EPA-350-R-06-006
December 2006
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OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Annual Performance Report
Fiscal Year 2006
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This report was produced by the EPA Office of Inspector General,
Office of Planning, Analysis, and Results
(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 Public Liaison Hotline:
OIG Hotline@epa.gov
1-888-546-8740
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Foreword and Overview
I am pleased to present the fifth Annual Performance Report of the U.S. Environmental
Protection Agency's (EPA's) Office of Inspector General (OIG). This report presents statistical
and narrative summaries of OIG performance results for Fiscal Year (FY) 2006 compared to our
FY 2006 Annual Performance Targets. It also presents cumulative OIG results for the period
FY 2003 through 2006 compared to the OIG Annual Performance Goals. Of special interest for
FY 2006, the EPA OIG questioned $87 million in costs; identified nearly $692 million in cost
efficiencies; and recorded almost $31 million from fines, restitutions, and settlements, with over
$157.2 million in questioned costs and efficiencies sustained from recommendations of current
and prior periods.
This report supplements, in greater statistical and narrative detail, the OIG summary
performance results presented in EPA's FY 2006 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.
Based on the performance measures and results from this and prior OIG Annual
Performance Reports, we are continuing to make significant improvements in the application of
performance measures to demonstrate our value added. In FY 2006, the OIG began developing
measures of internal management activity and cost accounting to our products to improve on our
own accountability and transparency. We are implementing a systematic post close-out followup
process to account for and report on the completion of agreed-upon Agency actions from OIG
recommendations. The OIG conducted comprehensive outreach planning meetings with each
Assistant and Regional Administrator to identify their most significant management and
environmental priorities, risks, and challenges, to inform our customer-focused planning process.
Additionally, the OIG served the Agency and participated as part of the President's Council on
Integrity and Efficiency (PCIE) team in providing timely audit, evaluation, and investigative
support for the EPA and the government-wide hurricane emergency response effort.
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.
Acting 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
Linking Our Work to Outcomes and Impacts 2
Planning Starts with the End in Mind 2
Performance Presented in a Hierarchy of Related Measures 2
Scoreboard of Results Compared to FY 2006
Annual Performance Goal Targets 3
OIG Strategic Cumulative Performance Results FYs 2003-2006 4
Summary of FY 2006 Performance Results by Product Line 5
Hurricane Katrina 5
Air 6
Water 7
Land 7
Cross Media 8
Congressional and Public Liaison 9
Assistance Agreements 10
Contracts 11
Financial 11
Information Technology & Business Systems 12
Investigations 12
OIG Enabling Support Programs 14
OIG Reported Key Agency Management Challenges 15
Results of OIG Outreach for Customer Feedback 16
OIG FY 2006 Resource Use and Allocation 18
OIG Management Challenges 19
Appendixes
Profile of FY 2006 OIG Performance Activity 20
Summaries of OIG Reports, Timeliness, and Costs 21
OIG Financial Statements: Analysis of FY 2006 Fund Use and
Carryover Balances 24
OIG Data Verification and Validation 25
OIG Future Annual Performance Targets (FYs 2007-2008) 26
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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
Cross Media
Financial/Information Investigations
Technology Audits
Financial Statements
Contracts
Assistance
Agreements
Information
Technology
Financial Fraud
Program Integrity
Employee Integrity
Laboratory Fraud
Computer Crimes
Public Liaison/
Advisory/Analysis
Legislation/Policy
Regulation Review
Special Review
Public Inquiry/
Outreach
President's Council
on Integrity and
Efficiency
Linking 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.
Planning Starts with the End in Mind
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
/
^
itputs
Recommendations
Referrals to DOJ
Best Practices
Risks Identified
Management
Challenges
Identified
<
Nj
Intermediate
Outcomes
Savings/
Recoveries
Process/Policy
Changes
Indictments/
Convictions
Certifications
CivilJudgments
Legislative/
Regulatory
Changes
Administrative
Action
| impact
Outcomes
Environmental
Risks Reduced
Improved
Efficiency
* Examples of
Environmental
Improvement
Examples of
Hearth
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 FY 2006 Annual Performance Goal Targets. Our long-term performance progress is
demonstrated by the charts comparing our results against our goal targets for the period FY 2003 to 2006.
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Scoreboard of Results Compared to FY 2006
Annual Performance Goal Targets
All results reported in Fiscal 2006, from current and prior year's work, as reported in OIG Performance
Measurement and Results System and IGOR.
Strategic Goals; With OIG Government Performance
and Results Act Annual Performance Targets
Compared to Mid-Year Fiscal 2006 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: 303; Reported: 407 (134%)
1 Legislative/regulatory change/decision
1 Example of environmental improvement
3 Best practices implemented
73 Policy, process, practice, control changes
(including actions taken/closed before report)
312 Certifications/validations/verifications/corrections
17 Environmental risks reduced/eliminated
Environmental & Business Recommendations,
Challenges, Best Practices, and Risks Identified
Target: 925; Reported: 1,024 (111 %)
915 Recommendations (for Agency/stakeholder action)
48 Critical Congressional or public mgt. Concerns
addressed
34 Best practices identified (to be transferred)
13 Referrals for Agency action
8 NewFMFIA/OMBA-123/Mgt. challenges/risks
identified
6 Environmental risks identified
Return on Investment: Potential dollar return as
percentage of OIG budget $49 million
Target: $73.5 M; Reported: $809.6 M Federal* (1,100%)
(Dollars in Millions)
$ 87.0 Questioned Costs (Federal)**
$ 691.8 Recommended efficiencies*, costs saved (Fed.
$ 30.8 Fines, recoveries, settlements
(includes actions taken prior to report issuance)
Criminal, Civil, and Administrative Actions
Reducing Risk of Loss/Operational Integrity
Target: 80; Reported: 121 (151 %)
25 Criminal convictions
17 Indictments/informations/complaints
8 Civil judgments/settlements/filings
56 Administrative actions
15 Allegations disproved (including Hotline complaints)
Sustained Monetary Recommendations and Savings
Achieved from Current and Prior Periods: (no goal
established) $157.2 M
(Dollars in Millions)
$ 63.1 Questioned Costs Sustained
$ 94.1 Cost Efficiencies Sustained or Realized
9= At or over 100 percent annual target; = At or over 80 percent annual target; 9= Below 65% annual target
* includes $2.7 M from previous year Superfund review not before captured, $39 M from a Superfund financial audit
of undistributed costs, and $639 M from a program evaluation of Superfund Special Accounts/Unliquidated Obligations.
** includes nearly $67 M from audits of grants to State of Alaska and its grantees.
Note: This Scoreboard, which represents OIG external performance reporting requirements under the Government
Performance and Results Act, consolidates similar measures that were previously presented separately as Goal 1
(environmental) and Goal 2 (business practices).
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OIG Strategic Cumulative Performance Results FYs 2003-2006
This section demonstrates the EPA OIG annual progress in attaining its Strategic Performance Goals for the
period of FY 2003 through FY 2006. OIG performance can best be considered and evaluated over a period of
several years rather than a single year. There can be a lengthy time lag before the outcome actions can come to
fruition and be substantiated.
Results VS Targets FY 2003 -2006
Environmental and Business Actions Taken and Risks Reduced from
OIG Audit, Evaluation, and Investigation Recommendations
Targets
Results VS Targets FY 2003 -2006
Results VS Targets FY 2003 -2006
Environmental and Business Recommendations and Risks from
Audits, Evaluations, and Investigations
3500
3000
2500
2000
1500
1000
500
Results VS Targets FY 2003 -2006
Criminal, Civil, Administrative Actions from OIG Investigations
Performance Progress
The OIG has streamlined its performance reporting by
reducing its vital few reporting measures from seven to four,
and improving the accuracy in the presentation and clarity
of its reporting. The OIG has significantly exceeded its
performance goals during FY 2006 by the confluence of
several extraordinary events, as well as many time-lagged
actions from current and prior years' recommendations
coming to fruition. Among the results, the OIG identified
questioned costs and efficiencies, including $67 million
from audits of grants to the State of Alaska and its grantees;
$39 million from a financial audit of Superfund
undistributed costs, and $639 million from a program
evaluation of Superfund Special Accounts and unliquidated
obligations. Additionally, EPA produced over $157 million
in monetary recommendations and savings from current and
prior periods. The OIG also provided direct assistance to
the Agency's Gulf Coast response and recovery efforts
through participation in the Hurricane Katrina Fraud Task
Force by identifying overcharges on emergency response
contracts, identifying and preventing the use of
contaminated trucks to supply water to the region, and
working with the U.S. Army Corps of Engineers to better
coordinate efforts in future emergency situations. While the
OIG has not met all of its Annual Performance Goal targets
every year due to time delay and the variable nature of OIG
results, the charts to the left demonstrate that the OIG has
exceeded its cumulative targets for FYs 2003-2006.
Challenges
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 by
establishing efficiency and production criteria measures.
