National Environmental
Performance Partnership System
FY 2011 Guidance
Office of Congressional and Intergovernmental Relations
Office of the Administrator
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National Environmental Performance Partnership System
FY 2011 National Program Guidance
CONTENTS
EXECUTIVE SUMMARY 3
Explanation of Changes from FY 2010 5
GUIDANCE 7
Goals and Objectives for FY 2011 7
Goal I: Conduct joint strategic planning that reflects NEPPS principles in 1
PPAs/PPGs or comparable EPA-state and EPA-tribal agreements and grant
work plans.
Goal I Objectives 8
Goal II: Implement the Administrator's priorities through PPAs, PPGs and 10
other EPA-state and EPA-tribal agreements.
Goal II Objectives 10
Goal III: Foster programmatically sound and fiscally responsible PPG 12
management practices.
Goal III Objectives 12
Appendix A: Programs Eligible for Inclusion in PPGs 14
NEPPS National Guidance FY 2011
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EXECUTIVE SUMMARY
I. Program Office
Office of Congressional and Intergovernmental Relations (OCIR) FY 2011 Guidance for
National Environmental Performance Partnership System (NEPPS).
II. Introduction/Context
Performance Partnerships - through which EPA and states and tribes set priorities and
design strategies together - are integral to planning and implementing our national
environmental programs. To advance the joint planning that is central to Performance
Partnerships, the Office of Congressional and Intergovernmental Relations (OCIR) is
issuing this guidance to the regions in conjunction with the Agency-wide process for
production and review of national program guidance through the Office of the Chief
Financial Officer.
This FY 2011 guidance sets out the goals and objectives for Performance Partnerships.
In January 2010, the Administrator sent a memorandum to all EPA employees that
outlined her top seven priorities. The guidance is aligned with and directly supports these
priorities, and contains specific objectives to advance three of the priorities through the
NEPPS process: Children's Health, Environmental Justice, and Building Strong State and
Tribal Partnerships.
III. Goals and Objectives
Goal I: Conduct joint strategic planning that reflects Performance Partnership
principles in PPAs/PPGs or comparable EPA-state and EPA-tribal agreements and
grant workplans.
Objectives:
1. Regions should take additional measures to work with states to identify opportunities
for enhanced worksharing, resource and workload flexibility and phased implementation
of program requirements, especially where budget reductions have negatively affected
state programs.
2. Whenever possible, include all the essential elements in PPAs as identified by a joint
EPA-state workgroup in 2004. Mutual state-EPA priorities should be clearly articulated
and distinguished from specific state and EPA priorities.
3. Identify collaborations to improve state-EPA business processes and promote
continuous improvement (for example, by applying LEAN, Kaizen, Value Stream
Mapping (VSM) and Six Sigma techniques).
4. Advance Performance Partnership principles through effective collaboration with
NEPPS National Guidance FY 2011 3
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states on policy and implementation issues, making full use of the issue resolution
process to ensure that requests for flexibility and innovation are addressed and resolved at
the highest levels (i.e., RA, AA, DA).
5. Explain and advocate for the use of PPAs and PPGs (including PPAs serving as PPG
workplans) as tools for implementing Performance Partnership principles within EPA and
with states and tribes.
Goal II: Implement the Administrator's priorities through PPAs, PPGs and other
EPA-state and EPA-tribal agreements.
Objectives:
1. Regions should use the NEPPS process to leverage funds and activities to advance
children's health.
2. Regions should work with states to advance environmental justice by improving
environmental conditions and public health in minority, low-income and other vulnerable
communities.
3. Building strong state and tribal partnerships: EPA must do its part to support state and
tribal capacity and, through strengthened oversight, ensure that programs are consistently
delivered nationwide.
A. Regions are encouraged to strategically use PPAs to organize and articulate
mutual compliance and enforcement priorities (C/E), and ensure the alignment of
commitments in PPGs and other categorical grant workplans to achieve those
goals.
B. To support state and tribal capacity, regions are encouraged to explore creative
new ways to partner with states and tribes that will augment the progress made
through NEPPS.
4. Ensure that the Administrator's other enumerated priorities are included in regional-
state planning discussions.
Goal III: Foster programmatically sound and fiscally responsible PPG management
practices.
Objectives:
1. Ensure the timeliness of state grants: it is a priority for the Agency to ensure the
timely award of continuing environmental program (CEP) grant funds.
2. Implement EPA's Grants Policy Issuance 08-05: Burden Reduction for State Grants.
NEPPS National Guidance FY 2011 4
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3. Build regional and state capacity to accommodate revisions to state grant workplans
and performance measures.
