EPA-350-R 10-005
November 2010
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
PRO"*
Semiannual Report to Congress
April 1, 2010-September30, 2010
^
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Index of Reporting Requirements
Inspector General Act of 1978, as Amended
Requirement Subject
Section 4(a)(2) Review of legislation and regulations 36-37
Section 5(a)(1) Significant problems, abuses, and deficiencies 5-6, 9-35
Section 5(a)(2) Significant recommendations for corrective action 5-6, 9-31, 35
Section 5(a)(3) Reports with corrective action not completed 60
Section 5(a)(3) Peer reviews conducted 36
Section 5(a)(4) Matters referred to prosecutive authorities 32-33, 43-44
Section 5(a)(5) Information or assistance refused None
Section 5(a)(6) List of reports issued 45-47
Section 5(a)(7) Summaries of significant reports 5-35
Section 5(a)(8) Audit, inspection, and evaluation reports—questioned costs 39-41, 44-47
Section 5(a)(9) Audit, inspection, and evaluation reports—funds to be put to better use 39-41, 44—47
Section 5(a)(10) Prior audit, inspection, and evaluation reports unresolved 40-41, 48-59
Section 5(a)(11) Significant revised management decisions None
Section 5(a)(12) Significant management decisions with which OIG disagreed None
Abbreviations
DCAA Defense Contract Audit Agency
ECHO Enforcement Compliance and History Online
EPA U.S. Environmental Protection Agency
FY Fiscal year
OIG Office of Inspector General
OMB Office of Management and Budget
Cover photos:
Left: EPA should take additional steps to reduce urban air toxics (photo courtesy
Chicago Tribune). Right: Projects such as the Great Lakes National Program Office's
habitat restoration in Buffalo, New York, present cross-media and cross-boundary
challenges (EPA photo).
To find out more about the U.S. Environmental Protection Agency
Office of Inspector General and its activities, visit our website at:
http://www.epa.gov/oig
Printed on 100% recycled paper (minimum 50% postconsumer)
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Message to Congress
On June 22, 2010,1 was honored to be confirmed by the United States Senate to serve as
the fifth inspector general of the United States Environmental Protection Agency (EPA).
The EPA's mission to protect public health and the environment is as important today as
it was when the first EPA inspector general was appointed. As EPA strives to fulfill its
mission, my office will be committed to contributing to EPA's success by assuring the
public and Congress that EPA is delivering services and managing its resources in the
most economical, efficient, and effective manner possible—free of fraud, waste, and
abuse.
In working to meet our goals, the EPA Office of Inspector General (OIG) will be guided
by the following three principles: deliver excellent customer service, operate with
integrity, and promote accountability. As we work to help the Agency fulfill its mission,
we will be transparent in our efforts. Our work will serve to highlight the areas in which
EPA can improve, and we will strive to produce quality products in a timely manner.
Our work will be performed with integrity. It will be objective and fact based. We will
continue to enhance our subject-matter expertise through training and skill development.
It is also imperative that we demonstrate personal and professional ethics, so that the
Agency, Congress, and the public can have confidence in what we do and say. We should
be an agent for positive change, helping the Agency better perform its mission without
sacrificing our independence.
As we hold others accountable for their efforts, we shall also hold ourselves accountable.
The OIG should be a well-managed and reliable organization. I will work to ensure that
we have systems and processes in place that provide strong support for our conclusions
and recommendations. We will have metrics that will hold OIG senior leadership, as well
as the rest of our staff, accountable for our work. We will also be accountable to the
public and Congress for the proper use and prudent management of our own resources.
In my first few months at the EPA OIG, I have been impressed with the expertise and
dedication of the talented staff. I look forward to working with them, and all of our
customers, as we strive to help the Agency achieve its mission and improve our own
internal operations. I thank all of them in advance for the hard work it will take to make
this a reality.
During this semiannual reporting period, we issued six reports on EPA's efforts related to
the American Recovery and Reinvestment Act of 2009. Two site inspections of Recovery
Act grants did not disclose any issues that would require action from fund recipients or
EPA. We also determined that EPA's weekly Recovery Act financial activity reports are
accurate, timely, and transparent. We did note, however, that EPA did not complete
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Semiannual Report to Congress April 1, 2010-September 30, 2010
contractor performance evaluations in a timely and thorough manner. Even though EPA's
controls for reviewing grantee and contractor recipient-reported data pursuant to the
Recovery Act resulted in low error rates, improvements could enhance data accuracy.
We also found that EPA has not implemented key Clean Air Act requirements related to
reducing risks from urban air toxics and identifying urban areas that continue to
experience significant public health risks from air toxics exposures. We concluded that
EPA does not have effective management controls to monitor the completion of
Five-Year Review recommendations at federal government Superfund sites. Further, we
determined that the national environmental structure created 40 years ago has resulted in
a fragmented approach to environmental protection, and that new, large-scale
environmental problems require coordinated efforts across government and stakeholder
groups.
America is facing serious environmental challenges: climate change and improving air
quality, protecting the nation's waters, cleaning up our communities, ensuring the safe
use of chemicals, and enforcing environmental laws. EPA has a vital role in addressing
these challenges. However, EPA also faces challenges in using its funds and
accomplishing its mission in an efficient and effective manner. The OIG will do its best
to help the Agency address the nation's critical environmental challenges by ensuring that
Agency funds are properly expended to safeguard human health and the environment.
(A
Arthur A. Elkins, Jr.
Inspector General
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Table of Contents
Arthur A. Elkins, Jr., Named Inspector General 1
About EPA and Its Office of Inspector General 2
U.S. Environmental Protection Agency 2
EPA Office of Inspector General 2
Management Challenges for the Agency 3
OIG Recovery Act Efforts 4
OIG Conducts Outreach to Deter Fraud, Improve Efficiency 4
EPA Should Improve Evaluation of Contractor Performance 5
EPA Can Improve the Accuracy of Recovery Act Recipient Data 5
EPA OIG Responds to Congressional Request on Signage Requirements 6
Site Inspections of Recovery Act Projects Did Not Note Problems 7
EPA Submitted Accurate and Timely Financial Reports 8
Additional OIG Audits and Evaluations Underway 8
Other Significant OIG Activity 9
Air 9
Water 10
Superfund/Land 11
Research and Development 16
Enforcement 17
Cross-Media 18
Special Reviews 20
Grants and Contracts 24
Forensic Audits 25
Risk Assessment and Program Performance 27
Information Resources Management 28
Investigations 32
Legal Reviews 34
Chemical Safety and Hazard Investigation Board 35
Other Activities 36
continued
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Statistical Data 39
Profile of Activities and Results 39
Audit, Inspection, and Evaluation Report Resolution 40
Hotline Activity 42
Summary of Investigative Results 43
Scoreboard of Results 44
Appendices 45
Appendix 1 - Reports Issued 45
Appendix 2 - Reports Issued Without Management Decisions 48
Appendix 3 - Reports With Corrective Action Not Completed 60
Appendix 4 - OIG Mailing Addresses and Telephone Numbers 61
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Arthur A. Elkins, Jr., Named
Inspector General
On June 22, 2010, the United States Senate confirmed Arthur A. Elkins, Jr., as inspector general of the
U.S. Environmental Protection Agency (EPA).
Before his appointment, Mr. Elkins served as associate general counsel in
EPA's Office of General Counsel. While in that position, he supervised the
delivery of legal counsel, opinions, litigation support, and other legal
services for the Office of General Counsel's information law practice,
employment law practice, and intellectual property law practice.
Previously, Mr. Elkins served as the chief legal officer and general counsel
for the Court Services and Offender Supervision Agency; counsel to the
inspector general of the National Science Foundation; and counsel to the
U.S. Department of Defense, Defense Office of Hearings and Appeals.
Prior to joining the federal government, Mr. Elkins served as an assistant
prosecuting attorney in the Ohio Cuyahoga County Prosecutor's Office
and as an assistant public defender in the Ohio Cuyahoga County Public
Defender's Office.
Arthur A. Elkins, Jr.
Mr. Elkins earned a bachelor's degree in social science from Thomas A. Edison State College; a Master
of Business Administration degree from Baldwin-Wallace College; a Juris Doctor degree from
Cleveland-Marshall College of Law, Cleveland State University; and a Master of Laws in law and
government from Washington College of Law, The American University.
Mr. Elkins is a member of the bar in Ohio, the District of Columbia, the United States District Court for
Northern Ohio, the United States Court of Appeals for the Sixth Circuit, and the Supreme Court of the
United States of America.
Mr. Elkins is the recipient of the Council of Counsels to the Inspectors General's Leadership Award, the
Federal Executive Council on Integrity and Efficiency Award for Excellence in Investigations, and the
National Science Foundation Office of Inspector General Commendable Service Award.
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Semiannual Report to Congress
April 1, 2010-September30, 2010
About EPA and Its
Office of Inspector General
U.S. Environmental Protection Agency
The mission of EPA is to protect human health and the environment. As America's
steward for the environment since 1970, EPA has endeavored to ensure that the public
has air that is safe to breathe, water that is clean and safe to drink, food that is free from
dangerous pesticide residues, and communities that are protected from toxic chemicals.
EPA has requested $10.02 billion in discretionary budget authority for fiscal year (FY)
2011. In addition to its annual budget, EPA received $7.2 billion under the American
Recovery and Reinvestment Act of 2009.
EPA Office of Inspector General
The Office of Inspector General (OIG) is an independent office of EPA that detects and
prevents fraud, waste, and abuse to help the Agency protect human health and the
environment more efficiently and cost effectively. Although we are part of EPA,
Congress provides us with a budget line item separate from the Agency's to ensure our
independence. The EPA OIG was created and is governed by the Inspector General Act
of 1978 (P.L. 95-452). The original act has been amended a number of times. OIG staff
are physically located at headquarters in Washington, DC; at the regional headquarters
offices for all 10 EPA regions; and other EPA locations including Research Triangle
Park, North Carolina, and Cincinnati, Ohio.
On September 29, 2010, Congress
passed H.R. 3081, the Continuing
Appropriations Act of 2011. This
continuing resolution provides
funding to the federal government
through December 3, 2010, at the
FY 2010 enacted level. The
president signed the bill
(P.L. 111-242) on September 30,
2010. The enacted budget for
FY 2010 was $54,766,000, and the
proposed budget for FY 2011 is
$55,802,000. In addition, the
Recovery Act provided the EPA
EPA OIG Vision and Mission
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.
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Semiannual Report to Congress
April 1, 2010-September30, 2010
OIG $20 million through September 30, 2012, for oversight and review of the Agency's
Recovery Act activities and expenditures. As of September 30, 2010, the OIG expended
$8.7 million in Recovery Act funds. Details on our Recovery Act efforts begin on page 4.
Management Challenges for the Agency
Following is a summary of the FY 2010 key management challenges that we provided to
EPA Administrator Lisa P. Jackson on May 11, 2010. The OIG defines management
challenges as a lack of capability derived from internal self-imposed constraints or, more
likely, externally imposed constraints that prevent EPA from reacting effectively to a
changing environment. The FY 2010 challenges listed below are based primarily on our
audit, evaluation, and investigative work. The last three challenges listed are new.
• The need for a national environmental policy
• Improving water and wastewater infrastructure
• Oversight of delegations to states
• Safely reusing of contaminated sites
• Securing Agency network resources and responding to cyber attacks
• Reducing domestic greenhouse gas emissions
• EPA's framework for assessing and managing chemical risks
Our memorandum to the Administrator is at
http://www.epa.gov/oig/reports/2010/EPA FY2010 ManagementChallenges.pdf
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Semiannual Report to Congress
April 1, 2010-September30, 2010
OIG Recovery Act Efforts
The American Recovery and Reinvestment Act of 2009, signed by President Obama on
February 17, 2009, provides the EPA OIG $20 million for oversight activities through
September 30, 2012. The OIG is conducting audits, investigations, and other reviews to
ensure economy and efficiency and to prevent and detect
fraud, waste, and abuse in EPA's disbursement of the
$7.2 billion the Agency received under the Recovery Act.
Reports on our findings are posted on our website at
http://www.epa.gov/oig/recovery.htm. An assessment
of EPA's progress after the first year of Recovery Act
funding, based on the OIG's work, is at
http://www.epa.gov/oig/reports/2010/ARRA One-
Year Overview Report-March 20 10 .pdf. The OIG
reviews, as appropriate, concerns raised by the public
about specific investments using Recovery Act funds. Individuals may report any
suspicion of fraud, waste, or abuse of EPA stimulus funds via the OIG Hotline. Any
findings of such reviews not related to ongoing criminal proceedings will also be posted
on our website. Details on Recovery Act efforts to date follow.
OIG Conducts Outreach to Deter Fraud, Improve Efficiency
The OIG Office of Investigations has implemented a three-pronged approach—education,
outreach, and investigations—to spread the word about the requirements of the Recovery
Act and deter and detect fraud schemes. A key goal is to educate stakeholders and
provide resources to help them use funds appropriately. The office has provided
Recovery Act-specific fraud training and presentations to Agency personnel; state, tribal,
and local officials; contractors; and grant recipients. The office has provided over
125 briefings across the country. As an example of a positive outcome, an engineer who
attended an OIG Recovery Act session from a western locality contacted the Office of
Investigations when allegations of fraud related to a Recovery Act-funded project came
to the engineer's attention. Upon subsequent contact and reviewing additional
information, the locality terminated the contract and avoided expending approximately
$3.4 million in Recovery Act funds.
In addition, the office has developed fraud awareness and education resources, including
pamphlets, posters, briefings, and webinar broadcasts. We have distributed over 6,000
pamphlets, posters, and Hotline cards to Agency personnel, state and tribal
administrators, contractors, and grant recipients. Brochures and information on training
opportunities are available on our website at http://www.epa.gov/oig/recovery trng.htm.
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Semiannual Report to Congress
April 1, 2010-September30, 2010
EPA Should Improve Evaluation of Contractor Performance
Because EPA did not complete contractor performance evaluations in a timely
manner and with complete information, the Agency risked providing funds to
contractors with a history of cost control and performance issues.
In July 2009, EPA decided to obligate approximately $211 million in Recovery Act funds
to Superrund contractors. Contracting officers are required to complete and document
performance evaluations for contractors awarded Recovery Act funds within 95 business
days after each 12 months of contract performance.
EPA had not completed in a timely manner 83 percent of the required performance
evaluations for contractors awarded Recovery Act funds. On average, EPA completed the
evaluations 109 business days late, generally because there was no system to monitor
evaluation timeliness. Further, contracting officers did not consider all available sources
of information when preparing the performance evaluations. EPA awarded $109 million
in Recovery Act funds to contractors with cost control and performance issues. In one
instance, the contractor's past performance evaluation information was not available to
EPA when it awarded a new Recovery Act contract totaling $5.4 million.
We recommended that EPA develop a system to monitor and verify the timeliness of
performance evaluations, revise quality assurance plan requirements, maintain reports in
an electronic system that contracting officers can access, and require contracting officers
to consider annual performance evaluation results. EPA agreed with our
recommendations.
(Report No. 10-R-0113, EPA Should Improve Its Contractor Performance Evaluation
Process for Contractors Receiving Recovery Act Funds, April 26, 2010—Report Cost:
$429,334)
EPA Can Improve the Accuracy of Recovery Act Recipient Data
EPA's controls for reviewing grantee and contractor recipient-reported data
pursuant to the Recovery Act resulted in low error rates. However, improvements
could enhance data accuracy.
The Recovery Act provides that the use of Recovery Act funds should be transparent and
reported clearly, accurately, and in a timely manner. The Office of Management and
Budget (OMB) issued government-wide guidance for carrying out the Recovery Act
reporting requirements included in section 1512 of the Recovery Act.
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Semiannual Report to Congress
April 1, 2010-September30, 2010
For the recipient-reported data fields that OMB identified as those for which there are
major concerns for significant reporting errors, we identified errors in 3 percent of
recipient entries. While EPA did not identify any of these errors as significant, we believe
two of the errors are significant. We also identified errors in other fields that OMB did
not identify as major concerns for significant reporting errors. In addition, EPA's
reference guide was not specific for some key data fields, leaving recipients to interpret
how to report information. Further, EPA allowed program offices to adopt their own
action limits for identifying errors, resulting in some discrepancies.
We recommended that EPA develop an Agency-wide threshold for identifying significant
errors for those fields OMB identified as major concerns, clarify the reference guide to
reduce the incidence of varying interpretations, and adopt a policy to investigate all
differences between what recipients report for their award amount and what EPA has
recorded in its information systems. EPA agreed with the findings and provided
corrective actions plans or acceptable alternatives.
(Report No. 10-R-0234, EPA Effectively Reviewed Recovery Act Recipient Data but
Opportunities for Improvement Exist, September 27, 2010—Report Cost: $278,859)
EPA OIG Responds to Congressional Request on Signage
Requirements
EPA required most Recovery Act recipients to post signs indicating that the
projects were funded through the Recovery Act.
On June 24, 2010, a congressional
request asked the Recovery
Accountability and Transparency Board
for information on signage requirements
for recipients of Recovery Act funds.
The board asked various OIGs,
including the EPA OIG, to respond
directly to the request.