The OIG is also working to provide greater followup on
actions the Agency has agreed to take as a result of OIG
recommendations. The OIG is enhancing its planning
process by directly involving EPA's leadership in the
development of assignments that are highly responsive to
the Agency's greatest priorities. During FY 2007, the OIG
will perform an Agency-wide Strategic Risk Assessment to
identify areas of possible fraud, waste, abuse, and
opportunities for operational savings.
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Summary of FY 2006 Performance Results by Product Line
HURRICANE KATRINA
On August 29, 2005, Hurricane Katrina brought
destruction to the Gulf Coast region. The OIG quickly
enacted an oversight plan to help EPA in its efforts to
react to the aftermath of Hurricane Katrina. The plan
focused on both ensuring adequate actions were taken to
protect the health of people in the area, as well as to
detect and address vulnerabilities in EPA's activities
before they led to fraud, waste, and abuse. These efforts
crossed many of the OIG's product lines.
Performance Highlights
The State of Louisiana and EPA officials identified
instances where tanker trucks that previously carried
hazardous materials were being used to provide
drinking water to hotels in New Orleans following
Hurricane Katrina in a 2006 OIG report, Lessons
Learned: EPA 's Response to Hurricane Katrina.
Actions were taken to stop this practice and
procedures were put in place to ensure the trucks
were properly inspected. We recommended that the
procedures be shared with other States and
regions to ensure this problem does not occur if
similar disaster takes place that results in the need to
transport drinking water. The procedures were
shared with other States and regions on August 31,
2006. (Reportno. 2006-P-00033; Cost $64,808)
In responding to the Katrina disaster, the EPA
Administrator required EPA senior management to
read the 2003 OIG report on EPA's response to the
World Trade Center collapse, regarding lessons
learned. As a result, two specific actions were taken
by EPA during its Hurricane Katrina response
efforts. The Agency decided to: (1) disclose
information publicly as soon as it was received and
judged to be sound and supportable; and (2) ensure
that risk decisions were based on sound science. In
particular, EPA convened a meeting of the EPA
Science Advisory Board over the 2005 Labor Day
weekend to review and comment on EPA's sediment
sampling plan following Katrina.
Based on the OIG report, EPA 's and Louisiana's
Efforts to Assess and Restore Public Drinking Water
Systems after Hurricane Katrina, the OIG
determined that the Louisiana Department of Health
and Hospitals and EPA provided the public with
timely and accurate information about the safety and
proper treatment of drinking water. As a result, we
determined that Louisiana's process for determining
the safety of drinking water appeared adequate to
support the determinations made for all public water
systems in the State. (Report no. 2006-P-000014;
Cost $3 3 3,800)
In the OIG report, EPA 's and Mississippi's Efforts to
Assess and Restore Public Drinking Water Supplies
after Hurricane Katrina, the OIG determined that the
Mississippi Department of Health and EPA provided
the public with timely and accurate information
about the safety and proper treatment of public
drinking water supplies. As a result, we determined
that Mississippi's process for determining the safety
of drinking water appeared adequate to support the
determinations made for all public water systems in
the State's six most impacted counties located in
coastal Mississippi. (Report no. 2006-P-00011;
Cost $325,797)
An OIG report, EPA Provided Quality and Timely
Information Regarding Wastewater after Hurricane
Katrina, determined that the EPA provided quality
and timely information regarding wastewater to
States, wastewater treatment facilities, and the
general public. Affected States used the information
that EPA provided to help determine how best to
protect rescue workers and the general public.
(Report no. 2006-P-00018; Cost $187,787)
In the OIG report, EPA Provided Quality and Timely
Information on Hurricane Katrina Hazardous
Material Releases and Debris Management, the OIG
ensured that EPA established effective approaches
for rapidly identifying, prioritizing, and assessing the
nature, magnitude and impact of hazardous material
releases. The OIG also ensured that EPA provided
oversight, assistance, and direct support in the
management of hazardous hurricane debris and waste
throughout the affected areas. During the course of
our work, we identified several environmental risks
and referred issues for Agency action. The Agency
took action to address household hazardous and
electronic wastes, and the St. Bernard Parish Landfill
fire. (Reportno. 2006-P-00023; Cost $535,642)
Using contracts already in place, as well as awarding
a small number of new contracts, EPA was able to
quickly respond to Katrina and help protect human
health and the environment under difficult
conditions. The OIG assisted the Agency by
providing real-time advice on contract administration
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and property controls. EPA made timely
improvements, including the termination of several
contracts with excessive periods of performance, and
strengthened its review of contractor invoices. To
further improve emergency response capability, the
Agency plans to award more flexible contracts of
shorter duration, devote additional resources to
monitoring contractor invoices, and better control
equipment obtained during emergency situations.
The OIG also worked with other Inspectors General
to share lessons learned from audits, reviews, and
investigations to improve the Federal Government's
response to future disasters. (Report no. 2006-P-
00038; Cost $462,870)
Since September 2005, the EPA OIG has deployed
six Special Agents on several missions to the
affected Gulf States to participate in Hurricane
Katrina Fraud Task Force efforts, meet with
government officials, and conduct a variety of
investigative steps in addressing allegations of fraud.
OIG Special Agents participate at the Hurricane
Katrina Fraud Task Force Joint Command Center
and have access to Task Force databases,
intelligence, and staff for operational support during
investigations conducted in the affected Gulf States.
To date, investigative efforts by the EPA OIG have
addressed several allegations of labor and equipment
cost mischarging and the impersonation of EPA
officials in furtherance of a scheme or artifice to
defraud. While some allegations have been
disproved or are currently pending prosecution,
others have successfully resulted in administrative
suspensions (pending debarment), cease and desist
letters for wrongful activity, and recommendations
for financial adjustments. EPA OIG continues to
aggressively pursue tips and leads concerning
allegations of fraud, and is actively supported by the
Task Force.
AIR
Air Return on Investment Summa
Reports Issued: 3
Total Staff Days: 1,476
Total Cost: $1,129,590
Environmental and Business Results
14 Environmental Recommendations
1 Regulatory Change
9 Environmental Policy, Process Changes
1 Environmental Risk Reduced
5 Environmental Critical Public/Cong Issues Resolved
3 Management Policy, Process Changes
1 New FMFIA/Management Challenge Identified
Performance Highlights
In issuing the May 2006 final reconsideration
"Response to Comments" in response to a 2000
regulatory finding, EPA articulated its position that
"the identification of a utility hotspot is NOT a
prerequisite" to revising standards of performance in
the Clean Air Mercury Rule, as recommended by the
OIG in the 2006 report, Monitoring Needed to Assess
Impact of EPA 's Clean Air Mercury Rule on
Potential Hotspots. The Agency went on to write in
its response that although information concerning
utility hotspots would be relevant to a possible future
revision of the standards of performance in the
mercury rule, such hotspots by no means were a
prerequisite to amending such standards. This was
an important clarification explaining legally what
role the "utility attributable" hotspot definition will
have in determining whether to make any future
changes to the performance standards under the Rule
(Report no. 2006-P-00025; Cost $265,267)
* As a result of recommendations in a 2006 OIG
report, EPA Can Improve Emissions Factors
Development and Management, the EPA determined
that the OIG recommendations generally align with
EPA's current improvement efforts. In particular,
EPA is making it easier for industry to transform
emissions data into emissions factors and transmit
them to State and Federal reviewers quickly. It did
so by reengineering the program to speed the
development of emissions factors, increasing the
number of factors, and accounting for uncertainty in
factors. By analyzing and reporting on the
uncertainty of emissions factors, EPA will be able to
assess the uncertainty of not only future but existing
emissions factors. Before fall 2006, EPA will have
developed and tested a new emissions factors stream-
lining process and developed emissions factors for
coke ovens, landfills, municipal waste combustors,
steel mini-mills, and low pressure petroleum storage
tanks. Working with other groups - consistent with
the EPA long-term goal of leveraging others'
resources to improve emissions factors - EPA will
initiate development of emissions factors for natural
gas engines, rubber manufacturers, and animal
feeding operations. (Report no. 2006-P-00017; Cost
$404,114)
* Based on a draft report, EPA 's Oversight of the
Vehicle Inspection and Maintenance Program Needs
Improvement, the Agency agreed with, and began
acting on, OIG recommendations to obtain and
evaluate all required Inspection and Maintenance
reports to ensure that the programs are operating
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effectively, and follow up with States on significant
issues identified. (Cost $369,110)
* The 2005 OIG report, EPA 's Implementation of the
Ambient Air Toxics Monitoring Network,
recommended that the EPA develop a method for
identifying and prioritizing high risk areas for local
scale monitoring. This is to involve various air
toxics-related information and available health data
(e.g., National Air Toxics Assessment results,
emissions data, population data, etc.) that could be
used by EPA, State and local agencies, and tribes to
implement the strategy developed. As a result, EPA
has begun using the National Air Toxics Assessment
results to prioritize and identify high risk areas for air
toxics monitoring. (Report no. 2005-P-00008; Cost
$30,378)
WATER
Water Return on Investment Summary
Reports Issued: 5
Total Staff Days: 1,952
Cost: $1,496,044
Environmental and Business Results
5 Environmental Recommendations
1 Environmental Policy, Process Changes
1 Example of Environmental Improvement
1 Environmental Risks Reduced
26 Environmental Best Practices Identified
5 Environmental Certifications/Validations
3 Environmental Critical Public/Cong. Issues
Resolved
1 New Management Challenge/FMFIA Risk Identified
2 Management Policy, Process Changes
Performance Highlights
An OIG review, Promising Techniques Identified to
Improve Drinking Water Laboratory Integrity and
Reduce Public Health Risks, found vulnerabilities
within the drinking water sample analysis not
addressed by EPA's process. These vulnerabilities
can compromise the integrity of the analysis process
and the quality of data produced. As a result of OIG
recommendations, EPA indicated it will encourage
use of promising techniques identified and play a
greater role in preventing and detecting inappropriate
procedures and fraud in drinking water laboratories.
