U.S. Environmental Protection Agency
                   Office of Inspector General

                   At  a  Glance
                                                             08-P-0236
                                                        August 25, 2008
                                                                 Catalyst for Improving the Environment

Why We Did This Review

We sought to determine
(1) the status of corrective
actions taken in response to an
Office of Inspector General
report, EPA  Could Improve Its
Redistribution of Superfund
Payments to Specific Sites,
issued in July 2006; and
(2) whether the Action
Official sufficiently
documented and certified the
corrective actions.

Background

I Audit follow-up is essential to
good management and
improving the efficiency and
effectiveness of U.S.
Environmental Protection
Agency (EPA) programs and
operations. EPA has audit
follow-up procedures and
designated officials who
I manage this process. EPA
Manual 2750 requires EPA to
form a corrective action plan
and complete the actions by
the agreed upon milestone
dates. In our prior report, we
noted that EPA did not timely
redistribute Superfund
payments from a general site
identifier to specific sites.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.

To view the full report,
click on the following link:
www.epa.qov/oiq/reports/2008/
20080825-08-P-0236.pdf
Follow-up on Audit of Undistributed Site  Costs
Finds Corrective Actions Not Complete
 What We Found
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 the Management Audit Tracking System.

Management control weaknesses contributed to a breakdown in the audit follow-
up process. EPA did not document formal work assignments for audit follow-up
and maintain accountability. EPA did not consistently monitor audit follow-up
activities, communicate follow-up status among program offices and obtain
follow-up agreements, and document work completion. The policies and
procedures in EPA Manual 2750 are the design framework for EPA's internal
controls over the audit follow-up process.  Since EPA did not complete the
corrective actions, its financial management and environmental protection efforts
could be impacted. Superfund costs not redistributed appropriately from a general
site identifier to specific sites may not be considered in settlement negotiations
and oversight billings.  Consequently, these funds may not be recovered from
responsible parties and be  available for future site clean-up activities.

Because EPA did not complete the corrective actions, we could not fully address
our second audit follow-up objective, which was to determine whether the Action
Official sufficiently documented the corrective actions and certified them, as
required by EPA Manual 2750.
 What We Recommend
We recommend 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.  Further, we 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. In response to
the draft report, EPA agreed with all our recommendations and its proposed
corrective actions should address our recommendations.

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