In response to the questions asked, we
found that:
Sign identifying a water project in New Hampshire
funded by the Recovery Act. (EPA OIG photo)
EPA developed two forms of guidance that discuss the need for recipients to
display a Recovery Act logo to communicate to the public that the project is a
Recovery Act investment.
Generally, the terms and conditions sections of EPA's assistance agreements
require Recovery Act fund recipients to post identifying signs, logos, or emblems.
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Semiannual Report to Congress
April 1, 2010-September30, 2010
• The Diesel Emissions Reduction Act and Leaking Underground Storage Tank
program offices relaxed the requirement that recipients post signs, logos, or
emblems identifying the expenditure of Recovery Act funds.
• As of July 2010, EPA did not have information on the total cost of posting signs,
logos, or emblems related to the Recovery Act; recipients are not required to
report this information.
(Report No. 10-X-0175, Response to Congressional Request on Signage Requirements
for Projects Funded by the Recovery Act, August 2, 2010)
Site Inspections of Recovery Act Projects Did Not Note Problems
As part of OIG efforts to ensure that EPA is spending its Recovery Act funds in
accordance with requirements, we are conducting a number of site inspections.
For two site inspections completed during the semiannual reporting period,
nothing came to our attention that would require action from the fund recipients
or EPA.
The City of Newark, Ohio, received a $20.4 million loan from Ohio under the Clean
Water State Revolving Fund program, including $5 million in EPA Recovery Act funds
for principal forgiveness. The city will construct a high-rate treatment facility at its
wastewater treatment plant. As part of our inspection, we toured the project, interviewed
city representatives and contractor personnel, and reviewed documentation related to
Recovery Act requirements. Nothing came to our
attention that would require action from the city, state, or
EPA. (Report No. 10-R-0147, American Recovery and
Reinvestment Act Site Inspection of the High-Rate Water
Treatment Facility, City of Newark, Ohio, June 16,
2010—Report Cost: $117,789)
The City of Bremerton, Washington, received a $6.06
million loan from the State of Washington under the
Drinking Water State Revolving Fund program. The
loan terms include a $60,000 loan fee and 100 percent
forgiveness on the $6 million principal funded by the
Recovery Act. The purpose of the project is to design and construct an ultraviolet
treatment and chlorine disinfection facility. As part of our inspection, we toured the
future site of the facility, interviewed city representatives, and reviewed documentation
related to Recovery Act requirements. Nothing came to our attention that would require
action. (Report No. 10-R-0132, American Recovery and Reinvestment Act Site Inspection
of the Ultraviolet Treatment and Chlorine Disinfection Facility Project, City of
Bremerton, Washington, May 26, 2010—Report Cost: $51,176)
Wastewater treatment facility under construction
in the City of Newark, Ohio. (EPA OIG photo)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
EPA Submitted Accurate and Timely Financial Reports
EPA's weekly Recovery Act financial activity reports are accurate, timely, and
transparent.
The Recovery Act provided EPA with $7.22 billion for specific programs. OMB
guidance requires federal agencies, including EPA, to report weekly on the cumulative
Recovery Act funds obligated and expended and post reports on the Internet for public
access and transparency.
EPA complied with requirements in its weekly financial activity reporting and submitted
accurate and timely financial reports. EPA ensured its financial reporting was transparent
to the public by posting data to the EPA Recovery Act website and submitting data to the
Recovery Accountability and Transparency Board for posting to a government-wide
website.
(Report No. 10-R-0151, EPA Submitted Accurate and Timely Recovery Act Financial
Reports, June 22, 2010—Report Cost: $104,776)
Additional OIG Audits and Evaluations Underway
The OIG has initiated additional audits and evaluations on the following activities
to determine whether EPA and funding recipients manage projects effectively
and meet Recovery Act objectives:
• EPA's Recovery Act targeting criteria
• Recovery Act Diesel Emission Retrofit Program
• EPA's use of interagency agreements for Recovery Act activities
• EPA's resource allocation for Recovery Act contract and assistance agreement
oversight
• EPA and state oversight of Recovery Act Clean Water State Revolving Fund
projects
• Recovery Act stewardship plan for Superfund remedial program contracts
• Oversight of Leaking Underground Storage Tank Program
• Requirements applicable to subrecipients under the State Revolving Funds
• Testing of Recovery Act financial transactions (as part of our annual financial
statement audit)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Other Significant OIG Activity
Helping to make air safe and healthy to breathe
Key Activities in EPA's Air Toxics Strategy Remain Unimplemented
EPA has not implemented key Clean Air Act requirements related to reducing
risks from urban air toxics and identifying urban areas that continue to
experience significant public health risks from air toxics exposures.
The Clean Air Act Amendments of 1990 required EPA to develop a strategy to reduce
public health risks from air toxics emissions in urban areas. EPA issued its Integrated
Urban Air Toxics Strategy in 1999. However, EPA has not implemented key
requirements of the act, including submitting a second report to Congress (due in 2002)
identifying urban areas that continue to experience significant public health risks from air
toxics. In addition, 10 years after issuing the 1999 strategy, EPA has not implemented
key strategy activities. For example, EPA has not established
baseline risk data to measure progress in reducing air toxics risks
and thus has not tracked progress.
Stationary and mobile sources in Chicago,
Illinois. (Photo courtesy Chicago Tribune)
Further, although EPA determined in 2001 that a risk-based
program is necessary to meet the goals of the strategy, EPA has
not yet determined whether it has the statutory authority to
require state and local agencies to implement such a program.
Many state and local agencies do not have their own risk-based
programs or have laws preventing them from implementing
environmental regulations stricter than EPA's regulations. Given the length of time since
the strategy was developed and the problems EPA has encountered in its implementation,
EPA should reassess and update its approach to addressing urban air toxics.
We recommended that EPA submit the required second report to Congress, which should
identify urban areas that continue to experience significant public health risks from air
toxics exposure, EPA's plans to reduce risks in those areas, and the factors that have
hindered implementing the strategy; and determine how EPA will measure progress in
meeting strategy goals. The Agency commented that EPA has made "significant strides
in reducing air toxics," and that delays were due in part to reduced funding. The Agency
agreed that much remains to be done to ensure clean air for all Americans, particularly
those living in urban areas.
(Report No. 10-P-0154, Key Activities in EPA 's Integrated Urban Air Toxic Strategy
Remain Unimplemented, June 23, 2010—Report Cost: $586,976)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Water
Helping to ensure that drinking water is safe and waterbodies are protected
The following report summaries, included in other sections, specifically address water
issues:
• "Site Inspections of Recovery Act Projects Did Not Note Problems" (page 7)
• "EPA Provides Limited Assurance on Contamination at North Carolina Site"
(page 12)
• "Clean Water Act Memoranda of Agreement Should Be Revised as Needed"
(page 17)
• "EPA Should Recover Questioned Costs Claimed by Alaska Native Tribal
Health Consortium" (page 25)
• "Laboratory Owner Sentenced for Fabricating Documentation" (page 33)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Superfund/Land
Improving waste management and clean-up
Federal facility National Priority List sites
Source: EPA.
EPA Should Improve Oversight of Reviews at Federal Superfund
Sites
EPA does not have effective management controls to monitor the completion of
Five-Year Review recommendations at federal government Superfund sites.
Prior studies have identified weaknesses in EPA's Superfund Five-Year Review—a
required process that examines the cleanup remedies at Superfund sites to determine
whether remedies adequately protect human health and the environment.
For Five-Year Reviews signed since 2006, 84 percent of the review recommendations
were overdue as of April 28, 2009. EPA regional staff do not consistently follow
Superfund review process guidance and policies for
updating the status of review issues and
recommendations in the Comprehensive Environmental
Response, Compensation, and Liability Information
System. Also, discrepancies in the presentation of issues
and recommendations exist between the reviews and the
information system, some data in the information
system are logically inconsistent, and recommendations
from prior reviews are not always closed out. Also, federal facilities are responsible for
their own reviews, and EPA's management of the concurrence process has resulted in
some reviews being conducted more than 5 years apart and some issues not being
addressed.
We recommended that EPA implement improved management controls to monitor and
ensure timely submission of federal facility reviews, improve the management of the
concurrence process, clarify and describe enforcement options, and improve data quality.
EPA agreed with all recommendations and proposed actions to address them.
(Report No. 10-P-0133, EPA Should Improve Its Oversight of Federal Agency Superfund
Reviews, June 2, 2010—Report Cost: $971,193)
Federal agency
U.S. Department of Defense
U.S. Department of Energy
Other
Total
Sites
140
21
11
172
Percent
81.4
12.2
6.4
100
11
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Semiannual Report to Congress
April 1, 2010-September30, 2010
EPA Provides Limited Assurance on Contamination at North Carolina
Site
The water and air quality sampling EPA conducted at the Mills Gap hazardous
waste site near Asheville, North Carolina, has provided limited assurance of the
extent of water and air contamination and risk at the site.
The site has been in North Carolina's hazardous waste cleanup program since 1993. EPA
Region 4 has carried out emergency response actions at the site since 1999. These actions
included providing an alternative drinking water source for residents with unsafe levels of
the chemical trichloroethylene, or TCE, in their drinking water.
In the records the OIG reviewed, Region 4 adhered to accepted standards and practices in
conducting its drinking water sampling in 2008-2009 and air sampling in 2007-2008.
However, the limited scope of Region 4's past sampling activities and oversight kept the
region from detecting groundwater contamination in
drinking water wells, and an ineffective response
action has not addressed the potential air quality risk
that remains. Also, Region 4's letters to affected
residents on sampling results contained jargon and
technical language and did not clearly communicate
safety issues. Further, Region 4's community
involvement plan did not reflect all site activities and
did not include a communication strategy, and
Region 4 staff have not always documented
conversations with residents or site visits.
Former facility at the Mills Gap hazardous waste site,
Asheville, North Carolina. (EPA photo)
We recommended that Region 4 develop a plan for site transition to the state, clarify
resident communications, update the community involvement plan, and improve
recordkeeping. Region 4 generally agreed with five of our six recommendations and
developed an acceptable corrective action plan for one recommendation that required
further review in response to site events. The acting regional administrator said the region
"will do everything within our authority to ensure the safety of the residents in the Mills
Gap area." In September 2010, Region 4 announced its plans to propose that the site be
placed on the National Priorities List.
(Report No. 10-P-0130, EPA Activities Provide Limited Assurance of the Extent of
Contamination and Risk at a North Carolina Hazardous Waste Site, May 17, 2010—
Report Cost: $382,254)
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Improved Oversight Needed at Bruin Lagoon Superfund Site
Pennsylvania did not collect ground water samples from the Bruin Lagoon
Superfund site in Bruin, Pennsylvania, for 6 years, from 2001 to 2007. EPA
Region 3 decided not to require the state to conduct the sampling.
The OIG is testing long-term monitoring results at Superfund sites that EPA has deleted
from the National Priorities List. Bruin Lagoon was added to the Superfund National
Priorities List in 1983 and was deleted in 1997.
EPA Region 3 managers told the OIG that they made a deliberate, but undocumented,
decision to not use oversight authority to require the state to conduct ground water
sampling at the site. In June 2007, Pennsylvania resumed ground water sampling at the
site. The region's 2009 Five-Year Review indicated that the site was protective of human
health and the environment. However, gaps in long-term monitoring may result in a
failure to detect conditions that show a cleanup remedy is not protecting human health
and the environment. We also noted that transcription errors in data were found in the
region's 2004 Five-Year Review that were carried over into the most recent 2009 Five-
Year Review, due to a lack of quality assurance procedures to check summary data
generated from laboratory reports.
We recommended that Region 3 improve its oversight, acknowledge and correct data
errors in Five-Year Reviews, and ensure accuracy of data used in site protectiveness
decisionmaking. Region 3 agreed with the recommendations and proposed acceptable
corrective actions.
(Report No. 10-P-0217, EPA Should Improve Oversight of Long-term Monitoring at
Bruin Lagoon Superfund Site in Pennsylvania, September 8, 2010—Report Cost:
$375,007)
Improved Oversight Needed at PAB Oil Superfund Site
Our independent ground water sampling results from the PAB Oil and Chemical
Services, Inc., Superfund site in Abbeville, Louisiana, were consistent with
Region 6's valid historical results. Region 6 accepted two types of invalid ground
water data at the site and included that invalid data in its analyses.
OIG is testing long-term monitoring results at Superfund sites EPA has deleted from the
National Priorities List. EPA placed PAB Oil on the Superfund National Priorities List in
1989 and deleted it in 2000.
For two wells, data were collected on stagnant water at the bottom of the wells, below
screen openings where the water enters the wells. Consequently, data on both water
13
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Semiannual Report to Congress
April 1, 2010-September30, 2010
quality and water levels were collected contrary to accepted procedures and were invalid.
Region 6 said it was aware of the declined water level condition, but noted it had data
from other wells that were sufficient to determine the direction of ground water flow and
that the remedy was protective of human health and
the environment. We agree that the invalid data did not
have adverse implications for the region's protection
decision because ground water flows past these two
wells before flowing under the area where
contaminated soils and wastes were capped. However,
should ground water conditions change, the invalid
data could impede the region's ability to determine
whether the site's cleanup remedy is still protective
and whether the network of ground water monitoring
wells remains effective.
Monitoring well MW-7 at the remediated PAB Oil
site. (EPA OIG photo)
We recommended that Region 6 improve its oversight by amending the site's Five-Year
Review to identify invalid data and modifying the long-term monitoring plan. Region 6
committed to completing actions that would meet the intent of both recommendations. In
its final response to this report, Region 6 should provide a corrective actions plan for both
recommendations.
(Report No. 10-P-0229, EPA Should Improve Oversight of Long-Term Monitoring at
PAB Oil and Chemical Services, Inc., Superfund Site in Louisiana, September 21, 2010—
Report Cost: $202,633)
EPA's Data at Wheeler Pit Superfund Site Generally Confirmed
With minimal exceptions, our independent sampling results at the Wheeler Pit
Superfund Site near Janesville, Wisconsin, were consistent with the sampling
results that EPA Region 5 has obtained historically.
The OIG is testing long-term monitoring results at Superfund sites EPA has deleted from
the National Priorities List. Wheeler Pit was added to the National Priorities List in 1984
and was deleted in 2004.
In May 2008, the OIG obtained site ground water samples and a sample from a nearby
residential well and conducted a site inspection. Among 135 contaminants, OIG results
for 8 were different from the region's results for some wells, but none of the differences
had adverse implications for site protectiveness. The site was properly maintained and
secured. We found excess levels of di(2-ethylhexyl) phthalate, or DEHP, in one
residential well, but it was unclear whether the excess levels had implications for site
protectiveness. The OIG notified the resident in coordination with Region 5.
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Semiannual Report to Congress April 1, 2010-September 30, 2010
We recommended that EPA Region 5 conduct additional sampling on the residential
well. Region 5 concurred with our findings and recommendation and proposed an
acceptable corrective action.
(Report No. 10-P-0218, Independent Ground Water Sampling Generally Confirms EPA 's
Data at Wheeler Pit Superfiind Site in Wisconsin, September 8, 2010—Report Cost:
$359,852)
For details on additional Superfund/land issues, refer to:
• Page 16, "Research and Development Performance Measures Need Improvement
• Page 23, "Region 6 Should Improve Oversight Practices"
• Page 26, "Reimbursement Claims for Cleanup at Superfund Sites Reviewed"
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Research and Development
Helping EPA improve its research and
development efforts and ensure sound science
EPA scientist performing
a chemical assay.
(EPA photo)
Research and Development Performance Measures Need Improvement
EPA's Land Research Program needs performance measure improvements to
better enable the Office of Research and Development to assess the
effectiveness of research products.
The Land Research Program provides the science and technology to help its clients
preserve the nation's land, restore contaminated properties, and protect public health
from exposure to environmental contaminants. Because no single measure can adequately
capture all elements of research performance, the program has employed a variety of
methods to assess performance, including OMB's Program Assessment Rating Tool
measures, client feedback, and peer review by the Board of Scientific Counselors.
We found that improvements were needed in all three areas to better enable the Office of
Research and Development to assess the Land Research Program's effectiveness. For
example, the program did not have measures that assessed progress toward the
short-term outcomes in its multiyear plan. Additionally, citation analysis
Program Assessment Rating Tool measures for the program were not meaningful
to program managers and were not linked to program goals and objectives.
Moreover, as implemented, EPA's survey of program clients was not reliable
because EPA did not identify the universe of clients, conduct a representative
sample, or obtain a sufficient number of responses. Further, the program lacked
some key measures and data that would aid the Board of Scientific Counselors in
conducting its peer reviews of the program. Collectively, the Land Research
Program's performance measures have not provided it with the data to assess
progress toward goals, identify areas for improvement, or track the short-term
outcomes of its research.
We recommended that EPA develop measures linked to the short-term outcomes in the
Land Research Program's multiyear plan, augment the program's citation analysis with
more meaningful measures, develop a reliable client survey or an alternative, provide
appropriate performance measurement data to the Board of Scientific Counselors prior to
full program reviews, and revise its long-term goal rating guidance to that board. EPA
generally agreed with our recommendations and is taking action to implement most of
them. For some recommendations, EPA is awaiting additional guidance from OMB.
