidentified IP
addresses.
Develop and implement procedures to document and keep
current a complete inventory of all IP addresses assigned
to EPA Headquarters.
Develop and implement a revised IP address allocation
scheme to assign entire IP address blocks to Program
Offices to eliminate fragmentation and improve security
administration.
Implement a process that augments the current
vulnerability testing process used to identify active
Headquarters IP address with the use of other network
monitoring tools.
Develop Plans of Actions and Milestones for each
recommendation.
http://www.epa.gov/oig/reports/2008/20080923-08-P-0273.pdf
In the OIG report, EPA Personnel Access and Security System
Would Benefit from Improved Project Management to Control
Costs and the Timeliness of Deliver ables, we found that EPA
has put into place processes to adequately justify costs of
projects identified in its IT investments portfolio. However, the
lack of key project management practices prevents it from
achieving many of the projected milestone and budget
estimates. In particular, EPA did not require the EPA
Personnel Access and Security System (EPASS) contractor to
follow Agency procedures for system development. Had EPA
implemented processes to mitigate many of the identified
system development weaknesses, it would have been better
able to anticipate and possibly avoid most of the additional
$983,216 in costs for EPASS. We recommended that the
Director of the Security Management Division, Office of
Administration, Office of Administration and Resources
Management:
Develop and maintain an EPASS System Management
Plan that includes the required Change Management and
information security documents.
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Appoint a certified EPASS Project Manager with authority
to oversee contractor work and ensure compliance with
EPA's System Life Cycle Management guidance.
Issue a memorandum to all EPASS Task Order Project
Officers that outlines and reinforces expectations for
complying with EPA invoice reviewing guidance.
Follow up with the Contracting Officer to ensure EPA
collects from the contractor the amount EPA overpaid for
billing rate errors in the contractor's invoices.
The Agency agreed with these recommendations.
http://www.epa.gov/oig/reports/2008/20080922-08-P-0271 .pdf
In the OIG report, Identification Proofing, Incident Handling,
and Badge Disposal Procedures Needed for EPA 's Smartcard
Program, we found that although EPA developed detailed
procedures to guide the EPASS staff's issuance of new
Smartcard identification (ID) badges, an employee error in
using the new ID card system resulted in an EPA employee
having ID documents and other identifying information
incorrectly associated with another EPA employee. Although
we did not discover more than one incident, we found that
EPA lacks procedures to ensure employees take steps to
correct similar incidents when they occur. We recommend that
the Director, Security Management Division, Office of
Administration and Resources Management:
Update existing identification card issuing procedures to
ensure the procedures include all mandatory steps.
Create incident-handling procedures to be used by EPASS
program staff when errors in the ID card issuing process
occur.
Create and implement procedures for proper handling and
disposal of defective ID badges.
The Agency agreed to implement our recommendations.
http://www.epa.gov/oig/reports/2008/20080916-08-P-0267.pdf
On behalf of the OIG, a contractor conducted the annual
FISMA audit of EPA. Vulnerability testing of the EPA
Headquarters network identified 391 Internet Protocol
addresses with high-risk and/or medium-risk vulnerabilities.
However, EPA's Enterprise Desktop Solutions Division could
not identify the offices responsible for 273 of the addresses.
EPA needs a process to track the assignment of Internet
Protocol addresses and to identify all active and assigned
addresses as reported in the annual required FISMA review.
http://www.epa.gov/oig/reports/2008/20080926-08-P-0280.pdf
INVESTIGATIONS
Performance Highlights
As a result of an OIG investigation, on May 28, 2008, a federal
jury found William C. Orr guilty of mail fraud, wire fraud, false
statements, and failure to file tax return charges. These charges
were related to defrauding investors and the U.S. Government
concerning Orr's proposed alternative fuel additive. Orr, of
Parker, Colorado, is the founder, President, and a member of the
Board of Directors for Octane International, Ltd. Sentencing is
pending in this matter. This case is being conducted with the
Internal Revenue Service Criminal Investigation Division and
the U.S. Postal Inspection Service.
JMJ Environmental, Inc., of Laurel Springs, New Jersey, as
well as its owner and a former employee of a prime contractor,
were charged and pled guilty in a bid-rigging scheme in
connection with subcontracts for wastewater treatment supplies
and services at two Superfund sites in New Jersey. On July 31,
2008, Bennett Environmental, Inc. (BEI), a Canadian
company, was also charged and pled guilty for its role in the
scheme. BEI defrauded EPA at the Federal Creosote site by
inflating the prices it charged to a prime contractor and paying
kickbacks to employees of that contractor from approximately
May 2002 until spring 2004. BEI was given confidential bid
information that it used to inflate invoices to cover almost $1.3
million in kickbacks to employees of the prime contractor in
exchange for their assistance in steering subcontracts to BEI.
The kickbacks were in the form of money wire transfers,
cruises for senior officials, various entertainment tickets, and
home entertainment electronics. As part of the fraudulent
scheme, BEI and its co-conspirators also included amounts
they kept for themselves in the inflated invoices. This case is
being conducted with the Internal Revenue Service Criminal
Investigation Division.
As a result of an OIG investigation, on August 14, 2008, two
U.S. Virgin Island government officials were sentenced to
prison in U.S. District Court for the District of the Virgin
Islands for their roles in a $1.4 million bribery and kickback
scheme. Both were found guilty on February 27, 2008,
following a 2-week jury trial. Dean C. Plaskett, the former
commissioner of U.S. Virgin Islands Department of Planning
and Natural Resources, and Marc A. Biggs, the former
commissioner of the Department of Property and Procurement,
were found guilty of demanding and accepting bribes and
kickbacks in connection with the award of a $650,000
government contract to a shell company. Plaskett was also
convicted of obstruction of justice stemming from his efforts to
conceal the scheme from federal and local investigators, as
well as a grand jury. Plaskett, was sentenced to 9 years in
prison to be followed by 3 years of probation. Biggs was
sentenced to 7 years in prison to be followed by 3 years of
probation. This investigation is being conducted with the
Federal Bureau of Investigation, the Internal Revenue Service
Criminal Investigation Division, the U.S. Postal Inspection
Service, and the Virgin Islands Office of Inspector General.
