o U.S. ENVIRONMENTAL PROTECTION AGENCY
? OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Compendium of
Unimplemented Recommendations
as of March 31, 2011
Report No. 11-N-0212
April 29, 2011
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Abbreviations
ARRA American Recovery and Reinvestment Act of 2009
CSO Combined Sewer Overflow
CWA Clean Water Act
CWSRF Clean Water State Revolving Fund
DWSRF Drinking Water State Revolving Fund
EAS EPA Acquisition System
EPA U.S. Environmental Protection Agency
FMFIA Federal Managers' Financial Integrity Act
GAO U.S. Government Accountability Office
ICMS Integrated Contracts Management System
MATS Management Audit Tracking System
NPDES National Pollutant Discharge Elimination System
OARM Office of Administration and Resources Management
OCFO Office of the Chief Financial Officer
OECA Office of Enforcement and Compliance Assurance
OEI Office of Environmental Information
OIG Office of Inspector General
OMB Office of Management and Budget
ORD Office of Research and Development
OW Office of Water
POTW Publicly Owned Treatment Works
SAAP Special Appropriation Act Project
Hotline
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b
| UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
^ WASHINGTON, D.C. 20460
X^
THE INSPECTOR GENERAL
April 29, 2011
MEMORANDUM
SUBJECT: Compendium of Unimplemented Recommendations as of March 31, 2011
Report No. ll-N-0212
FROM: Arthur A. Elkins, Jr. /
Inspector General
TO: Deputy Administrator
Assistant Administrators
Regional Administrators
General Counsel
Chief Financial Officer
Associate Administrators
Attached is the semiannual Compendium of Unimplemented Recommendations as of March 31,
2011, prepared by the Office of Inspector General (OIG) of the U.S. Environmental Protection
Agency (EPA). This compendium fulfills the requirement of the Inspector General Act of 1978,
as amended, to identify reports containing significant recommendations described in previous
semiannual reports to Congress on which corrective actions have not been completed.
This compendium, issued in conjunction with the Semiannual Report to Congress, October 1,
2010 through March 31, 2011, and as a separate document to EPA leadership, is part of the
OIG's followup strategy to promote robust internal controls. Followup is done in collaboration
with the EPA Office of the Chief Financial Officer and EPA audit followup coordinators. The
goal is to improve overall audit management by increasing EPA managers' awareness of
outstanding agreed-to commitments for action on OIG report recommendations. Implementing
these recommendations will correct weaknesses, reduce vulnerabilities to risk, and leverage
opportunities for improved performance.
The significance of audit followup, as described by the Office of Management and Budget
(OMB) Circular A-50, is enhanced by the public's expectation for greater transparency and a
heightened interest by Congress in realizing potential opportunities for improvement in the
federal government. The OIG's previous compendium reports appear to be increasing Agency
awareness of and action on Unimplemented OIG recommendations.
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We selected the unimplemented recommendations listed in this compendium based on their
significance and their status in EPA's Management Audit Tracking System. In addition, some
unimplemented recommendations were identified through review by the OIG.
According to OMB Circular A-50, audit followup is a shared responsibility between the Agency
and the OIG. We will continue to identify unimplemented recommendations for attention and
action, as well as remove the listing of recommendations as unimplemented when appropriate
information of completion is provided. We hope that you find this tool useful in identifying ways
to further improve Agency operations.
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Compendium of Unimplemented Recommendations as of March 31, 2011
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Table of Contents
Introduction 1
Purpose 1
Background 1
Scope and Methodology 2
Unimplemented Recommendations 4
OIG Report Number
10-P-0081 4
10-P-0071 6
10-R-0057 7
09-P-0232 9
09-P-0223 11
08-P-0213 13
08-P-0049 14
2007-P-00027 15
2007-P-00008 16
2007-P-00007 17
2004-P-00030 18
2002-P-00012 20
Appendix A: OIG Reports With Unimplemented Recommendations by
Program Office as of March 31, 2011 21
Appendix B: Unimplemented Recommendations: Current Compendium
Compared to 10/26/10 Compendium 22
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Introduction
Purpose
The purpose of this Compendium of Unimplemented Recommendations is to highlight for
U.S. Environmental Protection Agency (EPA) management significant recommendations that
remained Unimplemented past the due date agreed upon by EPA and the Office of Inspector
General (OIG). In addition, the compendium satisfies part of Section 5(a) of the Inspector
General Act of 1978, as amended, which requires each inspector general to issue semiannual
reports to Congress and include "an identification of each significant recommendation described
in previous semiannual reports on which corrective action has not been completed." We are
issuing the compendium in conjunction with the OIG's Semiannual Report to Congress, October
1, 2010 through March 31, 2011. We intend to issue a compendium each semiannual reporting
period. The compendium will keep Agency management informed about EPA's outstanding
commitments and its progress in taking agreed-upon corrective actions on OIG recommendations
to improve programs and operations.
Background
The OIG issues recommendations to improve the economy, efficiency, effectiveness, and
integrity of EPA programs and operations. Office of Management and Budget (OMB) Circular
A-50, Audit Followup, provides that corrective action taken by management on resolved findings
and recommendations is essential to improving the effectiveness and efficiency of government
operations, and that audit followup is a shared responsibility of agency management officials and
auditors.
OMB Circular A-50 requires each agency to establish systems to ensure the prompt and proper
resolution and implementation of audit recommendations. EPA Order 2750, based on OMB
Circular A-50, details EPA's policy and procedures on audit followup. The Chief Financial
Officer is EPA's audit followup official and is responsible for resolving audits Agency-wide and
ensuring that action officials implement corrective actions and meet the milestone dates
contained in the OIG-accepted management decision. If the action officials need to make a
significant change to the corrective actions by modifying an action or deferring critical milestone
dates for 6 months or more, they are required to obtain the OIG's approval of the change. The
OIG is required to respond to an action official's request within 15 calendar days of receipt of
the request; if the OIG does not respond, the action official may consider that the OIG has
approved the requested change. EPA uses the Management Audit Tracking System (MATS) to
track information on Agency implementation of OIG recommendations. The Office of the Chief
Financial Officer (OCFO) maintains and operates MATS. MATS receives report data, such as
the report title, issue date, and recommendations, from the Inspector General Enterprise
Management System.
