EPA-350-R 11-005
May 2011
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Semiannual Report to Congress
October 1, 2010-March 31, 2011
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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
Section 5(a)(1) Significant problems, abuses, and deficiencies
Section 5(a)(2) Significant recommendations for corrective action
Section 5(a)(3) Reports with corrective action not completed
Section 5(a)(3) Peer reviews conducted
Section 5(a)(4) Matters referred to prosecutive authorities
Section 5(a)(5) Information or assistance refused
Section 5(a)(6) List of reports issued
Section 5(a)(7) Summaries of significant reports
Section 5(a)(8) Audit, inspection, and evaluation reports—questioned costs
Section 5(a)(9) Audit, inspection, and evaluation reports—funds to be put to better use
Section 5(a)(10) Prior audit, inspection, and evaluation reports unresolved
Section 5(a)(11) Significant revised management decisions
Section 5(a)(12) Significant management decisions with which OIG disagreed
Pages
37-38
3-36
4-32, 35-36
60
37
3-4, 33-34, 44-45
None
46-49
4-32, 35-36
40-42, 45^9
40-42, 45^9
41-42, 50-59
None
None
Abbreviations
CSB U.S. Chemical Safety and Hazard Investigation Board
DCAA Defense Contract Audit Agency
EPA U.S. Environmental Protection Agency
FY Fiscal year
OIG Office of Inspector General
OMB Office of Management and Budget
RCRAInfo Resource Conservation and Recovery Act Information System
Cover photos: We examined various EPA efforts related to the spending of American Recovery and
Reinvestment Act of 2009 funds. From left: school buses are often a source of diesel
emissions, and we looked at Diesel Emission Reduction Act grants (EPA photo); we
conducted a site visit at a construction project in Oregon (EPA OIG photo); we also
conducted a site visit at a water system project in Georgia (EPA OIG 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 October 1, 2010-March 31, 2011
Message to Congress
I am pleased to present the U.S. Environmental Protection Agency (EPA) Inspector General
Semiannual Report to Congress for the reporting period October 1, 2010, through March 31,
2011. This report chronicles the Office of Inspector General's (OIG's) efforts to assist the EPA in
protecting human health and the environment, and maximizing the return on investment of
taxpayer dollars invested in the EPA. The OIG accomplished these tasks by (1) conducting and
supervising audits and investigations related to EPA programs and operations; (2) recommending
policies to Agency management for activities designed to promote economy, efficiency, and
effectiveness in EPA programs and operations; and (3) keeping the EPA Administrator and the
Congress informed about problems and deficiencies relating to the administration of EPA's
programs and operations, as well as the necessity for, and progress of, corrective actions.
A substantial portion of our resources during this semiannual reporting period were devoted to
assisting the EPA—through our audits, evaluations, and investigative activities—in properly and
efficiently spending the $7.2 billion it received under the American Recovery and Reinvestment
Act of 2009 (Recovery Act). We issued a dozen reports related to EPA's Recovery Act efforts.
We discovered, for example, that EPA needs to ensure that it has sufficient contracts and grants
staff to perform both Recovery Act and non-Recovery Act activities. More specifically, we found
that EPA's emphasis on Recovery Act activities resulted in non-Recovery Act activities being
delayed or not completed. Moreover, we found that EPA did not clearly describe its responsibilities
in the terms and conditions of the Recovery Act-funded interagency agreements that we reviewed.
Federal guidance and EPA's internal policies provide that an interagency agreement should
identify both the requesting and servicing agencies' responsibilities. Because EPA did not clearly
define its responsibilities within its Recovery Act interagency agreements and supporting
documents, it did not effectively establish accountability for implementing those agreements.
We also found that EPA regions are unable to ensure that states have directed Recovery Act funds
to shovel-ready Leaking Underground Storage Tank sites that provide the greatest environmental
benefit. Also, documentation of grant activities did not always demonstrate that Recovery Act-
funded Diesel Emissions Reduction Act work achieved the desired emissions reductions, and
EPA did not always document delays in diesel emissions projects. We issued reports on
unannounced site visits for six Recovery Act projects. We found issues at three sites, and nothing
came to our attention at the other three sites that would require action.
One of our investigations found that a foreign-based manufacturer and its U.S. subsidiary were
awarded numerous Recovery Act contracts after falsifying that their equipment met Buy
American provisions and, as a result, equipment valued in excess of $1.1 million was seized. Our
Recovery Act fraud awareness briefings are reaping the intended results. In one instance, an EPA
employee who attended one of our training sessions contacted us about potential fraud. While the
fraud allegations were unsubstantiated, we found that the principal of the company and his wife
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Semiannual Report to Congress October 1, 2010-March 31, 2011
were debarred from government contracting due to bankruptcy fraud convictions. As a result,
they are no longer eligible for further Recovery Act contracts. Another person who attended a
training session contacted us regarding counterfeit surety bonds; a stop-work order was
subsequently issued and the contracts terminated, saving $3.4 million in Recovery Act funds.
While our Recovery Act work is important, we continued our normal activities in a variety of
equally important program areas. For example, we found that EPA lacks controls to prevent
misuse of emergency drinking water facilities; that EPA promoted the use of coal ash products
with incomplete risk information; and that the ENERGY STAR program has sought to maximize
the number of qualified products available at the expense of identifying products and practices
that maximize energy efficiency. Moreover, in the area of workforce planning, we found that
EPA policies do not include a process for determining employment levels based on workload. We
also found that until EPA enforces a coherent position management program, the Agency lacks
reasonable assurance that it is using personnel in an effective and efficient manner.
We rendered an unqualified opinion on EPA's Consolidated Financial Statements for fiscal years
2010 and 2009, meaning that they were fairly presented and free of material misstatement, but we
did note four significant deficiencies. Further, as a result of one of our reviews, EPA Region 3
deobligated $6.1 million in unliquidated obligations. We also found that improvements are
needed in replacing EPA's core financial system, and that EPA can improve its network traffic
management practices as well as its data system for tracking hazardous solid waste shipments.
The OIG requested $60,766,000 for fiscal year 2012, which is $4,760,000 more than the
President's Budget request. The additional investment is needed to strengthen the OIG's ability to
investigate cyber attacks and develop and deploy a prevention and mitigation strategy. The
current OIG cyber security investigation team's limited resources may impede the OIG's ability
to effectively assist the Agency in securing its information technology networks, commensurate
with the risks.
The above highlights a small sample of our activities conducted during this reporting period.
I encourage you to read the remainder of our report for a more complete overview of our work
during this highly productive semiannual reporting period for the EPA OIG.
We know that the Agency's efforts to safeguard human health and the environment will continue
in the face of serious environmental and budgetary challenges. The dedicated staff of the Office
of Inspector General will also continue to do its best to ensure that Agency programs achieve
their intended results and that its funds are properly expended.
Arthur A. Elkins, Jr.
Inspector General
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Table of Contents
About EPA and Its Office of Inspector General 1
U.S. Environmental Protection Agency 1
EPA Office of Inspector General 1
OIG Recovery Act Efforts 2
Investigations Find Issues Regarding Recovery Act Funds 3
Audits and Evaluations Address Recovery Act Funding 4
Other Significant OIG Activity 11
Water 11
Superfund/Land 12
Cross-Media 16
Special Reviews 19
Grants and Contracts 22
Forensic Audits 23
Financial Management 24
Risk Assessment and Program Performance 28
Information Resources Management 30
Investigations 33
U.S. Chemical Safety and Hazard Investigation Board 35
Other Activities 37
Statistical Data 40
Profile of Activities and Results 40
Audit, Inspection, and Evaluation Report Resolution 41
Hotline Activity 43
Summary of Investigative Results 44
Scoreboard of Results 45
Appendices 46
Appendix 1—Reports Issued 46
Appendix 2—Reports Issued Without Management Decisions 50
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
October 1, 2010-March 31, 2011
About EPA and Its
Office of Inspector General
U.S. Environmental Protection Agency
The mission of the U.S. Environmental Protection Agency (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 requested $10.02 billion in discretionary
budget authority for fiscal year (FY) 2011, and has been operating under a series of
continuing resolutions.
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, as amended (P.L. 95-452). OIG staff are physically located at headquarters in
Washington, DC; at regional headquarters offices for all 10 EPA regions; and at other
EPA locations including Research Triangle Park, North Carolina, and Cincinnati, Ohio.
The OIG requested $60,766,000 for FY 2012, which is $4,760,000 more than the
President's Budget request for the OIG of $56,006,000. The additional resources in
FY 2012 are needed to strengthen the OIG's ability to investigate cyber attacks and
develop and deploy a prevention and mitigation strategy. Such attacks could compromise
public safety and personal property.
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
October 1, 2010-March 31, 2011
OIG Recovery Act Efforts
'**
'K' ^ M RECOVERY.GOV
The American Recovery and Reinvestment Act of 2009 (Recovery Act), 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. The Recovery Act provided the
EPA OIG $20 million through September 30, 2012, for
oversight and review of the Agency's Recovery Act
activities and expenditures. As of March 31, 2011, the OIG
had expended $10.8 million in Recovery Act funds. 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 not related to ongoing criminal proceedings will be posted
on our website at http://www.epa.gov/oig/recovery.htm.
As part of our outreach efforts, the OIG's Forensic Audits Division has issued a brochure,
Deterring Fraud, Waste & Abuse of EPA Funds, to alert the public to our ongoing efforts.
To view and download the brochure, issued in English and Spanish, go to
http: //www .epa. gov/oig/fraud waste abuse .htm#brochure s.
The OIG's 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 to deter, detect, and dismantle fraud schemes. A key goal is to educate
stakeholders and provide resources to help them use funds appropriately. We provided
Recovery Act-specific fraud training and presentations to Agency personnel; state, tribal,
and local officials; contractors; and grant recipients. Since the enactment of the Recovery
Act in 2009 through March 31, 2011, we provided 143 briefings across the country to
over 4,000 personnel who are administering or receiving Recovery Act funds. In
addition, we developed and distributed professional fraud awareness and education
materials, including pamphlets, postings, briefings, and webinar broadcasts. The OIG has
also participated in Agency Recovery Act workgroups and committees.
Details on OIG Recovery Act efforts during the semiannual reporting period ending
March 31,2011, follow.
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Investigations Find Issues Regarding Recovery Act Funds
Equipment Worth $1.1 Million Seized
A foreign-based manufacturer and its U.S. subsidiary were awarded numerous Recovery
Act-funded contracts after falsely certifying to municipalities that their equipment met
the Buy American provision of the Recovery Act. The contracts were for providing
equipment used in wastewater treatment facilities across the United States. Equipment
valued in excess of $1.1 million has been seized.
The investigation to date, including the execution of search warrants, has determined that
the equipment did not meet the substantial transformation requirements under the
Recovery Act. The equipment was manufactured at an overseas facility and shipped to
the United States in a completed state. The U.S. facility simply tested the equipment
before shipping it to the municipalities that purchased the equipment with Recovery Act
funds.
This investigation is ongoing and is being conducted jointly with the U.S. Department of
Homeland Security, Homeland Security Investigations.
Company and Principal Debarred
An EPA employee who attended an OIG Recovery Act fraud awareness training session
contacted the OIG to report information about a potential fraud involving the awarding of
Recovery Act grants in Saipan, Commonwealth of the Northern Mariana Islands.
While the allegations pertaining to the fraudulent award were unsubstantiated, it was
determined that the principal of the company and his wife had previously been convicted
of bankruptcy fraud. Based in part on the prior conviction, the principal and his company
were debarred from government contracting for 4 years on January 24, 2011. The
debarment precludes any additional participation in Recovery Act-funded projects.
Contractor and Two Employees Suspended
A contractor provided counterfeit surety bonds to obtain $3.5 million in contracts with
the City of Sacramento, California, to install replacement water meters. These contracts
were funded using Recovery Act dollars.
When the allegations of the counterfeit bonds surfaced, a city employee who had attended
one of our Recovery Act fraud awareness training sessions contacted us. The city
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
subsequently issued a stop-work order and terminated its contracts with the contractor,
saving $3.4 million in Recovery Act funds.
As a result of investigative efforts to date, two company officials were indicted in July
2010 for violating 18 U.S. Code 371 (Conspiracy) and 18 U.S. Code 494 (Uttering and
Publishing False Contractors Bonds). On March 29, 2011, the company and two of its
employees were suspended from participation in government contracts and assistance
agreements.
This investigation is being conducted jointly with the Federal Bureau of Investigation.
Audits and Evaluations Address Recovery Act Funding
EPA's Contracts and Grants Workforce May Face Future
Workload Issues
EPA should ensure that it has sufficient contracts and grants staff to perform both
Recovery Act and non-Recovery Act activities.
Of the $7.2 billion EPA received from the Recovery Act, EPA retained $81.5 million for
management and oversight.
EPA emphasized Recovery Act activities with respect to its administration, monitoring,
and oversight responsibilities, resulting in non-Recovery Act activities being delayed or
not completed. The management and oversight of resource allocations were not always
based on workforce analyses of the actual resources needed to accomplish Recovery Act
activities. Factors such as the funding limitations set forth in the Recovery Act heavily
influenced how Recovery Act management and oversight funds were distributed. As a
result, non-Recovery Act resources were devoted to Recovery Act activities, leaving less
time for staff to focus on non-Recovery Act administration, monitoring, and oversight.
We recommended that EPA review the metrics for Recovery Act and non-Recovery Act
contract and grant activities for the period ending September 30, 2010, prepare action
plans for any measure that did not meet its goal in 2010, and develop and implement
organization-wide performance measures to better manage its activities. The Agency
agreed with our recommendations.
(Report No. ll-R-0005, EPA 's Contracts and Grants Workforce May Face Future
Workload Issues, October 25, 2010)
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Semiannual Report to Congress October 1, 2010-March 31, 2011
EPA Should Strengthen Leaking Underground Storage Tank
Priority Lists
EPA regions are unable to ensure that states have directed Recovery Act funds
to shovel-ready Leaking Underground Storage Tank sites that provide the
greatest environmental benefit.
EPA allocated $190.7 million of Recovery Act funds to support state and territorial
Leaking Underground Storage Tank cleanup programs for cleaning up contaminated sites.
While the Recovery Act grants we reviewed contained most of the requirements specified
in Agency regulations and guidance, we found three management control deficiencies with
these grants: (1) EPA had not clarified to states whether municipally owned Leaking
Underground Storage Tank sites would be eligible for Recovery Act funds, (2) EPA had no
plan to deobligate unspent Recovery Act funds, and (3) EPA in many instances does not
use state data to ensure that grants comply with site priority requirements. EPA corrected
the first two deficiencies by spring 2010 through additional guidance to the regions, but has
not yet corrected the third deficiency. While every Recovery Act Leaking Underground
Storage Tank cooperative agreement we reviewed contained language to fund shovel-ready
sites, the agreements varied considerably in how they addressed site prioritization.