Stephanie Jackson, of Arlington, Texas, pled guilty in U.S.
District Court for the District of Massachusetts to 10 counts of
making false statements. Jackson was previously charged in June
2008. Jackson was employed with The Environmental Careers
Organization, Inc. (ECO). ECO placed Jackson in an internship
position with EPA in March 2006; however, EPA contacted
ECO within 2 weeks and requested that Jackson be replaced with
another intern. After she left her internship at EPA, Jackson
submitted forged timesheets to ECO, which subsequently
continued to pay Jackson a salary for approximately 1 year after
her internship had been terminated. Her salary was paid from
funds provided to ECO through an EPA grant. Jackson is
scheduled to be sentenced on December 3, 2008.
As a result of an OIG investigation, Stephen Francis, of
Lanham, Maryland, was convicted of theft and sentenced in the
District Court of Maryland for Montgomery County,
Maryland. Francis was sentenced to 18 months in jail, which
15
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the judge suspended to an 18-month supervised probation.
Francis was also ordered to pay a $300 fine and a $58 special
assessment. Francis used the stolen identity of an EPA
employee to establish cellular telephone service for five cell
phone accounts. During the investigation, the original cellular
service agreement was obtained and forwarded to the U.S.
Secret Service Forensics Laboratory for latent fingerprint
analysis. The fingerprints identified on the document were
used to identify Francis as the suspect in this case.
U.S. CHEMICAL SAFETY AND
HAZARD INVESTIGATION BOARD
Performance Highlights
In the OIG report, Evaluation of U.S. Chemical Safety and
Hazard Investigation Board's (CSB) Compliance with the
Federal Information Security Management Act and Efforts to
Protect Sensitive Agency Information (Fiscal Year 2007), our
contractor found that during Fiscal Year 2007, CSB continued
to make progress in improving the security of its information
system resources. CSB had done this by performing the
following:
Assigning a risk categorization to CSB's General Support
System in accordance with federal requirements,
Developing policies mandating the use of security
configuration checklists and updating them to contain
security configuration settings, and
Conducting contingency plan testing and an
e-authentication risk assessment.
We did find areas where CSB could continue to improve its
information security program. Specifically, the OIG
recommended that CSB (1) expand the security training to
include specialized, role-based training, (2) document the CSB
Breach Policy and related privacy information policies and
procedures to meet CSB needs and Office of Management and
Budget requirements, (3) update the CSB security policy and
associated procedures to address reviewing, approving, and
documenting non-standard security configurations, and
(4) update, as applicable, the appropriate security
documentation to ensure compliance with National Institute of
Standards and Technology Special Publication 800-53 controls
guidance.
http://www.epa.gov/oig/reports/2008/20080421-08-P-0134.pdf
In the OIG report, Evaluation of U.S. Chemical Safety and
Hazard Investigation Board's (CSB) Compliance with the
Federal Information Security Management Act and Efforts to
Protect Sensitive Agency Information (Fiscal Year 2008), our
contractor found that during FY 2008, CSB continued to make
significant progress in improving the security of its
information system resources. CSB had done this by
performing the following:
Expanding the security training to include specialized,
role-based training;
Implementing incident response training and testing and
issuing a Breach Policy; and
Benchmarking and utilizing government and industry best
practices and templates in updating the CSB Certification
and Accreditation documentation, including the System
Security Plan, the Risk Assessment, and the security test
controls.
We did find areas where CSB could continue to improve its
information security program; it should (1) insert the approved
security "banner" within all CSB database applications; (2)
continue to update the CSB Configuration Management policy
and associated procedures to address reviewing, approving,
and documenting non-standard security configurations to meet
the deadline established by CSB; (3) insert the approved
security "banner" within all CSB database applications; (4)
continue to update the CSB Configuration Management policy
and associated procedures to address reviewing, approving,
and documenting non-standard security configurations to meet
the deadline established by CSB; and (5) continue to update, as
applicable, the appropriate security documentation to ensure
compliance with National Institute of Standards and
Technology Special Publication 800-53 controls guidance and
update the security documents to include revision history
information such as date of revision, individual who updated
the document, and description of the revision.
http://www.epa.gov/oig/reports/2008/20080929-08-P-0295.pdf
OIG ENABLING SUPPORT PROGRAMS
The Immediate Office of the Inspector General
The Office of Planning, Analysis and Results*
The Office of Mission Systems*
The Office of Human Capital
The Office of Inspector General Counsel
The Office of Congressional and Public Liaison*
* also have mission product lines.
In early FY 2009, the Offices of Congressional and Public
Liaison, Human Capital, and Planning Analysis and Results
were consolidated into the Office of Congressional, Public
Affairs and Management.
Performance Highlights
OIG FY 2009 Annual Plan Designed to Address Agency
Risks: The OIG executed a planning process based upon the
Enterprise Risk Management Integrated Framework Model
developed by the Committee of Sponsoring Organizations of
the Treadway Commission. This resulted in the development
of an FY 2009 strategy and work plan that addresses EPA's
most significant environmental and management risks,
priorities, and challenges. The Plan is available at
http://www.epa.gov/oig/planning.htm. The planning process
included the updating of a comprehensive compendium of
risks, challenges, and opportunities for each Agency
management and media area, as well as regional cross-goal and
management issues. The plan lists assignments in progress
from FY 2008 for completion in FY 2009, along with required
assignments and those selected to start during the first half of
FY 2009, by product line. This plan, which also includes a
summary update on the OIG Strategic Plan, is designed to
adjust for new priorities and conditions while pursuing a
program of work that leverages the greatest return on
investment in terms of Agency improvements, performance,
and risk reduction.
16
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Legislation and Regulations Reviewed: The OIG analyzed
54 proposed changes to legislation, regulations, policy, and
procedures that could affect EPA and provided comments on
18 of those reviewed. Items on which the OIG made
significant recommendations include Strengthening
Transparency and Accountability in Federal Spending Act of
2008; Proposed EPA Order, Intelligence Operations; Proposed
Revision to EPA Order 1000.24, Management's Responsibility
for Internal Controls; and Proposed Resource Management
Directives System Chapter 2540-11, Property, Plant, &
Equipment (PP&E) Policy Standard and Technical
Interpretation.