(Reportno. 2006-P-00036; Cost$774,026)
* The OIG 2006 report, Much Effort and Resources
Needed to Help Small Drinking Water Systems
Overcome Challenges, identified that after many
years, small drinking water systems continue to
struggle with financial/management matters and
regulatory/compliance issues. This is despite many
Government and nongovernmental initiatives and
approaches to assist in the resolution of these
problems. EPA agreed with the recommendations
and has proposed corrective actions that the OIG has
accepted. (Report no. 2006-P-00026; Cost $200,430)
An OIG report, Sustained Commitment Needed to
Further Advance Watershed Approach,
recommended that EPA address challenges to
integrating watershed approach principles into its
core programs, as well as obstacles identified by
stakeholders concerning the watershed approach. In
addition, the report also noted EPA needs to improve
its strategic plans and performance measurement
system to address the watershed approach. As a
result of these recommendations, EPA said it will
continue to integrate the watershed approach into its
core water programs, work in partnership with
stakeholders to ensure obstacles to implementation of
the watershed approach are addressed, continue to
refine and improve key aspects of the strategic
planning process, and continue to improve key
aspects of the performance measurement system.
(Report no. 2005-P-00025; Cost $702,844)
LAND
Land Return on Investment Summary
Reports Issued: 5
Total Staff Days: 3,166
Total Cost: $2,400,069
Environmental and Business Results
$642 Million Cost Efficiencies
9 Environmental Recommendations
3 Environmental Policy, Process Changes
2 Environmental Risks Identified
2 Environmental Certifications/Validations
1 Environmental Critical Public/Cong. Issues
1 Allegations Disproved
15 Recommendations for Management Improvement
Performance Highlights
In an OIG report, Continued EPA Leadership Will
Support State Needs for Information and Guidance
on Resource Conservation and Recovery Act (RCRA)
Financial Assurance, the OIG evaluated EPA's
efforts to address problems and concerns in various
aspects of RCRA financial assurance. Financial
assurance (for cleanups) is a top priority for the
Office of Enforcement and Compliance Assurance
and affects multiple Office of Solid Waste and
Emergency Response (OSWER) programs. We
made recommendations for improvements in the
information and guidance EPA collects and provides
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on RCRA financial assurance. As a result of this
work, EPA's Environmental Financial Advisory
Board has adopted our findings related to captive
insurance in developing recommendations to the
Administrator on how to assist States and other
regulators with improved implementation and
understanding of captive insurance. (Report no.
2005-P-00026; Cost $442,733)
In the OIG report EPA Can Better Manage
Superfund Resources, the OIG identified multiple
opportunities and made multiple recommendations
on how the Agency could achieve efficiencies in the
Superfund program. In response to recommendations
to deobligate Superfund contract dollars and, where
possible, close out Superfund special accounts, the
Agency has taken actions that have resulted in
$39 million in monetary benefits for the Superfund
program. To date $38.6 million has been deobligated
and $352,000 in Superfund Special Account funds
has been returned to the Superfund Trust Fund. Cost
efficiencies from this report total $639 million to
date. (Report no. 2006-P-00013; Cost $846,665)
An OIG report, Rulemaking on Solvent-
Contaminated Industrial Wipes, recommended that
the EPA should implement the recommendations
proposed by a 2001 taskforce on improving
regulations regarding contaminated industrial wipes.
The Deputy Assistant Administrator for OSWER
agreed to work with the Office of Policy, Economics,
and Innovation to implement the recommendations
proposed by the 2001 taskforce. This includes strict
adherence to the Action Development Process and,
during 2006, ensuring all OSWER rulemaking staff
and management attend rulemaking training. (Report
no. 2006-P-00001; Cost $287,600)
Based on the OIG report EPA Can Better Implement
Its Strategy for Managing Contaminated Sediments,
the OIG determined that EPA needs to better manage
its efforts to clean up contaminated sediments on a
nationwide basis. EPA made some progress with its
Contaminated Sediments Management Strategy, but
the Agency cannot assure that resources devoted to
addressing contaminated sediments provide the most
effective and efficient solutions for reducing the
environmental and human health risks posed by this
national problem. As a result, EPA agreed to assign
responsibility for the oversight and evaluation of the
Agency's Contaminated Sediment Management
Strategy to a committee or office. In addition, EPA
also has developed performance measures for
implementing an updated Strategy, and will include
this activity in the Action Plan to correct this finding.
(Report no. 2006-P-00016; Cost $665,352)
CROSS MEDIA
Cross Media Return on Investment Summary
Reports Issued: 5
Total Staff Days: 2,142
Total Cost: $1,616,452
Environmental and Business Results
10 Environmental Recommendations
1 Environmental Risk Identified
1 Environmental Certification/Validation
6 Environmental Critical Public/Cong. Issue Resolved
2 Management Actions Taken
21 Recommendations for Management Improvement
Performance Highlights
The OIG 2006 report, Measuring the Impact of Food
Quality Protection Act (FQPA): Challenges and
Opportunities, found that EPA has made progress in
implementing the requirements of the FQPA.
However, the Office of Pesticides Program (OPP)
has primarily measured its success and the impact of
FQPA by adherence to its reregistration schedule
rather than by reductions in risk to children's health.
We conducted an analysis of the dietary pesticide
residue data from the U.S. Department of Agriculture
(USDA) Pesticide Data Program and found that
EPA's regulatory actions had a significant impact in
reducing pesticide exposure risk. EPA accepted our
recommendation that it move away from primarily
using outputs as performance measures, and
implement a suite of output and outcome measures to
assess the human health and environmental impacts
of its work. (Report no. 2006-P-00028; Cost
$234,614)
* As recommended by an OIG report, EPA Needs to
Conduct Environmental Justice Reviews of Its
Programs, Policies, and Activities, EPA agreed to
accept the OIG recommendations related to the
Agency developing more effective plans for
conducting environmental justice reviews in
accordance with Executive Order 12898. (Report no.
2006-P-00034; Cost $158,213)
* In the OIG report, Changes Needed to Improve
Public Confidence in EPA 's Implementation of the
Food Quality Protection Act, the OIG found that
OPP did not always solicit public comments before it
issued final pesticide reregistration decisions. As a
result, EPA agreed to provide clearer guidance to the
public, and OPP will revise the Reregistration/Public
Participation Process Web page to include a
discussion of the factors that the Agency considers in
choosing the six-phase, four-phase, or low risk
process for a pesticide to undergo reregistration. In
8
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addition, over the next 8 to 10 years, OPP will
collaborate with EPA's Office of Research and
Development in planning and research to identify
and reduce the risk to children and other major
identifiable susceptible subpopulations. (Report no.
2006-P-00003; Cost $379,173)
As a result of a recommendation in an OIG report,
Opportunities to Improve Data Quality and
Children's Health through the Food Quality
Protection Act, EPA agreed to develop a Standard
Evaluation Procedure to assess results of
developmental neurotoxicity testing. OPP agreed to
update the dietary exposure databases used in
probabilistic models for risk assessments as soon as
the food consumption data from the 2003-2004
National Health and Nutrition Examination Survey
become available in 2006. It also agreed to evaluate
the survey's dietary consumption data to determine if
additional children's foods need to be sampled for
USDA's Pesticide Data Program. (Report no. 2006-
f'-00009, Cost $420,633)
The OIG 2005 report, EPA Performance Measures
Do Not Effectively Track Compliance Outcomes,
found that the EPA's publicly-reported performance
measures lack compliance rates and other reliable
outcome data. EPA's 2005 publicly-reported
Government Performance and Results Act
performance measures do not effectively characterize
changes in compliance or other outcomes because
EPA lacks reliable outcome data. Instead, EPA
reports proxies for compliance to the public, not
knowing if compliance is actually going up or down.