The audit management official in the Office of the Administrator, the Office of General Counsel,
and each Assistant Administrator or Regional Administrator office designates an audit followup
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coordinator for that office. Audit followup coordinators are responsible for: managing their
office's data contained in MATS, tracking implementation of corrective actions, facilitating
timely progress on all corrective actions and maintaining documentation from the action official
confirming that corrective actions are complete. When corrective actions in response to
recommendations in an audit report are completed and certified, the Agency may inactivate that
report in MATS and the audit followup coordinator would no longer have to track it. The
Agency self-certifies that it has completed the corrective actions. The Agency is also responsible
under the Inspector General Act for reporting on audit reports for which the Agency has not
taken final corrective action within one year or more of the Agency's management decision.
This is the sixth edition of the Compendium of Unimplemented Recommendations. It identifies
18 Unimplemented recommendations from 12 reports, compared with 18 Unimplemented
recommendations from 15 reports identified in the fifth edition for the period ending
September 30, 2010. Of the 18 Unimplemented recommendations reported herein, 6 from 6
reports were included in the previous Compendium, and 12 from 8 reports are newly identified.
We removed 12 Unimplemented recommendations from 9 reports that were included in the
previous compendium. Removal of an Unimplemented recommendation does not mean that it
was verified as implemented, but rather that it was reported as being completed or that the target
completion date has been revised with OIG approval.
Scope and Methodology
We used MATS as our primary source for identifying Unimplemented recommendations. We
also performed additional steps to search for Unimplemented recommendations that may not have
been identified in MATS. These steps included consulting with OIG staff and Agency audit
followup coordinators for clarification of information contained in MATS.
To identify significant Unimplemented recommendations for inclusion in the compendium, we
reviewed:
• Selected OIG audit and evaluation reports issued to EPA during the period October 1,
1997, through September 30, 2010
• Recommendations that have corrective actions with agreed-to dates of March 31, 2011,
or earlier
We based our analysis on the status of recommendations entered into MATS by April 7, 2011,
for corrective actions that were completed by March 31, 2011. We excluded those
recommendations for which the OIG approved, by March 31, 2011, Agency-submitted requests
to extend the completion dates. We did not identify any significant Unimplemented
recommendations for fiscal years 1998 through 2001, 2003, 2005, and 2006. We did not review
recommendations from reports without an OIG agreement on the Agency's corrective action plan
(management decision). A list of these reports can be found in appendix 2 of the OIG
Semiannual Report to Congress, October 1, 2010 through March 31, 2011.
Some Unimplemented recommendations that were excluded from this compendium may, upon
further review, be included in the next compendium. A recommendation's exclusion from the
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compendium does not indicate our determination that the recommendation has been
implemented. We limited the inclusion of unimplemented recommendations to those we believe
are significant because they could have a material impact on the economy, efficiency,
effectiveness, or integrity of EPA programs and operations. For this purpose, we define
significant recommendations in the following terms:
• Economy: Opportunity to save, prevent loss, or recover at least $500,000 in monetary
costs or value
• Efficiency: Improvement in the process, capacity, accessibility, or delivery of program
objectives and the elimination of unnecessary or unproductive actions or expenses
• Effectiveness: Improvement in the quality of, or reduction in the risk to, public health
and the environment
• Integrity: Improvement in operational accountability, enforcement of and compliance
with laws and regulations, and security of resources for public confidence
The following EPA offices have unimplemented recommendations listed in this compendium
discussion draft:
• Office of Administration and Resources Management (OARM)
• Office of Enforcement and Compliance Assurance (OECA)
• Office of Environmental Information (OEI)
• Office of Research and Development (ORD)
• Office of Water (OW)
• Region 3
• Region 8
We anticipate that the Agency will update MATS on the status of each unimplemented
recommendation, including a description of progress, an explanation of the delay in completing
an agreed-to action, and any approved extensions of the planned completion dates.
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Unimplemented Recommendations
Action Office: OW
Report Title: EPA Needs Procedures to Address Delayed Earmark Projects
Report No.: 10-P-0081
Date Issued: 03/22/2010
Report Summary
The OIG performed this audit to quantify unused Special Appropriation Act Project (SAAP)
funds and to determine whether EPA awarded funds, and grantees used the funds, in a timely
manner. The OIG found that EPA still had not obligated some SAAP funds 5 years after
Congress appropriated them. Frequently, either earmark recipients could not obtain the matching
funds required to obtain the grants, or the projects were complex and required extensive
planning. As of April 2009, there were 84 earmarks that Congress appropriated before fiscal year
2004 with unobligated funds totaling over $28 million.
Additionally, as of April 2009, there were 119 SAAP grants that EPA awarded prior to fiscal
year 2004 that had total funds remaining of over $122 million. In many cases, funds were not
completely spent because the recipient had to make changes to the work plan, or the recipient
was required to comply with various state and local regulations, thereby delaying the project.
EPA established the goal of completing SAAP projects within 5 years of grant award. However,
EPA does not believe it has the authority to take action or require corrective action for delayed
SAAP earmarks or grants. EPA has no defined process for its regions to contact sponsoring
Members of Congress about reallocating unused SAAP funds. EPA needs a policy that specifies
time limits and procedures for addressing earmarks that remain unobligated. It should also
address steps to be taken when projects are delayed. Currently, unless Congress initiates a
rescission, millions of dollars are available for projects that may never get started, while other
projects that could improve the environment are not funded.