OIG Audit Follow-up Strategy Demonstrating Results: The
OIG continued implementing a new audit follow-up strategy
for strengthening both the OIG's and Agency's attention to the
process for closing-out and completing agreed-to actions on
OIG recommendations. According to the Institute of Internal
Auditors, follow-up is a process by which "internal auditors
determine the adequacy, effectiveness, and timeliness of
actions taken by management on all reported audit findings."
OMB Circular A-50 notes that audit follow-up is a "shared
responsibility" between the audited and auditor entities. In
response to a December 2007 request by the House Committee
on Oversight and Government Reform, the OIG provided a
description of unimplemented recommendations in OIG
reports issued to EPA from January 2001 to December 2007
including specific information on each recommendation.
Additionally, the OIG issued a report to the Agency on March
31, 2008, http://www.epa.gov/oig/reports/2008/20080331-08-
P-0123-rv.pdf. comprising the same information as that
provided to the House Committee. To comply with the
Inspector General Act reporting requirements and to help EPA
managers gain greater awareness of outstanding commitments
for action, we have developed a "Compendium of
Unimplemented Recommendations"
http://www.epa.gov/oig/reports/2009/20081031-09-P-
0014.pdf. The list of OIG reports containing unimplemented
recommendations from the Compendium is on page 22 of this
report. OIG identification of unimplemented recommendations
has already yielded significant results. During the first half of
FY 2008, the OIG identified 65 unimplemented
recommendations. Of those 65 identified requiring action, 32
have since been implemented. Subsequently, 21 additional
unimplemented recommendations have been reported in the
Compendium, for a total of 86 unimplemented
recommendations identified during the fiscal year with several
others identified pending further review. Additionally, we
provided training to OIG staff on improving follow-up
procedures; and worked with EPA's Office of Chief Financial
Officer to revise an Agency policy making the review of open
recommendations a required element of EPA's Agency-wide
Federal Managers' Financial Integrity Act (FMFIA) and Office
of Management and Budget A-123 Internal Control process.
OIG Performs Internal Funds Control Review: The OIG
performed a comprehensive internal review of its funds control
program processes, to ensure that: (1) funds are used only for
authorized purposes, (2) funds are economically and efficiently
used, and (3) obligations and expenditures do not exceed the
amounts authorized and available. Our review of FY 2007
travel and non-purchase card requisitions greater than $500
indicated that 100 percent of the sampled transactions are
properly recorded and accounted. The review was performed
using the revised OMB Circular A-123 checklist, which we
have advocated for use within the Agency through our review
comments on Agency Policy Directives. Although no
problems were found, as a result of the review, we are updating
the OIG's Financial Management Policy to account for the
current management and oversight structure, and processes.
The OIG also reviewed the control over billing of Working
Capital Fund services and hand-held electronic devices. As a
result, the OIG implemented additional controls to save
potentially tens of thousands of dollars by identifying when the
Agency Working Capital Fund continues billing for services
after notification that staff members have left the OIG.
OIG TESTIMONY
Performance Highlights
Testimony on EPA's Role in Restoring the Chesapeake
Bay: On July 30, 2008, Wade Najjum, Assistant Inspector
General for Program Evaluation, testified before the House
Transportation and Infrastructure Subcommittee on Water
Resources and Environment during a hearing on protecting and
restoring the Chesapeake Bay. In response to a request from a
U.S. Senator from Maryland, the OIG issued four major
reports on the Chesapeake Bay Program's efforts in reducing
excess nutrients and sediments into the Bay. The OIG focused
on the key sources of nutrients and sediments: agriculture, air
deposition, developing land, and wastewater treatment
facilities. "In each area the OIG found that the Bay partners
had accomplished some noteworthy achievements, but
achieving the Chesapeake Bay water quality goals is in serious
jeopardy," Mr. Najjum testified. Moreover, he said, "the Bay
remains degraded and at the current rate of progress, the Bay
will remain impaired for decades."
Testimony on Investigation of EPA's Clean-up of Libby,
Montana, Superfund Site: On September 25, 2008, Stephen
Nesbitt, Assistant Inspector General for Investigations,
testified before the Senate Environment and Public Works
Committee on the OIG's investigation of EPA clean-up actions
at the Libby, Montana, Superfund site. The OIG initiated an
investigation in March 2006 in response to a misconduct
allegation raised by a former EPA lexicologist against a
contractor working in Libby. "While we determined this
allegation did not merit prosecution, witnesses and EPA
employees raised other allegations regarding EPA's clean-up
actions in Libby that we believed warranted our attention,"
said Mr. Nesbitt. After the hearing, a joint report was issued by
the Senate Committee on Environment and Public Works
majority staff and Sen. Max Baucus' staff entitled "EPA's
Failure to Declare a Public Health Emergency in Libby,
Montana," that detailed their own findings and conclusions
regarding EPA's decision not to declare a public health
emergency in Libby.
17
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OIG Reported Kev Aaencv Manaaement Challenaes
The Reports Consolidation Act of 2000 requires the OIG to report on the Agency's most serious management
and performance challenges, known as the Key Management Challenges. Management Challenges represent
vulnerabilities in program operations and their susceptibility to fraud, waste, abuse, or mismanagement. This
fiscal year, the OIG identified three new challenges. The Agency took sufficient action on three previous
challenges and they were removed from the list. The table below includes issues the OIG identified as Key
Management Challenges facing EPA and the relationship of the issues to the Agency's Strategic Plan and the
President's Management Agenda.
EPA's Top Major Management Challenges FY FY FY Linktopr^ident-s
r * w Link to EPA Management
Reported by the Office of Inspector General zoos 2007 2008 strategic Goal Agenda
Performance Measurement': E3A trust -COLS en the logic ard
GS sign c>f its measures for success and eff-ciercy. a.csig s^tn data
standards srd consistent definitions, to ersu'e list usable, aesu'ats
tir>ey. ana mean n-gTj information is Lisee Its e>/a uate and manage EPA
programs, ops rat-ens, process as. and results.
Meeting Homeland Security Requirements"; EPA needs to
ir-plenverl a strategy lo effective y eoo-d na's and address threats.
incfjoing de".'tlopirg a seer a no to idertfy resoles n*ecs, -rterial ard
exte'ra, scord natior points, aid respcrts b-e ana acseunta&ie enttes.