(Report No. 10-P-0176, EPA 's Office of Research and Development Performance
Measures Need Improvement, August 4, 2010—Report Cost: $1,149,970)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Enforcement
Helping to improve compliance with environmental requirements
Clean Water Act Memoranda of Agreement Should Be Revised as
Needed
Outdated and inconsistent National Pollutant Discharge Elimination System
memoranda of agreement do not ensure Agency management control and
effective oversight over a national program administered by states and, therefore,
do not provide equal protection to all Americans.
The Clean Water Act allows EPA to authorize states to operate the National Pollutant
Discharge Elimination System program if states meet certain criteria. States cannot
operate such programs on behalf of EPA without authorizing and implementing proper
memoranda of agreement.
EPA headquarters does not hold EPA regional or state offices accountable for updating
their memoranda of agreement. When these memoranda are outdated or not adhered to,
EPA's ability to maintain a uniform program across states is reduced. We found that
74 percent of active memoranda of agreement were authorized prior to 2000; 35 percent
were signed in the 1970s. Based on a review of 46 criteria from the Code of Federal
Regulations, we found that memoranda of agreement were missing key requirements and
lacked memoranda of agreement-specific program regulations.
Degree to which agreements meet regulatory requirements for 46 criteria
37%
39%
Does not meet criteria element
Addresses the element in some way
Addresses the element verbatim or in
synonymous language
24%
Source: OIG assessment of agreements.
We recommended that EPA ensure that all memoranda of agreement contain the required
essential elements for a nationally consistent enforcement program, develop a national
template and/or guidance, and update outdated or inconsistent memoranda of agreement.
The Agency generally agreed with our recommendations.
(Report No. 10-P-0224, EPA Should Revise Outdated or Inconsistent EPA-State Clean
Water Act Memoranda of Agreement, September 14, 2010—Report Cost: $660,519)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Cross-Media
Evaluating nontraditional approaches to protecting the
environment and challenges that cut across programs
EPA Needs a Strategic Plan to Protect Children's Health
Five years after the OIG provided the EPA Office of Children's Health Protection
with recommendations related to the strategic and annual planning processes,
agreed-to corrective actions have not been completed.
The Office of Children's Health Protection was established in 1997 to formalize and
integrate EPA's efforts on behalf of children. The role of the office is to coordinate
efforts with other government agencies and to carry out Executive Order 13045 and the
National Agenda to Protect Children's Health from Environmental Threats.
Agency budget for children and other sensitive populations,
FYs 2004-2009
$6,400,000
$6,200,000
$6,000,000
$5,800,000
$5,600,000
$5,400,000
$5,200,000
2004 2005
Source: OIG.
2006 2007
Fiscal Year
2008 2009
According to the office, which is now
the Office of Children's Health
Protection and Environmental
Education, agreed-to corrective actions
have not been implemented due to
constant turnover in office directors.
We concluded that the office's lack of
strategic planning, identified goals,
adequate measures, and quantifiable
accomplishments resulted in its inability
to demonstrate its role and value added.
We also concluded that the Agency's
new five-point agenda for protecting
children's health requires a reevaluation
of the office's role and areas of
responsibility.
We recommended that EPA implement corrective actions previously agreed to, which
include developing a strategic plan, improving annual planning, establishing measures,
and reporting its results and outcomes, or have other program offices perform the
functions. The Agency agreed with our recommendations and implemented corrective
actions that meet the intent of our recommendations.
(Report No. 10-P-0095, Need Continues for a Strategic Plan to Protect Children's
Health, April 5, 2010—Report Cost: $201,257)
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Semiannual Report to Congress April 1, 2010-September 30, 2010
EPA's BioWatch Role Reduced
EPA's role regarding the BioWatch program has been significantly reduced since
the last OIG review of the program in 2005.
This report follows up on the 2005 OIG report, EPA Needs to Fulfill Its Designated
Responsibilities to Ensure Effective BioWatch Program. In that report, we found that
EPA did not provide adequate oversight of BioWatch sampling operations and did not
ensure that quality assurance guidance was followed.
Since 2005, the U.S. Department of Homeland Security has assumed control of the major
parts of the BioWatch program for which EPA was initially responsible, and the Centers
for Disease Control and Prevention took up other EPA responsibilities. Because EPA's
role has been reduced, followup on the recommendations in our previous report is no
longer required, and this report made no recommendations.
(ReportNo. 10-P-0106, EPA 's BioWatch Role Reduced, April 20, 20JO—Report Cost:
$158,446)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
S DGC131 R© VIGWS Reviewing issues of fraud, waste, and misuse in EPA programs
Cincinnati
RTF
Las Vegas
Improvements Needed for EPA's Revised Hiring Process
EPA had not implemented critical technology upgrades or obtained other
resources necessary for the service center concept to succeed.
The Office of Administration and Resources Management revised EPA hiring procedures
in June 2008 when it consolidated the processing of personnel actions from 15 locations
across the country to 3 service centers. These procedures must comply with pertinent
requirements, including those imposed by the Office of Personnel Management.
EPA produced three reports, including its 2007 business case, that identified key factors for
a successful transition to the service center concept. However, EPA management
implemented the transition without obtaining some of these key capabilities, including
electronic infrastructure. As a result, the new process to fill vacant positions falls
significantly short of Office of Personnel Management timeliness goals and does not
consistently provide program managers with the best candidates. EPA was taking an average
of 141 days to fill vacant positions for the sample actions when the Office of Personnel
Management goal was 80 days; thus, EPA exceeded the timeliness goal by 61 days.
Average Time Spent in
Three Phases of Recruitment Process
We recommended that
EPA officials determine
the scope of services to be
obtained from a line-of-
business provider, select
the provider, and develop
and implement a plan to
migrate to the provider.
We made additional
recommendations related
to improving the hiring
process. Agency officials
agreed with most of our
recommendations but
disagreed with one regarding changes to the EPA Reorganization Policy and part of
another recommendation regarding processing appointment actions.
(Report No. 10-P-0177, EPA 's Revised Hiring Process Needs Additional Improvements,
August 9, 2010—Report Cost: $805,400)
Source: OIG analysis of sample items.
20
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Region 9 Engaged in a Prohibited Personnel Practice
We the of authority in an August 2009 I
9 the Career
Program was but we did 9 in a
EPA Region 9 held a job fair in San Francisco, California, on July 28-30, 2009. EPA
provided only job fair participants with the registration code needed to apply for the four
intern program vacancies. The Federal Career Intern Program has few requirements, but
agencies must still meet Merit System Principles. Based on the complaint, we sought to
determine whether the region's use of a job fair and registration code was inappropriate,
and whether opening a vacancy announcement for only 4 calendar days (2 business days)
denied potential applicants the opportunity to apply for the positions.
Regarding the Hotline allegations, neither the Office of Personnel Management nor EPA
prohibits the use of a job fair and registration code as recruiting and hiring methods, nor
do they require a minimum number of days for performing applicant intake. Therefore,
the specific allegations were unsubstantiated.
However, Region 9 engaged in a prohibited personnel practice by giving four Federal
Career Intern Program job fair participants improper advantages not provided to others
attending the fair. Records show that these four individuals were favored for hire and
offered paid travel to the job fair by Region 9 before the fair or vacancies were publicly
announced, advantages not offered to other applicants. Additionally, based on concerns
about sparse attendance and outreach at a prior Region 9 job fair, the EPA Shared Service
Center, which is responsible for overseeing the region's recruiting and hiring, did not
provide sufficient oversight of the region's job fair process.
We recommended that the Region 9 administrator take appropriate administrative actions
against the individuals who engaged in a prohibited personnel practice. Region 9 did not
agree with the report's conclusions and its comments were not responsive to this
recommendation; as such, we referred this matter to the U.S. Office of Special Counsel.
We also recommended that the assistant administrator for administration and resources
management require that job fair plans be approved by senior management hosting the
job fair and verify that current oversight processes provide assurance that EPA does not
engage in prohibited personnel practices.
(Report No. 10-P-0112, Results of Hotline Complaint Review of EPA Region 9 Hiring
under the Federal Career Intern Program, April 26, 2010—Report Cost: $219,573)
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Scientific Analysis of Perchlorate Supports a Cumulative
Risk Assessment Approach
. , • a risk " . , .ice the in
' • • • risk by • ,
Over the last two decades, EPA has received numerous recommendations to improve
environmental risk assessments. However, EPA continues to rely on the outdated single
chemical risk assessment approach to characterize the risk posed by perchlorate. Prior to
the issuance of our draft report, EPA issued a perchlorate reference dose (generated from
the National Academy of Sciences) that was derived from a nonadverse biological effect
instead of an adverse effect. Prior to the issuance of the final report, EPA was considering
regulating perchlorate to protect against all human biological effects from exposure, which
is a stricter public health criterion than limiting environmental exposure to protect against
adverse effects in humans. This shift in risk management constituted a significant change
in environmental policy. EPA is considering the findings in the final report in its pending
regulatory determination on whether to issue a national primary drinking water regulation.
Our scientific analysis showed that perchlorate is only one of several chemicals that
stress the thyroid's ability to uptake iodide. The other sodium iodide symporter stressors
include thiocyanate, nitrate, and the lack of iodide. All four of these stressors meet EPA's
risk assessment guidance for conducting a cumulative risk assessment using the dose-
addition method. Our analysis implemented a cumulative risk assessment and found that:
• The risk from each of the four sodium iodide symporter stressors is not equal.
• EPA's perchlorate reference dose is conservative and protective of human health,
and further reducing the perchlorate exposure below the reference dose does not
effectively lower risk.
• Increasing maternal total iodide intake to healthy levels will reduce the frequency
and severity of permanent mental deficits in children.
• Correcting moderate and mild iodide deficiency occurring in about 29 percent of
the U.S. pregnant and nursing population is the most effective approach for
reducing risk.
(Report No. 10-P-0101, Office of Inspector General Scientific Analysis of Perchlorate,
April 19, 2010—Report Cost: $263,907)
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Region 6 Should Improve Oversight Practices
Allegations of mismanagement came from a Hotline complaint from Citizen Action New
Mexico. The Resource Conservation and Recovery Act requires EPA Region 6 to provide
oversight to delegated programs. EPA's Public Involvement Policy encourages EPA staff
and managers to ensure that decisionmaking processes are open and accessible.
Region 6 staff took inappropriate steps to keep the details of the landfill's monitoring
wells assessment from the public. The region decided not to provide documentation or
sometimes not to document their concerns about the landfill's monitoring wells. The
region provided a letter to the citizens' group that did not note the specific details of the
assessment. The region's actions are a violation of EPA policies on public involvement
and records management.
We recommended that the Region 6 administrator comply with EPA's national security,
public involvement, and records management policies. We also recommended that the
regional administrator evaluate the extent to which the region has not recorded oversight
information, or misclassified information, to determine the action necessary to remedy
the situation. Region 6 disagreed with the report's conclusion and recommendations,
stating that information was not withheld from the public, and requested that resolution
be elevated in accordance with EPA's audit management process.
In July 2009, the deputy administrator asked the inspector general to consider whether an
Office of General Counsel opinion he provided would influence the OIG's conclusions
that Region 6 improperly classified information and withheld documents under the
Freedom of Information Act. After reviewing the legal opinion and conducting additional
legal research, OIG modified its conclusion and found there was no violation of EPA
policies or guidance for marking national security information. Moreover, the OIG also
accepted that the document in question was not withheld by the Agency under the
Freedom of Information Act on the basis of improper classification. The report findings
and recommendations that remain in dispute are in the report resolution process.
(Report No. 10-P-0100, Region 6 Needs to Improve Oversight Practices, April 14,
2010—Report Cost: $272,846). Related correspondence can be found at
http://www.epa.sov/ois/reports/2010/Correspondence Rpt 10-P-0100.pdf.
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Grants and Contracts
Improving EPA's use ol
assistance agreements and contracts
The following report summaries, included in other sections, specifically address grant
and contract issues; many are related to Recovery Act funding:
"EPA Should Improve Evaluation of Contractor Performance" (page 5)
"EPA Can Improve the Accuracy of Recovery Act Recipient Data" (page 5)
"EPA OIG Responds to Congressional Request on Signage Requirements"
(page 6)
"Site Inspections of Recovery Act Projects Did Not Note Problems" (page 7)
"EPA Should Recover Questioned Costs Claimed by Alaska Native Tribal Health
Consortium" (page 25)
"Reimbursement Claims for Cleanup at Superfund Sites Reviewed" (page 26)
"Integrated Contracts Management System Needs Improved Data Integrity"
(page 28)
"EPA's Acquisition System Processes Need Stronger Controls" (page 29)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Forensic Audits
Identifying fraud, waste, and abuse in grants and contracts
EPA Should Recover Questioned Costs Claimed by Alaska Native
Tribal Health Consortium
The Alaska Native Tribal Health Consortium did not comply with federal
requirements applicable to EPA funding provided through an interagency
agreement.
EPA awarded interagency agreement DW 75-95754001 to the Indian Health Service. The
agreement, as amended, provides $22,226,077 in federal assistance to be used by the
Indian Health Service to provide sanitation facilities for native communities in Alaska
through subagreements with the Alaska Native Tribal Health Consortium.
Because the Alaska Native Tribal Health Consortium
did not meet financial management requirements
specified by Code of Federal Regulations, EPA should
recover $1,007,690 of questioned costs. In particular,
the consortium claimed indirect costs without
approved rates or a certified proposal; claimed labor,
equipment, freight, and material costs that were not
allocable; and claimed subcontract costs that were not
allocable or allowable. EPA, other federal agencies,
and the State of Alaska should evaluate costs claimed
by the consortium under other funding agreements.
New Stuyahok, Alaska, sewage lagoon constructed
by the Alaska Native Tribal Health Consortium and
partially funded by interagency agreement
DW 75-95754001. (Photo from Alaska Native Tribal
Health Consortium website)
We recommended that the EPA Region 10
administrator disallow $1,493,893 in questioned costs,
recover $1,007,690 in questioned costs, require the Indian Health Service to direct the
Alaska Native Tribal Health Consortium to establish controls to ensure costs claimed
under the interagency agreement meet federal financial criteria, designate the consortium
as a high-risk recipient and require special conditions that establish additional oversight
and monitoring, and evaluate costs claimed by the consortium under other open funding
agreements to ensure that costs meet federal criteria. Region 10, the Indian Health
Service, and the consortium disagreed with the findings and recommendations.
(Report No. 10-4-0241, Costs Claimed by the Alaska Native Tribal Health Consortium
Under EPA Interagency Agreement DW 75-95754001, September 30, 2010—Report
Cost: $750,973)
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Reimbursement Claims for Cleanup at Superfund Sites Reviewed
We reviewed several reimbursement funding claims during the semiannual
reporting period. We performed these reviews solely to assist the EPA Office of
Solid Waste and Emergency Response in evaluating the claimants' mixed
funding claims. We found the following:
• We reviewed a reimbursement mixed funding claim for $831,256 submitted by the
responsible parties for a Superfund site in Cape Girardeau, Missouri. Our review
noted no exceptions to the claimed amount. We recommended that EPA accept the
claim and reimburse the claimant $831,256 of the total eligible costs of $4,156,280.
• We reviewed a reimbursement mixed funding claim for $3,280,027 submitted by the
responsible parties for a Superfund site in Duval County, Florida. Our review noted
no exceptions to the claimed amount. We recommended that EPA accept the claim
and reimburse the claimant $3,280,027 of the total eligible costs of $7,273,989.
For details on additional forensic audit issues, refer to:
• Page 7, "Site Inspections of Recovery Act Projects Did Not Note Problems"
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Risk Assessment and
Program Performance
Improving EPA internal control processes,
structure, and workforce/manpower
Comprehensive National Environmental Policy and Review Needed
New, large-scale environmental problems require coordinated efforts across
government and stakeholder groups. However, the national environmental
structure created 40 years ago has resulted in a fragmented approach to
environmental protection.
Congress passed the National Environmental Policy Act and created EPA in 1970 to
carry out national policy. EPA shares responsibility for environmental protection with
^^^__^_ states and 25 federal agencies and, in some cases, other entities
have more authority than EPA over activities that impact
environmental quality.
Past and current Agency efforts did not set a national policy or
clearly align the environmental protection efforts of all federal
and state stakeholders. EPA lacks authority over many activities
that impact the nation's environment. For example, EPA and the
U.S. Department of Energy both issued ENERGY STAR criteria
documents for the same products, which could cause confusion
in the marketplace. Also, the U.S. Department of Agriculture
could use its extensive field experience with local farming
communities to further contribute to EPA's Chesapeake Bay
cleanup efforts.
Great Lakes National Program Office's
sampling in the Buffalo River near the
Smith Street habitat restoration site,
Buffalo, New York. Such projects present
cross-media and cross-boundary
challenges. (EPA photo)
EPA should work with Congress and the administration to create expert panels to
formulate a national environmental policy and quadrennial review similar to those of the
U.S. Departments of Defense and Homeland Security. Overall, EPA disagreed with our
suggestion.