Unimplemented Recommendations
Recommendation 2-1: We recommend that the Assistant Administrator for Water, in
consultation with OCFO, establish a national policy containing a response framework for
handling unobligated earmarks. The framework should include criteria for when to escalate the
handling of unobligated earmarks.
Recommendation 3-1: We recommend that the Assistant Administrator for Water, in
consultation with OCFO, establish a national policy that clearly identifies corrective actions for
delayed projects.
Recommendation 3-2: We recommend that the Assistant Administrator for Water, in
consultation with OCFO, create an exception reporting procedure for delayed projects to focus
management attention on such cases.
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Status: OW agreed to create a response framework to address the issue of unobligated
and unliquidated earmark grants. OW also agreed to have the draft issued 6 months after
the issuance of the OIG final report and the final 1 year after the OIG report. OW planned
to issue a final management plan and begin implementation as of March 30, 2011. These
corrective actions, which are past due, are associated with the three recommendations
above. As of November 30, 2010, OW had completed the following steps toward the
development of the final management plan:
• July 30, 2010—Sent the regions a draft management plan for review and
comment.
• September 30, 2010—Issued a revised draft after incorporating regional
comments.
• October 6-7, 2010—Discussed the draft document with the regional SAAP
coordinators at the Annual SAAP Coordinators' Conference.
• November 30, 2010—Submitted a final draft to OW for review and
comment.l
1 Subsequent to the close of our reporting period, March 31, 2011, OW informed us that it was revising the final
management plan based on comments received. OW expects to finalize the plan by May 31,2011.
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Action Office: OARM
Report Title: Plans to Migrate Data to the New EPA Acquisition System Need Improvement
Report No.: 10-P-0071
Date Issued: 02/24/2010
Report Summary
The OIG engaged Williams, Adley & Company, LLP, to conduct an audit of EPA's plans for
migrating data from the Integrated Contracts Management System (ICMS) to the EPA
Acquisition System (EAS). Williams, Adley & Company, LLP, identified that EPA's plans lack
sufficient incorporation of data integrity and quality checks to ensure the complete and accurate
transfer of procurement data. In particular, the Agency relies heavily on contracting officers to
review their own contract data in EAS for overall data accuracy after it has been migrated from
ICMS. However, EPA does not require that contracting officers attend data migration training. In
addition, EPA does not require verification of the accuracy and completeness of those data in its
plans to migrate closed contracts, which will be utilized for historic reporting purposes in EAS.
While EAS data validation and edit checks will enforce integrity constraints over user-entered
data, proper data migration controls are paramount to ensuring that the acquisition data transfer
accurately and completely from ICMS to EAS.
Proper data migration controls ensure that data intended for migration arrive in the new system
ready for their intended purpose and that erroneous data are identified and corrected prior to
release in the new system. By taking steps to improve its data migration strategy, EPA would
increase its chances of achieving effective data cleanup prior to migrating ICMS data to EAS.
Likewise, incorporation of data integrity checks and manual quality control review of data would
provide management with assurance that (1) it could rely on the accuracy and completeness of
the data in the new system, and (2) it could report that EPA has effective internal controls over
financial reporting as required by OMB Circular A-123, Management's Responsibility for
Internal Control.
Unimplemented Recommendation
Recommendation 3: We recommend that the Director of the Office of Acquisition Management
within OARM develop a plan to ensure closed contract data are reviewed for accuracy.
Status: OARM concurred with this recommendation. OARM planned the use of the
Federal Procurement Data System-Next Generation Verification and Validation Annual
Exercise to ensure that closed contract data are reviewed for accuracy. The original
agreed-to completion date was November 15, 2010. OARM later indicated it would
complete the corrective action by February 28, 2011. This corrective action is past due
for completion.
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Action Office: OW
Report Title: EPA Needs Definitive Guidance for Recovery Act and Future Green Reserve
Projects
Report No.: 10-R-0057
Date Issued: 02/01/2010
Report Summary
EPA has not provided clear and comprehensive guidance to states on how to determine the
eligibility of green reserve projects. EPA was promoting a green approach to wastewater and
drinking water programs for at least a year prior to enactment of the American Recovery and
Reinvestment Act of 2009 (ARRA). Despite that experience, EPA did not develop and issue
clear and comprehensive guidance in time to meet many of the states' needs. For example, EPA
did not provide guidance on how to solicit and select green projects until after many states had
finished doing so. Some states felt the need to resolicit for green projects while others did not.
EPA's guidance and subsequent updates have not addressed important aspects of project
selection. At the time of this review, EPA had not established water and energy efficiency
threshold ranges for many types of green projects. In addition, the Agency still had not provided
sufficient information to states on how to develop business case justifications for noncategorical
projects. Moreover, changes over time in EPA's guidance for how to determine project eligibility
resulted in EPA regions applying different standards for approving states' green project
proposals.
EPA cannot provide reasonable assurance that its green reserve projects will meet the objectives
of Congress without issuing guidance that sets definitive expectations. Additionally, future green
funding may face similar issues.
Unimplemented Recommendations
Recommendation 1: We recommend that the Assistant Administrator for Water develop and
revise guidance, information, and, as appropriate, specific criteria that states can employ to assist
them in identifying projects qualifying for funding from the state's green project reserve.
Status: OW indicated that it completed multiple actions within the 12-month deadline of
ARRA enactment that were successful in achieving approximately 30 percent green
project reserve funding for both the Clean Water State Revolving Fund (CWSRF) and the
Drinking Water State Revolving Fund (DWSRF). This accomplishment is well above the
20 percent requirement contained in the statute. OW also developed guidance for regions
and states on the green project reserve requirements of EPA's fiscal year 2010
appropriation and issued additional guidance on business cases provided in the
appropriation. OW planned to develop eight example business cases for the DWSRF and
two fact sheets by July 2010. These corrective actions are past due for completion.2
Recommendation 2: We recommend that the Assistant Administrator for Water conduct a
timely review of the states' submitted green projects and, where necessary, accompanying
2 OW submitted a request to the OIG on March 31, 2011, to extend the completion date to October 31, 2011.
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business cases, in accordance with the pertinent statutory provisions and EPA guidance,
information, and criteria.