We recommended that EPA ensure that the site priority requirement of the Solid Waste
Disposal Act, as amended, is consistently incorporated into the terms and conditions of
future Leaking Underground Storage Tank Trust Fund grant agreements. The Agency
agreed with our recommendation.
(Report No. ll-R-0018, Leaking Underground Storage Tank Recovery Act Grants
Contained Requirements but Priority Lists Need More Oversight, November 22, 2010)
EPA Should Ensure Effective Diesel Emissions Reductions
Documentation of grant activities did not always demonstrate that Recovery Act-
funded Diesel Emissions Reduction Act work achieved the desired emissions
reductions.
In FY 2008, EPA began funding projects through grants authorized by the Diesel
Emissions Reduction Act. Under this authority, EPA competitively awards grants for
projects to achieve significant reductions in diesel emissions, thus improving air quality
and protecting public health. In addition, EPA awards grants to support state diesel
emissions reduction programs.
Additional EPA guidance and oversight is needed to ensure that projects achieve the
planned emissions reductions and that activities are reported accurately. Furthermore,
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Semiannual Report to Congress October 1, 2010-March 31, 2011
EPA should better define early replacement for its state grant awards as early
replacements are considered normal attrition and are not eligible for Diesel Emissions
Reduction Act funding. The methodology used by prime
grantees to report the number of jobs funded by the Recovery
Act appeared reasonable.
We recommended that EPA's Office of Air and Radiation
develop oversight procedures to provide reasonable
assurance that grantee progress reports are accurate and that
emissions certification levels are verified. We also
recommended that the office require that Diesel Emissions
School buses, which are often a source of Reduction Act grant and subgrant agreements specify the
diesel emissions. (EPA photo) emissions certification level or year of new engines installed
as part of vehicle replacement and engine repower projects.
We also recommended that EPA issue guidance clearly defining eligible costs for early
replacements of vehicles and engines for state grants, and recoup unsupported
expenditures of funds. EPA agreed with our recommendations and provided us with
detailed corrective actions it has already undertaken or that are ongoing or planned. This
included supplemental supporting documentation to preclude the need for EPA to recoup
any Diesel Emissions Reduction Act expenditures.
(Report No. ll-R-0141, EPA Should Improve Guidance and Oversight to Ensure Effective
Recovery Act-Funded Diesel Emissions Reduction Act Activities, March 1, 2011)
EPA Should Better Document Diesel Emission Reduction Act Grant
Project Delays
While EPA project officers were aware of grant project delays for Recovery Act
Diesel Emission Reduction Act projects, they did not always document delays in
EPA's grants management system or, in some cases, take action to reduce the
impact of delays.
The Recovery Act provides the EPA Diesel Emissions Reduction Program with
$300 million for a variety of diesel emission reduction strategies. To accomplish its
objective, EPA awarded $244 million via grants under the State and National Clean
Diesel Funding Assistance Programs.
EPA stated in March 2009 that all grants would have an initial project period through
September 30, 2010. EPA met its secondary goal to have 40 percent of the Recovery Act
grant funds expended by that date. However, as of June 30, 2010, 49 grants, worth
$101,437,442, had less than 10 percent of the funds expended. Eighty-five percent of the
grantees did not finish projects by the completion date, and EPA granted no-cost time
extensions for all those grantees. In 10 of 15 cases we reviewed, project officers did not
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Semiannual Report to Congress October 1, 2010-March 31, 2011
document these delays, and EPA did not take sufficient action in some cases by
establishing new milestone dates and instituting corrective actions when approving grant
extensions. Delayed projects may result in recipients not completing projects within
specified timeframes and may delay achievement of Recovery Act objectives.
We recommended that EPA revise the baseline and advanced monitoring report questions
and corresponding guidance, verify that project officers document delays in baseline and
advanced monitoring reports, and institute corrective actions when delays occur. We also
recommended that EPA require project officers to regularly report to management on the
progress of projects and status of corrective actions. EPA agreed with our recommendations.
(Report No. ll-R-0179, EPA Needs to Better Document Project Delays for Recovery Act
Diesel Emission Reduction Act Grants, March 28, 2011)
EPA Should Improve Interagency Agreement Processes
Because EPA did not clearly define its responsibilities within its Recovery Act
interagency agreements and supporting documents, it did not effectively
establish accountability for implementing those agreements.
EPA uses interagency agreements when it acquires goods and services from other federal
agencies. From February 17, 2009, through June 30, 2010, using $278 million of
Recovery Act funding, EPA entered into interagency agreements for project management
services under the Superfund and Drinking Water State Revolving Fund programs.
EPA did not clearly describe its responsibilities in the terms and conditions of the
Recovery Act-funded Superfund and Drinking Water State Revolving Fund interagency
agreements we reviewed. EPA stated that defining its roles and responsibilities in
interagency agreements was unnecessary because its role was clearly defined in EPA
policy and guidance. We found that decision memoranda and matrices for EPA Recovery
Act interagency agreements met the requirements set forth in EPA policies, but we
believe that additional detail would be beneficial. EPA could consider the cost and level
of effort associated with the procurement, management, and oversight of construction
contracts for all Superfund cleanup contracting delivery options, to ensure that EPA has
selected the most efficient and effective method.
We recommended that EPA amend terms and conditions for Recovery Act interagency
agreements. We also recommended that EPA prepare a program evaluation of levels of
effort and use this evaluation to develop a strategy for determining the best value for
delivering Superfund construction contracts. EPA agreed with our recommendations.
(Report No. ll-R-0016, EPA 's Terms and Conditions as Well as Process to Award
Recovery Act Interagency Agreements Need Improvement, November 16, 2010)
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Semiannual Report to Congress October 1, 2010-March 31, 2011
EPA Can Improve Use of Financial Monitoring Reviews for
Superfund Contracts
EPA program staff do not have the knowledge of financial monitoring review
cost-related issues that impact Recovery Act Superfund contract costs being
billed. As a result, the staff may approve ineligible invoiced costs.
The Recovery Act provided $600 million in supplemental funding for Superfund
remedial cleanups, of which $246 million was expended as of August 2010. The Office
of Acquisition Management's financial monitoring review program selectively reviews
high-risk active contracts valued over $5 million.
EPA is implementing the monitoring functions established in the contracts functional
area of the EPA Recovery Act stewardship plan. These monitoring functions are standard
internal controls. However, program staff are not always aware of the results of the
financial monitoring reviews and, therefore, cannot use the reviews as a project
management tool for Superfund projects funded by the Recovery Act.
We recommended that EPA revise policies and procedures to ensure that financial
monitoring review reports are distributed timely to all project officers, work assignments
managers, and task order managers assigned to the contract impacted by the financial
monitoring review, as well as those working on other active contracts with the same
contractor. The Agency implemented the corrective action on October 22, 2010.
(Report No. ll-R-0081, EPA Can Improve the Use of Financial Monitoring Reviews for
Recovery Act Superfund Contracts, January 31, 2011)
Site Visits of Recovery Act Projects Conducted With Varying Results
As part of OIG efforts to ensure that EPA is spending Recovery Act funds in
accordance with requirements, we completed six site visits during the
semiannual reporting period. As part of our visits, we toured the projects,
interviewed relevant parties, and reviewed documentation related to Recovery
Act requirements. For three sites, we identified no issues that required corrective
action by EPA or the recipients, but we found issues at three other sites.
The Town of Ball, Louisiana, received $1 million in Recovery Act funds from the
Louisiana Department of Environmental Quality under the Clean Water State Revolving
Fund program, for sewer pump station rehabilitation and improvements. We identified no
issues that required corrective action by EPA or the recipient. (Report No. ll-R-0014,
American Recovery and Reinvestment Act Site Inspection of Sewer Pump Station
Rehabilitation and Improvements, Town of Ball, Louisiana, November 9, 2010)
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
The City of Long Beach, California, received $5,813,786 in Recovery Act funds from
the California State Water Resources Control Board under the Clean Water State
Revolving Fund program. This amount comprised $4,319,107 for the Colorado Lagoon
Restoration project, $539,634 for the Los Angeles River Vortex Separation System,
$403,200 for the Los Angeles River Trash Nets, and $551,845 for the Los Angeles River
Trash Separation Device. The Recovery Act funds were for principal forgiveness. We
identified a wage compliance issue that merits attention. A California State Water
Resources Control Board representative said the state will work with the city to ensure
the city has proper controls in place for wage compliance. (Report No. ll-R-0082,
American Recovery and Reinvestment Act Site Inspection of the Clean Water State
Revolving Fund Projects at the City of Long Beach, California, February 1, 2011)
The City of Parma, Ohio, received three loans totaling $4,443,102 for the Bradenton,
Grantwood, and Manhattan Avenue projects from the Ohio Environmental Protection
Agency and the Ohio Water Development Authority under the Clean Water State
Revolving Fund program. The loans included $2,221,551 in principal forgiveness. The city
is to use these funds to eliminate contamination by providing sewer service to unsewered
properties. We identified no issues that required corrective action by EPA or the recipient.
(ReportNo. ll-R-0083, American Recovery and Reinvestment Act Site Inspection of Sewer
System Improvement Projects, City of Parma, Ohio, February 2, 2011)
The City of Astoria, Oregon, is constructing an underground storage tank, an odor
control facility, and a sanitary sewer pipeline as part of its Denver Street Storage Project.
The project is funded by two Clean Water State Revolving Fund loans totaling
$7,475,436 from the Oregon Department of Environmental
Quality. One of the loans provided $4,000,000 in Recovery
Act funds, of which 50 percent of the loan principal will be
forgiven if the city complies with the loan agreement. We
found that the city and the Oregon Department of
Environmental Quality understated the number of jobs
created or retained with Recovery Act funds, and for one
of four contracts awarded a change order that did not meet
applicable procurement requirements, resulting in $57,346
in unallowable costs being claimed. EPA and the state
agreed with our recommendations. (ReportNo. ll-R-0172,
American Recovery and Reinvestment Act Site Visit of the
Denver Street Storage Project, City of Astoria, Oregon,
March 22, 2011)
m
Denver Street Storage Project under
construction in Astoria, Oregon.
(EPA OIG photo)
Project costs for the Town of Saugus, Massachusetts, sewer system rehabilitation
project totaled $2,504,691. The town received a $2,290,239 loan from the Massachusetts
Clean Water State Revolving Fund to fund the project. Using funds provided under the
Recovery Act, the Clean Water State Revolving Fund provided principal forgiveness of
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
$210,702. The town is required to repay the remaining loan amount of $2,079,537. We
identified no issues that required corrective action by EPA or the recipient. (Report No.
ll-R-0192, American Recovery and Reinvestment Act Site Visit of the Comprehensive
Sewer System Rehabilitation, Subsystem PS-5, Saugus, Massachusetts, March 29, 2011)
The City of Waleska, Georgia, received loans totaling $615,000 from the Georgia
Environmental Facilities Authority for a water system improvement project. These loans
included $386,610 of Recovery Act funds distributed through the Drinking Water State
Revolving Fund program ($246,000 for principal forgiveness and a $140,610 loan). Prior
to our visit, the city and state determined that the prime contractor was violating contract
terms and issued a stop-work order. Therefore, we
were unable to perform all of the required procedures
necessary to determine compliance with Recovery
Act requirements. During our review, we found the
city did not execute written contracts for engineering,
inspection, and legal services, and did not prepare a
cost or price analysis for its engineering services.
However, we found no applicable federal, state, or
local requirements that require the city to execute
written contracts or prepare a cost or price analysis.
Without federal, state, and local cost principles and
procurement standards, we do not have reasonable
assurance that Recovery Act funds are awarded and
distributed in a prompt, fair, and reasonable manner, and that funds are used for Recovery
Act purposes. We plan to address this issue in a separate report to the Agency. We
identified no other issues that require corrective action by the city, state, or EPA.
(Report No. ll-R-0193, American Recovery and Reinvestment Act Site Visit of Water
System Improvement, Waleska, Georgia, March 29, 2011)
Water system improvement site in Waleska, Georgia.
(EPA OIG photo)
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Other Significant OIG Activity
Water
Helping to ensure that drinking water is safe and waterbodies are protected
EPA Lacks Controls to Prevent Misuse of Emergency Drinking Water
Facilities
Neither EPA nor the states know the amount of risk that public water system
customers may face from misuse of water from emergency facilities.
Approximately 6,700 public water systems have at least one water source designated for
emergency use. In 2008, the Illinois Environmental Protection Agency discovered that
one of its public water systems supplemented purchased surface water with contaminated
water from an emergency facility without notifying the state agency.
EPA cannot accurately assess the risk of public water systems delivering contaminated
drinking water from emergency facilities because of limitations in Safe Drinking Water
Information System data management. There is no federal regulatory requirement for
EPA or states to oversee or monitor emergency facilities. EPA and the states do not have
common definitions or understandings of what constitutes an emergency facility, and
there is no common understanding of when and how emergency facilities may be used.
States rely on water systems to self-report when they use these emergency facilities, but
this reporting is voluntary. Consequently, EPA cannot accurately assess the risk faced by
those served by water systems with emergency facilities.
We recommended that EPA develop standard definitions for the five facility availability
codes, develop standard operating procedures to assist the states with entering data into
State Safe Drinking Water Information System databases, and determine whether
additional fields are needed in the Federal Safe Drinking Water Information System. We
also recommended that EPA assess the risk associated with the unauthorized use of
emergency facilities and, if necessary, develop controls to mitigate that risk. The Agency
neither agreed nor disagreed with our recommendations.
(Report No. ll-P-0001, EPA Lacks Internal Controls to Prevent Misuse of Emergency
Drinking Water Facilities, October 12, 2010)
For details on additional water issues, refer to:
• Page3, "Equipment Worth $1.1 Million Seized"
• Page 3, "Contractor and Two Employees Suspended"
• Page 7, "EPA Should Improve Interagency Agreement Processes"
• Page 8, "Site Visits of Recovery Act Projects Conducted With Varying Results"
• Page 25, "EPA Region 3 Deobligates $6.1 Million in Unliquidated Obligations,
Escalation Process Cited as a Best Practice"
• Page 33, "Laboratory Co-Owners and Affiliated Companies Debarred"
11
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Superfund/Land
Improving waste management and clean-up
EPA Promoted Use of Coal Ash Products With Incomplete Risk
Information
EPA may have known earlier about risks from large-scale disposal of coal
combustion residuals described as beneficial use if it had implemented plans in
2005 to identify environmentally safe and beneficial use practices.