(Report No. 10-P-0140, National Environmental Policy and Quadrennial Review Needed,
June 8, 2010—Report Cost: $205,000)
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Information Resources
Management
Helping the Agency maintain its systems and data
Better Management Practices Needed to Ensure Computer Savings
Although EPA believes it could save more than $115.4 million over 8.5 years by
consolidating its desktop computer environment, better management practices
are needed to ensure this cost savings.
The OIG conducted this audit in response to Hotline complaints about desktop
deployments for EPA by Customer Technology Solutions.
EPA scheduled replacing 11,744 computers in 12 months, as well as providing
maintenance and support for these computers and attached network printers, without
sufficient planning to ensure success. This lack of project
planning has led to questions about the quality of the provided
helpdesk support, an unfmalized quality management program,
undefined key business processes, and vacant leadership
positions. Many end users voiced dissatisfaction with the
deployment.
Hardware ready for deployment.
(EPA OIG photo)
We recommended that EPA implement and maintain a
helpdesk that responds to and resolves issues to meet
performance metrics. We also recommended improving the
quality management program, documenting milestones for
completing business process documents, and filling vacant leadership positions. In
general, the Agency agreed with the findings and recommendations.
(Report No. 10-P-0194, EPA Needs to Improve Management Practices to Ensure a
Successful Customer Technology Solutions Project, August 23, 2010—Report Cost:
$177,268)
Integrated Contracts Management System Needs Improved Data
Integrity
EPA should strengthen Integrated Contracts Management System data integrity
controls to increase data reliability for management reporting.
The Integrated Contracts Management System generates documents vital to EPA's
procurement process. The OIG contracted with a firm to conduct a data integrity audit of
28
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Semiannual Report to Congress April 1, 2010-September 30, 2010
the system, particularly to determine whether system data complied with the system edit
and validation checks.
The contractor found that system data contain exceptions to the established business
rules, as well as anomalies that cast suspicion over the validity of processed transactions.
The contractor also found discrepancies between Office of Acquisition Management-
defined system edit and validations checks and the Integrated Contracts Management
System data dictionary. These weaknesses exist in part due to a breakdown in the process
for controlling data entry, EPA not identifying and implementing edit and validation
checks during system implementation, and EPA inconsistently documenting edit and
validation checks as data requirements change.
EPA is replacing the Integrated Compliance Management System with a new acquisition
system called the EPA Acquisition System. While it may not be practical for EPA to
address the Integrated Compliance Management System weaknesses, EPA should take
proactive steps to strengthen its data integrity processes so that these similar weaknesses
will not exist in the new EPA Acquisition System. The Agency generally agreed with the
findings and recommendations.
(Report No. 10-P-0144, Improved Data Integrity Needed for the Integrated Contracts
Management System, June 14, 2010—Contract and OIG Oversight Costs: $424,969)
EPA's Acquisition System Processes Need Stronger Controls
its
so do not its
The Integrated Contracts Management System supports the procurement needs of EPA
offices. EPA is replacing this system with the EPA Acquisition System. We contracted
with a firm to determine to what extent EPA has taken steps to ensure weaknesses in the
current system do not impact the replacement system.
Before EPA replaces the current system, it should strengthen system controls. Examples of
system weaknesses include the following:
• System reporting does not always accurately associate a procurement action with
the user who initiated the action.
• The current system does not have an audit log to capture and allow monitoring of
security events.
• No formal user training exists.
• The continuity of operations plan and system backup procedures do not comply
with federal requirements.
• The current system generates procurement documents in such a way that changes
can be made outside of the system's processing environment.
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Semiannual Report to Congress April 1, 2010-September 30, 2010
On June 9, 2010, we briefed Agency officials on various steps that EPA should take to
ensure that the new EPA Acquisition System has sufficient controls. The Agency agreed
with most of the findings and recommendations.
(Report No. 10-P-0160, Steps Needed to Prevent Prior Control Weaknesses From
Affecting New Acquisition System, June 28, 2010—Contract and OIG Oversight Costs:
$199,174)
EPA Could Achieve Data Quality Rate With Additional Improvements
ECHO provides a single source of compliance history of EPA-regulated facilities. EPA
developed ECHO to provide the public compliance and inspection data under its
environmental programs. The OIG contracted with a firm to assess the quality of key
ECHO data elements.
Although the 91.5 percent data quality rate is close to EPA's goal, EPA and the state
environmental offices could take additional steps to increase the quality of data reported
through the ECHO website. The contractor made several recommendations to EPA
regarding procedural changes and improvements. The Agency generally agreed with the
report findings.
(Report No. 10-P-0230, ECHO Data Quality Audit - Phase 2 Results: EPA Could
Achieve Data Quality Rate With Additional Improvements, September 22, 2010—
Report Cost: $331,361)
Improvements Needed in Key EPA Information System Security
Practices
The Federal Information Security Management Act requires inspectors general, or
independent evaluators they choose, to perform annual evaluations of agencies'
information security programs and practices. The OIG contracted with a firm to perform
an independent review of EPA's information security program to determine whether EPA
meets the act's requirements.
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Semiannual Report to Congress April 1, 2010-September 30, 2010
The contractor found that program offices lacked evidence that they planned and
executed required tests of information system security controls, that contingency plans
were not current or accurate, and that the certification and accreditation process and
review of security plans needed improvements. Also, EPA had two authoritative system
inventories that did not reconcile, and had contractor-owned and -operated systems in
production without proper oversight monitoring.
The report recommended that EPA train its information security community on testing
and documenting information systems security controls, enhance the quality assurance
process, and design and implement a process to perform a periodic reconciliation
between its two authoritative system inventories. Agency officials indicated that they will
respond to the final report.
(Report No. 10-P-0146, Improvements Needed in Key EPA Information System Security
Practices, June 15, 2010—Contract and OIG Oversight Costs: $136,242)
Technical Network Vulnerability Assessed at Various Locations
at to ' ,
If not can EPA's., _• j to
the
The testing, done per the Federal Information Security Management Act, disclosed
several high-risk and medium-risk vulnerabilities at the following EPA locations, as
discussed in four separate reports:
• Andrew W. Breidenbach Environmental Research Center, Cincinnati, Ohio
(Report No. 10-P-0210, September 7, 2010—Report Cost: $11,084)
• Erlanger Building, Erlanger, Kentucky
(Report No. 10-P-0211, September 7, 2010—Report Cost: $4,858)
• Ronald Reagan Building, Washington, DC
(Report No. 10-P-0212, September 7, 2010—Report Cost: $7,628)
• Region 4, Atlanta, Georgia
(Report No. 10-P-0213, September 7, 2010—Report Cost: $3,459)
The OIG met with EPA information security personnel for each location to discuss the
findings and issued recommendations in each report.
31
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Investigating laboratory fraud, financial fraud, and computer crimes
Special Report
OIG Examines Environmental Justice Issues in EPA Region 4
Our investigative review of matters in EPA Region 4 within our jurisdiction
disclosed no evidence that EPA contracts, assistance agreements, or programs
were involved in environmental justice violations, or that an EPA employee
committed any actionable offense.
Environmental justice is the fair treatment and meaningful involvement of all people
regardless of race, color, national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations, and policies. EPA
Administrator Lisa Jackson has made environmental justice one of her top seven
priorities and has created an office to promote environmental justice.
The OIG Office of Investigations undertook a detailed review of certain allegations to
determine whether the OIG had investigative jurisdiction in terms of EPA contracts,
assistance agreements, programs, or personnel involvement. Using these criteria, we
determined that five allegations merited further investigative review. Our further
investigative review of the five allegations disclosed no evidence that EPA contracts,
assistance agreements, or programs were involved, or that an EPA employee committed
any actionable offense(s). In instances in which we determined that applicable violations
were outside of the OIG's jurisdiction, we made a professional referral to the appropriate
investigative entity.
(Report No. 10-N-0145, Investigation of Allegations Concerning Environmental Justice
Issues in EPA Region 4, June 14, 2010)
Investigative Actions
Former EPA Employee Sentenced for Theft
On August 25, 2010, a former EPA employee was sentenced in the U.S. District Court
for the Northern District of Georgia to 3 years of probation and ordered to pay $11,589 in
restitution to EPA. The employee was previously charged with theft of government
property in connection with misuse of her government-issued credit card. While entrusted
to make purchases on behalf of the government, the employee used the credit card to
obtain personal items such as a microwave, a coffee maker, and electronic equipment. In
addition, the employee used the EPA computer network to make purchases for
32
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Semiannual Report to Congress April 1, 2010-September 30, 2010
entertainment tickets using a stolen credit card. The employee resigned from EPA after
receiving notice that she would be removed from her position. (Case Cost: $12,748)
Laboratory Owner Sentenced for Fabricating Documentation
On April 19, 2010, Nancy Miller of Yuma, Arizona, co-owner of Sunstate Environmental
Laboratories in Yuma, was sentenced in U.S. District Court for the District of Arizona to
2 years of probation and ordered to pay a $5,000 fine and $765 in restitution. Sunstate
performed environmental laboratory testing for drinking water and wastewater analyses.
The investigation determined that Miller fabricated laboratory documentation to defraud
her customers into believing she had reported the analyses correctly. These documents
were false in that the laboratory tests were not performed. Sunstate's clients included the
U.S. Department of the Interior, the U.S. Army Corps of Engineers, the U.S. Marine
Corps, a fast-food restaurant, schools, mobile-home parks, and municipalities. Sunstate is
no longer a licensed laboratory in the State of Arizona. (Case Cost: $206,605)
33
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Legal Reviews
Conducting requested reviews of legal issues involving EPA
No EPA Violations Found Related to Draft/Proposed Legislative
Amendments
Our review of an EPA associate administrator's contacts with Shell Oil Company
concerning a draft legislative amendment and with the automotive industry
concerning the proposed legislative amendment disclosed no violations of
grassroots lobbying prohibitions.
In response to a congressional request, the OIG Office of Counsel reviewed the conduct
of certain EPA officials related to the handling of a proposed amendment to H.R. 2996.
We found no violations of law, regulation, or policy related to contact by the associate
administrator for congressional and intergovernmental relations with either the Shell Oil
Company or the Alliance of Automobile Manufacturers regarding a draft or the proposed
amendment number 2530 to H.R. 2996. The associate administrator called a Shell
representative when the amendment was in draft, prior to its introduction; he also called
and exchanged several e-mail messages with a representative at the Alliance of
Automobile Manufacturers after the proposed amendment was introduced in Congress.
However, we found that the associate administrator did not request Shell or Alliance of
Automobile Manufacturers representatives to lobby Congress on the amendment and,
therefore, found no violation of grassroots lobbying prohibitions in statutes or policy.
Further, we found no violation of policy or standards of conduct in the contact with Shell.
Also, we concluded that the associate administrator had no contact with the Association
of International Automobile Manufacturers.
(Report No. 10-N-0148, Response to Congressional Inquiry Concerning EPA 's Conduct
Related to Draft/Proposed Legislative Amendments, June 21, 2010—Report Cost:
$33,019)
34
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Chemical Safety and Hazard Investigation Board
The U.S. Chemical Safety and Hazard Investigation Board was created by the Clean Air
Act Amendments of 1990. The board's mission is to investigate accidental chemical
releases at facilities, report to the public on the root causes, and recommend measures to
prevent future occurrences.
In FY 2004, Congress designated the EPA OIG to serve as the inspector general for the
U.S. Chemical Safety and Hazard Investigation Board. As a result, the EPA OIG has the
responsibility to audit, evaluate, inspect, and investigate the board's programs, and to
review proposed laws and regulations to determine their potential impact on the board's
programs and operations.
Chemical Safety Board Should Improve Information Security
Practices
While the U.S. Chemical Safety and Hazard Investigation Board has an
information security program in place, we noted areas in which the board can
make improvements.
The EPA OIG contracted with a firm to perform the FY 2009 Federal Information
Security Management Act assessment for the U.S. Chemical Safety and Hazard
Investigation Board. The assessment noted that the board could improve its practices
related to risk assessment, system security planning, plans of action and milestones,
contingency planning, access controls, and audit logging. The contractor also conducted a
network vulnerability test that disclosed vulnerabilities, insecure system protocols,
default configurations, and unpatched devices.
The report made various recommendations to correct the deficiencies noted, including
providing needed training, developing a contingency plan, and updating guidance. The
board generally agreed with the findings and recommendations.
(Report No. 10-P-0174, Evaluation of the U.S. Chemical Safety and Hazard Investigation
Board's Compliance with the Federal Information Security Management Act (Fiscal Year
2009), August 2, 2010—Contract and OIG Oversight Costs: $113,478)
35
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Other Activities
Peer Reviews Conducted
The most recent external peer review of the EPA OIG was conducted by the U.S.
Department of Homeland Security in accordance with Government Auditing Standards
and guidelines established by the Council of the Inspectors General on Integrity and
Efficiency. The U.S. Department of Homeland Security reviewed our system of quality
controls for the period October 1, 2005, through September 30, 2008. The report, issued
July 10, 2009, contained no recommendations, and the EPA OIG received a rating of
pass.
Further, the EPA OIG conducted an external peer review of the system of quality control
for the audit organization of Treasury Inspector General for Tax Administration. Our
review of that organization covered the period April 1, 2006, through March 31, 2009,
and was also completed in accordance with Government Auditing Standards and
guidelines established by the Council of the Inspectors General on Integrity and
Efficiency. Our report, issued February 3, 2010, contained no recommendations and
provided the Treasury Inspector General for Tax Administration a rating of pass.
Legislation and Regulations Reviewed
Section 4(a) of the Inspector General Act requires the inspector general to review existing
and proposed legislation and regulations relating to the programs and operation of EPA
and to make recommendations concerning their impact. We primarily base our comments
on audit, evaluation, investigation, and legislative experiences, as well as our
participation on the Council of the Inspectors General on Integrity and Efficiency. During
the reporting period, we reviewed 125 proposed changes to legislation, regulations,
policy, and procedures that could affect EPA, and provided comments on 17. We also
reviewed drafts of OMB circulars, memoranda, executive orders, program operations
manuals, directives, and reorganizations. Details on several items follow.
Contracts Management Manual, New Chapter 18, "Emergency Acquisitions."
EPA's Office of Acquisition Management proposed a new chapter 18, "Emergency
Acquisitions," for the Contracts Management Manual. The proposed chapter
supplements the new Federal Acquisition Regulation part 18, "Emergency Acquisitions,"
by identifying specific acquisition flexibilities to be used by EPA contracting officers
during emergency situations. The proposed chapter also explains the difference between
acquisition flexibilities to be used during emergences and requirements covered by a
continuity of operations plan. We commented that the proposed chapter does not include,
36
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Semiannual Report to Congress April 1, 2010-September 30, 2010
or make reference to, contracting guidance for emergency acquisition issues raised in
OIG audit reports over the last few years, including:
• Deploying a sufficient number of contracting officers and other support
personnel, as well as sufficient personnel to review contractor invoices
• Having a predetermined list of emergency response volunteers
• Having advance agreements with vendors
• Having an effective property management system, including limiting the number
of property-receiving points, issuing purchase cards to responders, establishing a
central location for recording property, and recording property costs by contract
We suggested that if the Contracts Management Manual chapter 18 does not address these
issues, it should indicate where guidance on the topics can be found.
Proposed Revision to the Resource Management Directives System 2540
Chapter 14, "Working Capital Fund." EPA's Office of the Chief Financial Officer
proposed a revision to the Resource Management Directives System 2540 chapter 14,
"Working Capital Fund," to include an overall policy standard and five policy procedure
documents addressing ordering, funding, and billing Working Capital Fund services;
accounting and budget preparation; fund assets; new activities and services; and exit
procedures. We suggested that as part of measuring success, selected services should be
independently evaluated to determine whether they are meeting the expectations of the
initial business case justifying their inclusion in the Working Capital Fund. We
commented that we strongly believe that the Integrated Financial Management System
should remain a free service and not come under the umbrella of the Working Capital
Fund. Also, we commented that the revision should specify that one of the roles of the
chief financial officer is to ensure that an independent audit of the Working Capital Fund
is conducted to assure accuracy and completeness of the fund's financial statements, as
the current policy states.
National Security Council's Revised Proposed Executive Order, "Controlled
Unclassified Information." The National Security Council proposed a revised executive
order, based on agency comments received pursuant to the first draft, to establish a
uniform government-wide framework for managing sensitive unclassified information,
described in the executive order as "controlled unclassified information." We commented
that the executive order should explicitly state that individual agencies do not have the
authority to maintain regimes of marking an unclassified data item to "flag" it for special
handling (dissemination controls) unless the item is marked as controlled unclassified
information or has an approved marking by the executive agent as required by law. We
suggested that the executive order specifically identify in which National Archives and
Records Administration office the executive agent will reside and define the meaning of
the clause "principal officers of agencies as heads of their respective agencies."