Threat and Risk Assessments: The Agency does not
comorenensr.'elji assess threat; to human wealth -arc the eivifcninenl
across redia tc ensure EPA's actions are plarnsd. coord na'ed,
cesignad aid budget-id to ("ostsfficisiritl'y ard effsot'/e y address
environment risks.. ~he frag men Wy rature of EPA's app'cacn
cort-rtjes as eiv rormertal aws often focjs or s-irg^e ned a or fhr-^ais.
EPA's Organization and Infrastructure"": E=A ma'T.airs 234
off ces aid laboratores- n 144 o-;atons wth ov«-r "S,3C'C staf meiib-e'"s
'.Vith di-rihisimg resoorces. che autonomous- nature of regional and local
off C&E. ana tie g'owiTg p'eEsure to sxpaid its ro!= global ty. EPA will se
challergsd ts assess the efficiency 3rd effest-v*en=ss of its cijn'ei:
5:rj<:iur« ts denttfy cpoonuriiies ID' cotsoi dating ana recucirg costs.
Water and Wastewater Infrastructufe: Drink ng water ard
wsst^nviter treatmert systsins are vyeanig out and it w. 11 tske luge
investments :a repiace repj'-r and COP struct facilities.
Oversight of Delegations to States; * imnie^sntng EPA s
programs, erfc'cemert o~ Ussfs anc 'egjiatiors. ano report rg or
program per'c-n--a-i<;= has to a :a"ge s*:e-nt been del&ga.ed to States
and :rbss »-th E=A r«ta n ng overs git responsibility, -foweve',
incorsis:«nt capacity and ntenpretai.oi of 'e-sponsisility ^mong State,
loc^il arid triDal er tiles lip'its s ocou liability ":or ard co^-p i^rcFS with
env rormenta p'ograins and laws.
Chesapeake Bay Program: Afte- 20 years of ef-ir by feaeral.
State, aid loaal governinerts, Bsy waters reiiair degr^oed ard
rsqLirsc njtrsnt and secimert recuct cis will net ae net h-y tne- 2310
targel. EPA n^eds to institute -nanagennsrt santrois ensunng that
jdticns to manage i^nc -develop-mert, agrsuitjra -uno^ njTsnt
rteiLct on te-chnoloQy. and air emissions afe imp sine-ntec, snc tnat
corsistent s-aurdss of fur-eiog are idertfied ay EFA parti^rs.
Voluntary Proflrarns - Update""": E3A must ensjre th^t
apolyirg voi jr.wy app^sacnes a-io inrei/auvs or aN-mst ve pr3stses to
provide f esifcle ao'laboratve, ard rra'ket-cirven s-sljtiors fo*
measurable results are marageo us Tig standards, cor sister t
processes aid veritable cats tc ersu'etist p'c-graiis are effi cienfl y
and effective y p^c'/icirg nterd-sd and ci3irn^c snvironrtental ten^flTS
»
*
*
Cnsss-Gca
Cross-G 23
Cross-Goal
Crcs-s- 3oa
3oal 2
'3oal 4
3oal c
Goal I
3oal 4
Cross-Goal
Perf-s--nar-;e
iTiprovemsrit,
E-Cov
PerforTiarce
Improvement,
Psrf-3-Tijroe
Improvement.
PerforTiarse
Improvement,
Fin anc 3
=er"cTr-anc-=-
Hjr-an Capital
Perfomar ;e
Improvement.
Perfo-'^ar oe
Improvement,
PsrforTiarce
Improvement.
Performarse
Improvement,
" Fv" 2304 and ZX'C Worts.rg ^e atciships wlh the St^ies ar-.a Liih n-g Mission ts Managemert were consol dat&c nto
Msn^girg for ^eEtilts. -Y' HC3S 3rd ^V 2C3T Va^dgirg '"or Resute anc Data Sips wer= merged irto
^er'oifaics Management
" F'-1' 233c: and 2G3T tiled Agenoy Effoirts n Supootl of Homtland Secur be
'" F"-' 233T th:s took was n elude in Wc'kforee Flan^lng and in FV CIDOc aid 2306 r t-i,rnar Cap tai Maragement
"" F'1-' 2235 aid 2337 Voluntary =rograms inoludeo Alterrat'/e ana lirovatve Pra-st-ces ana Prcgfarns
Data Cualty, Emiss-ie-n = actors for Sources of A r F'e-llution, =rv'acy Program, ard Womfone =larnrig Deponed as -,ey
Management Cnallsnge in EY 2C33 3rd 2C3~ were reaonec -as Internal Centra \Veakress ir FY 20CS
18
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OIG Management Challenges
In FY 2008, for the ninth straight year, the OIG reported no material weaknesses under the Federal Managers'
Financial Integrity Act. Further, the OIG continues to make progress in addressing reported OIG-level
weaknesses. One of the weaknesses identified in FYs 2006 and 2007 was not fully resolved in FY 2008 because of
its complexity, although significant progress was made.