Coal combustion residuals are generated from burning coal. More than 136 million tons
of coal combustion residuals were generated in 2008. EPA defines beneficial use of coal
combustion residuals as one that provides a functional benefit, replaces the use of an
alternative material, conserves natural resources, and meets relevant product
specifications and regulatory standards. Without proper
protections, coal combustion residual contaminants can leach
into ground water and migrate to drinking water sources, posing
significant public health concerns.
Spreading and compacting fly ash
structural fill. (EPA photo)
EPA did not follow accepted and standard practices in
determining the safety of the 15 categories of coal combustion
residual beneficial uses it promoted through the Coal
Combustion Products Partnership program. EPA's application
of risk assessment, risk screening, and leachate testing and
modeling was significantly limited in scope and applicability.
EPA officials said they relied on individual state beneficial use
programs to review and approve specific coal combustion residual beneficial uses, and to
manage associated risks. EPA documented these risks in damage cases presented in its
June 2010 proposed rule to regulate certain coal combustion residuals. EPA stated in the
proposed rule that certain uses of coal combustion residuals—in sand and gravel pits as
well as large-scale fill operations—represent disposal rather than beneficial use. After
release of its proposed rule, EPA stopped promoting beneficial uses of coal combustion
residuals through the Coal Combustion Products Partnership program.
We recommended that EPA define and implement risk evaluation practices for beneficial
uses of coal combustion residuals, and that it determine if further action is warranted to
address historical coal combustion residual structural fill applications. EPA agreed with
our recommendations.
(Report No. ll-P-0173, EPA Promoted the Use of Coal Ash Products With Incomplete
Risk Information, March 23, 2011)
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Coal Combustion Products Partnership Website Issues Noted
During our review of EPA's use of coal ash products (see above), we noted that
EPA's Coal Combustion Products Partnership website presented an incomplete
picture regarding actual damage and potential risks that can result from large-
scale placement of coal combustion residuals. We therefore submitted an early
warning report to EPA regarding this website issue.
Since 2001, EPA has been promoting the beneficial use of coal combustion residuals
through the Coal Combustion Products Partnership, including through the partnership's
website. In June 2010, EPA released a proposed rule to regulate coal combustion
residuals.
In its proposed rule, EPA showed that environmental risks and damage can be associated
with the large-scale placement of unencapsulated coal combustion residuals, and states it
does not consider large-scale placement of coal combustion residuals as representing
beneficial use. However, EPA's Coal Combustion Products Partnership website, which
contained general risk information, did not disclose this EPA decision. The Coal
Combustion Products Partnership website also contained material that gave the
appearance that EPA endorses commercial products; such an endorsement is prohibited
by EPA ethics policies and communications guidelines.
We recommended in this early warning report that EPA remove the Coal Combustion
Products Partnership website during the rulemaking process, and identify why actions
prohibited by EPA policies occurred and implement controls to establish accountability.
EPA agreed, removed access to the website, and proposed actions to address the
recommendation.
(Report No. ll-P-0002, Website for Coal Combustion Products Partnership Conflicts
with Agency Policies, October 13, 2010)
EPA Needs Controls to Ensure Proper Brownfields Site
Investigations
Because of EPA's lack of oversight and reliance on environmental professionals'
self-certifications, "all appropriate inquiries" investigations at Brownfields sites not
meeting federal requirements may go undetected.
Grantees awarded EPA Brownfields assessment grants must meet all appropriate
inquiries requirements. To ensure a proper investigation on potential contamination and
liability at Brownfields sites, grantees must conduct all appropriate inquiries, also known
as environmental due diligence investigations, in compliance with federal regulations,
and issue a report on findings.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
EPA does not review all appropriate inquiries reports submitted by grantees to assure that
they comply with federal requirements. Rather, EPA has relied on the environmental
professional conducting the all appropriate inquiries to self-certify that requirements are
met. Of the 35 all appropriate inquiries reports we reviewed, from 3 EPA regions, none
contained all the required documentation elements. Improper all appropriate inquiries
investigations introduce risk that the environmental conditions of a property have not
been properly or adequately assessed. Ultimately, threats to human health and the
environment could go unrecognized.
We recommended that EPA establish accountability for compliant all appropriate
inquiries reports, develop a plan to review all appropriate inquiries reports, and establish
criteria to determine whether noncompliant grantees should return federal grant money.
In its 90-day response to the report, EPA partly or fully concurred with the
recommendations. However, the Agency continues to disagree with some OIG
conclusions. We are working to resolve the disagreements and obtain a complete
corrective action plan from EPA.
(Report No. ll-P-0107, EPA Must Implement Controls to Ensure Proper Investigations
Are Conducted at Brownfields Sites, February 14, 2011)
Improved Oversight Needed at Wheeling Disposal Superfund Site
Our independent sampling results from the Wheeling Disposal Superfund Site,
near Amazonia, Missouri, were generally consistent with the sampling data that
Region 7 has obtained historically. However, when the responsible parties
reported their annual monitoring results, Region 7 inadvertently allowed them to
use incorrect and outdated surface water standards, and outdated ground water
standards.
The OIG is testing long-term monitoring results at Superfund sites EPA has deleted from
the National Priorities List. The Wheeling Disposal Site was added to the National
Priorities List in 1989 and deleted in 2000.
By allowing incorrect standards and analysis methods, the region has limited assurance
that unsafe levels of contaminants are not migrating off-site and creating risk to human
health and the environment. These issues do not adversely impact the region's current
protectveness determination. However, if incorrect and outdated standards continue to be
used, or results are not properly analyzed, the region may be unable to detect when
excess levels of contaminants migrate offsite.
In a 2009 report, Region 7 should have explained the impact of excess levels of iron and
aluminum at sampling locations close to the site boundaries. EPA records describe the
14
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Semiannual Report to Congress October 1, 2010-March 31, 2011
site as a "habitat for wildlife and birds." However, the region had not addressed
contaminants in the site's surface water that can pose risks to ecological receptors. In
response to OIG inquiries and Agency guidance, in October 2010, the region completed
an ecological risk assessment, which showed that the remedy is protecting the
environment.
We recommended that Region 7 ensure: accurate and correct surface water, ground
water, and analytic standards are used; the ecological risk assessment is completed; and
excess levels of compounds are controlled. Region 7 agreed with the recommendations
and has initiated or completed some actions.
(Report No. ll-P-0034, EPA Should Improve Its Oversight of Long-Term Monitoring at
Wheeling Disposal Superfund Site in Missouri, December 20, 2010)
For details on additional Superfund/land issues, refer to:
• Page 5, "EPA Should Strengthen Leaking Underground Storage Tank Priority Lists"
• Page 7, "EPA Should Improve Interagency Agreement Processes"
• Page 8, "EPA Can Improve Use of Financial Monitoring Reviews for Superfund Contracts"
• Page 17, "EPA Needs Plan for Tribal Solid Waste Management Capacity Assistance"
• Page 31, "Data System for Tracking Hazardous Solid Waste Shipments Needs Improvement
• Page 33, "Sentencings Continue in Bid Rigging Case at New Jersey Superfund Site"
15
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Cross-Media
Evaluating nontraditional approaches to protecting the
environment and challenges that cut across programs
A refrigerator can
be an ENERGY
STAR product.
(ENERGY STAR
website photo)
ENERGY STAR Label Needs to Assure Superior Performance
We believe the ENERGY STAR program has sought to maximize the number of
qualified products available at the expense of identifying products and practices
that maximize energy efficiency.
ENERGY STAR is a voluntary program designed to help businesses and individuals
enhance energy efficiency. In 1996, EPA partnered with the U.S. Department of Energy
to promote the ENERGY STAR label.
EPA's implementation of the ENERGY STAR program has become inconsistent
with the program's authorized purpose: to achieve environmental benefits by
identifying and promoting energy-efficient products and practices that meet the
highest energy conservation standards. We previously found that EPA could not
assure that using ENERGY STAR products and practices actually deliver the
benefits savings that EPA reports annually, or that consumers are purchasing the
most energy-efficient products on the market. Products historically qualified for
the ENERGY STAR label based on manufacturer self-certification rather than EPA
testing.
In 2009, EPA and the U.S. Department of Energy signed a new memorandum of
understanding to enhance and expand federal programs that advance energy
efficiency, including ENERGY STAR. Because these changes have not yet
occurred, their effectiveness remains to be determined.
We recommended that EPA develop a strategic vision and program design that assures
that the ENERGY STAR label represents superior energy conservation performance. We
also recommended that EPA develop a set of goals and valid and reliable measures. EPA
disagreed with many of our conclusions, but concurred with the proposed
recommendations. Subsequently, the Agency submitted a corrective action plan that
meets the intent of the recommendations.
(Report No. ll-P-0010, ENERGY STAR Label Needs to Assure Superior Energy
Conservation Performance: A Summary Report, October 28, 2010)
16
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Semiannual Report to Congress October 1, 2010-March 31, 2011
EPA Needs to Assure Effectiveness of Antimicrobial Pesticide
Products
EPA's Antimicrobial Testing Program cannot provide assurance to the public that
label claims on antimicrobial products are valid.
Antimicrobial pesticides are designed to destroy or suppress harmful bacteria, viruses,
and other microorganisms on inanimate objects and surfaces. EPA's Office of Pesticide
Programs initiated the Antimicrobial Testing Program in response to a 1990 U.S.
Government Accountability Office report, which concluded that EPA lacked an
enforcement strategy to ensure that registered disinfectants worked as claimed on product
labels.
The Antimicrobial Testing Program has been testing to ensure antimicrobial products,
including hospital disinfectants and tuberculocides, meet stringent efficacy standards.
However, after nearly 19 years, over 40 percent of registered products have not been
tested. Those that have been tested have experienced a consistently high failure rate. Test
results of samples submitted via the direct shipment initiative were not considered
sufficient for enforcement. Also, EPA does not have a strategy for informing hospitals
and other likely end-users of failed test results or when enforcement actions are taken.
Sometimes, the response to the Antimicrobial Testing Program's test failures is retesting,
which can take years; meanwhile, the product may remain available for use.
We recommended that EPA redesign its process to verify antimicrobial effectiveness by
providing reasonable efficacy assurances for all registered products, and by providing
sampling protocol that enables regulatory and enforcement actions as well as consistent
monitoring of actions taken. The Agency agreed with most of our findings and was
responsive to our recommendations. Subsequently, the Agency submitted a corrective
action plan that meets the intent of the recommendations.
(Report No. ll-P-0029, EPA Needs to Assure Effectiveness of Antimicrobial Pesticide
Products, December 15, 2010)
EPA Needs Plan for Tribal Solid Waste Management Capacity
Assistance
The lack of a single, Agency-wide plan for helping tribes manage solid waste and
eliminate open dumps results in poor coordination and limited oversight, and may
lead to an ineffective use of resources.
Illegal dumping of solid waste poses significant health and environmental risks to the
members of 564 federally recognized Indian tribes throughout the country. Currently,
there are nearly 4,000 reported open dumps on tribal lands. EPA has been working for
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
over 25 years to help tribes develop the capacity to manage solid waste and enforce
against illegal dumping.
EPA does not have an Agency-wide plan that defines the roles and responsibilities of
EPA program offices and regions in helping tribes manage solid waste. EPA also lacks
internal controls that hold its offices accountable for providing consistent solid waste
management assistance to tribes. As a result, EPA cannot ensure that consistent solid
waste management assistance is provided, accurately determine the risks of open dumps,
or determine whether efforts are effective nationwide. EPA also lacks internal data
controls to track the status of open dumps.
We recommended that EPA develop an Agency-wide plan to implement consistent and
effective tribal solid waste management capacity assistance. The Agency did not agree
with our conclusion and did not accept most of the recommendations in the report. EPA
did agree to identify resources required for providing solid waste assistance and to
improve program office coordination.
(Report No. ll-P-0171, EPA Needs an Agency-Wide Plan to Provide Tribal Solid Waste
Management Capacity Assistance, March 21, 2011)
From /eft: Atypical dump site usually found in remote forested areas within reservation boundaries;
an open dump site on tribal lands in California; a reservation open dump site that has caught fire.
(EPA photos)
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
S DGC131 R© V16WS Reviewing issues of fraud, waste, and misuse in EPA programs
EPA Needs Better Agency-Wide Controls Over Staff Resources
Without an Agency-wide position management program, EPA lacks reasonable
assurance that it is using personnel in an effective and efficient manner.
Position management provides the operational linkage between human capital goals and
the placement of qualified individuals into authorized positions. Over the last 5 years,
EPA has averaged a little over 18,000 positions in its organizational structure.
Staff resources, FYs 2006-2010
Fiscal year
2006
2007
2008
2009
2010
Enacted budgets
(in billions)
$7.7
7.7
7.5
7.6
10.3
Full-time
equivalents
17,631
17,560
17,324
17,252
17,41 7 (est.)
Number of employees
at start of fiscal year
18,461
18,327
18,109
18,306
18,518
Source: FY 2011 EPA Budget in Brief for the full-time equivalents and enacted budget amounts;
EPA Office of Human Resources for the number of employees.
EPA does not enforce a coherent program of position management to assure the efficient
and effective use of its workforce. While some organizational elements have
independently established programs to control their resources, there is no Agency-wide
effort to ensure that personnel are put to the best use. Prior to April 2010, EPA had the
Position Management and Control Manual, which required an Agency-wide program.
However this manual was not enforced, and in April 2010, it was cancelled without
replacement. According to the cancellation memorandum, the manual was eliminated
because Office of Administration and Resources Management officials believed EPA had
other mechanisms in place to appropriately manage and control its positions. However,
the other mechanisms do not provide similar effects, controls, or documentation.
We recommended that EPA establish an Agency-wide workforce program that includes
controls to ensure regular reviews of positions for efficiency, effectiveness, and mission
accomplishment. The Agency neither agreed nor disagreed with the recommendation.
(Report No. ll-P-0136, EPA Needs Better Agency-Wide Controls Over Staff Resources,
February 22, 2011)
19
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Vapor Intrusion Health Risks May Exist at Bannister Federal Complex
Not all Bannister Federal Complex buildings with underlying or nearby
contaminant plumes have been assessed for soil vapor intrusion. As a result, the
public health risks in those buildings have not been determined. Although EPA
Region 7 conducted its assessment for two buildings at the complex in
accordance with EPA-approved procedures, additional actions would provide a
more comprehensive picture of the chemical hazards in the indoor air and
ground.
Bannister Federal Complex is a 310-acre federal property in Kansas City, Missouri.
Several contaminated ground water plumes exist beneath the complex. Both the U.S.
General Services Administration and the U.S. Department of Energy control the site. The
U.S. General Services Administration OIG is responding to
allegations that employees may have become sick due to
chemical exposures potentially occurring at the site.