37
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Semiannual Report to Congress April 1, 2010-September 30, 2010
OIG Quality Assurance Review Notes Work Paper Improvements,
but More Can Be Done
During FYs 2008 and 2009, the EPA OIG made noticeable improvements regarding
documenting work paper reviews, according to a quality assurance review conducted by
the EPA OIG special assistants to the deputy inspector general. However, further
improvements can be made. The purpose of this review was to report on the set of criteria
the EPA OIG uses to measure quality in its audit and evaluation reports. We applied our
quality measurement criteria to 98 EPA OIG reports issued from October 1, 2007,
through September 30, 2009.
Supervisory reviews were better documented and more timely. Product line directors and
project managers demonstrated that they were reviewing the supporting work papers for
the draft and final reports, and staff were responding to manager comments. Nonetheless,
we noted the following areas where improvements can be made:
• Work papers should be a more reasonable length.
• Indexing should be updated at various stages.
• Use of draft Agency documents should be managed better.
• Proper attribution should be provided in reports.
• Dates used to define the scope of work should be more standardized.
Our findings were publicly reported in Report No. 10-N-0134, Measuring the Quality of
Office of Inspector General Reports Issued in Fiscal Years 2008 and 2009, issued June 2,
2010. The then-acting inspector general agreed to take action on all recommendations.
OIG Internal Control Assessment Provides Assurances, Identifies
Challenges and Areas for Improvement
In accordance with the Federal Managers' Financial Integrity Act, Agency guidance, and
U.S. Government Accountability Office internal control standards, the EPA OIG assessed
the effectiveness of its internal controls and operations during this reporting period. We
also reviewed OIG management of timekeeping, the purchase card program, and
unliquidated obligations. We found that internal controls within the OIG are adequate to
reasonably protect against fraud, waste, abuse, and mismanagement, and the OIG is in
compliance with all applicable laws and regulations.
We identified an internal management weakness related to staffing. The OIG has been
directed by Congress to increase staffing, but we have encountered delays when working
with EPA's human capital services. Also, the OIG legacy investigative case management
system was identified as a weakness and the OIG is exploring several case management
systems used by others. We identified internal policies and procedures and
secured/classified communications as emerging issues for management attention.
38
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Statistical Data
Profile of Activities and Results
Audit and evaluation operations
Office of Inspector General reviews
April 1,2010, to
September 30, 2010
($ in millions)
Questioned costs * $1 .0
Recommended efficiencies * $0.0
Costs disallowed to be recovered $2.0
Costs disallowed as cost efficiency $0.0
Reports issued by DIG 42
Reports resolved 1 1 1
(Agreement by Agency officials
to take satisfactory corrective
actions) **
FY
2010
$6.8
$7.1
$2.8
$7.1
83
223
Audit and evaluation operations
Reviews performed by Single Audit Act auditors
April 1,2010, to
September 30, 2010 FY
($ in millions) 2010
Questioned costs * $0.3 $0.6
Recommended efficiencies * $0.0 $0.0
Costs disallowed to be recovered $0.2 $10.1
Costs disallowed as cost efficiency $0.0 $0.0
Single Audit Act reviews 1 06 1 57
Agency recoveries $4.6 $14.1
Recoveries from audit and
evaluation resolutions of current
and prior periods (cash collections
or offsets to future payments) ***
Investigative operations
April 1,2010, to
September 30, 2010 FY
($ in millions) 2010
Total fines and recoveries **** $0.017 $1.207
Cost savings $0 $0.026
Cost avoidances ***** $0.807 $4.208
Cases open during period 78 130
Cases closed during period 40 72
Indictments/informations of persons 9 15
or firms
Convictions of persons or firms 2 7
Civil judgments/settlements/filings 0 2
Questioned costs and recommended efficiencies are
subject to change pending further review in the audit
resolution process.
Reports resolved are subject to change pending
further review.
Information on recoveries from audit resolutions is
provided by EPA's Office of Financial Management
and is unaudited.
Fines and recoveries resulting from joint
investigations.
Includes $3.4 million not reported in a prior period.
39
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Audit, Inspection, and Evaluation Report Resolution
Status report on perpetual inventory of reports in resolution process
for semiannual period ending September 30, 2010
Report category
A. For which no management
decision was made by
April 1,2010*
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management
decision was made during the
reporting period
E. For which no management
decision was made by
September 30, 2010
F. Reports for which no
management decision was
made within 6 months of
issuance
No. of
reports
90
148
30
208
111
97
46
Report issuance
($ in thousands)
Questioned
costs
$24,033
1,272
0
25,305
9,151
16,154
9,349
Recommended
efficiencies
$0
0
0
0
0
0
0
Report resolution costs
sustained
($ in thousands)
To be
recovered
$2,191
120
0
2,311
2,311
0
0
As
efficiencies
$0
0
0
0
0
0
0
Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this
report and our previous semiannual report results from corrections made to data in our audit tracking system.
Status of management decisions on inspector general reports
This section presents additional statistical information that is required by the Inspector General Act of
1978, as amended, on the status of EPA management decisions on reports issued by the OIG involving
monetary recommendations. Tables 1 and 2 cannot be used to assess results of reviews performed or
controlled by this office. Many of the reports were prepared by other federal auditors or independent
public accountants. EPA OIG staff do not manage or control such assignments. Auditees frequently
provide additional documentation to support the allowability of such costs subsequent to report issuance.
40
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Table 1: Inspector general-issued reports with questioned costs for semiannual period ending
September 30, 2010 ($ in thousands)
Report category
A. For which no management decision was made by
April 1,2010**
B. New reports issued during period
Subtotals (A + B)
C. For which a management decision was made during the
reporting period:
(i) Dollar value of disallowed costs
(ii) Dollar value of costs not disallowed
D. For which no management decision was made by
September 30, 2010
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
37
8
45
16
8
8
26
19
Questioned
costs *
$24,033
1,272
25,305
9,151
2,311
6,840
16,154
9,349
Unsupported
costs
$18,374
1,068
19,442
8,302
1,983
6,319
11,140
5,527
Questioned costs include unsupported costs.
Any difference in number of reports and amounts of questioned costs between this report and our previous
semiannual report results from corrections made to data in our audit, inspection, and evaluation tracking system.
Table 2: Inspector general-issued reports with recommendations that funds be put to better use
for semiannual period ending September 30, 2010 ($ in thousands)
Report Category
A. For which no management decision was made by April 1 , 201 0 *
B. Which were issued during the reporting period
Subtotals (A + B)
C. For which a management decision was made during the reporting period:
(i) Dollar value of recommendations from reports that were
agreed to by management
(ii) Dollar value of recommendations from reports that were
not agreed to by management
(iii) Dollar value of nonawards or unsuccessful bidders
D. For which no management decision was made by September 30, 201 0
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
0
0
0
0
0
0
0
0
0
Dollar
value
$0
0
0
0
0
0
0
0
0
Any difference in number of reports and amounts of funds put to better use between this report and our previous
semiannual report results from corrections made to data in our audit, inspection, and evaluation tracking system.
Audits, inspections, and evaluations with no final action as of September 30, 2010, over 365 days past
the date of the accepted management decision (including audits, inspections, and evaluations in appeal)
Audits, inspections, and evaluations
Program
Assistance agreements
Contract audits
Single audits
Financial statement audits
Total
Total
44
26
3
20
0
93
Percentage
47
28
3
22
0
100
41
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Hotline Activity
The following table shows EPA OIG Hotline activity regarding complaints of fraud, waste, and abuse in
EPA programs and operations that occurred during the past semiannual period and fiscal year.
Issues open at the beginning of the period
Inquiries received during the period
Inquiries closed during the period
Inquiries pending or open at the end of the period
Issues referred to others
OIG offices
EPA program offices
Other federal agencies
State/local agencies
Other/miscellaneous
Semiannual period
(April 1,2010-
September 30, 2010)
18
169
156
31
70
75
7
13
4
Annual period
(October 1,2009-
September 30, 2010)
7
514
490
31
158
159
20
93
84
42
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Summary of Investigative Results
Summary of investigative activity during reporting period
Cases open as of April 1, 2010
Cases opened during period
Cases closed during period
Cases pending as of September 30, 2010
116
78
40
154
Investigations pending by type as of September 30, 2010
Contract fraud
Assistance
agreement fraud
Employee integrity
Program integrity
Computer crimes
Other
Total
Superfund
8
1
1
1
0
0
11
Management
8
31
24
13
4
10
90
Split
funded
2
5
1
1
1
2
12
Recovery
Act
14
19
0
1
0
6
40
Chemical
Safety Board
0
0
1
0
0
0
1
Total
32
56
26
17
5
18
154
Results of prosecutive actions
Criminal indictments/informations/complaints
Convictions
Civil judgments/settlements/filings
Fines and recoveries (including civil)
Prison time
Home detention
Probation
Community service
EPA OIG only
7
2
0
$17,479
0 months
0 months
60 months
0 hours
Joint*
2
0
0
$0
0 months
0 months
0 months
0 hours
Total
9
2
0
$17,479
0 months
0 months
60 months
0 hours
'' With another federal agency.
Administrative actions
Suspensions
Debarments
Employee resignations
Compliance agreements
Other administrative actions
Total
Administrative recoveries
Cost avoidance
EPA OIG only
4
0
0
0
23
27
$0
$806,571
Joint*
7
0
0
0
2
9
$203,624
$0
Total
11
0
0
0
25
36
$203,624
$806,571
* With another federal agency.
43
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Scoreboard of Results
Scoreboard of OIG FY 2010 performance results compared to
FY 2010 annual performance goal targets
All results reported in FY 2010, from current and prior years' work, are as reported in OIG Performance Measurement
and Results System, Inspector General Operations Reporting System, and Inspector General Enterprise
Management System. Unaudited.
OIG FY 2010 Government Performance and
Results Act annual performance targets
compared to FY 2010 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: 391 (117%)
3 Legislative/regulatory changes/decisions
25 Environmental or management policy, process,
practice, control change actions taken
2 Best practices implemented
3 Environmental & business risks/challenges eliminated
253 Certifications/validations/verifications/corrections
10 Actions taken or resolved prior to report issuance
(not otherwise reported)
5 Recommendations reported as implemented
previously identified unimplemented by OIG followup*
Environmental and business recommendations,
challenges, best practices, risks identified,
Recovery Act technical briefings
Target: 903
Reported: 945 (105%)
593 Recommendations (for Agency/stakeholder action)
21 Critical congressional or public management
concerns addressed
6 Best environmental or management practices
identified
58 Referrals for Agency action
12 New environmental or management operational
risks or challenges identified
83 Unimplemented recommendations identified
172 Awareness briefings/outreach sessions
(including Recovery Act)
Return on investment: Potential dollar return as
percentage (120%) of OIG budget ($54.7 million)
Target: $65.6 million
Reported: $19.6 million (30%)
($ in millions)
$7.4 Questioned costs (net EPA)
$10.5 Recommended efficiencies, costs saved (EPA)
$1.4 Fines, recoveries, settlements
$0.3 Monetary actions taken or resolved prior to report
issuance
Criminal, civil, and administrative actions
reducing risk of loss/operational integrity
Target: 75
Reported: 115 (153%)
7 Criminal convictions
15 Indictments/informations/complaints
60 Administrative actions
2 Civil actions
31 Allegations disproved
Other (no targets established)
Sustained monetary recommendations and
savings achieved from current and prior
periods: $23.4 million
Sustained environmental and management
recommendations for resolution action
Recovery Act activity results (cumulative)
Total reports issued: 240
($ in millions)
$12.9 Questioned costs sustained
$10.5 Cost efficiencies sustained or realized
245 Sustained recommendations
124 Recovery Act awareness briefings/outreach sessions
(also counted above)
52 Recovery Act complaints received
83 OIG-produced reports
157 Reports by other audit entities with OIG oversight
Reported by Agency as implemented of those previously reported by the OIG as unimplemented.
44
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Appendices
Appendix 1 - Reports Issued
The Inspector General Act requires a listing, subdivided according to subject matter, of each report issued by the OIG during
the reporting period. For each report, where applicable, the Inspector General Act also requires a listing of the dollar value of
questioned costs and the dollar value of recommendations that funds be put to better use. This listing includes a section for
reports involving the American Recovery and Reinvestment Act of 2009.
Questioned costs
Report no.
Report title
Date
Ineligible
costs
Unsupported
costs
Unreasonable
costs
Federal
recommended
efficiencies
PERFORMANCE REPORTS
10-P-0095 Follow-up Evaluation of EPA's Office of Children's Health Protection Apr. 05, 2010
10-P-0100 Region 6 Needs to Improve Management of Oversight at Sandia Landfill Apr. 14,2010
10-P-0101 Office of Inspector General Scientific Analysis of Perchlorate Apr. 19,2010
10-P-0106 EPAs BioWatch Role Reduced Apr. 20, 2010
10-P-0112 Hotline Complaint of EPA Region 9 Hiring under Federal Career Intern Program Apr. 26, 2010
10-P-0130 EPA Activities Provide Limited Assurance at North Carolina Hazardous Waste Site May 17, 2010
10-P-0133 EPA Should Improve Its Oversight of Federal Agency Superfund Reviews Jun. 02, 2010
10-P-0140 National Environmental Policy and Quadrennial Review Needed Jun. 08, 2010
10-P-0144 Improved Data Integrity Needed for the Integrated Contracts Management System Jun. 14, 2010
10-P-0146 Improvements Needed in Key EPA Information System Security Practices Jun. 15, 2010
10-P-0154 Key Activities in EPA's Integrated Urban Air Toxics Strategy Remain Unimplemented Jun. 23, 2010
10-P-0160 Control Deficiencies Need to be Addressed in New EPA Acquisition System Jun. 28, 2010
10-P-0165 Review of Hotline Complaint on Hotel Stay Jul. 15, 2010
10-P-0174 U.S. Chemical Safety and Hazard Investigation Board - FISMA 2009 Review Aug. 02, 2010
10-P-0176 Office of Research and Development Performance Measures Need Improvement Aug. 04, 2010
10-P-0177 Appointment Business Process Aug. 09, 2010
10-P-0194 EPA Needs to Improve Customer Technology Solutions Project Practices Aug. 23, 2010
10-P-0210 Technical Vulnerability Assessment for Andrew W. Breidenbach Research Center Sep. 07, 2010
10-P-0211 Technical Vulnerability Assessment for Erlanger Facility Sep. 07, 2010
10-P-0212 Technical Vulnerability Assessment for Ronald Reagan Building Sep. 07, 2010
10-P-0213 Technical Vulnerability Assessment for Region 4 Sep. 07, 2010
10-P-0217 EPA Should Improve Oversight at Bruin Lagoon Superfund Site Sep. 08, 2010
10-P-0218 Independent Sampling Generally Confirms EPA's Data at Wheeler Pit Superfund Site Sep. 08, 2010
10-P-0224 EPA Should Revise EPA-State Clean Water Act Memoranda of Agreement Sep. 14,2010
10-P-0229 EPA Should Improve Oversight at PAB Oil and Chemical Services Superfund Site Sep. 21, 2010
10-P-0230 Data Quality Audit of ECHO System-Phase II Sep. 22, 2010
TOTAL PERFORMANCE REPORTS = 26
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
ASSISTANCE AGREEMENT REPORTS
10-4-0241 Costs Claimed by Alaska Native Tribal Health Consortium - DW 75-95754001
TOTAL ASSISTANCE AGREEMENT REPORTS = 1
SINGLE AUDIT REPORTS
10-3-0094 Indian Township Tribal Government, FY 2008
10-3-0096 New Mexico Environment Department, FY 2009
10-3-0097 California, State of, FY 2009
10-3-0098 District of Columbia, Government of, FY 2008
10-3-0099 Maine, State of, FY 2009
10-3-0102 North Carolina, State of, FY 2009
10-3-0103 Connecticut, State of, FY 2009
10-3-0104 Vermont, State of, FY 2009
10-3-0105 Arkansas, State of, FY2009
10-3-0107 Puerto Rico Safe Drinking Water Treatment Revolving Loan Fund, FY 2009
10-3-0108 Puerto Rico Water Pollution Control Revolving Fund, FY 2009
10-3-0109 Cahuilla Band of Indians, FY 2007
10-3-0110 Texas, Stateof, FY2009
10-3-0111 Delaware, State of, FY 2009
10-3-0115 Oakland Housing Authority, FY 2009
10-3-0116 Hawaii Department of Health, FY2009
10-3-0117 Iowa, State of, FY 2009
10-3-0118 Wyoming, State of, FY 2009
10-3-0119 WestVirginia, Stateof, FY2009
10-3-0120 Colorado Water Resources and Power Development, FY 2009
10-3-0121 Wisconsin, State of, FY 2009
10-3-0122 North Dakota Public Finance Authority, FY 2009
10-3-0123 Fort Madison, Cityof, Iowa, FY2009
Sep. 30, 2010
Apr. 05, 2010
Apr. 05, 2010
Apr. 08, 2010
Apr. 12,2010
Apr. 12,2010
Apr. 16, 2010
Apr. 16, 2010
Apr. 16, 2010
Apr. 19,2010
Apr. 20, 2010
Apr. 20, 2010
Apr. 21,2010
Apr. 21,2010
Apr. 22, 2010
Apr. 30, 2010
Apr. 30, 2010
Apr. 30, 2010
Apr. 30, 2010
May 03, 2010
May 06, 2010
May 07, 2010
May 07, 2010
May 10, 2010
$79,068
$79,068
$14,668
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$928,622
$928,622
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$75,000
0
0
0
0
0
0
0
0
$0
45
-------
Semiannual Report to Congress
April 1, 2010-September30, 2010
Questioned costs Federal
Report no.