Status: OW indicated that it completed a series of checklists for the regions to use in
conducting oversight visits to ensure that the reviews were complete, well documented,
and consistent. OW agreed that regions would conduct regular state oversight reviews.
The first two state reviews were to be completed by December 2010. At a minimum,
regions were to conduct one project site visit per program during this same period.
Additionally, oversight visits to the regional offices by national program teams from both
the CWSRF and DWSRF were to be completed. The DWSRF visit was to be completed
by October 2010, and the CWSRF visit was to be completed by December 2010. These
corrective actions are past due for completion.3
3 Subsequent to the close of our reporting period, March 31, 2011, OW informed us that it had completed many of
the agreed-to oversight reviews. However, OW had not updated MATS with this information.
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Action Office: ORD
Report Title: EPA's Office of Research and Development Could Better Use the Federal
Managers' Financial Integrity Act to Improve Operations
Report No.: 09-P-0232
Date Issued: 09/15/2009
Report Summary
ORD's management integrity program is inconsistent with Agency Federal Managers' Financial
Integrity Act (FMFIA) guidance. ORD approaches FMFIA as an administrative reporting
activity rather than an opportunity to evaluate and report on research program performance. As a
result, ORD has not:
• Conducted a comprehensive risk assessment
• Included national program directors in the FMFIA process
• Developed and implemented a strategy to establish and evaluate the effectiveness
of internal controls over research programs
• Provided FMFIA training to managers and staff
• Included relevant risk and program performance information in assurance letters
EPA Order 1000.24 requires all organizations to systematically review and assess the
effectiveness of internal controls consistent with U.S. Government Accountability Office (GAO)
internal control standards. The order gives program managers flexibility in designing review
strategies. While ORD's largest laboratory, the National Health and Environmental Effects
Research Laboratory, informally identifies program risks, neither ORD nor the laboratory
conducts internal control risk assessments on which to base a program review strategy. Applying
FMFIA as intended would help EPA achieve its mission and program results through improved
accountability.
ORD's Administrative Efficiencies Project management integrity workgroup has initiated
actions that we believe will address our findings, such as developing a draft multiyear review
strategy. In developing its new strategy, ORD should include programmatic elements, a training
plan, pertinent results from peer reviews, and best practices to ensure more effective FMFIA
implementation.
Unimplemented Recommendation
Recommendation 2-1: We recommend that the Assistant Administrator for Research and
Development conduct a risk assessment using the GAO internal control standard for risk
assessment and EPA Order 1000.24 and, based upon the results, develop a comprehensive risk-
based program review strategy.
Status: ORD finalized and posted a strategy to examine and report on internal controls
covering programmatic and administrative operation and financial activities to ORD's
website in May 2010. ORD's multiyear program review strategy will help ORD officials
identify high-risk areas, detect weaknesses and deficiencies, and identify best practices
associated with internal controls. ORD is also piloting a risk assessment protocol
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intended to aid its management and management integrity coordinators with conducting a
risk assessment. All of ORD's assessable units will use this tool to identify and prioritize
existing program and administrative/research support risks. The risk assessment protocol
summarizes the roles and responsibilities as described in ORD:'s Management Integrity
Program manual. Like the manual, ORD centered the protocol on programmatic
operations. The protocol, which is still ongoing, was launched in one of ORD's
laboratories to see how well the protocol and manual support the risk assessment process.
ORD agreed to review its processes, test key internal controls related to ORD activities,
and assess programmatic and administrative risks by August 2010. After completing the
risk assessment, ORD agreed to revise its multiyear program review strategy as necessary
by September 2010. These agreed-to corrective actions are past due for completion. ORD
indicated that it plans to complete an organization-wide risk assessment by August 31,
2011.
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Action Office: OW
Report Title: EPA Needs to Accelerate Adoption of Numeric Nutrient Water Quality
Standards
Report No.: 09-P-0223
Date Issued: 08/26/2009
Report Summary
EPA's 1998 national strategy and plan to promote state adoption of nutrient water quality
standards to better protect aquatic life and human health have been ineffective. In 1998, EPA
stated that a critical need existed for improved water quality standards, given the number of
waters that were impaired from nutrients. In the 11 years since EPA issued its strategy, half the
states still had no numeric nutrient standards. States have not been motivated to create these
standards because implementing them is costly and often unpopular with various constituencies.
EPA has not held the states accountable to committed milestones. The current approach does not
assure that states will develop standards that provide adequate protection for downstream waters.
Until recently, EPA has not used its Clean Water Act (CWA) authority to promulgate water
quality standards for states.
EPA cannot rely on the states alone to ensure that numeric nutrient standards are established.
EPA should prioritize states/waters significantly impacted by excess nutrients and determine
whether it should set the standards. EPA should also establish effective monitoring and measures
so that accurate program progress is reported. Accurate reporting will assist EPA management in
program decision-making.
Unimplemented Recommendations
Recommendation 2-1: We recommend that the Assistant Administrator for Water select
significant waters of national value which need numeric nutrient water quality standards to meet
the requirements of the CWA.