Testing at the Bannister complex in February 2010 showed
elevated levels of volatile organic compounds in the soil vapor
beneath the foundations of buildings 50 and 52. EPA Region 7
assisted the U.S. General Services Administration in
evaluating the vapor intrusion risk for these buildings. Only
trichloroethylene vapors were observed to be intruding into
Building 50, Bannister Federal Complex. building 50 from the ground water. Building 50 contains
(EPA OIG photo) 55 5
office space and building 52 has a child care facility.
Region 7 assessed the health risk from inhaling indoor air in the two buildings in
accordance with EPA risk assessment procedures. The indoor air chemical concentrations
were below acceptable risk levels for short- and long-term exposure for the 14 volatile
organic compounds measured and, therefore, are not a health concern. As a precaution,
Region 7 recommended and reviewed the installation of soil vapor removal systems in
both buildings in February 2010. Testing in March 2010 showed that contaminant levels
for soil vapors beneath both buildings and trichloroethylenes levels for the indoor air of
building 50 were reduced. Not all of the other Bannister Federal Complex buildings with
underlying or nearby contaminant plumes have been assessed for soil vapor intrusion. As
a result, the public health risks in those buildings have not been determined.
We recommended that Region 7 test for additional volatile organic compounds for all
future air, soil vapor, soil, and ground water samples in and around buildings 50 and 52.
We also recommended that Region 7, as part of continuing oversight work, assess the
responsible agencies' efforts to fully evaluate the health risks from inhaling potentially
contaminated air for all buildings over or within close proximity of contaminated ground
20
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Semiannual Report to Congress October 1, 2010-March 31, 2011
water plumes at the Bannister Federal Complex. Region 7 staff concurred with our
recommendations.
(Report No.ll-P-0048, Vapor Intrusion Health Risks at Bannister Federal Complex Not
a Concern for Buildings 50 and 52, Unknown for Other Buildings, January 5, 2011)
EPA Political Appointees Found Not Filtering Freedom of Information
Act Requests
Based on our review conducted in response to a congressional request, we
concluded that EPA does not have a process to filter Freedom of Information Act
requests by its political appointees.
The Freedom of Information Act gives the public the right to ask for records possessed
by federal government agencies. Two members of Congress asked whether and, if so, the
extent to which political appointees are made aware of information requests and have a
role in request reviews or decisionmaking.
We found that EPA does not have a process to filter Freedom of Information Act requests
by political appointees. Under EPA regulations, the head of an office, or that individual's
designee, is authorized to grant or deny any request for EPA records. The heads of EPA's
23 major offices are political appointees. EPA policy permits releasing information at the
lowest practicable level. Generally, political appointees are not involved in deciding
Freedom of Information Act requests, unless there is denial of information. Political
appointees were usually only involved in signing denials or partial denials. None of the
offices required routine review of Freedom of Information Act requests by a political
appointee.
(Report No. 11 -P-0063, Congressionally Requested Inquiry Into EPA 's Handling of
Freedom of Information Act Requests, January 10, 2011)
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Grants and Contracts
Improving EPA's use of
assistance agreements and contracts
EPA Should Add Certifications to Small Business Innovative
Research Awards
EPA has many useful certifications and contract clauses for its Small Business
Innovative Research solicitation and contract awards, but we found that EPA
would benefit from two additional certifications.
The Small Business Innovative Research program provides incentive funding to small
businesses to translate their innovative ideas into commercial products that address
environmental problems. The Council of Inspectors General for Integrity and Efficiency
suggested that a series of certifications be included in Small Business Innovative
Research awards government-wide.
Although EPA has certifications and contract clauses that address many of the Council of
Inspectors General for Integrity and Efficiency concerns, our review found that EPA
would benefit from two additional certifications the council suggested. EPA does not
require awardees to submit a certification against false statements when submitting a
proposal. EPA also does not require a certification with the final report that addresses,
among other items, that the report statements are true and complete. We believe that risks
would be significantly mitigated if EPA added these certifications to its Small Business
Innovative Research program.
We recommended that EPA add a certification statement to the current requirements that
funding applicants must submit prior to award and require funding recipients to submit a
certification statement with their final reports. EPA agreed with our recommendations.
(Report No. ll-N-0199, EPA 's Small Business Innovative Research Awards Should
Include Additional Certifications to Reduce Risk, March 30, 2011)
For details on additional grants/contracts issues, refer to:
• Page3, "Equipment Worth $1.1 Million Seized"
• Page 3, "Company and Principal Debarred"
• Page 3, "Contractor and Two Employees Suspended"
• Page 4, "EPA's Contracts and Grants Workforce May Face Future Workload Issues"
• Page 5, "EPA Should Strengthen Leaking Underground Storage Tank Priority Lists"
• PageS, "EPA Should Ensure Effective Diesel Emissions Reductions"
• Page 6, "EPA Should Better Document Diesel Emission Reduction Act Grant Project Delays"
• Page 7, "EPA Should Improve Interagency Agreement Processes"
• Page 8, "EPA Can Improve Use of Financial Monitoring Reviews for Superfund Contracts"
• Page 8, "Site Visits of Recovery Act Projects Conducted With Varying Results"
• Page 23, "Grantee Does Not Meet Regulations Requirements for Procurement"
• Page 25, "EPA Region 3 Deobligates $6.1 Million in Unliquidated Obligations,
Escalation Process Cited as a Best Practice"
• Page 33, "Contractor to Repay $438,790"
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Forensic Audits
Identifying fraud, waste, and abuse in grants and contracts
Grantee Does Not Meet Regulations Requirements for Procurement
An examination of the costs claimed under a cooperative agreement found that
the Montana Physical Sciences Foundation, a grantee, does not meet federal
regulatory requirements.
EPA awarded cooperative agreement number X83275501 on September 23, 2005, for
research into producing biodegradable lubricants and solvents from waste. EPA's
contribution to the project was 100 percent of approved costs not to exceed $770,500.
The Montana Physical Sciences Foundation did not meet Title 40 Code of Federal
Regulations Part 30 requirements for procurement. Specifically, the grantee:
• Has an apparent, if not real, conflict of interest with its subcontractor
• Awarded a sole-source subcontract without a documented justification and a cost
or price analysis
• Did not amend the sole-source subcontract to cover a major change in project
scope and extension of the project period
• Did not include terms in the sole-source subcontract that provide EPA rights to
use work funded by the grant
We recommended that EPA disallow and recover $707,320 in costs claimed for the
grantee's subcontract; consider suspension and debarment proceedings against the
grantee and its subcontractor; and establish special conditions for future EPA awards.
The Agency generally agreed with the findings, but did not comment on the
recommendations. The grantee generally disagreed with the findings and
recommendations.
(Report No. 11-4-0013, Examination of Costs Claimed Under EPA Cooperative
AgreementX83275501 Awarded to The Montana Physical Sciences Foundation,
Novembers, 2010)
For details on additional forensic audit issues related to the Recovery Act, refer to:
• Page 8, "Site Visits of Recovery Act Projects Conducted With Varying Results"
23
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Financial Management
Improving the Agency's financial management
EPA Earns Unqualified Opinion on Financial Statements
We rendered an unqualified opinion on EPA's Consolidated Financial Statements
for FYs 2010 and 2009, meaning that they were fairly presented and free of
material misstatement. However, we noted four significant deficiencies:
• Further improvements are needed in reviewing the Superfund state contract
unearned revenue spreadsheets. Because EPA did not perform thorough reviews,
it overstated its FY 2010 fourth quarter Superfund state contract unearned
revenue accrual by $3,630,833 and its unbilled costs by $858,100.
• EPA should assess collectability of federal receivables and record allowances for
doubtful accounts as needed. By not timely reviewing federal debts, assessing the
collectability of federal receivables, and establishing a federal allowance for
doubtful accounts for uncollectable debt, EPA could be understating the
uncollectable debt expense and overstating receivables.
• EPA needs to improve its controls for headquarters personal property. As of
May 28, 2010, EPA headquarters could not account for 2,272 accountable
personal property items. Through subsequent searches, the number of missing
items as of September 30, 2010, fell to 1,134. EPA headquarters determined that
the acquisition cost of these missing items is $2,543,360.
• EPA needs to properly close the Fund Balance with Treasury when cancelling
treasury symbols.
Further, we noted one noncompliance issue involving EPA's need to continue efforts to
reconcile intragovernmental transactions.
In a memorandum from the Chief Financial Officer received on November 9, 2010, the
Agency generally concurred with the issues raised and indicated it will take corrective
actions. The Agency did not concur with two of our draft report recommendations, and
we modified those recommendations to reflect information provided.
(Report No. 11-1-0015, Audit of EPA 's Fiscal 20 JO and 2009 Consolidated Financial
Statements, November 15, 2010)
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Pesticide Funds Earn Unqualified Opinions
We rendered unqualified, or clean, opinions on the FYs 2010 and 2009 financial
statements for two funds EPA uses to collect fees related to pesticides.
The Pesticide Registration Improvement Act authorized EPA to assess and collect
pesticide registration fees to expedite registering certain pesticides; the fees are deposited
into the Pesticide Registration Fund. In our opinion, the financial statements for the funds
were fairly presented and free of material misstatement. We noted one significant
deficiency in internal controls. EPA misapplied federal retirement benefit cost factors in
calculating FY 2010 imputed cost related to the Civil Service Retirement System and the
Federal Employees Retirement System. Imputed costs are costs that are not fully
reimbursed. This significant deficiency resulted in an understatement of $120,422. The
Agency has corrected FY 2010 imputed costs in the fund's financial statements. The
Agency was in substantial compliance with the statutory decision timeframes.
(Report No. 11-1-0157, Fiscal Year 2010 and 2009 Financial Statements for the
Pesticide Registration Fund, March 10, 2011)
To expedite reregistering older pesticides against modern health and environmental
testing standards, Congress authorized EPA to collect fees from pesticide manufacturers;
the fees are deposited into the Pesticides Reregistration and Expedited Processing Fund.
In our opinion, the financial statements for the funds were fairly presented and free of
material misstatement. We noted one significant deficiency in internal controls. EPA
misapplied federal retirement benefit cost factors in calculating FY 2010 imputed cost
related to the Civil Service Retirement System and the Federal Employees Retirement
System. This $340,772 understatement is material for the fund and, if not corrected,
would result in a qualification of the fund's financial statements. The Agency has
corrected FY 2010 imputed costs in the fund's financial statements. The Agency was in
compliance with applicable laws and regulations. (Report No. 11-1-0156, Fiscal Year
2010 and 2009 Financial Statements for the Pesticides Reregistration and Expedited
Processing Fund, March 10, 2011)
EPA Region 3 Deobligates $6.1 Million in Unliquidated Obligations,
Escalation Process Cited as a Best Practice
We identified $6,130,166 of unneeded funds for three assistance agreements
awarded by EPA Region 3 to the District of Columbia, and the region deobligated
those funds during the course of the audit.
To achieve clean and safe water goals, EPA provides funds through assistance
agreements to states, local governments, and tribes under the water program. Timely
review and deobligation of unneeded funds allows these funds to be used on other
environmental projects.
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
An EPA official said the $6,130,166 in unneeded funds could not be deobligated sooner
because of a construction dispute, nonperformance issues, technical issues, or equipment
problems. Further, the need to direct resources to projects related to the Recovery Act
was also an issue. Because Region 3 deobligated the funds during the course of our audit,
we made no recommendations.
Sampled assistance agreements with unneeded funds for deobligation
Assistance
agreement
number
FS99381601
0011002730
C1 1002734
Total
Obligation
amount3
$18,352,503
22,868,812
8,328,608
$49,549,923
Unliquidated
obligation amount
as of 12/07/2009"
$1,462,103
5,976,412
784,508
$8,223,023
Amounts identified
for deobligation
$341,514
5,523,348
265,304
$6,130,166
Source: OIG analysis.
a Each total obligation amount represents the total funds obligated on the agreement.
b Unliquidated obligation amounts represent the unused funds on the agreement.
During our audit, we determined that Region 3's escalation process for addressing project
delays should be considered a best practice. While EPA has policies for baseline
monitoring of assistance agreements, Region 3 accelerates the award or dispute resolution
process, and directly contacts the recipient expressing concerns about lack of progress
and requests they perform specific tasks to move the project.
(Report No. ll-P-0170, EPA Region 3 Reduced Unliquidated Obligations Under Water
Program Assistance Agreements, March 15, 2011)
EPA Not Compliant With Circular A-123 Unliquidated Obligation
Reviews
Seventeen of 22 EPA regions and program offices did not fully comply with the
guidance for conducting and reporting on their FY 2009 Office of Management
and Budget (OMB) Circular A-123 reviews of internal controls over the
unliquidated obligation review process.
OMB Circular A-123 guidance for implementing the Federal Managers' Financial
Integrity Act requires federal agencies to assess internal controls over financial reporting.
In FY 2009, EPA expanded its internal control reviews to include unliquidated obligation
reviews. The Office of the Chief Financial Officer requested offices to conduct a
thorough internal control review of their unliquidated obligation review process. EPA
regions and program offices did not fully comply with the guidance because:
26
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Semiannual Report to Congress October 1, 2010-March 31, 2011
• Some regions and program offices did not properly plan and staff the reviews.
• EPA's Office of the Chief Financial Officer did not closely monitor the reviews.
• Neither the Office of the Chief Financial Officer nor the assistant administrators
and regional administrators held the review teams accountable for performing the
reviews.
We recommended that the Chief Financial Officer develop procedures to oversee the
OMB Circular A-123 unliquidated obligation reviews, develop plans for staffing OMB
Circular A-123 unliquidated obligation reviews and training reviewers, and implement
performance measures for assurance letters. The Agency concurred with our
recommendations.
(Report No. 11-1-0069, EPA Did Not Fully Comply With Guidance Regarding OMB
Circular A-l 23 Unliquidated Obligation Reviews, January 19, 2011)
27
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Risk Assessment and
Program Performance
Improving EPA internal control processes,
structure, and workforce/manpower
EPA Needs to Strengthen Controls for Determining Workforce Levels
EPA's policies and procedures do not include a process for determining
employment levels based on workload as prescribed by OMB. Further, EPA does
not determine the number of positions needed per mission-critical occupation
using workforce analysis as required by the Office of Personnel Management.
EPA cannot demonstrate that it has the right number of resources to accomplish its
mission. The U.S. Government Accountability Office and EPA OIG have reported
instances in which personnel resources were not adequately considered, and
consequently, offices encountered delays or did not meet mission requirements. EPA's
Human Capital Management Report shows evidence that EPA's work is guided by
human capital goals and objectives. However, EPA's Office of Human Resources does
not require that workforce planning results link to EPA's strategic and performance goals
because the Office of Human Resources has not clearly defined the reporting
requirements needed. As a result, there is no assurance that EPA's workforce levels are
sufficient to meet the workload of the Agency.