OIG - Level Weakness
2006
2007
Information Technology
Product Timeliness and Quality
Follow-up on Corrective Actions
Data Quality
Office Security - Controls Over Equipment
Communication Equipment and Accuracy of Working Capital Fund Charges
Freedom of Information Act Requests
Staffing
Organizational Structure
The OIG took the following steps to assess and improve management controls:
Scored specific quality characteristics of all reports issued by the OIG during FY 2008;
Revised the Project Management Handbook;
* Developed or updated policies and procedures on funds control, communications devices, data quality, and
personal property inventory;
Prepared the February 2008 report entitled Measuring the Quality of Inspector General Reports that
highlighted areas for improvement;
Revised the OIG Inventory Accountability Tracking System to better track the distribution and status of IT
property;
Assigned and provided training to Property Custodial Officers in headquarters and each field office;
Coordinated and implemented planning, measuring, evaluating, and reporting under GPRA, FMFIA, and the
Inspector General Act, as well as requirements of the President's Council on Integrity and Efficiency (PCIE);
Analyzed all Special Agents' compliance with the requirements of Law Enforcement Availability Pay for
FY 2007;
Reviewed and commented on 55 regulatory and policy issues and Agency directives;
Completed a data integrity review of information that had been entered into The Inspector General Enterprise
Resource (TIGER) system;
Reviewed Working Capital Fund billings and canceled charged services for departed staff members;
Produced the OIG FY 2007 Annual Performance Report in January 2008;
Continued the OIG FMFIA internal control review and corrective action reporting process;
Provided instructors for PCIE Introductory Audit Classes (nearly 200 students) to develop individuals to
perform at the highest levels of professionalism;
Conducted reviews of invoices and usage logs for Office of Investigation's contracts with ChoicePoint and
Dun and Bradstreet to ensure appropriate usage and billing;
Ensured all OIG employees completed annual Security Awareness Training and Hatch Act Training;
Developed a follow-up work plan to analyze and report on EPA's progress and results in implementing OIG
recommendations;
Revised policies on the OIG Review of Regulations and Agency Directives, Software Management and Piracy
Policy, Student Loan Repayment Program, Career Ladder Promotion Policy, Law Enforcement Availability
Pay, Law Enforcement Vehicles, and Safety Incident Review Board;
* Conducted an Annual Work Planning Process and issued an Annual Assignment Plan based on assessing
Agency risks and outreach;
Conducted a comprehensive inventory review of OIG handheld communication devices;
Initiated financial controls for review of OIG contracts by the contract specialist and Senior Resource Official;
Conducted a comprehensive review of the OIG Purchase Card Program.
19
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OIG FY 2008 Profile of Activities and Results
Audit/ Evaluation Activity and Agency Action
Reports Issued
Reviews performed by OIG
Reviews by another Federal Agency
Single Audit Reviews
TOTAL Reports
Monetary Results (in millions)
* Questioned costs
Questioned costs form DCAA/OIG coordinated
* Cost efficiencies
Cosf efficiencies from DCAA/OIG coordinated
* Costs sustained (from current and prior periods)
Reports resolved (from current and prior periods)
Agency recoveries (from current and prior periods)
*lncludes $1.3 M in efficiencies identified and sustained
prior to report completion - not in the resolution process.
Audit Resolution (Dollars in Millions)
Recommendations as Costs
With no management decision start
FY 2008 (67)
Issued in FY 2008 (92)
Total inventory
Agreed to/sustained by management
or value of nonawards (not including
prior to issuance) (67)
Not agreed/sustained to by
management (42)
With no management decision,
end FY 2007 (131)
Percent of total costs agreed to by mgmt.
Total audits with no Federal actions as
of 9/30/08 which are over 365 days
past issuance date: 74 reports
o Program 34
o Assist Agreemt 23
o Contract 0
o Single Audits 16
o Financial Statement 1
Reports with costs for which no
management decision was made
within 6 months of issuance at 9/30/08:
1 9 reports.
Reports resolved: 103
Questioned
$57.8
$13.9
$71.7
$16.3
$36.7
$18.7
52%
$16.4
57
163
84
304
$13.9
$5.6
*$79.7
$2.2
*$38.2
103
$9.8
Efficiencies
$14.5
$79.7
$94.2
$22.5
$19.1
$52.6
24%
$1.5
Investigative Activity
Investigations opened
Investigations closed
Pending investigations as of
9/30/08
Indictments persons/firms
Convictions persons/firms
Administrative actions: EPA
employees/firms
Civil judgments
Fines and recoveries (in millions)
Prison time in months
Suspended time in months.
Probation in months
Community service in hours
49
65
95
21
18
42
3
$3.7
251
18
558
280
Other
Hotline complaints received
Hotline complaints opened
Hotline complaints closed
Public inquiries addressed
without opening complaint
Referrals to other offices
Legislative/regulatory/policy
items reviewed
838
2
8
182
647
54
20
-------
OIG FY 2008 Audit, Inspection, and Evaluation Report
A. Audits with management decisions but
without final action at the beginning of the period
B. Audits for which management decisions were
made during the period
(i) Management decisions with disallowed costs
(56)
(ii) Management decisions with no disallowed
costs (95)
67 $63,555,893
151 $ 15,697,008
7 $ 95,477,000
6 $ 21,228,301
C. Total audits pending final action during the
period (A+B)
D. Final action taken during the period:
(i) Recoveries
a) Offsets
b) Collection
c) Value of Property
d) Other
(ii) Write-Offs
(iii) Reinstated Through Grantee Appeal
(iv) Value of recommendations completed
(v) Value of recommendations management
decided should/could not be completed
E. Audits without final action at end of period
(C-D)
218 $79,252,901
159 $ 5,537,144
$ 233,935
$ 1,405,776
$ 0
$ 1,390,746
$ 1,553,210
$ 953,477
59 $73,715,757
13 $116,705,301
4 $ 2,683,900
$ 68
$ 2,683,832
9 $114,021,401
EPA's FY 2008 management activities for audits without dollars are summarized below:
Final Corrective Action Not Taken. Of the 384 audits that EPA tracked, a total of 215
auditswhich include program evaluation/program performance, assistance agreement,
contracts, and single auditswere without final action and not yet fully resolved at the end
of FY 2008. (The 27 audits with management decisions under administrative appeal by the
grantee are not included in the 215 total; see discussion below.)
Final Corrective Action Not Taken Beyond 1 Year. Of the 215 audits, EPA officials had
not completed final action on 47 audits within 1 year after the management decision (the
point at which the Office of Inspector General and the Action Official reach agreement on
the corrective action plan). Because the issues to be addressed may be complex, Agency
managers often require more than 1 year after management decisions are reached with the
Office of Inspector General to complete the agreed-upon corrective actions. These audits
are listed below by categoryaudits of program performance and single auditsand
identified by title and responsible office. Additional details are available on EPA's Web site
at www.epa.gov/ocfo/par/2008par.