10-3-0124
10-3-0125
10-3-0126
10-3-0127
10-3-0128
10-3-0129
10-3-0135
10-3-0136
10-3-0137
10-3-0138
10-3-0139
10-3-0141
10-3-0142
10-3-0143
10-3-0149
10-3-0150
10-3-0152
10-3-0153
10-3-0155
10-3-0156
10-3-0157
10-3-0158
10-3-0159
10-3-0161
10-3-0162
10-3-0163
10-3-0164
10-3-0167
10-3-0168
10-3-0169
10-3-0170
10-3-0171
10-3-0172
10-3-0178
10-3-0179
10-3-0180
10-3-0181
10-3-0182
10-3-0183
10-3-0184
10-3-0185
10-3-0186
10-3-0187
10-3-0188
10-3-0189
10-3-0190
10-3-0191
10-3-0192
10-3-0193
10-3-0195
10-3-0196
10-3-0197
10-3-0198
10-3-0199
10-3-0200
10-3-0201
10-3-0203
10-3-0204
10-3-0205
10-3-0206
10-3-0207
10-3-0208
10-3-0209
10-3-0214
10-3-0215
10-3-0216
10-3-0219
10-3-0220
10-3-0221
10-3-0222
10-3-0223
10-3-0225
10-3-0226
10-3-0227
10-3-0228
10-3-0231
Report title
Pala Band of Mission Indians, FY 2008
Alabama Drinking Water Finance Authority, FY 2009
Alabama Water Pollution Control Authority, FY 2009
Alaska Inter Tribal Council, FY2007
Cahuilla Band of Indians, FY 2007
Tesuque, Pueblo of, FY 2008
Reedsport, City of, FY 2009
Clarksburg, City of, FY 2009
Brattleboro, Town of, Vermont, FY 2009
Syracuse, City of, FY 2009
Nanwalek IRA Council, FY 2008
Ekalaka, Town of, FY 2009
Cavalier, City of, FY 2009
Syracuse University, FY 2009
Anaconda-Deer Lodge County, FY2009
Buffalo, Town of the City of, FY 2009
Bridgeport, City of, FY 2009
Novato Sanitary District, FY 2009
West Central Highlands Resource Conservation and Development Council, FY2009
Kuskokwim Native Association, FY 2008
Ekuk Village Council, FY2009
New Mexico Finance Authority, FY 2009
Arizona, State of, FY 2009
Mason County, FY2009
New York Indoor Environmental Quality Center, FY 2008
Guam, Government of, FY2009
Guam Waterworks Authority, FY 2009
Northern Mariana Islands, Commonwealth of, FY2009
Bird Island, City of, FY 2009
Southeast Rural Community Assistance Project Inc., FY 2009
Springsteel Island Sanitary District, FY 2008
Red Cliff Band of Lake Superior Chippewas, FY 2009
Livingston, City of, FY2009
Logistics Management Institute, FY 2009
Kearney, City of, FY 2009
Long Grove, City of, FY 2009
Mt. Vernon, City of, FY 2009
Douglas, City of, FY 2009
Buffalo, City of, FY 2009
Metropolitan Water District of Southern California, FY 2009
Murrieta, City of, FY 2009
West Burlington, City of, FY2009
Lake Michigan Air Directors Consortium, FY2009
South Carolina, State of, FY 2009
Mifflintown Municipal Authority, FY 2009
Cochranton, Borough of, FY 2009
Avondale, City of, FY 2009
Cass Rural Water Users District, FY 2009
Health Effects Institute, FY 2009
Westminster, City of, FY 2009
Western States Resources Council, FY 2009
Sun'aq Tribe of Kodiak, FY 2009
Yucaipa Valley Water District, FY 2009
FortBenton, City of, FY2009
Marion, City of, FY 2009
Banning, City of, FY 2009
Pennsylvania, Commonwealth of, FY2009
Illinois, State of, FY2009
Pojoaque, Pueblo of, FY 2009
Ventura, County of, FY 2009
Lakeland, City of, FY 2009
Nogales, City of, FY 2008
American Medical Association and Subsidiary, FY 2009
Southern Ute Indian Tribe, FY 2009
Eight Northern Indian Pueblo Council, FY2009
Rutland, City of, FY 2009
Te-Moak Tribe of Western Shoshone/Battle Mountain Band Council, FY2009
Fred Hutchinson Cancer Research Center, FY 2009
New York University School of Medicine, FY 2007
Michigan Department of Environmental Quality
Detroit, City of, Michigan, FY 2009
Kearns Improvement District, FY 2009
Superior, Town of, Montana, FY 2009
Milwaukee Redevelopment Authority, FY2009
Minnesota Environmental Initiative, FYs 2008 and 2009
New Mexico Finance Authority, FY 2007
Ineligible Unsupported Unreasonable recommended
Date costs costs costs efficiencies
May 10, 2010 0
May 10, 2010 0
May 11, 2010 0
May 12, 2010 0
May 13, 2010 0
May 17, 2010 0
Jun.04, 2010 0
Jun. 04, 2010 0
Jun.04, 2010 0
Jun. 04, 2010 0
Jun. 08, 2010 0
Jun. 08, 2010 0
Jun. 08, 2010 0
Jun. 08, 2010 0
Jun. 21, 2010 0
Jun. 21,2010 0
Jun. 22, 2010 0
Jun. 22, 2010 0
Jun. 22, 2010 0
Jun. 23, 2010 0
Jun. 25, 2010 $66,414
Jun. 25, 2010 0
Jun. 25, 2010 0
Jun. 29, 2010 0
Jul. 02, 2010 2,366
Jul. 13,2010 0
Jul. 13, 2010 0
Jul. 19, 2010 0
Jul. 21,2010 0
Jul. 21,2010 0
Jul. 21,2010 0
Jul. 21,2010 0
Jul. 21,2010 0
Aug. 06, 2010 0
Aug. 11,2010 0
Aug. 11,2010 0
Aug. 11,2010 0
Aug. 11,2010 0
Aug. 11,2010 0
Aug. 12, 2010 0
Aug. 12, 2010 0
Aug. 16, 2010 0
Aug. 16, 2010 0
Aug. 24, 2010 0
Aug. 18, 2010 0
Aug. 18, 2010 0
Aug. 18, 2010 0
Aug. 18, 2010 0
Aug. 20, 2010 0
Aug. 24, 2010 0
Aug. 25, 2010 0
Aug. 25, 2010 0
Aug. 25, 2010 0
Aug. 25, 2010 0
Aug. 26, 2010 0
Aug. 26, 2010 0
Aug. 30, 2010 0
Aug. 30, 2010 0
Sep. 01,2010 0
Sep. 01,2010 0
Sep. 01,2010 0
Sep. 01,2010 0
Sep. 02, 2010 0
Sep. 07, 2010 0
Sep. 07, 2010 0
Sep. 07, 2010 0
Sep. 08, 2010 0
Sep. 08, 2010 0
Sep. 08, 2010 0
Sep. 13, 2010 41,161
Sep. 13, 2010 0
Sep. 14, 2010 0
Sep. 16, 2010 0
Sep. 16, 2010 0
Sep. 16, 2010 0
Sep. 22, 2010 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
$9,550 0
0 0
0 0
0 0
40,986 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
13,699 0
0 0
0 0
0 0
0 0
0 0
0 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
46
-------
Semiannual Report to Congress
April 1, 2010-September30, 2010
Questioned costs
Federal
Report no.
10-3-0232
10-3-0233
10-3-0235
10-3-0236
10-3-0237
10-3-0238
10-3-0239
Report title
Southwest Research Institute, FY2007
Howard University, FY 2009
Atchison, City of, FY 2009
Brown University, FY 2009
Nevada System of Higher Education, FY 2009
Pelican, City of, FY 2009
Bay Foundation of Morro Bay, FY 2009
TOTAL SINGLE AUDIT REPORTS = 106
Date
Sep. 23, 2010
Sep. 23, 2010
Sep. 28, 2010
Sep. 28, 2010
Sep. 29, 2010
Sep. 29, 2010
Sep. 30, 2010
Ineligible
costs
0
0
0
0
0
0
0
$124,609
Unsupported Unreasonable recommended
costs costs efficiencies
0
0
0
0
0
0
0
$139,235
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
$0
CONTRACT REPORTS
10-4-0173
10-4-0202
Missouri Electric Final Mixed Funding Claim
CERCLA Claim White House Oil Pits Superfund Site #3
TOTAL CONTRACT REPORTS = 2
Jul. 26, 2010
Aug. 30, 2010
0
0
$0
0
0
$0
0
0
$0
0
0
$0
FINANCIAL STATEMENT REPORTS
10-2-0131
10-2-0166
10-2-0240
Agreed-Upon Procedures for EPA's FY 2010 First Quarter Financial Statements
Agreed-Upon Procedures for EPA's FY 2010 Second Quarter Financial Statements
Agreed-Upon Procedures for EPA's FY 2010 Third Quarter Financial Statements
TOTAL FINANCIAL STATEMENT REPORTS = 3
May 19, 2010
Jul. 19,2010
Sep. 30, 2010
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 REPORTS
10-R-0113
10-R-0132
10-R-0147
10-R-0151
10-R-0234
10-X-0175
EPA Should Improve Its Contractor Performance Evaluation Process
Site Inspection, Ultraviolet Treatment/Disinfection Project, Bremerton, Washington
Site Inspection, High-Rate Water Treatment Facility, Newark, Ohio
EPA Submitted Accurate and Timely Recovery Act Financial Reports
Review of the Effectiveness of EPA Data Quality Review Processes
Congressional Request on Recovery Act Signs and Logos
TOTAL AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 REPORTS = 6
Apr. 26, 2010
May 26, 2010
Jun. 16,2010
Jun. 22, 2010
Sep. 27, 2010
Aug. 02, 2010
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
0
0
0
0
0
0
$0
OTHER REPORTS
10-N-0114
10-N-0134
10-N-0145
10-N-0148
Compendium of Unimplemented Recommendations as of March 31, 2010
EPA OIG Quality Assurance Review - 2008 and 2009
Investigation of Allegations on Environmental Justice Issues in EPA Region 4
Congressional Inquiry on EPA's Handling of a Proposed Legislative Amendment
TOTAL OTHER REPORTS = 4
Apr. 28, 2010
Jun. 02, 2010
Jun. 14,2010
Jun. 21,2010
0
0
0
0
$0
0
0
0
0
$0
0
0
0
0
$0
0
0
0
0
$0
TOTAL REPORTS ISSUED = 148
$203,677 $1,067,857
$0
$0
47
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Appendix 2 - Reports Issued Without Management Decisions
For reporting period ended September 30, 2010
The Inspector General Act requires a summary of each audit report issued before the commencement of the
reporting period for which no management decision has been made by the end of the reporting period, an explanation
of the reasons such management decision has not been made, and a statement concerning the desired timetable for
achieving a management decision on each such report. OMB Circular A-50 requires resolution within 6 months of a
final report being issued. In this section, we report on audits with no management decision or resolution within
6 months of final report issuance. In the summaries below, we note the Agency's explanation of the reasons a
management decision has not been made, the Agency's desired timetable for achieving a management decision, and
the OIG followup status as of September 30, 2010.
Office of Air and Radiation
Report No. 2004-P-00033, Effectiveness of Strategies to Reduce Ozone Precursors, September 29, 2004
Summary: Our analysis of EPA emissions data for "serious," "severe," and "extreme" ozone nonattainment areas
indicated that some major metropolitan areas may not have achieved the required 3 percent annual emission
reductions in ozone precursor emissions. While EPA air trends reports have emphasized that ozone levels are
declining nationally and regionally, only 5 of 25 nonattainment areas designated serious to extreme had substantial
downward trends. EPA provided an action plan to the OIG that provided a partial list of actions planned, and we
closed 8 of the 25 recommendations. We believed that we may have been able to close six recommendations once
the final Milestone Compliance Demonstration rule was promulgated. However, in May 2006, EPA told us it had
decided not to issue the rule; it instead planned to issue guidance that EPA regions could share with states. We did
not agree that guidance is an acceptable alternative. As of September 12, 2008, the Agency had not agreed with the
other recommendations and had not submitted a complete response that addresses all the recommendations in the
report. We will continue to follow up on the Agency's actions.
Agency Explanation: EPA recently issued a lower ozone standard and is completing reconsideration of that standard.
Based on the resulting classifications of ozone attainment and nonattainment areas, EPA will revisit the effectiveness
of the OIG's recommendations for Milestone Compliance Demonstration guidance. Resolution expected by June
2011.
OIG Followup Status: Incomplete response received.
Report No. 08-P-0020, Maximum Achievable Control Technology Implementation Progress and Challenges,
October 31, 2007
Summary: EPA's National Emissions Inventory data indicate an overall decline in air toxic emissions concurrent with
implementation of the maximum achievable control technology standards. EPA plans to use National Emissions
Inventory data to assess the public health risk remaining from maximum achievable control technology sources of air
toxics emissions, but the reliability of the data for site-specific emissions varies considerably. EPA has not
established objectives that define an acceptable level of quality for National Emissions Inventory data used in the
residual risk process. EPA guidance recommends that program offices develop data quality objectives for using data
in such decisionmaking processes. Given the uncertainties associated with National Emissions Inventory data, EPA
could over- or underestimate the public health risk from maximum achievable control technology sources of
emissions. Overstating risk could result in EPA placing regulations on industries that are not cost beneficial.
Conversely, understating risk could result in EPA not requiring regulations where needed to protect public health. The
Agency has not agreed with our recommendation to establish the recommended state reporting requirements, and
we consider the issue unresolved.
Agency Explanation: The Agency concurs with the objective of the OIG's recommendations and provided the OIG
with updated corrective actions on August 4, 2010. Estimate resolution by January 2011.
OIG Followup Status: Resolution under negotiation in headquarters.
48
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Report No. 09-P-0125, Effect of Efforts to Address Air Emissions at Selected Ports, March 23, 2009
Summary: While EPA has issued air emissions regulations for most port sources, EPA's actions to address air
emissions from large oceangoing vessels in U.S. ports have not yet achieved the goals for protecting human health.
The Clean Air Act provides EPA with the authority to regulate emissions from oceangoing vessel engines. EPA has
deferred taking a position on whether it has authority to regulate emissions from foreign-flagged vessels, which
account for about 90 percent of U.S. port calls. We recommended that EPA assess its authorities and responsibilities
under the Clean Air Act to regulate air emissions from foreign-flagged vessels in U.S. ports, and report any shortfalls
to Congress. In its 90-day response, EPA said it would describe the legal analyses of stakeholders regarding this
issue and make the description available to Congress through the preamble to a proposed rule for new Category 3
marine diesel engines. However, describing the legal analyses of others does not meet the intent of our
recommendation. We recommended that EPA assess its authorities and responsibilities under the Clean Air Act to
regulate air emissions from foreign-flagged vessels in U.S. ports and report any shortfalls to Congress, but EPA's
comments were not responsive. We also recommended that EPA revise its ports strategy to include a transformation
plan, but EPA did not agree with that recommendation.
Agency Explanation: The Office of Air and Radiation sent a memorandum (dated March 19, 2010) to the OIG
outlining actions that will address all open corrective actions. EPA is leaving the first recommendation open pending
further discussion with the OIG.
OIG Followup Status: Incomplete response received.
Report No. 09-P-0151, EPA Does Not Provide Oversight of Radon Testing Accuracy and Reliability, May 12, 2009
Summary: EPA does not perform oversight of radon testing device accuracy or reliability. The 1988 Indoor Radon
Abatement Act required that EPA establish proficiency programs for firms offering radon-related services, including
testing and mitigation. EPA established and operated proficiency programs until 1998, when it disinvested in these
programs. EPA asserts that it shares oversight responsibility with states and industry, including the two national
proficiency programs operating under private auspices. However, without oversight, EPA cannot assure that radon
testing devices provide accurate data on indoor radon risks or that radon testing laboratories accurately analyze and
report radon results. We recommended that EPA disclose that while radon testing is recommended, EPA cannot
provide assurance that commercially available radon testing devices or testing laboratories are accurate and reliable.
EPA generally agreed with this recommendation and stated that it will review and revise both its Web-based and
printed public materials, as appropriate. However, the Agency did not provide information on how it intends to
characterize the accuracy and reliability of radon testing in its public documents, and more information is needed.
Agency Explanation: EPA has undertaken studies to obtain additional information related to the accuracy and reliability of
test devices. This effort is expected to be complete by spring 2011 when appropriate updates to the documents will also
be competed. The Office of Air and Radiation continues to negotiate with the OIG on the recommendation and is
preparing a memorandum to outline actions and proposed dates for addressing the recommendation.
OIG Followup Status: Incomplete response received.