Thus, EPA does not have all the data it needs to
make management and program decisions. Some
measures do not clearly link to strategic goals, and
EPA frequently changed its enforcement and
compliance-related performance measures from year
to year. As a result, EPA agreed to design and
implement a pilot project that verifies the estimated,
predicted, and facility self-reported outcomes of the
enforcement and compliance assurance program.
EPA also agreed to improve the linkage and
relationship between goals and measures in strategic
planning, annual performance reporting, and budget
documents through consistent wording of the goals
and measures across these documents. (Report no.
2006-P-00006; Cost $423,816)
CONGRESSIONAL AND
PUBLIC LIAISON
Congressional and Public Liaison
Return on Investment Summary
Reports Issued: 4
Total Staff Days: 996
Total Cost: $805,838
Environmental and Business Results
4 Environmental Recommendations
13 Environmental Critical Public/Cong
8 Allegations Disproved
1 Management Actions Taken
5 Recommendations for Management
. Issues Resolved
Improvement
Performance Highlights
In the OIG report More Information is Needed on
Toxaphene Degradation Products, we
recommended that the EPA Administrator direct the
Assistant Administrators for Water and for Solid
Waste and Emergency Response to validate and
approve the new analytical method that tests for
toxaphene degradation products, and use the new
method to analyze environmental samples. In
addition, we also recommended that the Assistant
Administrator for Research and Development work
with others in EPA to arrange for specific research
needed to determine the risk that toxaphene
degradation products may pose to people.
(Report no. 2006-P-00007; Cost $269,059)
* An OIG report, Review of Environmental Concerns
atMcFarland, California, found that Region 9's
efforts to keep the McFarland community informed
exceeded requirements, but specific improvements
were needed. The OIG recommended that the
Region 9 Administrator update the mailing list for
McFarland for future communications and outreach
to the community, and for providing notice of any
future public meetings. In addition, the Region
should consider publicizing notices of future public
meetings through local media outlets to supplement
the regional mailings. (Report no. 2006-P-00041;
Cost $302,694)
In the OIG report on a complaint regarding an
assistance agreement awarded to the University of
Nevada, Reno, Regional Environmental Monitoring
and Assessment Program, we recommended that
EPA have the recipient submit the required report
and establish a better system of internal controls for
grant funds. We also recommended that EPA
require the recipient to repay $21,260 in
unallowable costs. EPA concurred with our
recommendations and is seeking to have the
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recipient provide the required report and establish
better controls. Further, EPA is arranging for the
recipient to repay the $21,260 in unallowable costs.
(Reportno. 2006-P-00008; Cost $166,923)
* An OIG report, EPA Is Properly Addressing the
Risks of Using Mercury in Rituals, addressed
allegations that EPA did not sufficiently act on the
potentially dangerous use of mercury in folk
remedies and religious practices. The OIG
disproved the allegations that EPA was not taking
sufficient action. We agreed with EPA that further
regulations regarding the ritual use of mercury are
unwarranted at this time, and we believe EPA is
taking appropriate community outreach/education
actions. (Reportno. 2006-P-00031; Cost$66,274)
ASSISTANCE AGREEMENTS
Assistance Agreements Return on Investment
Summary
Reports Issued: 12
Total Staff Days: 2,768
Total Cost: $2,285,467
Environmental and Business Results
$82.1 Million in Questioned Costs
$ 4.9 Million Cost Efficiencies
$ 3.0 Million in Fines and Restitutions*
31 Criminal, Civil, Admin. Actions*
2 Allegations Disproved*
3 Best Management Practices Identified
5 Management Actions Taken
589 Recommendations for Management Improvement
* investigative results
Performance Highlights
EPA continues to improve its ability to demonstrate
the benefits received from the investment of financial
resources. For example, in response to an OIG
recommendation, States and communities began
reporting data to EPA on expected environmental
benefits from Clean Water State Revolving Funds.
Based on partial reporting, EPA grants have resulted
in $9.47 billion of loans financing approximately
2,200 projects serving 835 communities and
84 million people. These projects treat almost
22 billion gallons per day. Estimates are that these
communities would have had to spend $3.4 billion
more to obtain the same loans from private banks.
(Report no. 2004-P-00022; Costs $360,422)
* Grants management continues to be a challenge but
progress is being made. In response to an OIG
recommendation, EPA drafted a series of measures
during FY 2006 to hold grant project officers
accountable for their performance. The measures are
expected to be finalized in November 2006.
A 2006 OIG report on the Alaska single audit report
for FY 2003 questioned $1,166,051 in labor costs
because State employees did not account for
activities in accordance with Federal requirements.
Also, the audit questioned the balance of the EPA
grant amounts of $32,721,149 due to the following
single audit results: (1) the State claimed
disbursements that were advances and not actual
costs, (2) the State did not correctly report assets and
expenditures, and (3) the State did not follow
procurement procedures. The audit also found the
State did not adequately monitor its subrecipients.
As a result, one subrecipient earned interest and
dividend income, contrary to EPA regulations.
(Report no. 2006-3-00167; Cost $170,817)
A 2006 OIG report on the Alaska single audit report
for FY 2004 questioned $1,115,721 in labor costs
because State employees did not account for their
activities in accordance with Federal requirements.
In addition, the audit questioned the balance of the
EPA grant amounts of $31,860,680 due to single
audit results similar to those discussed regarding the
FY 2003 single audit (see above). (Report no. 2006-
3-00168; Cost$67,631)
Across the Federal Government, nearly half a trillion
dollars in grant funds is spent each year to support
programs the public relies on, such as health care,
transportation, and education. This includes over
$4 billion spent by EPA on grants to States, tribes,
local governments, and not-for-profit organizations.
To promote sound grants administration at all levels
of government, the EPA OIG led a team of more than
20 Federal, State, and local audit organizations in
developing a Guide to Opportunities for Improving
Grant Accountability. The Guide discusses best
practices in grants administration that all levels of
government can use to obtain greater results from
their inve stment of grant funds. (Costs $369,119)
On December 15, 2005, the OIG issued a memo to
the EPA Grants Administration Division to provide
the Agency with our preliminary observations on
accounting control issues, control weaknesses, and
regulatory non-compliance that we identified at the
America's Clean Water Foundation. As a result of
our report, EPA denied the grant deviation, and also
returned the Foundation's grant application for FY
2005. This audit recommended $4,960,000 in
efficiencies. (Report no. 2006-S-00007; Cost
$170,998)
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CONTRACTS
Contracts Return on Investment Summary
Reports Issued: 20
Total Staff Days: 3,003
Total Cost: $2,451,858
Environmental and Business Results
$ 2.9 Million in Questioned Costs
$ 5.0 Million in Cost Efficiencies
$26.8 Million in Fines and Restitutions*
18 Criminal, Civil, Administrative Actions*
1 Allegations Disproved*
3 Environmental Recommendations
14 Management Actions Taken
161 Recommendations for Improvement
1 New FMFIA Management Challenge
* investigative results
Performance Highlights
The OIG applied agreed-upon procedures to the State
of Illinois Emergency Management Agency's
February 26, 2003, Credit Claim for costs associated
with the remediation of the Luminous Processing
Inc. facility and grounds prior to the listing of the
Ottawa Radiation Areas' National Priorities List site.
Our work resulted in a cost savings of $3.2 million
because the cost escalation factor was not a "direct
out-of pocket expenditure" of funds. (Report no.
2006-4-00026; Cost $39,323}
* Contractor-supplied records indicated that EPA
provided $110 million of equipment to contactors.
EPA can mange the administrative functions over
this property itself or have the Defense Contract
Management Agency (DCMA) perform these
functions. Our review disclosed that EPA did not
know which contractors had the property, the dollar
value of the property, or whether contractors
conducted annual inventories. Further, neither EPA
nor DCMA were administering some contracts and
EPA was paying DCMA to administer contracts with
no property. EPA initiated corrective actions while
our audit was underway. (Report no. 2006-P-00035;
Cost $127,75 3}
EPA's Critical Infrastructure and Key Resources
Protection Plan discusses actions to enhance the
Agency's ability to respond to terrorist attacks and
other emergencies. During FY 2006, EPA made
progress on the majority of these initiatives.