21
-------
OIG Reports with Unimplemented Recommendations by Program Office
(as of September 30, 2008)
Office of Air and Radiation
2007-P-00028, ENERGY STAR Program Can Strengthen Controls Protecting the Integrity of the Label
2005-P -00010, Substantial Changes Needed in Implementation and Oversight of Title V Permits If Program Goals
Are to Be Fully Realized
Office of Administration and Resources Management
08-P-0093, EPA Should Further Limit Use of Cost-Plus-Award-Fee Contracts
Office of the Chief Financial Officer
08-1-0032, Audit of EPA 's Fiscal 2007 and 2006 (Restated) Consolidated Financial Statements
2006-P-00027, EPA Could Improve Its Redistribution ofSuperfund Payments to Specific Sites
Office of Enforcement and Compliance Assurance
2007-P-00026, EPA Needs to Take More Action in Implementing Alternative Approaches to Superfund Cleanups
2005-P-00024, Limited Knowledge of the Universe of Regulated Entities Impedes EPA 's Ability to Demonstrate
Changes in Regulatory Compliance
2001-P-00013, State Enforcement of Clean Water Act Dischargers Can Be More Effective
Office of Environmental Information
2007-P-00035, EPA Needs to Strengthen Its Privacy Program Management Controls
2007-P-00008, EPA Could Improve Controls Over Mainframe System Software
2007-P-00007, EPA Could Improve Processes for Managing Contractor Systems and Reporting Incidents
Office of Policy, Economics, and Innovation
2007-P-00013, Performance Track Could Improve Program Design and Management to Ensure Value
2006-P-00001, Rulemaking on Solvent-Contaminated Industrial Wipes
Office of Prevention. Pesticides, and Toxic Substances
2006-P-00009, Opportunities to Improve Data Quality and Children's Health through the Food Quality
Protection Act
Office of Solid Waste and Emergency Response
2007-P-00026, EPA Needs to Take More Action in Implementing Alternative Approaches to Superfund Cleanups
2006-P-00038, Existing Contracts Enabled EPA to Quickly Respond to Hurricane Katrina; Future Improvement
Opportunities Exist
2006-P-00016, EPA Can Better Implement Its Strategy for Managing Contaminated Sediments
2006-P-00013, EPA Can Better Manage Superfund Resources
2003-P-00012, EPA 's Response to the World Trade Center Collapse: Challenges, Successes, and Areas for
Improvement
Office of Water
2007-P-00025, EPA Can Improve Its Oversight of Audit Follow-up
2006-P-00016, EPA Can Better Implement Its Strategy for Managing Contaminated Sediments
2004-P-00030, EPA Needs to Reinforce Its National Pretreatment Program
22
-------
OIG FY 2008 Budget and Resource Analysis Use and Allocation
OIG Budget Boost Initiates Staffing Increases - But Progress in Staffing is Slow
In December 2007, Congress provided the EPA OIG with a needed but unanticipated continuing resolution
budget funding level that was above both the FY 2007 enacted level and $7.4 million over the FY 2008
President's Budget level. In accordance with a congressional directive pertaining to the Consolidated
Appropriations Act for 2008, the OIG commenced a hiring initiative to increase its staffing level to that of
prior years, consistent with the available funds.
Difficulties with the hiring process hindered the OIG's efforts to increase its staffing level as quickly as
anticipated. However, the OIG was able to hire 35 new employees during FY 2008, and an additional 41
staffing actions were in various stages of the recruitment and selection process at the end of the fiscal year.
Below is a summary of the OIG actual and projected resource levels/expenditures for FYs 2000 though 2009.
The lag in the hiring process created a gap between funding and staffing levels. The OIG partially
compensated for the gap in specialized skills by contracting and entering into interagency agreements for
specialty evaluative services. Additionally, FY 2008 funds planned for the unfulfilled staffing level were
carried over into 2009. The OIG will use these carryover funds, in addition to new FY 2009 funding, to
support increased staffing levels as much as possible.
Historical Budget and Manpower Summary
Fiscal Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Enacted Budget
(after rescissions
where applicable)
$43,379,700
$45,493,700
$45,886,000
$48,425,200
$50,422,800
$50,542,400
$50,241,000
$50,459,000
$52,585,000
$52,585,000*
On-Board Staff
(as of October 1)
340
351
354
348
363
365
350
326
290
304
Expenditures
(includes carryover)
$39,384,100
$41,050,807
$45,238,608
$46,023,048
$52,212,862
$61,733,781
$49,583,584
$48,658,217
$52,231,690
$56,362,400**
* H.R. 2638, the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009
** Projected
23
-------
Resource Usage by Appropriation
FY 2007 Appropriation - Final Utilization Rate
Account
$ Appropriation Available $ Appropriation Used % $ Appropriation Used
Management
Superfund
TOTAL
$37,111,000
13.336.853
$50,447,853
$37,052,680
13.3193.951
$50,372,631
FY 2008 Appropriation Usage
Account $ Appropriation Available $ Appropriation Used
99.8%
99.9%
99.9%
% $ Appropriation Used
Management
Superfund
TOTAL
$41,035,000
11.485.979
$52,520,979
$36,324,538
10.450.099
$46,774,637
88.5%
91.0%
89.1%
FY 2008 FTE Usage
Account
Management
Superfund
TOTAL
FY 08 FTE Available
259.8
72.0
331.8
FY 07 FTE Used
225.1
62.7
287.8
% FTE Budget Used
86.6%
87.1%
86.7%
*FY 2007 funds were available through FY 2008 **Unused FY 2008 funds are available through FY 2009
FY 2008 Funds Used (FY 07 Carryover and FY 08 Appropriation) By Object Class: $51.628.082
Contracts
$7,651,073
Expenses
$1,771,634
I
WCF
$3,000,000
Grants
$73,951
Travel
$1,711,566
FY 2008 FTEs Used By Component: Total 287.8
Awards
$575,559
Salaries
$36,844,299
Immediate IG
4.3
Investigations
49.4
Program Evaluation
70.5
Planning, Analysis
& Results
11.3
Congressional
& PublicLiaison
20.5
Human Capital
Mission Systems 6.2
39.5
24
-------
OIG Financial Analysis of FY 2008 OIG Fund Use and Carryover Balances
MANAGEMENT
PC&B
Travel
Expenses
Contracts
WCF
Grants
Total Management
SUPERFUND
PC&B
Travel
Site Travel
Expenses
Contracts
WCF
Grants
FY07
Carryover
Available in 08
$1,862,471
474,477
443,206
864,743
0
46.387
$3,691,284
46
FY07
Carryover
Available in 08
$757,106
57,294