Status: OW developed a list of selection factors to consider when identifying and
prioritizing states and waters that need numeric nutrient water quality standards to meet
the requirements of the CWA. OW is developing a Nutrient Screening Tool that includes
state-specific data for each factor so that EPA can apply these factors to compare states
on a national basis with regard to the risk and impact of nutrient impairment, and to
assess a state's progress toward mitigating nitrogen and phosphorus pollution. The tool
will help EPA to evaluate whether numeric nutrient criteria are necessary for a given state
and to prioritize states for possible CWA Section 303(c) determinations. The agreed-to
completion date was May 31, 2010. Additional time was needed to refine the selection
factors and to collect and verify the state data. This corrective action is past due for
completion. OW also agreed to assess availability of resources and determine the number
of evaluations and possible determinations that can be funded. Given the funding and
full-time equivalent that OW has already dedicated and continues to put toward the
determination and promulgation of nutrient criteria, OW determined it would not have
the capacity to initiate another determination in 2010, as planned.
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Recommendation 2-3: We recommend that the Assistant Administrator for Water establish
EPA and state accountability for meeting milestones for adopting numeric nutrient water quality
standards for those waters in the rest of the nation that require them. EPA should do this by:
a. Requiring states to develop milestones based on resources available
b. Reviewing those milestones and approving them as appropriate
Recommendation 2-4: We recommend that the Assistant Administrator for Water establish
metrics to gauge the actual progress made by states in adopting numeric nutrient water quality
standards.
Recommendation 2-5: We recommend that the Assistant Administrator for Water ensure that
the regions annually validate Water Quality Standards Action Tracking Application data.
Status: OW indicated that it revised the program activity measures for nutrient criteria in
the National Water Program Guidance, which will guide state actions for 2011. The
guidance describes the more aggressive approach EPA will use regarding overseeing
state performance in developing nutrient criteria. OW also indicated that it developed a
template to assist EPA regions in their performance discussions with states to provide
consistent information regarding the development and documentation of milestones and
measurable expectations for numeric nutrient criteria development. Next, OW will launch
a revised nutrient criteria website with more comprehensive information on the progress
of states to better track progress and routinely update/maintain the information contained
therein. These corrective actions are associated with the three recommendations above.
The website has been revised to provide more information on state progress and to
provide the public more information regarding the nature and scope of the nutrient
pollution problem. The expansion of this effort has delayed its launch because EPA
senior managers determined that these changes should be made before the revised
website is launched. Additionally, the official launching of this effort has been delayed
due to a significant change in EPA's website format, which was institutionalized in
mid-2010. OW had not foreseen this major change in website formatting when making
the original commitment. EPA must now migrate the revised site into the new format.
This migration will take a considerable amount of effort, but EPA expects that the revised
website will be launched in June 2011. The agreed-to completion date was December 31,
2010. This corrective action is past due for completion.
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Action Office: Region 8
Report Title: Oglala Sioux Single Audits—Corrective Actions Taken but Improvements
Needed in Resolving Costs
Report No.: 08-P-0213
Date Issued: 07/28/2008
Report Summary
EPA Region 8 continues to take actions to resolve the internal control findings in single audit
reports. Region 8 identified the Oglala Sioux Tribe as high risk, requested a corrective action
plan, and reviewed the tribe's accounting documentation. However, Region 8 did not monitor
implementation of the corrective actions in MATS until all actions were completed. As a result,
the Agency was not accurately reporting on its status of implementing corrective actions
resulting from audit reports.
Region 8 did not obtain sufficient documentation to support resolving $2.5 million in questioned
costs. The documentation for resolving the questioned costs was not from the Oglala Sioux
Tribe's official accounting system and did not reconcile to the costs claimed. Region 8 did not
resolve these issues before concluding that the tribe did incur the costs. Without sufficient
documentation to support resolving questioned costs, the region cannot ensure those costs were
allowable under the EPA grants.
Unimplemented Recommendation
Recommendation 1: We recommend that the Region 8 Regional Administrator track the
remaining corrective action that the Oglala Sioux Tribe has not implemented in MATS, or submit
a revised corrective action plan to the OIG for evaluation.
Status: Region 8 agreed to arrange for ongoing training and technical assistance for the
accounting staff. Region 8 plans to work with the Oglala Sioux Finance Department to
provide training to the tribal program directors on the expectations for compliance with
specific provisions of the grants management common rule and OMB Circulars A-87,
A-102, and A-133. The training is to take place in May 2011. Region 8 agreed to
complete this corrective action by December 31, 2006. This corrective action is past due
for completion.
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Action Office: Region 3
Report Title: Despite Progress, EPA Needs to Improve Oversight of Wastewater Upgrades in
the Chesapeake Bay Watershed
Report No.: 08-P-0049
Date Issued: 01/08/2008
Report Summary
Chesapeake Bay wastewater treatment facilities were at risk of not meeting the 2010 deadline for
nutrient reductions if key facilities were not upgraded in time. In the 7 years since signing the
Chesapeake 2000 Agreement, EPA and its state partners have taken a number of steps to lay the
foundation for achieving the 2010 wastewater nutrient reduction goals. Water quality standards
have been set, nutrient loadings have been allocated, and nutrient limits are beginning to be
incorporated into permits. However, states need to finish adding nutrient limits to the National
Pollutant Discharge Elimination System (NPDES) permits, and the facilities will need to make
significant reductions in the 3 years remaining before the deadline. It is critical that these
reductions be maintained once the reduction goals are achieved. Significant challenges include
generating sufficient funding and addressing continuing population growth. EPA needs to better
monitor progress to ensure that needed upgrades occur on time and loading reductions are
achieved and maintained. Otherwise, Chesapeake Bay waters will continue to be impaired,
adversely affecting the ecosystem that supports commercial and recreational uses.
Unimplemented Recommendation
Recommendation 2-1: We recommend that the Region 3 Regional Administrator instruct staff
to review and comment on state-drafted NPDES permits for significant facilities to ensure that
interim construction milestones are included in compliance schedules longer than 1 year to meet
the Chesapeake Bay allocations. The milestones should include design completion, construction
start, construction completion, and compliance with permit limits.