However, additional work remains. In response to a
recommendation from the OIG for greater
accountability, OSWER will hold semiannual
meetings with EPA's Office of Homeland Security
and report on the Plan's status to the Deputy
Administrator and the Associate Administrator for
Homeland Security. EPA also needs to purchase
additional emergency response equipment and put in
place a nationwide information system to manage
such equipment. (Report no. 2006-P-00022; Cost
$295,408}
FINANCIAL
Financial Return on Investment Summary
Reports Issued: 3
Total Staff Days: 5,412
» Total Cost: $4,365,148
Environmental and Business Results
$3 9 Million in Cost Efficiencies
5 Environmental Policy, Process Changes
1 Management Policy, Practice Change
26 Recommendations for Improvement
Performance Highlights
EPA has the authority through the Superfund
program to respond directly to releases of hazardous
substances and seek recovery of its costs from the
responsible parties. As a result of recommendations
from the OIG, the Agency strengthened its policies
and procedures for recording costs to specific sites,
and redistributed more than $26 million from a
general account to specific site accounts. The
Agency planned to redistribute an additional
$13 million. These funds can now be recovered and
used for other site cleanups. Cost efficiencies totaled
over $39 million from this report. (Report no. 2006-
P-00027; Cost $323,396)
* While EPA earned an unqualified opinion on its
FY 2005 financial statements, we identified
conditions which, while not causing a material
misstatement of financial statement amounts, should
be addressed. These conditions include payments to
separated employees and making adjusting entries in
the financial management system without adequate
supporting documentation. EPA agreed to address
the conditions OIG identified. (Report no. 2006-1-
00015; Cost $4,012,867)
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INFORMATION TECHNOLOGY &
BUSINESS SYSTEMS
Information Technology & Business Systems
Return on Investment Summary
Reports Issued: 11
Total Staff Days: 1,548
Total Cost: $1,406,188
Environmental and Business Results
9 Environmental Policy, Process Changes
5 Best Management Practices Identified
32 Recommendations for Improvement
18 Management Policy, Process Changes
3 Best Management Practices Implemented
Performance Highlights
Based on a 2005 OIG report, EPA Needs to Improve
Oversight of Its Information Technology Projects, in
response to comments from the OIG concerning the
status of System Life Cycle Management Policy and
Procedures, the Office of Environmental Information
(OEI) issued a memo to Agency program offices
instructing them to adhere to the existing policy and
procedures document. OEI finalized and issued the
new policy and procedures in time for program
offices to use during the current Capital Planning
Investment Control cycle. (Report no. 200 5-P-
00023; Cost $610,511)
The OIG participated in an EPA-wide Quality
Information Council Subcommittee to develop,
review, and approve EPA information technology
policy to incorporate new Office of Management and
Budget (OMB) requirements and oversight authority
responsibilities. The various policies developed were
approved by EPA's Quality Information Council.
Based on our 2006 audit, Assessing EPA 's Efforts to
Protect Sensitive Information, OEI expanded its
work plan to address OIG's concerns regarding
internal controls and key processes. Also, the OIG
assisted the PCIE in developing a Government-wide
reporting tool that was used to assess Federal
agencies' efforts to protect sensitive data, including
personally identifiable information. (Report no.
2006-S-0006; Cost$22,716)
* Based on the 2006 OIG Information Security Series:
Security Practices, management officials from the
five reviewed program offices took steps to
remediate over 100 system vulnerabilities that placed
EPA major applications at risk. Program official
took actions to (1) strengthen key security controls;
and (2) improve EPA's capability to sustain
operations of major information technology
investments by updating application security plans,
completing risk assessments, and developing
contingency plans. (Cost of all reports in series
$675,228)
Based on the 2006 OIG report, EPA Could Improve
Physical Access and Service Continuity/Contingency
Controls, the Office of Administration and
Resources Management (OARM) implemented new
access control procedures to provide greater
accountability of visitors to several computer and
media storage rooms at EPA's Research Triangle
Park complex. OARM and OEI developed and
implemented new environmental control procedures
to respond to fire and water emergencies within
computer rooms. The Office of Research and
Development implemented enhanced procedures for
notifying key personnel during an emergency and
updated its Contingency Plan to provide specific
instructions for data recovery operations. OSWER
updated the Comprehensive Environmental
Response, Compensation, and Liability Information
System (CERCLIS) Contingency Plan to identify
critical resources and outline contracts needed for
restoring the application. OSWER also redesigned
its recovery tests to address all critical elements
needed to restore CERCLIS. (Report no. 2006-P-
00005; Cost $223,395)
INVESTIGATIONS
Investigative Return on Investment Summary
175 Investigations Closed
123 Investigations Opened
Total Staff Years: 62.8
Total Cost: $10.5 Million
Environmental and Business Results
$30.8 Million in Fines, Settlements, Restitutions
16 Environmental Risk Reduced
2 Environmental Risks Identified
25 Convictions of Persons or Firms
17 Indictments/Informations of Persons or Firms
8 Civil Judgments/ Settlements/ Filings
56 Administrative Actions
5 Allegations Disproved
Performance Highlights
The EPA Office of Investigations continues to work
collaboratively with the Office of Acquisition
Management and the Office of Grants and
Debarment to incorporate Procurement Fraud
Awareness Briefings as an integral part of training
for EPA Contracting Officers, Contracting Officer
12
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Representatives, Grants Specialists, Grant
Management Officers, and Project Officers. During
FY 2006, 19 briefings were presented to over 700
managers and staff nationwide, as part of EPA's
efforts to train its staff in contracts and grant
management. The fraud briefings have helped to
identify common financial fraud scenarios which are
often encountered by contracting or grants
management staff, and identify various criminal,
civil, and administrative actions the Agency and the
OIG can take to protect funds at risk.
While making no admission of wrongdoing or
liability, Washington Group International, Inc.
(WGI), formerly known as Morrison Knudson
Corporation, entered into a $ 1 million settlement
agreement with the U.S. Government for allegedly
submitting false representations and certifications in
progress reports. WGI also improperly billed costs
during its performance of a U.S. Army Corps of
Engineers contract funded by EPA to perform
cleanup activities at the Tar Creek Superfund Site,
Northern Ottawa County, Oklahoma, resulting in the
Government paying more for the cleanup contract
than was necessary. Allegedly WGI: required truck
drivers and others to falsely record more cubic
yardage, truck loads, and/or full loads than were
actually hauled; directed or caused truck drivers to
give the false appearance that the trucks were being
fully and efficiently utilized for their intended
purpose; paid full salary to workers who had been
injured on the job and therefore should have been
paid worker's compensation benefits rather than
wages; and billed the Government for time and
expenses associated with the transport of injured
workers to medical care. WGI also entered into a
compliance agreement with the EPA Suspension and
Debarment Division to include specific ethics, audit,
and training requirements. (Cost $358,404)
While making no admission of wrongdoing or
liability, Bearingpoint, Inc.; Booz Allen Hamilton,
Inc.; Ernst & Young, LLP; and KPMG, LLP, each
settled lawsuits concerning alleged false claims for
travel reimbursement submitted to numerous Federal
agencies, including EPA. Bearingpoint has agreed to
pay $15 million to settle the matter, Booz Allen
$3.37 million, Ernst & Young $4.47 million, and
KPMG $2.77 million. In relation to work performed
for the Government, all four firms received rebates
on travel expenses from airlines, credit card
companies, hotels, rental car agencies, and travel
service providers, but did not consistently disclose
the existence of these travel rebates to the United
States to reduce travel reimbursement claims by the
amounts of the rebates. Each company allegedly
knowingly presented claims for payment to the
United States for amounts greater than the travel
expenses actually incurred, violating contractual
provisions of the Federal Acquisition Regulations.
The settlement resolved suits filed by Neal A. Robert
under the qui tarn or whistleblower provisions of the
False Claims Act. Mr. Roberts will receive an
amount to be determined in the near future. (Cost
$64,143)
The University of Connecticut (UConn) agreed to
pay $2.5 million in damages and penalties to settle
civil allegations that the university submitted false
claims on approximately 500 Federal grants awarded
to UConn from July 1997 through October 2004.
Several Federal agencies, including EPA, awarded
the grants for work to be performed by two of
UConn's specialized service facilities: the
Environmental Research Institute (ERI) and the
Booth Research Center (BRC). The Government
specifically alleged that UConn submitted grant
applications containing incorrect or overstated
information about anticipated expenses for ERI and
BRC, charged certain expenses that were not
properly chargeable, and submitted invoices to the
Government for three types of improper grant
expenses. UConn also entered into a compliance
agreement with the Federal Government that requires
the university to make significant changes in its grant
administration program, including certifying that it
has in place an adequate compliance program for
preventing fraud and false billings to Federal grants.
(Cost $259,416)
Based on their guilty pleas for conspiracy in a
kickback scheme, Ronald Check, Jr., the President of
Grace Industries, Inc. (Grace), was sentenced to
60 months of probation, 6 months of house arrest,
and fined $5,000, with a special assessment of $200;
James Vagra, a former Project Manager for Grace,
was sentenced to six months in prison, followed by
3 years supervised release and fined $32,382 with a
$200 special assessment; and Gary Sanders, a former
site foreman for Grace, was sentenced to 60 months
of probation, and fined $32,382 with a $200 special
assessment. In addition to the sentences imposed
above, Grace paid $113,711 to the IRS that
represented amounts due because Grace had
previously deducted the kickback payments as
business expenses. Vagra paid $12,177 to the IRS
because he failed to report the income he received
from the kickback payments. Sanders also paid
$21,527 to the IRS for under reporting his income.