0
234,796
164,673
0
23,514
FY07
Carryover
Used in 08
$1,818,658
473,323
439,752
854,844
0
$3,632,964
,387
FY07
Carryover
Used in 08
$749,792
55,084
0
232,523
159,568
0
FY07
Lapsed
Funds
$43,813
1,154
3,454
9,899
0
0
$58,320
FY07
Lapsed
Funds
$7,314
2,210
0
2,273
5,105
0
0
FY08
Appropriation
$30,410,780
2,037,000
929,220
5,309,000
2,345,000
4,000
$41,035,000
FY08
Appropriation
$8,469,060
572,000
0
249,940
1,538,900
655,000
1,079
FY 08 Funds
Used in 08
$27,023,425
933,323
869,173
5,150,377
2,345,000
$36,324,538
3,240
FY 08 Funds
Used in 08
$7,827,983
249,836
0
230,186
1,486,284
655,000
Total Cost
of FY 08
Operations
$28,842,083
1,406,646
1,308,925
6,005,221
2,345,000
49,627
$39,957,502
Total Cost
of FY 08
Operations
$8,577,775
304,920
0
462,709
1,645,852
655,000
24,324
FY08
Carryover
Available in 09
$3,387,355
1,103,677
60,047
158,623
0
760
$4,710,462
FY08
Carryover
Available in 09
$641 ,077
322,164
0
19,754
52,616
0
269
Total Superfund
Total Management
and Superfund
$1,237,383 $1,220,481
23,514
$4,928,667 $4,853,445
$16,902 $11,485,979
$10,450,099
$11,670,580
$75,222 $52,520,979 810 $46,774,637 $51,628,082
$1,035,880
$5,746,342
25
-------
Historic Planned versus Actual Resources and Results FYs 2005 to 2009
FY2005 FY2006 FY 2007 FY 2008 FY 2009
OIG Appropriation:
Enacted
Used
FTE
Authorized
Used
$50,542,400
$61,733,781
368.0
358.0
$50,241,000
$49,583,584
361.8
337.1
$50,509,000
$48,752,387
361.8
308.1
$52,585,000
$51,628,082
331.8
287.8
$52,521,000
TBD
340
TDB
Annual Performance
Measures Supporting Indicators Target Actual Target Actual Target Actual Target Actual Targets
Environmental and Business
Actions Taken for Improved
Performance from OIG Work
(outcomes)
Environmental and Business
Recommendations or Risks
Identified for Corrective Action
by OIG Work
(outputs)
Potential Monetary Return on
Investment in the OIG, as a
Percentage of the OIG Budget
(in millions)
Criminal, Civil, Administrative
and Fraud Prevention Actions
Taken from OIG Work
Activity
o Policy, process, practice or control
changes implemented
o Environmental or operational risks
reduced or eliminated
o Critical congressional or public
concerns resolved
o Certifications, verification, or analysis
for decision or assurance
o Recommendations or best practices
identified for implementation
o Risks or new management
challenges identified for action
o Critical congressional/public actions
addressed or referred for action
o Recommended questioned costs
o Recommended cost efficiencies and
savings
o Fines, penalties, settlements,
restitutions
o Criminal convictions
o Indictments/Informations
o Civil judgments
o Administrative actions (staff actions
and suspension or debarments)
o Audit/Evaluation Reports Issued
288
895
150%
$75.8
80
794
1231
285%
$144
125
65
303
925
150%
$73.5
80
407
1024
1600%
$809.6
121
65
318
925
150%
75.7
80
464
949
189%
$95.2
103
71
334
971
150%
$78.5
80
463
624
186%
$97.3
84
57
334
971
120%
$63
(without
DCAA work)
80
All targets are set, consistent with relative changes in funding. Outputs change in nearly direct proportion, while outcomes are further adjusted for growth because a lag
generally occurs between all previous outputs (recommendations) before they come to fruition as outcomes (action on recommendations).
26
-------
OIG Data Verification and Validation
Performance Database: The OIG Performance Measurement and Results System captures and aggregates
information on an array of measures in a logic model format, linking immediate outputs with long-term
intermediate outcomes and results. OIG performance measures are designed to demonstrate value added by
promoting economy, efficiency, and effectiveness; and preventing and detecting fraud, waste, and abuse as
described by the Inspector General Act of 1978 (as amended). Because intermediate and long-term results
may not be realized for several years, only verifiable results are reported in the year completed.
Data Source: Designated OIG staff enter data into the systems. Data are from OIG performance
evaluations, audits, research, court records, EPA documents, data systems, and reports that track
environmental and management actions or improvements made and risks reduced or avoided. OIG also
collects independent data from EPA's partners and stakeholders.
Methods, Assumptions, and Suitability: OIG performance results are a chain of linked events, starting with
OIG outputs leading to subsequent actions taken by EPA or its stakeholders/partners reported as intermediate
outcomes to improve operational efficiency and environmental program delivery. The resulting
improvements in operational efficiency, risks reduced/eliminated, and conditions of environmental and
human health are reported as outcomes. The OIG can only control its outputs, and has no authority, beyond
its influence, to implement its recommendations that lead to environmental and management outcomes.
Quality Assurance/Quality Control Procedures: All performance data submitted to the database require at
least one verifiable source assuring data accuracy and reliability. Data quality assurance and control are
performed as an extension of OIG products and services, subject to rigorous compliance with the Government
Auditing Standards of the Comptroller General Government Auditing Standards (2003 Revision),
Government Accountability Office, GAO-07-731G, July 2007; available on the Internet at
www.gao.gov/govaud/vbkO 1 .htm, and regularly reviewed by an independent OIG Quality Assessment
Review Team, and external independent peer reviews. Each Assistant Inspector General certifies the
completeness and accuracy of his or her respective performance data. Additionally, the EPA OIG earned a
"clean" or unmodified opinion in FY 2007 through a rigorous peer review performed the previous year.
Data Limitations: All OIG staff are responsible for data accuracy in their products and services. However,
a possibility of incomplete, miscoded, or missing data in the system could exist due to human error or time
lags. Data supporting achievement of results are often from indirect or external sources, with their own
methods or standards for data verification/validation.