Status: Region 3 will continue to review and comment on state-drafted NPDES permits
for significant facilities. Region 3 will assure that interim construction milestones are in
place if the compliance schedule to achieve the permit limit exceeds 1 year. Region 3 will
seek to include the following milestones as appropriate in the permits: design completion,
construction start, construction completion, and compliance with permit limits. The
agreed-to completion date for the corrective action was December 31, 2010. The
corrective action is past due for completion.4
4 Subsequent to the close of our reporting period, March 31, 2011, Region 3 informed us that it has completed all of
the corrective actions and is closing this audit in MATS.
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Compendium of Unimplemented Recommendations as of March 31, 2011
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Action Office: OECA
Report Title: Overcoming Obstacles to Measuring Compliance: Practices in
Selected Federal Agencies
Report No: 2007-P-00027
Date Issued: 06/20/2007
Report Summary
Federal regulatory agencies with missions and obstacles similar to EPA's use statistical methods
to generate compliance information. They use this information to monitor their enforcement and
compliance programs and demonstrate program results. These federal programs extensively use
statistical methods to identify and analyze risk, set goals, develop strategies to manage the most
significant risks, and report their accomplishments. The federal programs we reviewed face
obstacles similar to those OECA faces, and they use practical approaches to overcome those
obstacles that OECA could potentially apply to its programs.
Other programs apply statistical methods, such as selective random inspections, to develop and
publish compliance and other rates for their regulated populations. Some programs collect data
through national surveys, while others require states to submit data as a condition of grant
agreements. Programs do not use statistical methods solely for reporting compliance rates.
Programs reported that other benefits include identifying previously unknown risks, quantifying
results, verifying the effectiveness of targeting schemes, and maximizing limited resources.
Unimplemented Recommendation
Recommendation 2-1: We recommend that the Assistant Administrator for Enforcement and
Compliance Assurance establish a plan of action with milestones to incorporate using statistical
methods to demonstrate the results of EPA's enforcement and compliance strategies.
Status: OECA has been working continuously to develop the measures and the
implementation strategies for the initiatives. Because these measures are new and will
direct Agency-wide enforcement resources for some time, this complex project has been
given the highest priority. These measures are new and different than what have been
historically used by the Agency; the goal is to provide a set of strategic measures that
better describe the progress and benefits derived from enforcement and compliance
actions. These new experimental measures for the National Enforcement and Compliance
Initiatives are almost complete, but need final review by OECA's senior management.
The agreed-to completion date was December 31, 2010. The corrective action is past due
for completion.5
5 OECA submitted a request to the OIG on March 25, 2011, to extend the completion date to July 5, 2011.
Subsequent to the close of our reporting period, March 31, 2011, the OIG approved the request.
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
Action Office: OEI
Report Title: EPA Could Improve Controls Over Mainframe System Software
Report No.: 2007-P-00008
Date Issued: 01/29/2007
Report Summary
The OIG engaged KPMG, LLP, to conduct an audit of access to and modification of EPA's
mainframe system software housed at the Agency's National Computer Center. The National
Computer Center is located at the Research Triangle Park Campus in Raleigh, North Carolina.
KPMG identified several weaknesses in EPA's internal controls over its mainframe systems
software, including:
• Roles and responsibilities were not clearly assigned.
• Change controls were not performed in accordance with Agency policies.
• Policies, procedures, and guides could be strengthened.
• Security settings for sensitive datasets and programs were not effectively configured or
implemented.
As a result of these weaknesses, EPA is exposed to greater risk since its mainframe system
software could potentially be compromised.
Unimplemented Recommendation
Recommendation 9: We recommend that the Director of the Office of Technology Operations
and Planning within OEI complete efforts to update the OEI Information Security Manual and
the EPA Information Security Manual. Subsequent to finalizing the changes, ensure the manuals
are: (1) reviewed timely by EPA management for adequacy, accuracy, and completeness; and
(2) approved by EPA management in a timely manner.
Status: OEI determined that updating the Agency Network Security Manual would be
more appropriate than updating the OEI Information Security Manual and the EPA
Information Security Manual. OEI has developed a schedule for approval/signature of the
Agency Network Security Manual. The Quality and Information Council must review and
approve it. The agreed-to completion date was March 30, 2011. The corrective action is
past due for completion.6
6 OEI submitted a request to the OIG on March 29, 2011, to extend the completion date to September 15, 2011.
The request was submitted too late to be approved before the end of the reporting period, March 31, 2011.
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Compendium of Unimplemented Recommendations as of March 31, 2011
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Action Office: OEI
Report Title: EPA Could Improve Processes for Managing Contractor Systems and
Reporting Incidents
Report No.: 2007-P-00007
Date Issued: 01/11/2007
Report Summary
EPA uses contractors to collect and process information on its behalf. EPA's Computer Security
Incident Response Capability defines the formal process by which EPA responds to computer-
security-related incidents. We found that EPA had not established procedures to ensure
identification of all contractor systems. Further, EPA had not ensured that information security
requirements were accessible for the contractors and appropriately maintained. Although EPA
offices were aware of the Agency's computer security incident response policy, many offices
lacked local reporting procedures, had not fully implemented automated monitoring tools, and
did not have access to network attack trend information necessary to implement proactive
defensive measures. The report was issued to OEI and OARM. OARM reported in MATS that
its one corrective action has been completed.
Unimplemented Recommendation
Recommendation 2-1: We recommend that the Assistant Administrator for Environmental
Information develop and implement guidance that EPA offices can use to identify contractor
systems that contain EPA data.