We recommended that EPA's Chief Financial Officer require that the Agency complete a
workload analysis for all critical functions to support the Agency's budget request for
full-time equivalents. We recommended that the Office of Administration and Resources
Management require that program offices and regions provide the number of positions
needed for each mission-critical occupation, along with the applicable full-time
equivalents associated with each of EPA's strategic goals and program areas. The Office
of Administration and Resources Management provided an acceptable corrective action
plan. Recommendations to the Office of the Chief Financial Officer are open awaiting
completion dates.
(Report No. ll-P-0031, EPA Needs to Strengthen Internal Controls for Determining
Workforce Levels, December 20, 2010)
28
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Semiannual Report to Congress October 1, 2010-March 31, 2011
EPA Should Further Connect National Program Manager Process
with Federal Internal Control Guidance
Making national program offices primarily responsible for internal controls over
national programs would streamline reporting and lessen confusion among staff.
The Federal Managers' Financial Integrity Act requires federal agency managers to
annually evaluate and indicate whether their agencies' internal controls comply with
prescribed standards. National program manager guidance sets forth goals and program
priorities to support compliance with the Government Performance and Results Act of
1993.
EPA has not fully integrated the Federal Managers' Financial Integrity Act and the
national program manager processes. Activities conducted per the national program
manager process support internal controls, but EPA did not start connecting these
processes until midway through FY 2009, and integration efforts are still in their infancy.
National program managers already conduct many activities related to internal control,
yet national program offices have separate processes and staff responsible for each
process. Without consistently conducting risk assessments, EPA lacks a sound,
documented basis for reasonably assuring that programs implement effective internal
controls consistent with federal internal control standards.
We recommended that EPA assign national program managers primary responsibility for
Federal Managers' Financial Integrity Act reporting on internal controls for national
programs and rely on the lead regional coordinator process for input from the regions,
and direct regional personnel to report on administrative and financial internal control
activities along with unique geographic and programmatic issues in regional assurance
letters. The Agency agreed with our recommendations and began taking steps to address
them.
(Report No. ll-P-0067, EPA Should Further Connect the National Program Manager
Process With Federal Guidance on Internal Control Risks, January 18, 2011)
29
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Information Resources
Management
Helping the Agency maintain its systems and data
Improvements Needed in Replacing Core Financial System
The EPA Office of the Chief Financial Officer's internal control environment does
not enforce EPA's system development policies and procedures.
In 1989, EPA implemented the Integrated Financial Management System as its core
financial management and budget execution system. In 2001, EPA began the process to
replace that system. EPA selected a commercial-off-the-shelf core financial system.
The Office of the Chief Financial Officer's management control processes do not ensure
compliance with EPA's Systems Life Cycle Management policies and procedures. The
Office of the Chief Financial Officer proceeded with the design subphase of the system
project without obtaining executive management approval of the updated system
requirements or developing and obtaining the required approval of test plans to ensure the
system will meet Agency needs. Further, the Office of the Chief Financial Officer did not
predetermine the allowable failure percentages for product acceptance testing, which
management would use as the basis for evaluating the product and making a go/no-go
decision. These conditions could result in a system that does not meet management's
expectations and EPA's needs.
We recommended that EPA develop and implement formal procedures for future
projects, and obtain the authorization for any subsequent changes. EPA agreed with the
recommendations.
(Report No. ll-P-0019, Improvements Needed in EPA 's Efforts to Replace Its Core
Financial System, November 29, 2010)
EPA Can Improve Network Traffic Management Practices
Agency network security program deficiencies greatly decrease the likelihood
that consistent, repeatable results are produced in identifying threats to the
Agency's network, and increase the likelihood that potential threats will not be
identified.
EPA spends approximately $160 million annually to support Agency network operations
and infrastructure. As new threats associated with the electronic exchange of information
emerge, information security has become a greater concern.
30
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Semiannual Report to Congress October 1, 2010-March 31, 2011
The Office of Environmental Information does not have consistent, repeatable intrusion
detection system monitoring practices in place. The office has not documented a
methodology to aid in making decisions about potentially unusual network traffic and
does not consistently conduct management oversight of contractor performance and
reporting. In addition, key federally required security documents for EPA's Wide Area
Network were not complete or accurate, the approved security plan had not been updated,
and the implemented system changes had never been authorized by management to
operate. The Agency cannot accurately depict the operating environment and implement
a system that meets federal requirements unless it can ensure that the security plan is
complete, accurate, and approved.
We recommended that EPA develop and implement comprehensive log review policies
and procedures, establish a management control process to review contractor
performance, update and approve the Wide Area Network security plan, and properly
certify and accredit future significant Wide Area Network configuration changes prior to
moving them into production. The Agency agreed with our recommendations.
(Report No. ll-P-0159, Improvements Needed in EPA 's Network Traffic Management
Practices, March 14, 2011)
Data System for Tracking Hazardous Solid Waste Shipments Needs
Improvement
Resource Conservation and Recovery Act Information (RCRAInfo) system data
that track hazardous solid waste handlers and the shipment and receipt of
hazardous waste contain errors and are missing source documentation. These
conditions call into question the quality and reliability of data within the RCRAInfo
system, as well as any resulting reporting.
RCRAInfo collects data from states and private companies to track the generation,
shipment, and receipt of hazardous solid waste. These data are reported to the public in
the Biennial Hazardous Waste Report and through the Envirofacts website.
In addition to the errors and missing source documentation, RCRAInfo system owners
did not follow the prescribed System Life Cycle Management testing procedures. Further,
field work found instances of test data comingled with production data. Overall, the
conditions were caused by not having specific data quality procedures, not following
System Life Cycle Management procedures, and not adequately communicating with the
states.
The contractor that completed this review recommended that EPA implement a procedure
for regional personnel to notify a state when changes are made to handler records. The
contractor also recommended that guidance and policy be provided on retaining source
31
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Semiannual Report to Congress October 1, 2010-March 31, 2011
documentation, and that control procedures be implemented on updating documentation
and on reviewing the production database for test data.
(Report No. ll-P-0096, EPA Could Improve RCRAInfo Data Quality and System
Development, February 7, 2011)
Information Security Progress Made, Further Action Needed
Our annual review of EPA's implementation of the Federal Information Security
Management Act, submitted to OMB, disclosed that the Agency continues to
make progress in improving its information technology security. However, further
action is needed regarding inactive accounts.
The audit work performed during this review disclosed a significant deficiency that
required EPA to take immediate or near-immediate corrective action in establishing and
maintaining an account and identity management program for user accounts that reside
on the Agency's network. While we found that the Agency took steps to identify inactive
network accounts, EPA offices did not take appropriate action to timely disable or
terminate the accounts.
(Report No. ll-P-0017, Fiscal Year 2010 Federal Information Security Management Act
Report: Status of EPA 's Computer Security Program, November 16, 2010)
32
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
I nVGStlC|dtlOnS Investigating laboratory fraud, financial fraud, and computer crimes
Contractor to Repay $438,790
On October 14, 2010, a Montana contractor entered into an agreement with the U.S.
Department of Energy to settle allegations related to the allowability of certain costs. The
company will repay $438,790 over a 2-year period.
The Department of Energy issued the contract and other agencies, such as the EPA, used
this contract to have research conducted for their respective agency. In turn, each agency
paid the Department of Energy an administrative fee. EPA funds were provided to the
Department of Energy through an interagency agreement.
The investigation disclosed that the contractor billed the government for unallowable
lobbying costs, trade mission costs, and severance pay.
This investigation was conducted jointly with the U.S. Department of Energy; the Federal
Bureau of Investigation; the U.S. Army Criminal Investigative Command; the U.S. Air
Force, Office of Special Investigations; and the Defense Criminal Investigative Service.
Sentencings Continue in Bid Rigging Case at New Jersey Superfund
Site
On March 30, 2011, Zul Tejpar, Vancouver, Canada, was sentenced in U.S. District
Court of New Jersey to 3 years probation related to a bid rigging case. In addition, he was
ordered to pay a $15,000 fine and $300,000 in restitution to EPA. Tejpar was a former
Vice President of Business Development for Bennett Environmental, Inc.
Tejpar previously pled guilty to a one-count information, in which he was charged with
providing and attempting to provide kickbacks to his co-conspirators at the Federal
Creosote Superfund Site in Manville, New Jersey. To date, eight individuals and three
companies have pled guilty as part of this investigation into bid rigging. Fines and
restitution totaling more than $3 million have been ordered.
This case is being conducted with the Internal Revenue Service, Criminal Investigation
Division.
Laboratory Co-Owners and Affiliated Companies Debarred
On February 18, 2011, two individuals and five companies, all of Yuma, Arizona, were
each debarred for a period of 3 years related to a case involving fabricated laboratory
33
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Semiannual Report to Congress October 1, 2010-March 31, 2011
documentation. Two laboratory co-owners, Nancy Miller and Richard Miller, were
debarred, along with Sunstate Environmental Laboratory; El Prado Water Company;
Sunstate Utility Management; Sunstate Environmental Services; and Tierra Mesa Estates
Water Company, Inc.
The debarment follows Nancy Miller's conviction and sentencing in April 2010. Miller
was the co-owner of Sunstate Environmental Laboratories and performed environmental
laboratory testing for drinking water and wastewater analysis. The investigation
determined that Miller fabricated laboratory documentation in order 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.
or details on additional investigations related to the Recovery Act, refer to:
• Page3, "Equipment Worth $1.1 Million Seized"
• Page 3, "Company and Principal Debarred"
• Page 3, "Contractor and Two Employees Suspended"
34
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
U.S. Chemical Safety and Hazard Investigation Board
The U.S. Chemical Safety and Hazard Investigation Board (CSB) was created by the
Clean Air Act Amendments of 1990. CSB'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 CSB.
As a result, the EPA OIG has the responsibility to audit, evaluate, inspect, and
investigate CSB's programs, and to review proposed laws and regulations to determine
their potential impact on CSB's programs and operations.
Chemical Safety Board Did Not Take Timely Corrective Action on
Prior Audits
CSB did not take timely corrective actions to address 34 audit recommendations
from three Inspector General offices and the U.S. Government Accountability Office.
In four instances, it took CSB 4 years beyond the agreed-upon corrective actions date
(or report date) to implement corrective actions. CSB's actions to address
13 recommendations were not completely effective and require additional corrective
actions, and 7 recommendations are not yet completed.
CSB's control environment and control activities do not ensure accountability.
Specifically, CSB's office directors are not accountable for achieving individual and
program initiatives leading to chemical accident prevention. In addition, without a clearly
defined statutory mandate, CSB will face difficulties in developing outcome-related goals
for measuring its impact on chemical accident prevention.
On September 16, 2010, CSB announced an internal reorganization and appointed a
managing director who will oversee all aspects of CSB operations. A managing director
who ensures accountability should provide for more timely and effective resolution of
audit recommendations.
We recommended that the CSB Chairman create a management control plan, take actions
to fully address all outstanding audit recommendations, and further improve upon actions
taken on previous recommendations. CSB concurred with all of our new recommendations
and developed timelines and completion dates for the corrective actions.
(Report No. ll-P-0115, Chemical Safety and Hazard Investigation Board Did Not Take
Effective Corrective Actions on Prior Audit Recommendations, February 15, 2011)
35
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Chemical Safety Board Can Improve Information Security Practices
CSB has an information security program in place that appears to be functioning
as designed. CSB takes information security weaknesses seriously, as 8 of the
10 prior-year recommendations were resolved. However, there are areas in
which CSB could improve its vulnerability scanning management process.
The EPA OIG contracted with a firm to perform the FY 2010 Federal Information
Security Management Act assessment for CSB. That assessment noted several challenges
CSB faces in securing its main information technology system. The assessment found
insecure system protocols, default configuration settings, and unpatched network devices,
which significantly elevated CSB's risk of system and data compromise by unauthorized
users.
The report made various recommendations to correct the deficiencies noted, including
consistently performing vulnerability scans and documenting audit log reviews,
implementing baseline configurations for network devices, and developing a contingency
plan. CSB agreed with the recommendations and provided agreed-upon corrective
actions.
(Report No. ll-P-0148, Evaluation of U.S. Chemical Safety and Hazard Investigation
Board's Compliance With the Federal Information Security Management Act (Fiscal
Year 2010), March 8, 2011)
36
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Semiannual Report to Congress October 1, 2010-March 31, 2011
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 OIG 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)(2) 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. The primary basis for our
comments are the audit, evaluation, investigation, and legislative experiences of the OIG,
as well as our participation on the Council of the Inspectors General on Integrity and
Efficiency. During the reporting period, we reviewed 82 proposed changes to legislation,
regulations, policy, and procedures that could affect EPA and/or the Inspector General,
and provided comments on 9. We also reviewed drafts of OMB circulars, memoranda,
executive orders, program operations manual, directives, and reorganizations. Details on
three items follow.
S. 3480, Protecting Cyberspace as a National Asset Act of 2010. During the
111th Congress, the OIG submitted comments on S. 3480. We commented that cyber
security is a concern that spans the federal government, not just homeland security and
intelligence agencies. OIGs should be partners in combating cyber crime because of their
authorities under the Inspector General Act of 1978, as amended, and their unique
positions within their respective agencies. As drafted, S. 3480 would have established a
traditional role for OIGs in cyber security. We commented that, instead, OIGs should
have an enhanced oversight role in their agency's cyber security program and should
37
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Semiannual Report to Congress October 1, 2010-March 31, 2011
fully participate in criminal and other investigations of attacks on agency computer
systems and programs.
New Policy Standard and Procedure Documents for Resource Management
Directive 2540-02, Internal Controls. EPA's Office of the Chief Financial Officer
proposed new a Policy Standard and Procedure Documents for Resource Management
Directive 2540-02, Internal Controls. The proposed documents will include a policy
standard and policy procedures that assist EPA employees in safeguarding financial
transactions in accordance with the standards put forth by OMB. We provided a number
of comments to help strengthen and clarify the policy and procedures outlined in these
documents, including:
• Identifying additional incompatible functions that prevent adequate separation of
duties.
• Making it clearer that the request for waiver to the separation of duties policy is a
formal process, and requires a formal, written request for a waiver to the Chief
Financial Officer.
• Specifying that the procedures must be followed until the waiver has been
granted by the Chief Financial Officer.
• Making it applicable to all system upgrades, not just major upgrades, and to
make it clearer that financial management systems include financial and mixed
financial systems regardless of whether they are operated by EPA personnel or
contractors.