Error Estimate: The error rate for outputs is estimated at +1-2%, while the error rate for outcomes is
presumably greater because of the longer period needed for realizing results and difficulty in verifying a
nexus between our work and subsequent impacts beyond our control. Errors tend to be those of omission.
27
-------
Listing of OIG Reports, Timeliness, and Costs
Report Calendar Days Staff
Number Report Name in Production Days Total Cost
2008-P-0020
2008-P-0049
2008-P-0055
2008-P-0080
2008-P-0083
2008-P-0093
2008-P-0102
2008-P-0116
2008-P-0120
2008-P-0121
2008-P-0123
2008-2-0039
2008-2-0045
2008-2-0062
2008-2-0084
2008-2-0095
2008-2-0099
2008-1-0032
2008-P-0134
2008-P-0141
2008-P-0169
2008-P-0174
MACT Implementation Progress and Challenges
Chesapeake Bay Point Sources
Emergency Response Business Plan
Follow-up Process for Air Evaluation Reports
Tribal Capacity for Indian General Assistance Program
Use of Cost-Plus-Award-Fee Contracts
Utilization of Superfund Special Accounts - Region 8
Recovery of Superfund Expenditures
Summary Assessment of EPA Drinking Water Program
U.S. Mexico Border Water Projects Grant Program
Congressionally Requested Report on OIG Unimplemented
Recommendations
Village of Laurelville, Ohio
Wayne County, New York
City of Elizabeth, New Jersey
Borough of Carteret, New Jersey
City of Bad Axe, Michigan
New York/New Jersey Cooperative Agreement Follow-up
Audit of EPA's FY 2007 & 2006 (Restated) Financial
Statements
FY2007 FISMA Review of Chemical Safety Board
Tracking Compliance with Superfund Clean-up
Requirements
Management of the National Priorities List
Efforts to Address Indoor Risks from Radon
807
394
232
87
199
196
335
351
178
230
115
45
128
85
120
59
184
196
N/A
567
606
416
1,661
744
181
180
566
421
1,164
621
352
504
4
99
53
46
63
85
65
3,213
6
414
1,252
800
$1,298,318
$585,776
$142,745
$146,335
$472,195
$351 ,224
$920,174
$490,359
$278,133
$420,146
$2,898
$82,861
$44,093
$38,680
$52,452
$71 ,027
$54,643
$2,833,000
$4,362
$326,997
$987,507
$634,369
28
-------
Report Calendar Days Staff
Number Report Name in Production Days Total Cost
2008-P-0184
2008-P-0186
2008-P-0196
2008-P-0199
2008-P-0200
2008-P-0206
2008-P-0213
2008-P-0235
2008-P-0236
2008-P-0245
08-P-0264
08-P-0265
08-P-0266
08-P-0267
08-P-0271
08-P-0273
08-P-0276
08-P-0278
08-P-0280
08-P-0290
08-P-0291
08-P-0295
08-1-0277
08-2-0204
08-2-0226
Assistance Agreements - Colonias Water Grants Region 6
Award of Noncompetitive Contracts
Making Better Use of Stringfellow Superfund Special
Accounts
EPA Needs to Better Report Chesapeake Bay Challenges
Follow-up at Escambia Treating Company Superfund Site
Voluntary Greenhouse Gas Reduction Programs
Oglala Sioux Single Audits
EPA Decisions to Delete Superfund Sites
Follow-up on Audit of Undistributed Site
Border 201 2 Program
Follow-up at Stauffer Chemical Company Superfund Site
Unliquidated Obligations in Brownfields Pilot Grants
Assisting Tribal Water Systems
Procedures for EPA's Smartcard Program
EPA Personnel Access and Security System
Management of EPA Headquarters Internet Protocol
EPA Actions Should Lead to Improve Grants Accountability
Strategic Planning for Priority Enforcement Areas
Fiscal Year 2008 FISMA Report
Techniques for State Monitoring of Revolving Funds
Region 5 Penalty Reduction
FY2008 FISMA Review of Chemical Safety Board
National Caucus and Center on Black Aged Incurred Costs
Village of Wellsville, Ohio-Grant XP97582801
Passaic Valley (New Jersey) Sewerage Commissioners-
Grant XP98237601
190
232
272
399
161
170
183
618
105
299
291
171
351
82
354
*
185
267
N/A
N/A
N/A
N/A
86
94
79
109
378
1094
348
188
569
99
757
159
561
192
269
1,058
154
463
*
236
663
99
N/A
N/A
N/A
144
153
84
$91 ,002
$314,750
$865,000
$275,466
$162,970
$449,866
$84,208
$809,869
$132,371
$443,684
$165,151
$231,917
$836,663
$120,932
$392,376
*
$200,353
$528,717
$388,135
$95,076
$6,224
$123,370
$130,586
$73,519
29
-------
Report Calendar Days Staff
Number Report Name in Production Days Total Cost
08-4-0156
08-1-0149
08-1-0194
08-2-0142
08-2-0241
08-2-0309
08-4-0143
08-4-0146
08-4-0154
08-4-0270
Assistance Agreements - Canaan Valley Institute
2007 PRIA Financial Statements
2007 FIFRA Financial Statements
Agreed Upon Procedures - FY 2008 1st Qtr Fin. Statements
Agreed Upon Procedures - FY 2008 2nd Qtr Fin. Statements
Agreed Upon Procedures - FY 2008 3rd Qtr Fin. Statements
Tech Law Labor Charges
Cambridge Labor Charging Verification Review
Tetra Tech Charging Verification Review
Final Mixed Funding Claim
226
109
161
30
53
48
79
86
171
162
448
211
275
158
36
21
57
66
168
43
$373,397
$175,830
$228,642
$131,492
$29,973
$17,484
$47,456
$54,855
$140,018
$35,384
' Costs and staff days of this report are included in those for report 08-P-0280
Comparison of Production Statistics FYs 2004 to 2008
Total Number of Reports
Avg. Calendar Days Elapsed
Avg. Staff Days Charged
Avg. Loaded Cost.
FY 2004
57
351**
341**
$259,357**
FY 2005
65
380**
331**
$257,056**
FY 2006
65
288**
278.3**
$231,005**
FY 2007
71 (net)
383**
297**
$239,215**
FY 2008
57
221**
337**
$282,946**
** Not including Financial Statement Audit
30
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