Status: OEI planned to update its Information Security Manual io include procedures
EPA offices can use to identify contractor systems that contain EPA data. The original
agreed-to date for completion of this corrective action was September 18, 2008. OEI
indicated it is following OMB Memorandum M-09-29, FY 2009 Reporting Instructions
for the Federal Information Security Management Act and Agency Privacy Management
(August 20, 2009), as required. This guidance pertains to contractor systems and the
types of information systems that have contractor involvement. In a followup audit
(Report No. 09-P-0240, Project Delays Prevent EPA from Implementing an Agency-wide
Information Security Vulnerability Management Program, September 21, 2009), the OIG
determined that this recommendation had not been completed. The OIG recommended
that OEI update the status of this recommendation in MATS and establish plans of action
and milestones for this recommendation. OEI reopened this recommendation in MATS
with a planned completion date of March 30, 2011. The corrective action is past due for
completion.7
7 OEI submitted a request to the OIG on March 29, 2011, to extend the completion date to September 15, 2011. The
request was submitted too late to be approved before the end of the reporting period, March 31, 2011.
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
Action Office: OW
Report Title: EPA Needs to Reinforce Its National Pretreatment Program
Report No: 2004-P-00030
Date Issued: 09/28/2004
Report Summary
The reductions in industrial waste discharges to the nation's sewer systems that characterized the
early years of the pretreatment program have not endured. Since the mid-1990s, there has been
little change in the volume of a broad list of toxic pollutants transferred to publicly owned
treatment works (POTW) or in the index of risk associated with these pollutants. As a result, the
performance of EPA's pretreatment program, which is responsible for controlling these
discharges, is threatened, and progress toward achieving the CWA goal of eliminating toxic
discharges that can harm water quality has stalled. The curtailing of the early gains may be
explained in part by two factors: (1) dischargers that developed systems in response to EPA's
initial program requirements have not enhanced their pretreatment systems in recent years, and
(2) the rate at which EPA has been issuing effluent guidelines dramatically declined since 1990.
Without more visible leadership from headquarters, improved programmatic information, and the
adoption of results-based performance measures, EPA's pretreatment program is at risk of losing
the gains it made in its early years.
Unimplemented Recommendation
Recommendation 4-1: We recommend that the Assistant Administrator for Water direct staff to
develop a long-term strategy to identify the data it needs for developing pretreatment results-
based measurements; determine the resources necessary to carry out the strategy; and gain the
support of other Agency, state, and POTW staff to carry out the strategy. Provide milestones for
the development of this strategy to the OIG, and if this strategy cannot be completed within
90 days of report issuance, provide quarterly progress reports to the OIG until results-based
measures are developed.
Status: OW agreed to request information on databases used by the EPA regions and
states to store information regarding POTW pretreatment program performance.
Through the Permitting for Results process, OW will compile information regarding
current data systems used to store pretreatment data at the EPA regional and state level.
OW intends to use this information to identify inaccurate data and target data correction
in the Permit Compliance System. Both of these activities are crucial to facilitate
migration and retention of data as OW transitions to the Integrated Compliance
Information System. Once these efforts are complete, OW will be able to determine a
long-term strategy based on data availability and resources, which should ultimately
assist it in developing pretreatment result-based measurements.
OW indicated it has not met its commitment with respect to pretreatment because
developing a long-term strategy for results-based measurements and gaining support of
stakeholders has proven to be more complex than initially expected. As part of its plan of
action to address the OIG recommendations, OW agreed to assess data collection,
methods of data collection, and data availability and accessibility on pretreatment
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
program performance. OW examined information on EPA regions' and states' databases
used to store program information. Although data considered crucial to program
management were historically required through policy, OW determined that data input
into a central, national database was inconsistent for the past 20 years. Instead,
programmatic data were maintained in decentralized databases within each state and/or
EPA regional office. To resolve the centralized data entry challenges identified by states
and EPA regions, EPA is developing an educational handbook for non-program managers
that identifies the environmental and economic merits of implementing the pretreatment
program, developing new guidance to minimize data quality errors and facilitate data
upload to a centralized database (necessary for national reporting requirements), and
exploring ways to reduce the burden of data entry into a centralized database through the
CWA Action Plan. Currently, EPA is pursuing the proposal of the NPDES Electronic
Reporting Rule to define NPDES reporting necessary to manage the national NPDES
Program and achieve the tools needed to populate EPA's data systems. The agreed-to
completion date for these corrective actions was September 30, 2007. These corrective
actions are past due for completion.
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
Action Office: OW
Report Title: Wastewater Management: Controlling and Abating Combined
Sewer Overflows
Report Number: 2002-P-00012
Date Issued: 08/26/2002
Report Summary
Combined sewer overflows (CSOs) are the total discharges into water bodies of untreated
domestic, commercial, and industrial waste; wastewater; and storm water runoff. CSOs can
adversely affect the health of humans, animals, and aquatic organisms, as well as cause beach
closings and fishing and recreational restrictions. Many communities do not have the data to
determine the effect of CSO controls on water quality. Most communities were only monitoring
the number, volume, and duration of CSO discharges, and did not have data on the effect that
CSO controls were having on the quality of receiving waters. EPA does not require monitoring
until completion of CSO projects. Consequently, whether each CSO project was a wise
investment of taxpayer dollars could not be determined until it was too late.
Unimplemented Recommendation
Recommendation 5-1; We recommend that the Assistant Administrator for Water work with
CSO permitting authorities and communities to assure they negotiate and establish the proper
level of interim monitoring of CSO efforts to determine the impact of the project on water
quality.
Status: OW agreed to initiate an effort at EPA headquarters to develop a compilation of
the monitoring approaches that are or may be used in different situations. This
compilation will help permit writers develop appropriate monitoring expectations for
those permittees that have completed construction of their planned CSO controls. OW
has developed CSO monitoring guidance for developing and conducting postconstruction
water quality monitoring programs that can be used to verify compliance with water
quality standards, as well as to ascertain the effectiveness of CSO controls. This guidance
was reviewed by OW's regional offices and revised to reflect their comments. The
guidance, while still in draft, is available for use. However, due to budget uncertainties,
further development of this guidance has been delayed. The agreed-to completion date
was September 30, 2009. This corrective action is past due for completion8.