Financial Analysis and Rate Negotiation Service Center
Report No. 2004-1-00099, Lockheed Martin Services Group - FYE 12/31/2002 Incurred Cost, August 23, 2004
Summary: The Defense Contract Audit Agency (DCAA) questioned indirect costs of $3,595,399, of which $2,128 is
applicable to EPA contracts. DCAA qualified the audit results pending receipt of assist audit reports.
Agency Explanation: Resolution on hold due to other cognizant federal agency (U.S. Department of Defense).
OIG Followup Status: Resolution pending receipt of additional information.
Report No. 2006-4-00120, National Academy of Sciences - FY 2006 Info Tech System, July 20, 2006
Summary: DCAA determined that the contractor's information technology system general internal controls were
inadequate in part.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Office of Naval Research).
OIG Followup Status: Resolution pending receipt of additional information.
49
-------
Semiannual Report to Congress April 1, 2010-September 30, 2010
Report No. 2006-4-00165, National Academy of Sciences - FY 2006 Indirect/ODC System, September 27, 2006
Summary: In DCAA's opinion, the contractor's service centers cost system and related internal control policies and
procedures were inadequate in part. DCAA's examination noted certain significant deficiencies in the design or
operation of the Indirect/Other Direct Costs system process.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Office of Naval Research).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 2006-4-00169, National Academy of Sciences - FY 2006 Labor System, September 29, 2006
Summary: In DCAA's opinion, the contractor's labor system and related internal control policies and procedures were
inadequate in part. DCAA's examination noted certain significant deficiencies in the design or operation of the internal
control structure.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Office of Naval Research).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 2007-1-00016, URS Corporation (c/o URS Greiner, Inc.) - FY 2001 Incurred Cost, November 13, 2006
Summary: DCAA questioned a total of $188,772,784 in direct and indirect costs. Of these, $5,585,929 are claimed
direct costs, of which $1,328,189 are from EPA Contract No. 68-W9-8225. The questioned indirect expenses
impacted all fringe, overhead, and general and administrative rates. Of the questioned indirect costs, EPA's share is
$401,412, for a total of $1,729,601 in questioned direct and indirect costs.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (U.S. Department of Defense).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 2007-1-00061, Lockheed Martin Services Group - FY 12/31/2004 I/C, April 10, 2007
Summary: DCAA questioned $34,708,911 in claimed direct costs and proposed indirect costs. Further, DCAA did not
audit $338,864,655 in claimed direct and indirect costs for assist audits not yet received or for received assist audit
reports, the impact of which on the contractor's cost objectives has not yet been calculated. Additionally, DCAA
upwardly adjusted $48,224,805 in claimed base costs. EPA's share of the questioned costs totals $694,178. DCAA
did not provide any Cumulative Allowable Cost Work Sheet or Schedule of Allowable Costs by Cost Element by
Contract because the most current year with negotiated indirect rates is calendar year 1998. DCAA will issue a
supplemental audit report upon completion of its analysis of the assist audit results, and as the outstanding fiscal
years' indirect rates are negotiated, the requested Cumulative Allowable Cost Work Sheet and Schedule of Allowable
Costs by Cost Element by Contract will be provided.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (U.S. Department of Defense).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 2007-4-00058, SAIC - Companies 1, 6, and 9 - FY 2006 Floorchecks, April 30, 2007
Summary: We will close two audits under this account control number, A/N 4171-2005B13500001, dated
September 25, 2006, and A/N 4171-2006B13500001, dated February 27, 2007. This corrects a mix-up in the account
control numbers assigned to requested DCAA audits. In A/N 4171-2005B13500001, dated September 25, 2006,
DCAA determined that the floorchecks disclosed no significant deficiencies in the contractor's timekeeping or labor
system in FY 2005. DCAA did not express an opinion on the adequacy of the contractor's labor accounting system
taken as a whole. In A/N 4171-2006B13500001, dated February 27, 2007, DCAA determined that certain labor
practices require corrective actions to improve the reliability of the contractor's labor accounting system. DCAA did
not express an opinion on the adequacy of the contractor's labor accounting system taken as a whole.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
50
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Report No. 2007-1-00079, Science Applications Intl. Corporation - FYE 1/31/2005 I/C, July 18, 2007
Summary: DCAA submitted three audit reports under this assignment. DCAA accepted the claimed direct costs at
Companies 1 and 6 (there are no claimed direct costs at Company 9) and questioned proposed indirect costs and
rates at Companies 1, 6, and 9. DCAA questioned a total of $17,224,585 of Company 9's claimed indirect expenses
($9,938,874) and fringe benefit costs and rates ($7,285,711), of which $7,762,651 was allocated to other companies
that do not perform government work. Questioned indirect costs of $3,525,230 and $4,552,250 were allocated to and
questioned in the claimed general and administrative costs and rates of Companies 1 and 6, respectively. The
questioned fringe benefit rates in Company 9 resulted in questioned fringe benefit costs of $865,365 and $519,089
for Companies 1 and 6, respectively. DCAA questioned an additional $1,995,869 of Company 1 claimed indirect
expenses, and an additional $511,822 of Company 6 claimed indirect expenses. Total questioned costs in
Companies 1 and 6 are $11,969,625, of which $119,696 is applicable to EPA contracts.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 2007-1-00080, Lockheed Martin Services, Inc. - FY 2005 Incurred Cost, August 6, 2007
Summary: DCAA questioned $595,792,539 in claimed direct costs and $10,982,460 in proposed indirect costs and
rates. None of the questioned direct costs are chargeable to EPA contracts. A number of the EPA contracts have
indirect ceiling rates that are lower than the contractor's proposed indirect rates, and are not impacted by the
questioned indirect expenses and rates. However, there are EPA contracts/subcontracts that do not have indirect
ceiling rates and are impacted by the questioned indirect rates. EPA's share of questioned indirect costs totals
$133,069.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 2007-4-00080, National Academy of Sciences - FY 2006 Budget System, September 26, 2007
Summary: In DCAA's opinion, the budget and planning system and related internal control policies and procedures
were inadequate in part.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Office of Naval Research).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 08-4-0002, SAIC - Company 1 Compensation Follow-Up, October 2, 2007
Summary: In DCAA's opinion, the contractor's compensation system and related internal control policies and
procedures are inadequate in part. DCAA's examination noted certain significant deficiencies in the design or
operation of the internal control structure that could adversely affect the contractor's ability to record, process,
summarize, and report compensation in a manner that is consistent with applicable government contract laws and
regulations.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 08-1-0114, Weston Solutions Inc. - FY 12/31/2004 Incurred Cost, March 24, 2008
Summary: DCAA determined that the contractor's claimed direct costs are acceptable; however, DCAA questioned
$2,082,837 in proposed indirect costs and rates. Further, DCAA applied penalties in accordance with Federal
Acquisition Regulation 42.709, and identified expressly unallowable costs subject to penalty that had been allocated
to various contracts specified in Federal Acquisition Regulation 42.709(b), including 11 EPA contracts. Of the
questioned costs, EPA's total share of questioned costs is $197,869, of which $164,163 is questioned overhead costs
and $33,706 is questioned general and administrative costs.
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Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 08-1-0131, Washington Group International, Inc. - FY 2001 Incurred Costs, April 15, 2008
Summary: DCAA questioned $2,208,686 of claimed direct costs and $13,757,945 of proposed indirect costs and
rates, a total of $15,966,631. EPA's share of questioned costs is $44,648.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 08-1-0130, Morrison Knudsen Corporation - FY 1999 Incurred Costs, April 15, 2008
Summary: DCAA questioned $3,705,233 in claimed direct costs and $3,472,023 in proposed indirect costs and rates,
a total of $7,177,256. EPA's share of questioned costs is $57,369.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 08-4-0208, MACTEC Engineering & Consulting, Inc. - CAS 409, July 24, 2008
Summary: In DCAA's opinion, the contractor was in noncompliance with Cost Accounting Standard 409 during the
period January 1, 2006, through December 31, 2006.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 08-4-0308, Tetra Tech EC, Inc. - EDP General Controls, September 30, 2008
Summary: In DCAA's opinion, the contractor's information technology system of general internal controls was
inadequate in part. DCAA's examination noted significant deficiencies in the design or operation of the internal control
structure that could adversely affect the contractor's ability to record, process, summarize, and report direct and
indirect costs in a manner consistent with applicable government contract laws and regulations.
Agency Explanation: Audit resolution on hold due to other cognizant federal agency (Defense Contract Management
Agency).
O/G Followup Status: Resolution pending receipt of additional information.
Report No. 09-1-0034, Lockheed Martin Services Group - FY 2006 Incurred Cost, November 24, 2008
Summary: DCAA questioned $23,672,344 in claimed direct and proposed indirect costs and rates. Of this, $381,582
is claimed direct costs and $23,290,762 is proposed indirect costs and rates. DCAA also did not audit $159,778,286
in claimed subsidiary and subcontracts costs. EPA's share of the questioned costs is 3 percent, or $11,448 in claimed
direct costs and $698,722 in proposed indirect costs, a total of $710,170.
Agency Explanation: This audit is awaiting additional information on the resolution of the questioned costs and rates
by the cognizant federal agency (Defense Contract Management Agency).
O/G Followup Status: Resolution pending receipt of additional information.
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Grants and Interagency Agreements Management Division
Report No. 2003-4-00120, Geothermal Heat Pump Consortium, Inc. - Costs Claimed, September 30, 2003
Summary: We questioned $1,153,472 due to material financial management deficiencies. The consortium's financial
management system was inadequate for various reasons, including that the consortium did not separately identify
and accumulate costs for all direct activities, such as membership support and lobbying; account for program income
generated by the activities funded by the EPA agreements; and prepare or negotiate indirect cost rates.
Agency Explanation: The branch chief and associate award official met with Office of General Counsel on January 22
to discuss our review of the audit and options for resolution. Although we have made some progress, we are continuing
to work toward an agreement on which costs are unallowable. We are reviewing submitted procurement actions and
costs documentation. Our next meeting will be in late April to discuss the resolutions agreed upon in our Office of
General Counsel meeting and next steps. Further meetings with the Office of General Counsel and the Grants and
Interagency Agreements Management Division director are required to evaluate the recommendation to count
membership fees as program income before a final determination can be issued. Expect resolution by October 31,
2010.
O/G Followup Status: No response.
Report No. 09-3-0213, National Congress of American Indians - FY 2007, August 17, 2009
Summary: Employees and supervisors did not always sign timesheets. As a result, the single auditor questioned
labor charged of $10,965 as unsupported, of which $5,467 was for EPA grants. The recipient also did not submit its
indirect cost rate proposal within the required timeframe. Additionally, EPA's special grant conditions state that the
recipient is not allowed to claim indirect costs unless its indirect cost rate agreement has been sent to the cognizant
agency for approval. As a result, we questioned indirect costs of $25,155 as unsupported.
Agency Explanation: EPA indicated it is issuing a management decision memorandum by October 29, 2010.
O/G Followup Status: No response.
Report No. 10-4-0067, Incurred Cost Audit of Three EPA Cooperative Agreements Awarded to National Tribal
Environmental Council, Inc., February 17, 2010
Summary: We questioned $2,802,222 of the $3,586,445 reported because the recipient claimed unsupported costs of
$2,768,490 and ineligible costs of $33,732 that did not comply with the financial and program management standards
of Title 40, Code of Federal Regulations, Subpart B, Part 30. While the recipient's work plans describe activities and
planned deliverables, they do not include a description of the recipient's goals or objectives for its participation in the
Western Regional Air Partnership and National Tribal Air Association. Without the goals and objectives, the annual
reports could not include a comparison of accomplishments with the objectives for the period, as required by Title 40,
Code of Federal Regulations, Subpart B, Part 30.51. As a result, EPA cannot determine whether the funds EPA
provided the recipient achieved their intended purpose.
Agency Explanation: The Agency sent the National Tribal Environmental Council a certified letter requesting a
corrective actions plan and a schedule for submitting support documents for questioned costs. The council's
response was due October 8, 2010, and final determination was due by EPA on October 15, 2010.
O/G Followup Status: No response.
Office of Enforcement and Compliance Assurance
Report No. 08-P-0278, Strategic Planning in Priority Enforcement Areas, September 25, 2008
Summary: The Office of Enforcement and Compliance Assurance has instituted a process for strategic planning in its
national enforcement priority areas. The FYs 2008-2010 strategic plans we reviewed—for air toxics, combined sewer
overflows, and mineral processing—contain an overall goal, a problem statement, and other key elements. 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, the combined sewer overflow strategy does not address the states' key roles in
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attaining the strategy's overall goal. The absence of these elements hinders the Office of Enforcement and
Compliance Assurance from monitoring progress and achieving desired results in a timely and efficient manner.
Agency Explanation: The OIG issued a memorandum to the Office of Enforcement and Compliance Assurance on
January 20, 2010, that requested this office to change the designation of recommendation 2-2 in the Management
Audit Tracking System to "unresolved" and include it in the list of recommendations unresolved after a year. The OIG
indicated that it would pursue this matter through the formal EPA audit resolution process.
OIG Followup Status: Referred to Audit Resolution Board.
Office of Chemical Safety and Pollution Prevention
Report No. 10-P-0066, EPA Needs a Coordinated Plan to Oversee Its Toxic Substances Control Act
Responsibilities, February 17, 2010
Summary: EPA is responsible for ensuring that new chemicals entering commerce do not pose unreasonable risk to
human health and the environment. The Office of Chemical Safety and Pollution Prevention (formerly the Office of
Prevention, Pesticides, and Toxic Substances) is responsible for reviewing industry submissions and managing risks
from new chemicals. We conducted this evaluation to review EPA's implementation of the Toxic Substances Control
Act. We found that EPA does not have integrated procedures and measures in place to ensure that new chemicals
entering commerce do not pose an unreasonable risk to human health and the environment. We made various
recommendations, including establishing a management plan, and EPA agreed with our recommendations.
Agency Explanation: The OIG is currently reviewing a revised corrective actions plan, and the plan is expected to be
in place no later than October 29, 2010.
OIG Followup Status: No response.
Office of Environmental Information
Report No. 10-P-0058, Self-Reported Data Unreliable for Assessing EPA's Computer Security Program,
February 2, 2010
Summary: The oversight and monitoring procedures for the Automated Security Self-Evaluation and Remediation
Tracking System provide limited assurance the data are reliable for assessing EPA's computer security program.
Limited independent reviews and lack of followup inhibit EPA's ability to identify and correct data inaccuracies.
Information security personnel believe they need more training on how to assess security controls and feel pressure
to answer system security questions in a positive manner.
Agency Explanation: The OIG has not yet agreed with the proposed due dates. Expect resolution by October 31,
2010.
OIG Followup Status: Incomplete response received.
Region 1 - Regional Administrator
Report No. 08-3-0250, Indian Township Tribal Government, FY 2006, September 5, 2008
Summary: The tribe did not submit financial status reports within required timeframes. For the EPA partnership
performance grants, the single auditor reported that the tribe did not have records or formal calculations to
demonstrate that it met the matching requirements under these grants. Payroll issues were noted, as well as $26,134
in unsupported costs. There also were 17 cross-cutting findings. The U.S. Department of Health and Human Services
is the oversight agency responsible for audit resolution, but we reported these findings to EPA as they may impact
EPA grant funds.
Agency Explanation: The resolution of this audit is rolled into discussion of resolution of the FY 2008 audit, since
issues carry over. Expect resolution by April 2011.
OIG Followup Status: No response.
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Report No. 09-3-0024, Indian Township Tribal Government, FY 2007, November 12, 2008
Summary: There are several EPA grants for which the official time period has expired; however, the tribe still has
funds available under these grants and potential related expenditures. To have access to these funds, the tribe
should request time extensions from EPA. The tribe has drawn funds from various federal programs to pay general
fund expenditures, which is not allowable. The single auditors noted a net deficit to federal programs of $189,961.
The tribe recognized that this condition existed due to misappropriation activities by the former tribal governor.
Agency Explanation: The resolution of this audit is rolled into discussion of resolution of the FY 2008 audit, since
issues carry over. Expect resolution by April 2011.
O/G Followup Status: No response.
Report No. 09-3-0191, New Hampshire, State of, FY 2008, August 12, 2009
Summary: Administrative and direct program cost drawdowns were not in accordance with the agreement entered
between the secretary of the treasury, U.S. Department of the Treasury, and the state. Also, costs that met the
definition of indirect costs were charged directly to the grant and were not included in the indirect cost rate.
Agency Explanation: The state continues to work with Treasury to resolve. Expect resolution by November 30, 2010.
O/G Followup Status: No response.
Region 4 - Regional Administrator
Report No. 10-4-0001, Internal Control Weaknesses under EPA Grant Nos. I004802070 and BG96483308,
Awarded to the Eastern Band of Cherokee Indians, Cherokee, North Carolina, October 5, 2009
Summary: The OIG received a Hotline complaint regarding EPA assistance agreement nos. I004802070 and
BG96483308, awarded to the Eastern Band of Cherokee Indians, Cherokee, North Carolina. The grantee did not
have a conflict of interest, as alleged, and its Standard Form 272s are correct and prepared in compliance with
federal requirements, EPA policies, and grant terms and conditions. However, during the course of our examination,
we identified significant deficiencies in internal control concerning equipment purchases and segregation of duties.