In 1996, Tetra Tech Nus, Inc. was awarded a contract
by the EPA to serve as the prime contractor in the
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cleanup of the Berkley Products Superfund site.
Tetra Tech had awarded a subcontract to Grace in
2000 for the construction of a landfill cap at the
Berkley Products site. James Risner, the Project
Manager for Tetra Tech, was responsible for
overseeing the work performed by Grace. Risner
solicited kickbacks for about $129,531 from Check,
Jr. in exchange for Risner certifying the work
performed by Grace was completed in a satisfactorily
manner. Risner, in turn, kicked back approximately
one-half of all money he received to Vagra, who in
turn provided one-half of that money to Sanders.
Risner provided Grace with phony invoices in the
amount of the kickbacks to disguise the illegal
payments. (Cost $64,268)
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.
Support Return on Investment Summary
Total Staff Years: 72 (21.6% of total FTE)
Total Cost: $10.8 Million (21.8% of total costs)
Environmental and Business Results
19 Recommendations for Management Improvement
6 New Management Challenges/FMFIA Risks Identified
Performance Highlights
National Training Conference: The EPA OIG held
its fourth Biannual National Training Conference,
December 6-8, 2005, in Orlando, Florida. This
Conference provided OIG staff with the opportunity
to earn 19 to 22 Continuing Professional Education
credits. The concept of the National Training
Conference is to provide the members of the EPA
OIG with an opportunity to come together from
around the nation and from different professional
disciplines, in the spirit of "One OIG," for a common
leaning experience. The Conference featured 42 topic
sessions with 65 speakers from EPA, industry,
academia, other Federal agencies, Congress, and
nationally recognized experts, as well as professional
presentations by our own highly talented staff.
Plenary and specialized sessions were planned around
these Conference Themes: Environmental Innovation:
Exploring Risks, Costs and Green Opportunities;
The Power of Data: Leveraging Accountability,
Credibility and Change; Exercising Our Authority to
Promote Integrity; and Taking Care of Business:
Ourselves and Our Organization.
Legislation, Regulation, and Policy Review: The
OIG analyzed 34 legislative, regulatory, or policy
items, making 19 recommendations and suggestions
for improvements and additions. Items on which the
OIG made significant recommendations included:
Proposed Office of Human Resources Reorganization;
Proposed Interim EPA Personal Property Policy and
Procedures Manual; Proposed Office of Air Quality
Planning and Standards Reorganization; OMB Audit
Bulletin 01-02 Revision; EPA Draft Order Federal
Credentials for Inspections and Enforcement of
Federal Environmental Statutes; Draft EPA Order -
Food at EPA Conferences, Workshops and
Observances; and Generally Accepted Government
Auditing Standards Draft Revision.
Implementation of Cost Accounting Methodology:
To determine the costs of specific OIG work products
associated with disaster relief, the OIG developed and
applied cost accounting methodology to all OIG
mission products and services. The OIG cost
accounting model, developed in compliance with
Generally Accepted Cost Accounting Principles and
Standards (separates costs into the traditional
categories of direct, indirect, and overhead [general
and administrative]), grouped costs by office and
products. We developed an overhead cost rate that
was consistently applied to incremental costs of
specific products and services, resulting in fully-
loaded billable staff-day costs. We validated the
model by equating the cost of total billable hours to
the total budget expended. The success in the
application of this methodology is demonstrated in the
total costs reported for the work of each product line,
and in the appendix listing the cost of each OIG report
issued.
Outreach Planning With Agency Leadership:
The OIG implemented a customer driven planning
process to develop an FY 2007 work plan that
addresses EPA's most significant environmental and
management risks, priorities, and challenges. Nearly
50 percent of the plan resulted from stakeholder input.
The planning process included developing separate
compendiums of risks, challenges, and opportunities
for Agency-wide management, media-specific areas,
and regional cross-goal and management issues. We
met with each EPA Assistant and Regional
Administrator to obtain their input about their highest
priority risks, challenges, and opportunities, and then
aggregated the results to formulate our plan to address
greatest concerns.
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OIG Reported Key Agency Management Challenges
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 identified by the OIG as
Key Management Challenges facing EPA and the relationship of the issues to the Agency Strategic Plan and
the President's Management Agenda.
EPA's Top Major Management Challenges
Reported by the Office of Inspector General
Link to
President's
FY FY FY Link to EPA Management
2004 2005 2006 Strategic Goal Agenda
Managing for Results: Focusing on the logic of design, measures of
success (outputs and outcomes), and measures of efficiency, so that
EPA programs and processes can be set up to evaluate results and
make necessary changes.
Agency Efforts in Support of Homeland Security:
Implementing a strategy to effectively coordinate and address threats.
Data Standards and Data Quality: Improving the quality of data
used to make decisions and monitor progress, and data accessibility to
EPA's partners.
EPA's Use of Assistance Agreements to Accomplish Its
Mission: Improving the management of the billions of dollars of grants
awarded by EPA.
Emissions Factors for Sources of Air Pollution: Reliable
emission factors and data are needed to target the right sources for
control strategies, ensure permitting is done properly, and measure the
effectiveness of programs in reducing air pollution.
Human Capital Management: Implementing a strategy that will
result in a competent, well-trained, and motivated workforce.
Voluntary, Alternative, and Innovative Practices and
Programs: Applying voluntary approaches and innovative or
alternative practices to provide flexible, collaborative, market driven
solutions for measurable results.
Efficiently Managing Water and Wastewater Resources and
Infrastructure: Current drinking water, treatment and supply, and
wastewater treatment and disposal systems are wearing out and will
take huge investments to replace, repair, and construct facilities.
Information Technology Systems Development and
Implementation: Overseeing information technology projects to
ensure they meet planned budgets and schedules.
Data Gaps: Deciding what environmental and other indicators will be
measured, providing data standards and common definitions to ensure
that sufficient, consistent, and usable data are collected.
*
**
*
&&
Cross-Goal
Cross-Goal
Cross-Goal
Cross-Goal
Goal 1
Cross-Goal
Cross-Goal
Goal 2
Cross-Goal
Cross-Goal
Integrating
Performance
& Budget
Homeland
Security
E-Gov
Financial
Performance
Human
Capital
E-Gov
E-Gov
**
From FY 2004 and 2005 Working Relationships with the States and Linking Mission to Management were
consolidated into Managing for Results.
From FY 2004 and 2005 Information Resources Management and Data Quality were consolidated into
Data Standards and Data Quality
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Results of OIG Outreach for Customer Feedback
As part of the OIG planning outreach review process, senior Agency officials were asked to provide their
perceptions of the OIG strengths and areas for improvement. A summary of these comments are provided
below.
Customer Comments on Areas of Perceived OIG Strengths
Emergency Advisory Services
o OIG work on Katrina was extremely valuable and timely. Immediate feedback on problems that could be
quickly corrected was useful for EPA Program Offices and Regional Offices. This area was frequently
identified as a best practice on how the OIG collaborated and communicated with the Agency to prevent
abuse.
o Similar early warning work is requested in other Agency areas to prevent future problems.
Effective Communication and Relationship Management
o OIG's recent use of discussion drafts of reports allows offices a chance to comment on facts and tone of
the report.
o The OIG has improved relations with Program and Regional Offices by offering more communication
and report review opportunities.
o OIG coordinates well and provides valuable background information in planning assignments.
o OIG staff listens to concerns and reacts positively.
o OIG is respected for its honesty and independence.
o OIG is willing to take on big problems and issues.
o Program Offices and Regional Offices are able to agree and disagree with OIG findings. The
communication process is getting better between the Agency and the OIG.
o OIG is good at working with Regional entities and giving direct answers on issues.
Auditing, Evaluating, Investigating, and Advisory Services
o OIG maintains a solid approach to audits and abuse investigations.
o Fraud awareness briefings have been very effective in presenting practical information.
o OIG evaluation work is getting better at framing the important questions and making recommendations in
areas requiring change.
o Financial audits and OIG work on Human Capital have been very effective.
o OIG work on high performing organizations has helped Program and Regional Offices clarify and focus
on their visions and missions.
o OIG work that supports the Program Assessment Rating Tool (PART) is useful and needs to be expanded.
o OIG Logic Modeling assistance is valuable in helping Program Offices build the link between
environmental conditions and human health.
16
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Customer Comments and Suggestions on Perceived Areas for OIG Improvement
OIG Products and Advisory Services
o OIG needs to streamline the financial statement audit process to make it less burdensome.
o Assignments must address long-term compliance issues and causes of noncompliance.
o OIG work needs to be aligned with PART schedules, and OIG should prepare capping reports in order to
combine related issues together in one report that supports PART assessments.
o OIG needs to offer early warning work/early involvement in new initiatives to help avoid problems later.