EPA's current CSO policy requires permittees to conduct post-construction water quality
monitoring to verify compliance with water quality standards and protection of
designated uses, as well as to ascertain the effectiveness of CSO controls. Under the
NPDES program, permitting authorities are responsible for determining the level of
monitoring necessary to assess the effectiveness of the CSO controls. The guidance will
help permit writers develop appropriate monitoring expectations for permittees who have
completed construction of their planned CSO controls.
8 OW submitted a request to the OIG on March 31, 2011, to extend the completion date to September 30, 2012. The
request was submitted too late to be approved before the end of the reporting period, March 31, 2011.
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
Appendix A
OIG Reports With
Unimplemented Recommendations
by Program Office as of March 31, 2011
OARM
10-P-0071 Plans to Migrate Data to the New EPA Acquisition System Need Improvement
OECA
2007-P-00027 Overcoming Obstacles to Measuring Compliance: Practices in Selected Federal Agencies
OEI
2007-P-00008 EPA Could Improve Controls Over Mainframe System Software
2007-P-00007 EPA Could Improve Processes for Managing Contractor Systems and Reporting Incidents
ORD
09-P-0232 EPA's Office of Research and Development Could Better Use the Federal Managers' Financial
Integrity Act to Improve Operations
ow
10-P-0081 EPA Needs Procedures to Address Delayed Earmark Projects
10-R-0057 EPA Needs Definitive Guidance for Recovery Act and Future Green Reserve Projects
09-P-0223 EPA Needs to Accelerate Adoption of Numeric Nutrient Water Quality Standards
2004-P-00030 EPA Needs to Reinforce Its National Pretreatment Program
2002-P-00012 Wastewater Management: Controlling and Abating Combined Sewer Overflows
Resion 3
08-P-0049 Despite Progress, EPA Needs to Improve Oversight of Wastewater Upgrades in the Chesapeake
Bay Watershed
Resion 8
08-P-0213 Oglala Sioux Single Audits—Corrective Actions Taken but Improvements Needed in Resolving
Costs
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
Appendix B
Unimplemented Recommendations:
Current Compendium Compared to
10/26/10 Compendium
Continuing Unimvlemented Recommendations
10-R-0057 EPA Needs Definitive Guidance for Recovery Act and Future Green Reserve Projects
(Recommendation 1)
09-P-0223 EPA Needs to Accelerate Adoption of Numeric Nutrient Water Quality
(Recommendation 2-1)
08-P-0213 Oglala Sioux Single Audits—Corrective Actions Taken but Improvements Needed in Resolving
Costs (Recommendation 1)
2007-P-00008 EPA Could Improve Controls Over Mainframe System Software (Recommendation 9)
2004-P-00030 EPA Needs to Reinforce Its National Pretreatment Program (Recommendation 4-1)
2002-P-00012 Wastewater Management: Controlling and Abating Combined Sewer Overflows
(Recommendation 5-1)
New Unimvlemented Recommendations
10-P-0081 EPA Needs Procedures to Address Delayed Earmark Projects (Recommendations 2-1,3-1,
and 3-2)
10-P-0071 Plans to Migrate Data to the New EPA Acquisition System Need Improvement
(Recommendation 3)
10-R-0057 EPA Needs Definitive Guidance for Recovery Act and Future Green Reserve Projects
(Recommendation 2)
09-P-0232 EPA's Office of Research and Development Could Better Use the Federal Managers' Financial
Integrity Act to Improve Operations (Recommendation 2-1)
09-P-0223 EPA Needs to Accelerate Adoption of Numeric Nutrient Water Quality
(Recommendations 2-3,2-4, and 2-5)
08-P-0049 Despite Progress, EPA Needs to Improve Oversight of Wastewater Upgrades in the Chesapeake
Bay Watershed (Recommendation 2-1)
2007-P-00027 Overcoming Obstacles to Measuring Compliance: Practices in Selected Federal Agencies
(Recommendation 2-1)
2007-P-00007 EPA Could Improve Processes for Managing Contractor Systems and Reporting Incidents
(Recommendation 2-1)
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Compendium of Unimplemented Recommendations as of March 31, 2011
(Report No. 11-N-0212)
Removed Unimplemented Recommendations
Note: Removal of an Unimplemented recommendation does not imply that it was verified as implemented, but rather
that it was reported as being completed or that the target completion date has been revised with OIG approval.
10-P-0065 EPA Can Improve Its Preparation and Use of Independent Government Cost Estimates for
Superfund Contracts (Recommendation 2-5)
10-P-0002 Review of Hotline Complaint on Employee Granted Full-Time Work-at-Home Privileges
(Recommendations 2a and 2b)
09-P-0197 EPA Should Delay Deploying Its New Acquisition System until Testing is Completed
(Recommendation 1)
08-P-0141 EPA Needs to Track Compliance with Superfund Cleanup Requirements (Recommendation 4)
08-P-0049 Despite Progress, EPA Needs to Improve Oversight of Wastewater Upgrades in the Chesapeake
Bay Watershed (Recommendation 2-4)
2007-P-00036 Total Maximum Daily Load Program Needs Better Data and Measures to Demonstrate
Environmental Results (Recommendation 1-2)
2007-P-00017 EPA Needs to Strengthen Financial Database Security Oversight and Monitor Compliance
(Recommendation 4)
2006-P-00007 More Information is Needed on Toxaphene Degradation Products (Recommendation 2)
2005-P-00010 Substantial Changes Needed in Implementation and Oversight of Title V Permits If Program
Goals Are to be Fully Realized (Recommendations 2-1,2-2, and 2-3)
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