Draft OMB Guidance on Effective Measurement and Remediation of Improper
Payments. OMB asked the Council of Inspectors General on Integrity and Efficiency to
comment on its draft guidance on Effective Measurement and Remediation of Improper
Payments. The guidance implements the requirements of the Improper Payments
Elimination and Recovery Act of 2010, which amended the Improper Payments
Information Act of 2002 and generally repealed the Recovery Auditing Act. We noted
that the definition of a "payment recapture audit program" is integral to the
implementation of the law and this guidance, as the law contains specific provisions for
how funds collected under a payment recapture audit program can be used. The EPA OIG
reviewed EPA's description of its existing activities under the Improper Payments
Elimination and Recovery Act of 2010 that OMB requested the Agency to submit
previously. In that document, EPA did not consider activities it performs on contracts and
grants that include a review of the allowability of payments or testing of transactions for
erroneous payments as "payment recapture audits." The guidance seemed to imply that
such reviews would be part of a payment recapture audit program even though they are
not considered payment recapture audits. The guidance should clarify whether "post-
award audit" activities are considered part of a payment recapture audit program and
should be included when implementing provisions of the Improper Payments Elimination
and Recovery Act of 2010 related to disposition of recovered amounts.
38
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Semiannual Report to Congress October 1, 2010-March 31, 2011
OIG Takes Action to Improve Followup Process
The OIG initiated a followup improvement strategy to examine ways to improve the
monitoring, managing, reporting, and implementing of OIG recommendations. OMB
Circular A-50 describes audit followup as an integral part of good management and a
shared responsibility between Agency management and the OIG. Without attention to
needed action on OIG recommendations by both the Agency and the OIG, the value and
usefulness of OIG recommendations in achieving savings and cost reductions, eliminating
or reducing risk, and promoting EPA's program and operational effectiveness may be lost.
Therefore, the OIG reviewed its own internal process and performance in transmitting
audit and evaluation recommendations to the Agency for resolution, and in tracking the
Agency's progress toward implementing the agreed-to action on recommendations.
As a result of the review, we identified a number opportunities for process and technical
improvements to make sure that all OIG recommendations are individually accounted for,
directed to the proper Agency action official, and achieve resolution with appropriate
corrective action plans. The OIG followup improvement strategy, focusing on both the
OIG and Agency responsibilities for effective followup, is resulting in significant
progress in increasing the Agency's attention to, and accountability for, completing
corrective action on recommendations. Some of the recommended improvements have
been taken while others are ongoing. For example, the OIG:
• Designed an automated structure and process to identify and account for
individual recommendations and the specific responsible Agency action official.
• Began uploading individual recommendations into the Agency Management
Audit Tracking System rather than relying on the Agency audit followup
coordinators to type in the recommendations for Agency tracking and action.
• Began issuing a semiannual Compendium of Unimplemented Recommendations.
• Clarified confusing terminology and process steps though a revision to the OIG
Followup Policy, and developed a brochure and provided training on the process.
• Provided all OIG managers with access to the Management Audit Tracking
System so that they could timely monitor progress on recommendations.
• Provided direct links to EPA Manual 2750, EPA 's Audit Management Process.
• Promoted more comprehensive formal review of corrective actions plans.
• Established a more rigorous and formalized review of Agency requests for and
OIG acceptance of extensions in responses to reports and of changes to the
corrective action plans.
Additionally, at the OIG's behest, the Agency created an Agency-wide taskforce to
review and revise EPA Manual 2750 to promote a belter understanding of and
compliance with audit management, resolution, and followup activity. The taskforce, led
by the Office of the Chief Financial Officer with OIG involvement, expects to complete
the revision of the manual by the end of FY 2011.
39
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Statistical Data
Profile of Activities and Results
Audit Operations
Office of Inspector General Reviews
October 1
2010 to
March 31, 2011
(Sin
Questioned costs *
Recommended efficiencies *
Costs disallowed to be recovered
Costs disallowed as cost efficiency
Reports issued by DIG
Reports resolved
(Agreement by Agency officials
to take satisfactory corrective actions) **
millions)
$2.8
$7.5
$0
$7.5
39
207
Audit Operations
Reviews Performed by Single Audit Act Auditors
Questioned costs *
Recommended efficiencies *
Costs disallowed to be recovered
Costs disallowed as cost efficiency
Single Audit Act reviews
October 1
March
($ in
Agency recoveries
Recoveries from audit and evaluations of
current and prior periods (cash collections or
offsets to future payments) ***
, 201 0 to
31 , 201 1
millions)
$2.5
$0
$0.2
$0
168
$4.3
Investigative Operations
October 1
March
(Sin
Total fines and recoveries ****
Cost savings
Cost avoidances
Cases opened during period
Cases closed during period
Indictments/informations of
persons or firms
Convictions of persons or firms
Civil judgments/settlements/filings
, 201 0 to
31 , 201 1
millions)
$0.754
$0
$1 .372
54
39
9
1
0
Questioned costs and recommended efficiencies are
subject to change pending further review in the audit
resolution process.
Reports resolved are subject to change pending
further review.
Information on recoveries from audit resolutions is
provided by EPA's Office of Financial Management
and is unaudited.
Fines and recoveries that resulted from joint
investigations.
40
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Audit, Inspection, and Evaluation Report Resolution
Status report on perpetual inventory of reports in resolution process
for semiannual period ending March 31, 2011
Report category
A. For which no management
decision was made by
October 1,2010*
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management
decision was made during the
reporting period
E. For which no management
decision was made by
March 31, 2011
F. Reports for which no
management decision was made
within 6 months of issuance
No. of
reports
95
198
145
148
207
86
71
Report issuance
($ in thousands)
Questioned
costs
$17,255
5,413
0
20,528
648
22,020
9,103
Recommended
efficiencies
$0
7,530
0
7,530
7,530
0
0
Report resolution costs
sustained
($ in thousands)
To be
recovered
$151
168
0
318
318
0
0
As
efficiencies
$0
7,530
0
7,530
7,530
0
0
Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this
report and our previous semiannual report results from corrections made to data in our audit tracking system.
Status of management decisions on Inspector General reports
This section presents additional statistical information that is required by the Inspector General Act of
1978, as amended, on the status of EPA management decisions on reports issued by the OIG involving
monetary recommendations. Tables 1 and 2 cannot be used to assess results of reviews performed or
controlled by this office. Many of the reports were prepared by other federal auditors or independent
public accountants. EPA OIG staff do not manage or control such assignments. Auditees frequently
provide additional documentation to support the allowability of such costs subsequent to report issuance.
41
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Table 1: Inspector General-issued reports with questioned costs for semiannual period ending
March 31, 2011 ($ in thousands)
Report category
A. For which no management decision was made by
October 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
March 3 1,20 11
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
33
11
44
12
11
1
32
21
Questioned
costs *
$17,255
5,413
22,668
648
319
329
22,020
9,103
Unsupported
costs
$12,069
2,348
14,417
227
181
46
14,189
5,349
Questioned costs include unsupported costs.
Any difference in number of reports and amounts of questioned costs between this report and our previous
semiannual report results from corrections made to data in our audit, inspection, and evaluation tracking system.
Table 2: Inspector General-issued reports with recommendations that funds be put to better use
for semiannual period ending March 31, 2011 ($ in thousands)
Report category
A. For which no management decision was made by October 1, 2010 *
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 March 31 , 201 1
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
0
2
2
2
2
0
0
0
0
Dollar
value
$0
7,530
7,530
7,530
7,530
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 March 31, 2011, 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
51
20
0
22
0
93
Percentage
55
21
0
24
0
100
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
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.
Semiannual period
(October 1,2010-
March31,2011)
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
16
148
31
133
Issues referred to others
OIG offices
EPA program offices
Other federal agencies
State/local agencies
Other/miscellaneous
63
73
4
43
-------
Semiannual Report to Congress
October 1, 2010-March 31, 2011
Summary of Investigative Results
Summary of investigative activity during reporting period
Cases open as of October 1, 2010
Cases opened during period
Cases closed during period
Cases pending as of March 31 , 201 1
159
54
39
174
Investigations pending by type as of March 31, 2011
Contract fraud
Assistance
agreement fraud
Employee integrity
Program integrity
Computer crimes
Other
Total
Superfund
7
1
2
2
1
1
14
Management
10
28
29
14
6
11
98
Split
funded
3
10
3
4
2
2
24
Recovery
Act
12
16
0
1
1
7
37
Chemical
Safety Board
0
0
0
1
0
0
1
Total
32
55
34
22
10
21
174
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
4
0
0
$0
0
0
0
0
Joint*
5
1
0
$315,000
0
0
36 months
0
Total
9
1
0
$315,000
0
0
36 months
0
'' With another federal agency.
Administrative actions
Suspensions
Debarments
Other administrative actions
Total
Administrative recoveries
Cost avoidance
EPA OIG only
11
16
8
35
$0
$223,875
Joint*
4
6
0
10
$438,790
$1,148,842
Total
15
22
8
45
$438,790
$1,372,717
* With another federal agency.
44
-------
Semiannual Report to Congress
October 1, 2010-March 31, 2011
Scoreboard of Results
Scoreboard of OIG performance results for semiannual period ended
March 31, 2011, compared to annual performance goal targets
All results reported in FY 2011, 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 2011 Government Performance and
Results Act annual performance targets
compared to first half FY 2011 results
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: 156 (47%)
1 Legislative/regulatory changes/decisions
34 Environmental or management policy, process,
practice, control change actions taken
9 Best practices implemented
1 Environmental/health improvements
4 Environmental/business risks/challenges eliminated
47 Certifications/validations/verifications/corrections
10 Actions taken or resolved prior to report issuance
(not otherwise reported)
50 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: 662 (73%)
235 Recommendations (for Agency/stakeholder action)
4 Critical congressional or public management
concerns addressed
1 Best practices identified
21 Referrals for Agency action
7 New environmental or management operational
risks or challenges identified
41 Unimplemented recommendations identified
288 Findings without controlled recommendations
66 Awareness briefings/outreach sessions
Return on investment: Potential dollar return as
percentage (120%) of OIG budget ($54.7 million)
Target: $65.6 million
Reported: $14.73 million (22%)
($ in millions)
$5.42 Questioned costs (net EPA)
$2.74 Recommended efficiencies, costs saved (EPA)*
$0.75 Fines, recoveries, settlements
$6.13 Monetary actions taken or resolved prior to report
issuance
Criminal, civil, and administrative actions
reducing risk of loss/operational integrity
Target: 80
Reported: 42 (52.5%)
1 Criminal convictions
9 Indictments/informations/complaints
45 Administrative actions
0 Civil actions
14 Allegations disproved
Other (no targets established)
Sustained monetary recommendations and
savings achieved from current and prior
periods: $7.77 million
Sustained environmental and management
recommendations for resolution action
Recovery Act activity results (cumulative)
Total reports issued: 220
($ in millions)
$0.24 Questioned costs sustained
$7.53 Cost efficiencies sustained or realized
132 Sustained recommendations
143 Recovery Act awareness briefings/outreach sessions
(also counted above)
61 Recovery Act complaints received
39 OIG-produced reports
168 Reports by other audit entities with OIG oversight
Includes $1.4 million in savings from investigations.
45
-------
Semiannual Report to Congress
October 1, 2010-March 31, 2011
Appendices
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 Unreasonable
costs costs
Federal
recommended
efficiencies
PERFORMANCE REPORTS
11-P-0001 EPA Lacks Internal Controls to Prevent Misuse of Emergency Drinking Water Facilities Oct. 12, 2010 $0 $0
11-P-0010 ENERGY STAR Label Needs to Assure Superior Energy Conservation Performance Oct.28,2010 0 0
11-P-0029 EPA Needs to Assure Effectiveness of Antimicrobial Pesticide Products Dec. 25, 2010 0 0
11-P-0031 EPA Needs to Strengthen Internal Controls for Determining Workforce Levels Dec. 20, 2010 0 0
11-P-0034 EPA Should Improve Oversight at Wheeling Disposal Superfund Site in Missouri Dec. 20, 2010 0 0
11-P-0048 Vapor Intrusion Health Risks Considered at Bannister Federal Complex Jan.1,2011 0 0
11-P-0067 EPA Should Further Connect National Program Manager Process with Guidance Jan. 18, 2011 0 0
11-P-0115 CSB Did Not Take Effective Actions on Prior Audit Recommendations Feb. 15,2011 0 0
11-P-0136 EPA Needs Better Agency-Wide Controls Over Staff Resources Feb. 22, 2011 0 0
11-P-0159 Improvements Needed in EPA's Network Traffic Management Practices Mar. 14,2011 0 0
11-P-0096 EPA Could Improve RCRAInfo Data Quality and System Development Feb. 7, 2010 0 0
11-P-0002 Website for Coal Combustion Products Partnership Conflicts with Agency Policies Oct. 13, 2010 0 0
11-P-0017 FY 2010 FISMA Audit of EPA's Computer Security Program Nov. 16,2010 0 0
11-P-0019 Improvements Needed in EPA's Efforts to Replace Its Core Financial System Nov. 29, 2010 0 0
11-P-0063 Congressionally Requested Inquiry into Handling Freedom of Information Act Requests Jan. 10,2011 0 0
11-P-0107 EPA Must Implement Controls to Ensure Proper Investigations at Brownfields Sites Feb. 14,2011 2,140,000 0
11-P-0148 CSB Board Compliance With Federal Information Security Management Act-FY 2010 Mar. 18, 2011 0 0
11-P-0156 Fiscal Year 2010 and 2009 Financial Statements for FIFRA Fund Mar. 10,2011 0 0
11-P-0157 Fiscal Year 2010 and 2009 Financial Statements for PRIA Fund Mar. 10,2011 0 0
11-P-0170 EPARegionSReducedUnliquidatedObligationsUnderWaterAssistanceAgreements Mar. 15,2011 0 0
11-P-0171 EPA Needs an Agency-Wide Plan on Tribal Solid Waste Management Mar. 21,2011 0 0
11-P-0173 EPA Promoted the Use of Coal Ash Products With Incomplete Risk Information Mar.23,2011 0 0
TOTAL PERFORMANCE REPORTS = 22 $2,140,000 $0
SINGLE AUDIT REPORTS
11-3-0003 National Association of State Departments of Agriculture Oct. 22,2010 $0 $0
11-3-0004 Monroe, City of Ml FY 2009 Oct. 22,2010 0 0
11-3-0007 Research Triangle Institute FY 2009 Oct. 26,2010 0 0
11-3-0008 Soboba Band of Luiseno Indians FY 2008 Oct. 26,2010 0 0
11-3-0009 ElkoBandCouncilFY2008 Oct. 26,2010 37,649 0
11-3-0011 Snoqualmie Indian Tribe FY 2007 Oct. 27,2010 6,499 4,304
11-3-0012 Lovelace Respiratory Research Institute FY 2009 Oct. 27,2010 0 0
11-3-0020 Nassau-County of-FY 2009 Nov. 30,2010 0 0
11-3-0021 Mason City-City of FY 2009 Nov. 30,2010 0 0
11-3-0022 United States Virgin Islands-Government of-FY 2007 Dec. 1,2010 0 1,146,011
11-3-0023 Meyersdale- Borough of - FY 2009 Dec. 2,2010 0 0
11-3-0024 Volant-Borough of-FY 2009 Dec. 3,2010 0 0
11-3-0025 Asbury Park -City of - FY 2009 Dec. 3,2010 0 0
11-3-0026 Alliance for the Chesapeake Bay FY 2009 Dec. 3,2010 0 0
11-3-0027 Bernalillo County of FY 2009 Dec. 6,2010 0 0
11-3-0028 Logistics Management Institute - FY 2009 Dec. 14,2010 0 0
11-3-0030 The Metropolitan District-FY 2009 Dec. 20,2010 0 0
11-3-0032 Gwinett County Government FY 2009 Dec. 20,2010 0 0
11-3-0033 Cresson-The Municipal Authority of the Borough of FY 2009 Dec. 20, 2010 0 0
11-3-0035 Sullivan - County of FY 2009 Dec. 20,2010 0 0
11-3-0036 Independence-Cross Creek Joint Sewer Authority FY 2009 Dec. 21,2010 0 0
11-3-0037 Upper Pottsgrove Township - FY 2009 Dec. 21,2010 0 0
11-3-0038 United States Virgin Islands-Government of-FY 2008 Dec. 21,2010 6,165 148,393
11-3-0039 West Milford Municipal Utilities Authority FY 2010 Dec. 21,2010 0 0
11-3-0040 Dawson Springs Municipal Waterworks and Sewer System FY 2010 Dec.28,2010 0 0
11-3-0041 Sopchoppy-City of FY 2009 Dec.28,2010 0 0
11-3-0042 Grand Ridge Town of FY 2009 Dec.28,2010 0 0
11-3-0043 Slatington Borough Authority FY 2010 Dec.28,2010 0 0
11-3-0044 Redbank Valley Municipal Authority FY 2009 Dec.28,2010 0 0
11-3-0045 Johnsonburg Municipal Authority FY 2009 Dec.28,2010 0 0
11-4-0046 Carrabelle - City of FY 2009 Jan. 4,2011 0 0
11-3-0047 Massachusetts Water Pollution Abatement Trust FY 2009 Jan. 4,2011 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
6,130,116
0
0
$6,130,116
46
-------
Semiannual Report to Congress
October 1, 2010-March 31, 2011
Questioned costs Federal
Report no.