Some purchase authorizations were dated the same day equipment was delivered, three quotes were not always
obtained, and purchases were not always properly authorized. Also, one employee was authorized to write grant
proposals; solicit funding to carry out the program goals; prepare budgets; oversee the expenditure of funds; and
purchase, maintain, repair, and inventory all equipment. We recommended that EPA require the grantee to comply
with its internal control policies and establish additional internal controls as needed.
Agency Explanation: The OIG did not accept Region 4's final management determination letter dated September 22,
2010, because the response did not address the recommendations. The grants management officer submitted a
revised final management determination letter on September 30, 2010, and we anticipate an OIG agreement date by
October 1,2010.
OIG Followup Status: Resolution pending receipt of additional information.
Report No. 10-4-0003, Costs Claimed Under EPA Grant XP97424901 Awarded to West Rankin Utility
Authority, Flowood, Mississippi, October 13, 2009
Summary: The grantee did not meet the procurement and financial management requirements of Title 40 Code of
Federal Regulations Part 31. As a result, we questioned $1,745,457 in unsupported architectural and engineering
costs claimed. The grantee will need to repay $663,321 of grant funds. The grantee did not agree with those
questioned costs. Due to the noncompliances and internal control weaknesses noted, the grantee may not have the
capability to manage future grant awards.
Agency Explanation: The OIG determined that the proposed final determination letter, dated February 10, 2010, is
incomplete for recommendation 1. The OIG is requesting that EPA Region 4 issue a deviation to the recipient for
noncompliance with Title 40 Code of Federal Regulations 31.36(f). Region 4 will continue to work with the OIG to
resolve this issue. For recommendation 4, the OIG would like an affirmative statement that EPA reviewed the
recipient's policies and procedures and determined that they complied with applicable federal requirements. The
grantee agreed to establish written policies and procedures for procurement, financial management, and monitoring
grant activities. The grantee did not concur with the questioned costs, lack of a financial management system, grant
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Semiannual Report to Congress April 1, 2010-September 30, 2010
monitoring noncompliance, and the designation as a high risk grantee. The grantee also disagreed with the audit
finding on its recordkeeping.
OIG Followup Status: No response.
Report No. 10-4-0013, Costs Claimed Under EPA Grant No. XP9468195 Awarded to the City of Flowood,
Mississippi, October 27, 2009
Summary: The grantee did not perform a cost analysis or negotiate a fair and reasonable profit as a separate element
of the contract price as required under Title 40 Code of Federal Regulations 31.36(f). As a result, we questioned
$1,755,157 in unsupported architectural and engineering costs claimed. The grantee will need to repay $896,224 of
grant funds. The grantee did not agree with those questioned costs.
Agency Explanation: The OIG determined that the proposed final determination letter, dated March 15, 2010, is
incomplete for recommendation 1. The OIG is requesting that EPA Region 4 issue a deviation to the recipient for
noncompliance with Title 40 Code of Federal Regulations 31.36(f). Region 4 will continue to work with the OIG to
resolve this issue. The grantee agreed with the recommendations to develop written procurement and recordkeeping
procedures. However, the grantee did not agree with the questioned costs and stated that it had performed the
equivalent of the required cost analysis for its architectural and engineering contract.
O/G Followup Status: No response.
Region 8 - Regional Administrator
Report No. 2007-4-00078, Cheyenne River Sioux Tribe, September 24, 2007
Summary: The tribe did not comply with the financial and program management standards under Title 40 Code of
Federal Regulations Parts 31 and 35 and OMB Circular A-87. We questioned $3,101,827 of the $3,736,560 in outlays
reported. The tribe's internal controls were not sufficient to ensure that outlays reported complied with federal cost
principles, regulations, and grant conditions. In some instances, the tribe also was not able to demonstrate that it had
completed all work under the agreements and had achieved the intended results.
Agency Explanation: We were able to utilize a federal contract and provide tribal staff (programmatic and financial)
with comprehensive grants management training that will hopefully provide the general understanding to those
involved with EPA funds management. The next step is to work with the tribe to implement procedures/controls to
assure that the compliance requirements are consistently met. Expect to close the audit by March 31, 2011.
OIG Followup Status: No response.
Report No. 08-3-0307, Oglala Sioux Tribe, FY 2004, September 30, 2008
Summary: The single auditor findings indicate the tribe may not be able to support costs claimed under EPA grants.
As a result, we are questioning the costs claimed of $1,158,903.
Agency Explanation: EPA is working with the tribe. Expect to close the audit by March 31, 2011.
O/G Followup Status: No response.
Report No. 09-3-0252, Oglala Sioux Tribe, FY 2005, September 29, 2009
Summary: The single auditor's findings indicate that the tribe may not be able to support the costs claimed under
EPA grants. As a result, we are questioning the costs claimed in 2005 of $307,323 as being unsupported.
Agency Explanation: We continue to work with the tribe to address the deficiencies in its management and
accounting systems. We have a series of meetings set up with the tribe's Environmental and Finance Departments
over the next 5 months to work with the tribe to identify and overcome its performance limiting factors through
adherence to existing policies and procedures and/or development of new policies and procedures that better serve
its (and our) needs. Once these new practices are fully implemented and tested, we will recommend that the audit be
closed. Expect resolution by October 31, 2010.
O/G Followup Status: No response.
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Report No. 09-3-0253, Oglala Sioux Tribe, FY 2006, September 30, 2009
Summary: The single auditor's findings indicate that the tribe may not be able to support the costs claimed under
EPA grants. As a result, we are questioning the costs claimed in 2006 of $530,042 as being unsupported.
Agency Explanation: We continue to work with the tribe to address the deficiencies in its management and
accounting systems. We have a series of meetings set up with the tribe's Environmental and Finance Departments to
work with the tribe to identify and overcome its performance limiting factors through adherence to existing policies
and procedures and/or development of new policies and procedures that better serve its (and our) needs. Once these
new practices are fully implemented and tested, we will recommend that the audit be closed. Expect resolution by
October 31, 2010.
O/G Followup Status: No response
Report No. 10-3-0092, Montana, State of, FYs 2008 and 2009, March 31, 2010
Summary: The June 30, 2007, audit of the program financial statements for the State of Montana disclosed material
weaknesses in the control over financial reporting, the Water Pollution Control State Revolving Fund balance not
being properly recorded, and material financial statement compilation and classification errors. The auditors
questioned $96,916.
Agency Explanation: Montana Department of Environmental Quality has answered all questions and submitted its
corrective actions plan. However, Montana Department of Agriculture has not been able to verify its carry forward for
2007-2008. We are currently working with the department to determine the next course of action. Anticipated
resolution date is December 31, 2010.
O/G Followup Status: No response.
Region 9 - Regional Administrator
Report No. 09-3-0218, Northern Mariana Islands, Commonwealth of, FY 2007, August 24, 2009
Summary: Of 35 nonpayroll expenditures of the Environmental Protection Consolidated Grants Program tested
involving $320,208, there was no indication that price or rate quotations were obtained from an adequate number of
qualified sources for six items that qualified under small purchase procedures. The single auditors questioned
$17,027. Also, property records had incomplete information, reporting of accumulated expenditures was inconsistent,
the policy for competitive procurement for items less than $2,500 did not conform to federal requirements, and
procurement procedures did not include procedures related to airfare.
Agency Explanation: The project officer and accounting staff still need the missing general ledger report from the
recipient's accounting system, which should reflect the numbers on the financial statement report. In addition, we still
need procedures.
O/G Followup Status: No response.
Report No. 09-3-0248, Northern Mariana Islands, Commonwealth of, FY 2008, September 24, 2009
Summary: We questioned $19,501 of direct costs as unsupported. Another $78,763 in unsupported costs was noted
in relation to indirect cost rates. The auditee's noncompliance with procurement regulations resulted in $56,969 in
ineligible costs. Because of a lack of compliance in relation to accounting for program income, $11,685 in ineligible
costs was noted. Property records were not reconciled and accumulated expenditures were not properly recorded.
Agency Explanation: The project officer and accounting staff have completed their review of submitted documents.
However, there is still an issue with the indirect cost claimed by the recipient: it falls outside the project period.
Additional information has been requested but not received. A final determination letter should be prepared and
routed for signature within the month of the receipt of the additional indirect cost information.
O/G Followup Status: No response.
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Semiannual Report to Congress April 1, 2010-September 30, 2010
Report No. 10-2-0054, Examination of Costs Claimed under EPA Grant X96906001 Awarded to Walker Lake
Working Group, Hawthorne, Nevada, January 6, 2010
Summary: The grantee did not meet financial management requirements specified by Title 40 Code of Federal
Regulations Part 30 and Title 2 Code of Federal Regulations Part 230. In particular, the grantee claimed contract
costs that were not allowable because analysis and administration requirements were not met. Travel and other direct
costs were not allowable because documentation requirements or cost principles were not met. The grantee's
financial status report was also not supported by accounting system data. Because of these issues, EPA should
recover $384,678 in questioned costs under the grant.
Agency Explanation: The Grants Management Office has been working with the OIGto address issues in a final
determination letter, which is targeted for completion by December 31, 2010.
O/G Followup Status: Incomplete response received.
Report No. 10-3-0051, Cahuilla Band of Indians, FY 2005, December 18, 2009
Summary: Audit procedures revealed that required reports under the grant agreement were either not filed at all or
not filed in a timely manner. The tribe did not use the accrual basis of accounting in accordance with generally
accepted accounting principles. In addition, adjusting entries made by the prior year auditor to record proper accruals
were not posted to the tribe's general ledger.
Agency Explanation: An enforcement warning letter was sent to the recipient on March 25, 2010. We are still awaiting
a response from the Cahuilla Band of Indians on the FYs 2005 and 2006 single audits. Unless an acceptable
response is received from the tribe by August 30, 2010, the grants office will send a notice of grant enforcement letter
to Cahuilla by September 30, 2010.
O/G Followup Status: No response.
Report No. 10-3-0052, Cahuilla Band of Indians, FY 2006, December 18, 2009
Summary: In addition to issues noted in the FY 2005 audit, we found that the employment of 44 percent of tribal
employees could not be supported with any form of authorization-to-hire documents, and amounts paid could not be
supported for 36 percent of the sample. Also, the tribe does not perform bank reconciliations.
Agency Explanation: An enforcement warning letter was sent to the recipient on March 25, 2010. We are still awaiting
a response from the Cahuilla Band of Indians on the FYs 2005 and 2006 single audits. Unless an acceptable
response is received from the tribe by August 30, 2010, the grants office will send a notice of grant enforcement letter
to Cahuilla by September 30, 2010.
O/G Followup Status: No response.
Report No. 10-3-0073, Torres Martinez-Desert Cahuilla Indians, FY 2008, February 26, 2010
Summary: Payroll testing disclosed that salaries and wage allocations between multiple activities were not found to
be properly supported on individual employees' timesheets, and timesheets did not always identify the specific
department/program in which the employee performed services.
Agency Explanation: The response is currently being submitted and, if approvable, a final determination letter will be
prepared and routed for signature by October 29, 2010.
O/G Followup Status: No response.
Report No. 10-4-0067, Incurred Cost Audit of Three EPA Cooperative Agreements Awarded to National Tribal
Environmental Council, Inc., February 17, 2010
Summary: We questioned $2,802,222 of the $3,586,445 reported because the recipient claimed unsupported costs of
$2,768,490 and ineligible costs of $33,732 that did not comply with the financial and program management standards
of Title 40 Code of Federal Regulations Subpart B Part 30. While the recipient's work plans describe activities and
planned deliverables, they do not include a description of the recipient's goals or objectives for its participation in the
Western Regional Air Partnership and National Tribal Air Association, which are needed to determine whether the
intended purpose has been achieved.
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Agency Explanation: EPA has provided the recipient with an outline of corrective actions needed to address the audit
findings and requested the submittal of milestones and support documentation. A final determination letter may be
available by March 31, 2011.
O/G Followup Status: No response.
Region 10 - Regional Administrator
Report No. 10-4-0086, Examination of Costs Claimed under EPA Grant XP98069201 Awarded to the City of
Blackfoot, Idaho, March 29, 2010
Summary: The grantee did not meet financial management requirements specified by Code of Federal Regulations.
In particular, the grantee claimed contract costs of $1,713,009 that were also claimed under two other federal grants,
supply and labor costs of $24,836 that were not supported by source documents, and supply and administration costs
of $6,684 that were not eligible because they did not meet cost principles. As a result of these issues, EPA should
recover $1,045,926 in questioned costs under the grant. The grantee also should be designated as "high-risk" in the
Integrated Grants Management System, and special conditions should be imposed on all future awards of EPA funds
to the grantee.
Agency Explanation: The OIG rejected the region's proposed management decision. The region will provide another
management decision by November 11, 2010.
O/G Followup Status: No response.
Total reports issued before reporting period for which
no management decision has been made as of September 30, 2010 = 46
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Semiannual Report to Congress
April 1, 2010-September30, 2010
Appendix 3 - Reports With Corrective Action Not Completed
In compliance with reporting requirements in the Inspector General Act, Section 5(a)(3), "Identification of
Reports Containing Significant Recommendations Described in Previous Semiannual Reports on Which
Corrective Action Has Not Been Completed," and to help EPA managers gain greater awareness of
outstanding commitments for action, we developed a Compendium of Unimplemented
Recommendations. This separate document provides the information required in Appendix 3 to this
semiannual report to Congress. This compendium (available upon request or at
http://www.epa.qov/oiq/reports/2011/20101026-11 -N-0006.pdf) is produced semiannually for Agency
leadership and Congress based on Agency reports on the status of action taken on OIG
recommendations and OIG selective verification of that reported status.
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April 1, 2010-September30, 2010
Appendix 4 - OIG Mailing Addresses and Telephone Numbers
Headquarters
U.S. Environmental Protection Agency
Office of Inspector General
1200 Pennsylvania Ave., NW (2410T)
Washington, DC 20460
(202) 566-0847
Atlanta
U.S. Environmental Protection Agency
Office of Inspector General
61 Forsyth Street, SW
Atlanta, GA 30303
Audit/Evaluation: (404) 562-9830
Investigations: (404) 562-9857
Boston
U.S. Environmental Protection Agency
Office of Inspector General
5 Post Office Square, Suite 100 (OIG15-1)
Boston, MA 02109-3912
Audit/Evaluation: (617) 918-1470
Investigations: (617) 918-1466
Chicago
U.S. Environmental Protection Agency
Office of Inspector General
77 West Jackson Boulevard
13th Floor (IA-13 J)
Chicago, IL 60604
Audit/Evaluation: (312) 353-2486
Investigations: (312) 353-2507
Cincinnati
U.S. Environmental Protection Agency
Office of Inspector General
26 West Martin Luther King Drive
Cincinnati, OH 45268-7001
Audit/Evaluation: (513)487-2360
Investigations: (513)487-2364
Dallas
U.S. Environmental Protection Agency
Office of Inspector General (6OIG)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-2733
Audit/Evaluation: (214)665-6621
Investigations: (214)665-2790
Offices
Denver
U.S. Environmental Protection Agency
Office of Inspector General
1595 Wynkoop Street, 4th Floor
Denver, CO 80202
Audit/Evaluation: (303) 312-6969
Investigations: (303) 312-6868
Kansas City
U.S. Environmental Protection Agency
Office of Inspector General
901 N. 5th Street
Kansas City, KS 66101
Audit/Evaluation: (913) 551-7878
Investigations: (913) 551-7875
New York
U.S. Environmental Protection Agency
Office of Inspector General
290 Broadway, Room 1520
New York, NY 10007
Audit/Evaluation: (212)637-3080
Investigations: (212)637-3041
Philadelphia
U.S. Environmental Protection Agency
Office of Inspector General
1650 Arch Street, 3rd Floor
Philadelphia, PA 19103-2029
Audit/Evaluation: (215) 814-5800
Investigations: (215) 814-5820
Research Triangle Park
U.S. Environmental Protection Agency
Office of Inspector General
Mail Drop N283-01
Research Triangle Park, NC 27711
Audit/Evaluation: (919) 541-2204
Investigations: (919) 541-1027
San Francisco
U.S. Environmental Protection Agency
Office of Inspector General
75 Hawthorne Street (IGA-1)
7th Floor
San Francisco, CA 94105
Audit/Evaluation: (415) 947-4521
Investigations: (415) 947-4500
Seattle
U.S. Environmental Protection Agency
Office of Inspector General
1200 6th Avenue, 19th Floor
Suite 1920, M/SOIG-195
Seattle, WA 98101
Audit/Evaluation: (206) 553-4033
Investigations: (206) 553-1273
Winchester
U.S. Environmental Protection Agency
Office of Inspector General
200 S. Jefferson Street, Room 314
P.O. Box 497
Winchester, TN 37398
Investigations: (423) 240-7735
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Report fraud, waste or abuse
e-mail: OIG_Hotline@epa.gov
write: EPA Inspector General Hotline (2431M)
1200 Pennsylvania Avenue NW
Washington DC 20460
fax: 202-566-1610 • phone: 1-888-546-8740
www.epa.gov/oig/hotline.htm
It's your money
It's your environment
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