OIG process reviews would help identify better operational efficiencies.
o An OIG checklist for the assessment of particular areas such as the Federal Information Security
Management Act (FISMA) or OMB A-123 would be useful.
o OIG can help Program and Regional Offices understand where the money is going by introducing
efficiency measures, and identifying effective and non-effective Agency programs.
o OIG should examine effective ways of managing grantee failures, and how to help them build capacity to
achieve compliance.
OIG Accessibility, Visibility, and Communications Strategy
o OIG should consider new ways of delivering its message to customers EPA-wide. Much of the OIG's
work is applicable and transferable to other areas, if people know about it. One of the greatest services
the OIG can provide to the Agency to help solve and avoid problems would be to promote best practices
in its reports, and maintain a web-based inventory of recommendations and actions taken.
o OIG needs greater visibility within EPA, and among States and grantees. The OIG can help reinforce the
requirements for compliance by grantees, frequently better than the Agency can.
o A user-friendly organizational structure needs to be available so that Program and Regional Offices can
know whom to contact for specific program and regional issues and concerns.
o OIG reviews require a great deal of program staff time and often are a major inconvenience. During OIG
requests, the OIG needs to be more aware of deadlines and other requirements. OIG needs to provide
more advance notice of its requests.
o The OIG needs to change its focus of reports from media specific to cross media. Often the concentration
is too great in one area, which may be dependent upon or related to other programs, media, or operational
issues.
o The OIG needs to become a more active member on the environmental crimes task force.
Report Tone and Balance
o OIG needs to check tone and sensitivity to hyperbole.
o Some OIG staff members tend to demonstrate pressure to find fault and not successes. OIG can distort
report outcomes by being heavy handed or lacking balance.
o OIG needs to report on the substance of the issues, and not dwell on the documentation aspects.
o The boundaries of OIG work should be better explained and understood.
o OIG report titles and summaries need to be more descriptive and focus on the full report text. Sometimes
the report headlines and summaries sensationalize an issue or report it out of context.
Staff Knowledge, OIG and EPA
o OIG staff are not always knowledgeable enough to have a clear understanding of programs, or be
conversant in the complexities of the Agency program topics. The OIG should tap into the knowledge of
Agency employees in the Program and Regional Offices to increase its knowledge in various areas.
o Allow rotation of OIG staff to Agency programs so they can share their knowledge of evaluation
techniques and accountability processes for better management practices.
17
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OIG FY 2006 Resource Use and Allocation
FY 2005 Appropriation - Final Utilization Rate
Account $ Appropriation Available $ Appropriation Used % $ Appropriation Used
Management $37,646,400
Superfund 12,896,000
TOTAL $50,542,400
FY 2006 Appropriation Usage
$37,631,234 100.0%
12,886,862 pp po/n
$50,518,096 100.0%
Account $ Appropriation Available $ Appropriation Used % $ Appropriation Used
Management $36,896,858
Superfund 13,334,489
TOTAL $50,231,347
FY 2006 FTE Usage
Account FY 06 FTE Available
Management 268.0
Superfund 93.8
TOTAL 361.8
$34,682,200 94 Oo/0
12,294,897 922%
$46,977,097 93.5%
FY 06 FTE Used % FTE Budget Used
248.3 92.6%
88.8 94.7%
337.1 93.2%
FY 2006 Funds Used By Object Class
Contracts
$2,659,241 ~~\
Grants \
$114,180 ~~\ \ j~ $2,£
Expenses \ \ I
$878,729 ~A \ \ I f
Travel \\ [
$2,151,260 ~^_______^^
WCF
45,863
Awards
$624,360
^x
k Salaries J\
\^~~^__^ $40,209^50_^^-^\y
^^ ^___ __^^-^
TOTAL $49,583,584
FY 2005 Distribution of FTE Used: Total 358
Mission Systems
20.5
Human Capital
39.1
Planning, Analyis & Results
11.7
Cong/Public Liaison
20.6
Program Evaluation
84.8
IG Counsel
r 7.8
Immediate IG
7.6
Audit
105.7
\ Investigations
60.2
18
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OIG Management Challenges
In fiscal 2006, for the eighth 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. Several of the weaknesses identified in FY 2005 were not fully resolved in FY 2006
because of their complexity.
OIG - level Weakness
Records Management
Information Technology
OIG Intranet/Internet
Product Timeliness and Quality
Follow-up on Corrective Actions
Data Quality
2004
2005
2006
In fiscal 2006, the OIG took the following steps to improve management controls:
Q Scored specific quality characteristics of all reports issued by the OIG between October 1,
2005 and March 31,2006.
Q Developed policies and procedures on: the OIG Directives System, Quality Assurance
Program, Coordinating Work among Offices, Procedures for Organizational and Personal
Independence, OIG Alternative Work Schedules, Workforce Diversity, Personnel Security
Investigations, Standards of Conduct, Report Editing and Distribution, OIG Purchase Card
Program, and Control and Use Handheld Electronic Devices.
Q Revised the Training Information System (TIS) to track not only current training but
previously completed continuing professional education for staff.
Q Modified our procedures to ensure that advice concerning compliance with the Paperwork
Reduction Act is consistent and in writing.
Q Modified our guidance for OIG reports to comply with Government Auditing Standards.
Q Issued the OIG Annual Performance Report demonstrating specific progress on OIG Strategic
Goals, June 2006.
Q Completed an in-depth quality assurance review of the Office of Audit Financial Audit
product line, May 2006.
Q Conducted periodic inventories of (issued and stored) firearms, badges, credentials, and other
law enforcement equipment.
Q Completed the self-study courses "Information Security Awareness" and "Essential Ethics for
EPA Employees," December 31, 2006.
Q Delivered training to all Office of Program Evaluation staff on evidence and indexing.
Q Prepared the first OIG compendium of Agency-wide program and management risks,
challenges and opportunities, to guide the OIG assignment planning, development, and
selection process.
19
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Appendixes
Profile of FY 2006 OIG Performance Activity
Audit/ Evaluation Activity and Agency Action
Reports Issued
Reviews performed by OIG
Reviews by another Federal Agency
Single Audit Reviews
TOTAL Reports
Monetary Results
Questioned Costs (in millions)
Cost Efficiencies (in millions)
Costs Sustained (from current and prior periods)
Reports Resolved (from current and prior periods)
Agency Recoveries (from current and prior periods)
Audit Resolution (Dollars in Millions)
Recommendations as Costs
With no management decision start
FY 2006
Issued in FY 2006
Agreed to by management or value of
nonawards (not including prior to
issuance)
Not agreed to by management or value
of nonawards
With no management decision,
end FY 2006
Percent of total agreed to by mgmt.
* Audits with no Federal actions as of
9/30/06 which are over 365 days past
issuance date: 65 reports
Reports for which no management
decision was made within 6 months of
issuance at 9/30/06: 75 reports
Audit Resolution Reported by EPA
Audits with management decision but
without final action start FY 2006
Audits for which management
decisions were reached in FY 2006
Total audits pending final action during
FY 2006
Final action taken during FY 2006
Audits without final action end of
FY 2006 (carried as opening balance
in FY 2007)
Percent $ value final action taken
FY2006)
Questioned
$89.60
$87.00
$38.91
$20.16
$117.38
22%
$43.34
$71.9
$40.0
$105.9
$39.6
$66.2
37.4%
68
257
206
531
$87
$691
$157.2
269
$4.7
Efficiencies
$9.50
$697.45
$94.13
$598.74
$5.55
73.5%
$3.61
$2.0
$49.4
$51.4
$10.0
$41.4
19.5%
Investigative Activity
Investigations opened
Investigations closed
Pending investigations as of
9/30/06
Indictments persons/firms
Convictions persons/firms
Administrative actions: EPA
employees/firms
Civil Judgments
Allegations disproved
(excluding Hotline cases)
* Fines and recoveries (in millions)
Prison time in months
Suspended time in months.