11-3-0049
11-3-0050
11-3-0051
11-3-0052
11-3-0053
11-3-0054
11-3-0055
11-3-0056
11-3-0057
11-3-0058
11-3-0059
11-3-0060
11-3-0061
11-3-0062
11-3-0064
11-3-0065
11-3-0065
11-3-0068
11-3-0070
11-3-0071
11-3-0072
11-3-0073
11-3-0074
11-3-0075
11-3-0076
11-3-0077
11-3-0078
11-3-0079
11-3-0080
11-3-0084
11-3-0085
11-3-0086
11-3-0087
11-3-0088
11-3-0089
11-3-0090
11-3-0091
11-3-0092
11-3-0093
11-3-0094
11-3-0095
11-3-0097
11-3-0098
11-3-0099
11-3-0100
11-3-0101
11-3-0102
11-3-0103
11-3-0104
11-3-0105
11-3-0106
11-3-0108
11-3-0109
11-3-0110
11-3-0111
11-3-0112
11-3-0113
11-3-0114
11-3-0116
11-3-0117
11-3-0118
11-3-0119
11-3-0120
11-3-0121
11-3-0122
11-3-0123
11-3-0124
11-3-0125
11-3-0126
11-3-0127
11-3-0128
11-3-0129
11-3-0130
11-3-0131
11-3-0132
11-3-0133
Report title
Miles -City of FY 2009
Green Bay Metropolitan Sewerage District FY2009
Otter Lake Water Commission FY 2009
Auburn Hills - City of FY 2009
Swanvi lie -City of FY 2009
Harvard University FY 2009
Brownstown - Charter Township of FY 2009
Clearwater - City of FY 2009
Kandiyohi - City of FY 2009
Ladoga - Town of FY 2009
Fountain - City of FY 2009
Lansing- Charter Township of FY 2009
Whitewater - City of FY 2009
Walton - Town of FY 2009
Kentucky Infrastructure Authority FY 201 0
Algoma Sanitary District No.1 FY 2009
Hurley - City of FY 2009
Two Harbors - City of FY 2009
Burlington City of IA FY 2009
Red Cliff Band of Lake Superior Chippewas FY 2008
Danville Fire District #1 - FY 2009
Irasburg Fire District #1-FY 2009
Broad Top City Water Authority - FY 2009
East Penn Township - FY 2009
Verndale- City of FY 2009
Howard Lake - City of FY 2009
Gering City of - FY 2009
Widefield Water and Sanitation District - FY 2009
Hot Sulphur Springs Town of - FY 2009
Colorado City Metropolitan District - FY 2009
Mountain Regional Water Special Service District - FY 2009
Port Huron -City of FY 2009
Brainerd -City of FY 2009
Lake County FY 2009
Fontana-on-Geneva Lake - Village of FY 2009
Mechanicsburg Buffalo Water Commission FY 2009
Dousman- Village of FY 2009
Utah State of FY 20 10
Fairfax County of VAFY 2010
Grand Rapids Public Utilities Commission FY2009
Jackson County Water Utility, Inc. - FY 2009
Trempealeau - Vilage of FY 2009
Red Lake Falls City of -FY 2009
Fairfax County FY 2009
Clarksburg WV FY 2009
Beaver Dam - City of FY 2009
Evansville - City of FY 2009
Colby - City of FY 2009
Dekalb Sanitary District FY 2010
Germantown - Village of FY 2009
Lathrup- Village of FY 2010
Marinette - City of FY 2009
Loyal -City of FY 2009
Metro East Sanitary District FY 2010
Milwaukee City of -FY 2009
New York Mills - City of FY 2009
Oronoco - City of FY 2009
Richmond -City of FY 2010
ElktonMD-FY2009
Frankfort KY-FY 2009
Spring Valley -City of FY 2010
Sleepy Eye City of -FY 2009
Rock River Water Reclamation District FY 2010
Saint Peter -City of FY 2009
St. Hiliaire- City of FY 2009
Sycamore-CityofFY2010
Olympia City of - FY 2009
North Pole City of -FY 2009
Snohomish County Startup Water District - FY 2009
Elk Point City of - FY 2009
Upper Blackstone Water Pollution Abatement District FY 2010
Milton -Town of FY 2010
Pompton Lakes Borough Municipal Utilities Authority FY 2010
Smyth County VAFY 2009
Evesham Municipal Utilities Authority FY 2010
Redbank Valley Municipal Authority FY 2010
Date
Jan. 6, 2011
Jan. 6, 2011
Jan. 6, 2011
Jan. 6, 2011
Jan. 6, 2011
Jan. 6, 2011
Jan. 6, 2011
Jan. 6, 2011
Jan. 7, 2011
Jan. 7, 2011
Jan. 7, 2011
Jan. 7, 2011
Jan. 7, 2011
Jan. 7, 2011
Jan. 12,2011
Jan. 13, 2011
Jan. 14,2011
Jan. 19,2011
Jan. 20, 2011
Jan. 20, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Jan. 24, 2011
Feb. 2, 2011
Feb. 2, 2011
Feb. 3, 2011
Feb. 3, 2011
Feb. 3, 2011
Feb. 3, 2011
Feb. 3, 2011
Feb. 3, 2011
Feb. 4, 2011
Feb. 4, 2011
Feb. 4, 2011
Feb. 4, 2011
Feb. 7, 2011
Feb. 8, 2011
Feb. 9, 2011
Feb. 9, 2011
Feb. 9, 2011
Feb. 10, 2011
Feb. 10,2011
Feb. 10, 2011
Feb. 10, 2011
Feb. 10, 2011
Feb. 14, 2011
Feb. 14, 2011
Feb. 14, 2011
Feb. 14, 2011
Feb. 14, 2011
Feb. 14, 2011
Feb. 14,2011
Feb. 15, 2011
Feb. 15, 2011
Feb. 15,2011
Feb. 15, 2011
Feb. 15, 2011
Feb. 15, 2011
Feb. 17, 2011
Feb. 17,2011
Feb. 17, 2011
Feb. 17, 2011
Feb. 17, 2011
Feb. 17, 2011
Feb. 17,2011
Feb. 17, 2011
Feb. 17, 2011
Feb. 18, 2011
Feb. 18, 2011
Feb. 18, 2011
Ineligible Unsupported Unreasonable recommended
costs costs costs efficiencies
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
110,005
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 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
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
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
47
-------
Semiannual Report to Congress
October 1, 2010-March 31, 2011
Questioned costs
Report no.
11-3-0134
11-3-0135
11-3-0137
11-3-0138
11-3-0139
11-3-0140
11-3-0142
11-3-0143
11-3-0144
11-3-0145
11-3-0146
11-3-0147
11-3-0149
11-3-0150
11-3-0151
11-3-0152
11-3-0153
11-3-0154
11-3-0155
11-3-0158
11-3-0160
11-3-0161
11-3-0162
11-3-0163
11-3-0164
11-3-0165
11-3-0166
11-3-0167
11-3-0168
11-3-0169
11-3-0174
11-3-0175
11-3-0176
11-3-0177
11-3-0178
11-3-0180
11-3-0181
11-3-0182
11-3-0183
11-3-0184
11-3-0185
11-3-0186
11-3-0187
11-3-0188
11-3-0189
11-3-0190
11-3-0191
11-3-0194
11-3-0195
11-3-0196
11-3-0197
11-3-0198
11-3-0200
11-3-0201
11-3-0202
11-3-0203
11-3-0204
11-3-0205
11-3-0206
11-3-0207
CONTRACTS
11-4-0013
Report title
Williamsport - Town of FY 2010
New Market - Town of FY 2010
Rich lands -Town of FY 2010
Pennsylvania Environmental Council Inc and Affiliated Entities FY 2010
Buffalo Sewer Authority FY 2010
Delano City of - FY 2009
Grace Hill Settlement House FY 2009
Selma- Town of FY 2010
Harris County Water Control and Improvement District No. 36 FY 2010
Morgan City-City of FY2009
Gardner Community Water Association Inc. FY2010
Alaska Rural Water Association FY 2009
National Council on Aging - FY 2009
Summit Lake Paiute Tribe FY 2008
Summit Lake Paiute Tribe FY 2009
Madison County Industrial Development and Building Authority FY 2009
Renewable Water Resources FY 2010
Pulaski County School District FY 2010
Grand Strand Water and Sewer Authority FY 2010
Alaska Rural Water Association FY 2009
Millsboro- Town of FY 2010
La Plata -Town of FY 2010
Clay County FY 20 10
Warsaw -City of FY 2010
Pitt County Board of Education FY 2010
Farmville- Town of FY 2010
Maggie Valley Sanitary District FY 2010
Florida Rural Water Association Inc. FY2010
Jefferson County Commission - FY2007
Grove-City of
Big Lake, City of FY 2009
Center Line, City of FY 2009
Chicago Metropolitan Agency for Planning FY 2010
Decatur- City of FY 2010
East Chicago - City of FY 2009
Cocoa-City of FY 2009
Dorchester County Sanitary District
Millstadt-Villageof
Buffalo Island Regional Water District FY2010
Eagle Mountain City FY 2010
Park County FY 2010
Daniel-Town of FY 2010
Riverton-CityofFY2010
Flagg Creek Water Reclamation District FY 2010
Lenawee Intermediate School District FY 2010
Buchanan-City of FY 2010
Pecatonia-VillageofFY2010
Decatur - Sanitary District of FY 201 0
Stevens Point FY 2009
Thomaston- City of FY 2010
Yorkville-Bristol Sanitary District FY 2010
Willmar- City of FY 2009
Fountain Water District FY 201 1
Frankfort -Village of FY 2010
Fenton- City of FY 2010
Hoffman -City of FY 2009
Hamburg-Township of FY 2010
South Lyons Township Sanitary District FY 2010
Neenah-CityofFY2009
Wheaton-CityofFY2009
TOTAL SINGLE AUDIT REPORTS = 168
Costs Claimed Under Agreement for Montana Physical Sciences Foundation
TOTAL CONTRACT REPORTS = 1
Date
Feb. 18,2011
Feb. 18,2011
Feb. 28, 201 1
Feb. 28, 2011
Feb. 28, 201 1
Feb. 28, 2011
Mar. 4, 2011
Mar. 7, 201 1
Mar. 7, 2011
Mar. 7, 2011
Mar. 7, 2011
Mar. 7, 2011
Mar. 7, 201 1
Mar. 9, 2011
Mar. 9, 2011
Mar. 10,2011
Mar. 10,2011
Mar. 10,2011
Mar. 10,2011
Mar. 11,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 14,2011
Mar. 23, 201 1
Mar. 23, 201 1
Mar. 24, 2011
Mar. 24, 2011
Mar. 24, 201 1
Mar. 28, 2011
Mar. 28, 201 1
Mar. 28, 201 1
Mar. 28, 2011
Mar. 28, 2011
Mar. 28, 2011
Mar. 28, 2011
Mar. 28, 201 1
Mar. 28, 2011
Mar. 28, 201 1
Mar. 28, 2011
Mar. 28, 201 1
Mar. 29, 2011
Mar. 29, 2011
Mar. 29, 201 1
Mar. 29, 201 1
Mar. 29, 201 1
Mar. 30, 201 1
Mar. 30, 2011
Mar. 31,2011
Mar. 31,2011
Mar. 31,2011
Mar. 31,2011
Mar. 31,2011
Mar. 31,2011
Nov. 8, 2010
Ineligible
costs
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
$160,318
$707,320
$707,320
Unsupported Unreasonable
costs costs
0
0
0
0
0
0
456,940
0
0
0
0
0
0
291,097
301,113
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
$2,347,858
$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
Federal
recommended
efficiencies
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
FINANCIAL STATEMENT REPORTS
11-1-0015
11-1-0069
Audit of EPA's Fiscal 2010 and 2009 Consolidated Financial Statements
EPA Did Not Fully Comply With Guidance Regarding Unliquidated Obligation Review
TOTAL FINANCIAL STATEMENT REPORTS = 2
Nov. 15, 2010
Jan. 19, 2011
$0
0
$0
$0
0
$0
$0
0
$0
$1,400,000
0
$1,400,000
AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 REPORTS
11-R-0005
11-R-0014
11-R-0016
11-R-0018
Recovery Act Staffing and Qualifications
Site Inspection of Sewer Pump Station Rehabilitation and Improvements, Ball, LA
Terms and Conditions to Award Interagency Agreements Need Improvement
Leaking Underground Storage Tank Grants Priority Lists Need More Oversight
Oct. 25, 2010
Nov. 09, 2010
Nov. 16,2010
Nov. 22, 2010
$0
0
0
0
$0
0
0
0
$0
0
0
0
$0
0
0
0
48
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Questioned costs
Report no.