Probation in months
Community Service hours
123
175
166
17
25
56
8
5
$30.8
120
78
570
1,175
Other
Hotline complaints received
Hotline complaints opened
Hotline complaints closed
Public inquiries addressed
Referrals to other offices
Legislative/Regulatory/Policy
Items Reviewed
564
17
30
170
377
34
20
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Summaries of OIG Reports, Timeliness, and Costs
Calendar
Report Days in Staff
Number Report Name Production Days Total Cost
2006-1-00018
2006-1-00024
2006-P-00015
2006-P-00005
2006-4-00131
2006-S-00001
2006-P-00024
2006-P-00021
2006-P-00020
2006-P-00019
2006-P-00010
2006-P-00002
2006-P-00004
2006-2-00017
2006-4-00056
2006-P-00022
2006-1-00021
2006-P-00012
2006-4-00026
2006-4-00027
2006-4-00147
2006-4-00051
2006-4-00052
2006-4-00025
2006-S-00003
2006-S-00005
Nevada Drinking Water State Revolving Fund 6/30/04
Nevada Clean Water State Revolving Fund 6/30/04
EPA OAR and OW Can Further Limit Use of LOE Contracts
IS Service Continuity & Physical Access Controls At NCC
E&E Accounting System
2005 Federal Information Security Management Act
Information Security Series: Security Practices - CAMDB
Information Security Series: Security Practices - SDWIS
Information Security Series: Security Practices - ICIS
Information Security Series: Security Practices CERCLIS
Information Security Series: Security Practices ICMS
EPA Could Improve Information Security
E&E Needs To Improve Info Technology Gen Controls
E&E Data Input CAS 402 Noncompliance - Cost Impact
E&E 2005 Floorcheck
EPA Needs To Better Implement CIPP
SRF-Oregon Clean Water 2005
Contract Administration Followup
Illinois Credit Claim for the Ottawa Radiation Site
White House Oil Pits Superfund Site Mixed Funding Claim
Oregon DEQ Reported Outlays Under Agreement V990601 02
E&E Revised ES Disclosure Statement (Effective Aug. 1999)
E&E Revised HR Disclosure Statement (Effective Aug. 1999)
CO - E&E Adequacy of CFY 2004 Incurred Cost Proposal
Congressional Request-Grants To National Rural Water Assoc
Assist. Agreement - National Rural Water Assoc - Congressional
671
618
586
482
704
462
230
82
663
114
243
838
$181,151
$64,087
$528,432
$92,059
$193,297
$675,228
Counted in 2006-S-00001 above
254
380
263
348
350
423
109
109
429
128
128
67
273
371
118
35
97
365
229
102
48
38
258
13
11
13
494
363
$93,690
$27,638
$77,132
$300,217
$185,385
$83,674
$39,323
$30,290
$213,776
$10,904
$8,715
$10,755
$411,194
$302,037
21
-------
Calendar
Report Days in Staff
Number Report Name Production Days Total Cost
2006-P-00032
2006-P-00038
2006-2-00008
2006-S-00008
2006-S-00002
2006-P-00035
2006-4-00093
2006-P-00029
2006-4-00097
2006-4-00102
2006-4-00122
2006-S-00004
2006-2-00019
2006-P-00037
2006-S-00007
2006-4-00139
2006-S-00006
2006-1-00015
2006-1-00080
2006-P-00027
2006-P-00007
2006-P-00008
2006-P-00031
2006-P-00041
2006-P-00006
AA-Purpose and Use of Chesapeake Bay Grants
Hurricane Katrina - Contracts
E&E Agreed Upon Procedures RFP-PR-R7-05-10029
FY 2006 FISMA Report
OCR of NRDC FY 2003 Single Audit-PriceWaterhouse-Coopers
Management of Government Furnished Equipment
Mixed Funding Claim - Bofors-Nobel Superfund Site
Business Systems - EPA's Organizational Structure Study
Army Creek Mixed Funding Claim No. 2
Armour Road Superfund Site Mixed Funding Claim
ASIWPCA Incurred Costs for Seven Grants
Delta Institute FY 2003 Single Audit OCR
Contract No. W91 1 kb-06-D-004
Assist. Agreements - Earmarks Consolidated
Assist. Agreements-America's Clean Water Foundation-Grant Costs
White House Mixed Funding Claim Number 2
Protection of Sensitive Information Assessment
2005 Agency F/S - General (Master)
2005 Chemical Safety Board Financial Statement Audit
Undistributed Superfund Costs
More Information Is Needed On Toxaphene Degradation Products
University Of Nevada Reno REMAP Grants
Ritualistic Uses Of Mercury
Review of Environmental Concerns at McFarland, California
Performance Measurement and Reporting For Enforcement
351
371
55
351
224
334
154
272
147
158
206
176
42
148
144
121
61
299
554
238
555
459
362
850
729
499
838
34
602
99
153
66
499
68
46
109
62
13
139
205
39
27
4,989
35
388
344
209
77
365
568
$415,725
$698,390
$27,926
$501,793
$82,633
$127,753
$54,915
$415,825
$56,843
$38,451
$90,657
$51,685
$11,149
$116,135
$170,998
$32,355
$22,716
$4,012,866
$28,885
$323,396
$269,059
$166,923
$67,160
$302,694
$423,816
22
-------
Calendar
Report Days in Staff
Number Report Name Production Days Total Cost
2006-P-00013
2006-P-00003
2006-P-00009
2006-P-00016
2006-P-00036
2006-P-00017
2006-P-00001
2006-P-00039
2006-P-00028
2006-P-00026
2006-P-00025
2006-P-00014
2006-P-00011
2006-P-00023
2006-P-00018
2006-P-00033
2006-P-00034
Superfund Mandate: Program Efficiencies
Impact of FPQA On EPA's Pesticide Registration Program
Impact of Data Gaps on EPA's Implementation of FQPA
EPA's Management Strategy for Contaminated Sediments
Evaluation of Drinking Water Laboratory Procedures
Emissions Factors Management, Use, and Benefits
Industrial Wipes - Congressional Request
Nonroad Emission Reduction Strategies
Measuring the Impact and Progress Of FQPA
Small Drinking Water Systems
Mercury Hot Spot Analysis Under CAMR
Katrina - Water (Louisiana)
Katrina - Water (Mississippi)
Katrina - Land
Katrina - Wastewater
Katrina - Lessons Learned
Environmental Justice Survey
725
475
558
586
758
502
348
517
437
356
331
159
1126
507
562
885
1021
533
387
600
302
263
343
428
$846,665
$379,173
$420,633
$665,352
$774,026
$404,114
$287,600
$460,207
$234,614
$200,430
$265,267
$333,800
Counted in 2006-P00014 above
215
151
139
67
686
241
83
203
$535,642
$187,787
$64,808
$158,213
68 OIG Reports Produced and Issued (memo reports are not counted)
23
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OIG Financial Statements: Anah
MANAGEMENT
PC&B
Travel
Expenses
Contracts
WCF
Grants
Total Mgmt
SUPERFUND
PC&B
Travel
Site Travel
Expenses
Contracts
WCF
Grants
FY05
Carryover
Avail in 06
$246,818
748,458
231,435
404,526
564
22,000
$1,653,801
FY05
Carryover
Avail in 06
$185,733
390,986
0
185,724
209,347
100
5,100
FY05
Carryover
Used in 06
$247,191
747,776
234,046
394,622
0
5^8,635
FY05
Carryover
Used in 06
$183,002
390,735
0
186,390
202,725
0
/sis of FY 2006 Fund Use and Carryover Balances
FY05
Lapsed
Funds
($373)
682
(2,611)
9,904
564
7,000
$15,166
FY05
Lapsed
Funds
$2,731
251
0
(666)
6,622
100
100
FY 2006
Approp.
$29,820,675
900,125
722,300
3,572,658
1,806,600
74,500
$36,896,858
FY 2006
Approp.
$10,313,100
804,000
5,000
264,000
1,259,789
661,700
26,900
FY 06 Funds
Used in 06
$29,763,601
909,428
358,097
1,518,874
2,062,530
69,670
$34,682,200
FY 2006
Used in 06
$10,640,331
103,321
0
100,382
543,020
883,333
24,510
FY 2006
Carryover
$57,074
(9,303)
364,203
2,053,784
(255,930)
$2,214,658
4,830
FY 2006
Carryover
($327,231)
700,679
5,000
163,618
716,769
(221,633)
Total Cost
of FY 06
Operations
$30,010,792
1,657,204
592,143
1,913,496
2,062,530
84,670
$36,320,835
Total Cost
of FY 06
Operations
$10,823,333
494,056
0
286,772
745,745
883,333
29,510
Total Cost
as % of
06
Approp.
101%
1 84%
82%
54%
114%
114%
98%
Total Cost
as % of
06
Approp.
105%
61%
0%
109%
59%
133%
1 1 0%
Total SF
Total Mgmt & SF
$976,990 $967,852
5,000
$9,138 $13,334,489
$2,630,791 $2,606,487 $24,304 $50,231,347
$12,294,897 $1,039,592 $13,262,749 99%
2,390
$46,977,097 $3,254,250 $49,583,584 99%
PC&B: Personnel Compensation and Benefits
WCF: Working Capital Fund
24
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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-03-673G, June 2003; 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 their respective performance data.
Data Limitations: All OIG staff are responsible for data accuracy in their products and services. However, there is a
possibility of incomplete, miscoded, or missing data in the system 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.
25
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OIG Future Annual Performance Targets (FYs 2007-2008)
Annual Performance FY2007 FY20Q8
Measures Supporting Indicators Targets Targets
Environmental and Business
Actions Taken for Improved
Performance from OIG work
Environmental and Business
Recommendations or Risks
Identified for Corrective Action by
OIG work
Potential Monetary Return on
Investment in the OIG, as a
Percentage of the OIG Budget
Criminal, Civil, Administrative
and Fraud Prevention Actions
Taken from OIG Work
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 practice 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)
318
925
150%
($72.6
Million)
80
309
901
150%
80
26
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