11-R-0081
11-R-0082
11-R-0083
11-R-0141
11-R-0172
11-R-0179
11-R-0192
11-R-0193
Report title
EPA Can Improve the Use of Financial Monitoring Reviews
Site Inspection of the Clean Water State Revolving Fund Projects, Long Beach, CA
Site Inspection of Sewer System Improvement Projects, Parma, OH
EPA Should Improve Guidance, Oversight for Diesel Emissions Reduction Act Activities
Site Visit of the Denver Street Storage Project, Astoria, OR
EPA Needs to Better Document Delays for Diesel Emission Reduction Act Grants
Site Visit of Comprehensive Sewer System Rehabilitation Project, Saugus MA
Site Visit Water System Improvement Project, Waleska GA
TOTAL AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 REPORTS = 1 2
Federal
Ineligible Unsupported Unreasonable recommended
Date costs costs costs efficiencies
Jan. 31,2011 0
Feb. 1,2011 0
Feb. 2, 2011 0
Mar. 1,2011 0
Mar. 22, 201 1 0
Mar. 28, 2011 0
Mar. 29, 2011 0
Mar. 29, 201 1 0
$0
0
0
0
0
0
0
0
0
$0
0
0
0
0
$57,346
0
0
0
$57,346
0
0
0
0
0
0
0
0
$0
OTHER REPORTS
11-N-0006 Compendium of Unimplemented Recommendations - September 30, 2010
11-N-0199 EPA's Small Business Innovative Research Awards Need Additional Certifications
TOTAL OTHER REPORTS = 2
Oct. 26, 2010
Mar. 30, 2011
0
$0
0
$0
TOTAL REPORTS ISSUED = 207
$3,007,638 $2,347,858
$57,346
$7,530,116
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Appendix 2—Reports Issued Without Management Decisions
For Reporting Period Ended March 31, 2011
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 March 31, 2011.
Report No. 10-P-0112, Results of Hotline Complaint Review of EPA Region 9 Hiring under the Federal Career
Intern Program, April 26, 2010
Summary: The Hotline allegations against EPA, Region 9 were unsubstantiated. We identified that the region
engaged in a prohibited personnel practice. Neither the Office of Personnel Management nor EPA prohibits the use
of a job fair and registration code as recruiting and hiring methods. 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 job fair.
Agency Explanation: As of February 23, 2011, the Office of Administration and Resources Management is preparing
a formal memorandum to the OIG to request the closeout of this audit.
OIG Followup Status: Incomplete response.
Report No. 10-P-0177, EPA's Revised Hiring Process Needs Additional Improvements, August 9, 2010
Summary: Our analysis of EPA's appointment process managed by the Office of Administration and Resources
Management identified that EPA had not implemented critical technology upgrades or obtained other resources
necessary for the service center concept to succeed. EPA produced three reports, including its 2007 Business Case,
which 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.
Agency Explanation: The corrective action plan was forwarded to the OIG on December 10, 2010. The Agency is
currently waiting for the OIG's acceptance of the corrective action plan and OIG closure of the audit.
OIG Followup Status: No response.
Office of Air and Radiation
Report No. 04-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.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Agency Explanation: EPA continues to disagree with the OIG recommendation to issue a Milestone Compliance
Demonstration Rule. EPA has agreed to reconsider the recommendation after reconsideration of the Ozone Standard
is completed. Resolution expected by December 2011.
OIG Followup Status: Incomplete response.
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 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
agreed with the first recommendation in our audit report and provided acceptable milestones dates for its
implementation. The Agency has not agreed to establish the recommended state reporting requirements, and we
consider the issue unresolved.
Agency Explanation: On February 14, 2011, the OIG requested clarification of the EPA's action plan timeline. EPA
response to the OIG is due in late April. Estimated completion date is December 2011.
OIG Followup Status: Incomplete response.
Report No. 09-P-00125, 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.
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
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Semiannual Report to Congress October 1, 2010-March 31, 2011
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 completed. 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.
Financial Analysis and Rate Negotiation Service Center
Report No. 04-1-00099, 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. 06-4-00120, 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.
Report No. 06-4-00165, National Academy of Sciences—FY 2006 Indirect/Other Direct Costs 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).
OIG Followup Status: Resolution pending receipt of additional information.
Report No. 06-4-00169, 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).
OIG Followup Status: Resolution pending receipt of additional information.
Report No. 07-1-00016, URS Corporation (c/o URS Greiner, Inc.)—FY2001 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).
OIG Followup Status: Resolution pending receipt of additional information.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Report No. 07-1-00061, Lockhead 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. 07-4-00058, Science Applications Intl. Corporation—Companies 1, 6, and 9—FY 2006 Floorchecks,
April 30, 2007
Summary: On 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. On 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.
Report No. 07-1-00079, 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. 07-1-00080, 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 any of the 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 contract/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.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Report No. 07-4-00080, 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
are 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, Science Applications Intl. Corp—Company 1 Compensation Followup, 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. 08-1-00114, 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 the questioned general and administrative costs.
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. 08-1-00131, 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 the 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 in questioned costs. 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 Statistics: Resolution pending receipt of additional information.
Report No. 08-4-00208, 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 of January 1, 2006, through December 31, 2006.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
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. 08-4-00308, 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. 09-1-00034, 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.
Grants and Interagency Agreements Management Divisior
Report No. 03-4-00120, 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 Grants and Interagency Agreements Management Division has been meeting with Office of
Grants and Debarment senior managers, the Inspector General, and the Office of General Counsel to review the
audit findings and recommendations. A proposed management decision has been prepared, and resolves most of the
issues identified in the audit report. However, the Agency is still in negotiations with the Inspector General on the next
steps for final resolution. On March 31, 2011, the Agency met with the Inspector General to further discuss the
remaining issue of recovering program income as it relates to membership fees in accordance with Title 2 Code of
Federal Regulation 215.24. The Agency will submit additional information to the Inspector General for review and
comment, and expects to receive feedback during the week of April 11, 2011. A final course of action will be
forthcoming shortly thereafter. Resolution expected by June 30, 2011.
O/G Followup Status: Response received, being evaluated.
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.
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
Agency Explanation: As of March 28, 2011, the Office of Grants and Debarment continues to review the National
Tribal Environmental Council payroll costs.
O/G Followup Status: No response.
Office of Enforcement and Compliance Assurance
Report No. 08-P-00278, 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
attaining the strategy's overall goal. The absence of these elements hinders 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.
O/G Followup Status: Referred to Audit Resolution Board.
Report No. 10-P-00224, EPA Should Revise Outdated or Inconsistent EPA-State Clean Water Act Memoranda
of Agreement, September 14, 2010
Summary: This review is part of a series the OIG is conducting of EPA oversight of state enforcement programs.
We assessed whether EPA's memoranda of agreement with states related to the National Pollutant Discharge
Elimination System program impede consistent EPA-state enforcement and to what degree memoranda of
agreements comply with federal requirements under the Clean Water Act. EPA generally agreed with our
recommendations, saying it would coordinate assessment and revision of National Pollutant Discharge Elimination
System memoranda of agreements with implementation of the Clean Water Action plan.
Agency Explanation: The Office of Enforcement and Compliance Assurance and the OIG did not have a mutually
agreed corrective action plan as of March 28, 2011. Once both parties agree upon the corrective action plan, the
corrective actions will be added to Management Audit Tracking System.
O/G Followup Status: No response.
Region 1—Regional Administrator
Report No. 10-3-0094, Indian Township Tribal Government—FY 2008, April 5, 2010
Summary: Our analysis identified significant variances between grant funds received from EPA and the funds expended
by the tribe. This difference created variances between funds left to draw and expend to financially close out the grants.
The total variance between funds left to draw and the funds left to expend was $14,668.
Agency Explanation: The tribe continues to improve its grants management tracking. Bureau of Indian Affairs monthly
discussions are conducted with the regional audit coordinator, contract auditor for the tribe, and tribal compliance
staff to discuss progress on reconciling open issues. Target resolution is September 2011.
OIG 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
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Semiannual Report to Congress October 1, 2010-March 31, 2011
have a conflict of interest, as alleged, and its Standard Form 272s were 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: Per the Grants Management Officer, the grantee's memorandum to the OIG will be revised to
address missing information as requested by the OIG. The projected completion date is April 30, 2011.
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: Per the Grants Management Officer, the OIG and EPA are still in negotiations. The projected
completion date is April 30, 2011.
OIG Followup Status: Incomplete 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: Per the grants management officer, the OIG has not responded to the revised response
memorandum from Region 4. However, the OIG notified the Grants Management Office on December 21, 2010, that
EPA Order 2750 was being revised and no decision will be made until they are finished.
OIG Followup Status: Resolution on hold, awaiting additional information. The OIG discussed resolution with
Region 6 on April 6, 2011. The offices have agreed to a course of action to resolve the report.
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 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: Projected date to reach management decision/approved Final Determination Letter is April 22,
2011. The Agency met with the tribal chairman, treasurer, contracts specialist, and environmental director during the
week of January 24, 2011, to discuss the need for policies, procedures, and controls to ensure compliance with
federal laws, regulations, policies, and standards. We discussed the need for these policies and procedures to detail
what everyone's responsibilities are, from the program staff, to the first line supervisor, to the finance department, to
the environmental committee, and the tribal leadership. The Agency reviewed OMB Circulars A-87 and A-102 and
discussed Part 6 of OMB's compliance supplement regarding internal controls.
OIG Followup Status: No response.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Report No. 08-3-0307, Oglala Sioux Tribe, FY 2004, September 30, 2008
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 of $1,158,903.
Agency Explanation: Projected date for completion of corrective actions is December 31, 2011. The Tribal Finance
Department has made tremendous progress toward developing and implementing departmental procedures and
controls. They have requested EPA's assistance in helping to train program directors and key staff so that the control
system and expectations for compliance can be rolled out throughout the tribal programs. In conjunction with Bureau
of Indian Affairs, Indian Health Service, and Bureau of Reclamation, the Agency is preparing to work with the tribe's
Finance Department to provide training to the Tribal Program Directors on the expectations for compliance with
specific provisions of OMB Circular A-87 (particularly the basic guidelines), the grants management common rule
(Title 40 Code of Federal Regulations Part 31), the current OMB Circular A-102, and OMB Circular A-133 (with an
emphasis on Part 6 to the Compliance Supplement related to Internal Controls). The tribal administration will follow
up with a discussion of the new policies and procedures they have developed that, when followed, will help provide
assurances to tribal leadership and their federal partners that fiscal procedures and controls will be enacted as well
as federal compliance requirement will be met. The training is to take place in late April or early May 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 during 2005 of $307,323 as being unsupported.
Agency Explanation: Projected date for completion of corrective actions is December 31, 2011. The Tribal Finance
Department has made tremendous progress toward developing and implementing departmental procedures and
controls. See description above for report no. 08-3-0307 for Agency explanation.
O/G Followup Status: No response.
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: Projected date for completion of corrective actions is December 31, 2011. The Tribal Finance
Department has made tremendous progress toward developing and implementing departmental procedures and
controls. See description above for report no. 08-3-0307 for Agency explanation.
O/G Followup Status: No response.
Region 9—Regional Administrator
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. The grantee claimed contract costs 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. EPA should recover $384,678 in questioned costs under the grant.
Agency Explanation: The Grants Management Office has been working with the OIG to address issues in a draft final
determination letter. A final determination letter was originally targeted for completion by February 28, 2011. Both
OIG and the Grants Management Office agreed to close out by March 31, 2011.
O/G Followup Status: Incomplete response.
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Semiannual Report to Congress October 1, 2010-March 31, 2011
Report No. 10-3-0238, Pelican, City of, FY 2009, September 29, 2010
Summary: Our analysis identified that the city overstated program expenditures on its reimbursement request by
approximately $24,000, which led the city to request $12,357 in excess of the actual costs from EPA for the
congressionally mandated project assistance agreement, XP-96027601-2.
Agency Explanation: Region 10 has obtained satisfactory resolution of the audit findings, including receipt of the
corrective action plan recommended by the OIG, and requested closure by OIG on March 15, 2011. In its close
request, Region 10 called the OIG's attention to poor performance by the single auditor in this case. As a result, the
OIG has not yet closed out this audit and has indicated it is further evaluating the closeout request before doing so.
Closeout is pending the outcome of that evaluation.
OIG Followup Status: OIG awaiting information from single auditor.
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.
The grantee claimed contract costs of $1,713,009 also claimed under two other federal grants, supply and labor costs
of $24,836 not supported by source documents, and supply and administration costs of $6,684 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: Region 10 drafted a second proposed management decision. Issuance to OIG is pending a
briefing of the Deputy Regional Administrator and other staff; issuance to the OIG is expected by April 15, 2011.
OIG Followup Status: No response
Report No. 10-4-00241, Costs Claimed by the Alaska Native Tribal Health Consortium Under EPA Interagency
Agreement DW 75-95754001, September 30, 2010
Summary: The consortium did not meet financial management requirements specified by Code of Federal
Regulations. EPA needs to recover $1,007,690 of $1,493,893 in costs questioned under the interagency agreement.
The questioned costs identified during the audit were primarily caused by a miscommunication between the
consortium and the U.S. Department of Health and Human Services on the application of approved indirect rates.
Agency Explanation: The OIG requested an extension until April 15, 2011, to provide a determination on the region's
proposed management decision. On March 23, 2011, Region 10 granted the extension.
OIG Followup Status: Response received, being evaluated
Total report issues before reporting period for which
no management decision has been made as of March 31, 2011 = 39
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Semiannual Report to Congress
October 1, 2010-March 31, 2011
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/2011/20110429-11 -N-0212.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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Semiannual Report to Congress
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-13J)
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
1200 Pennsylvania Avenue NW
Mailcode 8431P (Room N-4330)
Washington DC 20460
fax: 703-347-8330 • phone: 1-888-546-8740
www.epa.gov/oig/hotline.htm
It's your money
It's your environment
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