4. Ensure the proper management of grant unliquidated obligations.
IV. Program Contacts
Mike Osinski (OCIR): tel. (202) 564-3792; e-mail: osinski.michael@epa.gov
Reynold Meni (OCIR): tel. (202) 564-3669; e-mail: meni.reynold@epa.gov
V. OCIR's Feedback Process
Upon receiving the draft FY 2011 NEPPS National Guidance from OCIR, the Office of
the Chief Financial Officer (OCFO) will post it on its website and notify its counterparts
in the EPA regional offices. OCFO also will notify the Environmental Council of the
States (ECOS) and EPA tribal planning contacts. The review period lasts approximately
one month.
EPA's regional offices, states/ECOS and other stakeholders may send their comments
directly to OCIR's program office contacts (listed above). Regional, state/ECOS and
stakeholder comments and suggestions will be considered by OCIR for the final draft of
the guidance to be released in early May.
VI. Explanation of Changes from FY 2010
This guidance was streamlined and reorganized (16 pages shorter) and contains major
revisions/rewrites. It is more clear and focused on defining goals and objectives than last
year's guidance and includes three goals (each with accompanying objectives):
1. Conduct j oint planning and priority setting that reflects Performance Partnership
principles in PPAs, PPGs, and other state-EPA agreements. There is one new objective
under this goal requesting the regions to identify and support collaborations to improve
state-EPA business processes and promote continuous improvement.
2. Implement the Administrator's priorities through PPAs, PPGs, and other state-EPA
agreements. This is a new goal with new objectives requesting the regions to leverage
funds and activities to advance children's health and environmental justice; advance
strong partnerships and accountability, and support state and tribal capacity. There are
two new subobjectives under this goal encouraging the regions to (1) use grant
agreements, PPGs and PPAs serving as grant workplans to organize and articulate mutual
C/E priorities and plans; and (2) explore new ways to partner with states using NEPPS
principles.
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3. Foster sound PPG management practices. There are three new objectives under this
goal requesting the regions to: (a) ensure that EPA's Grants Policy Issuance 08-05:
Burden Reduction for State Grants is implemented; (b) work with the states to ensure the
proper management of ULOs, as new policy is established; and (c) build regional and
state capacity to accommodate revisions to state grant workplans and performance
measures.
NEPPS National Guidance FY 2011
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National Environmental Performance Partnership System
FY 2011 National Program Guidance
EPA and states share responsibility for protecting public health and the environment.
Since 1995, EPA and states have been implementing the National Environmental
Performance Partnership System (NEPPS)1, an environmental performance system
designed to improve the efficiency and effectiveness of state environmental programs and
state-EPA partnerships.
Several fundamental concepts underlie NEPPS. Goals, priorities, and strategies should
be based on information about environmental conditions, including consideration of local
conditions and respecting the need for a "level playing field" across the country.
Performance should be evaluated based on results that are achieved in the environment.
By taking full advantage of the unique capacities of EPA and states and leveraging our
collective resources most efficiently and effectively, we can achieve the greatest results.
Performance Partnerships - in which EPA and states and tribes set priorities, design
strategies, and negotiate grant agreements together - are integral to the planning and
implementation of our national environmental programs. To advance the joint planning
that is central to Performance Partnerships, the Office of Congressional and
Intergovernmental Relations (OCIR) is issuing this guidance to the regions in conjunction
with the Agency-wide process for production and review of national program guidance
through the Office of the Chief Financial Officer (OCFO).
This FY 2011 guidance2 sets out overarching goals and objectives for Performance
Partnerships. In January 2010, the Administrator sent a memorandum to all EPA
employees that outlined her top seven priorities. The guidance is aligned with and
directly supports these priorities, and contains specific objectives to advance three of the
priorities through the NEPPS process: Children's Health, Environmental Justice, and
Building Strong State and Tribal Partnerships.
Goals and Objectives for FY 2011
Goal I: Conduct joint strategic planning that reflects Performance Partnership
principles in PPAs/PPGs or comparable EPA-state and EPA-tribal agreements and
grant work plans.
1 See Joint Commitment to Reform Oversight and Create a National Environmental Performance
Partnership System, at http://www.epa.gov/ocir/nepps/policies_guidance.htm.
2 This guidance is a compilation of existing policies and initiatives. It does not impose any legally binding
requirements.
NEPPS National Guidance FY 2011 7
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Objectives
1. Regions should take additional measures to work with states to identify
opportunities for enhanced worksharing, resource and workload flexibility and
phased implementation of program requirements, especially where budget
reductions have negatively affected state programs.
Given the current economic downturn, states are experiencing severe budget shortfalls
and high unemployment. Many state environmental agencies are experiencing severe
budget cuts and will be challenged to maintain core programs. In this climate, it is
particularly important to emphasize EPA's willingness to work collaboratively with the
states to develop agreements that capture achievable priorities and commitments and help
address state-federal workload overall.
2. Whenever possible, include all the essential elements in PPAs as identified by a
joint EPA-state workgroup in 2004. Mutual state-EPA priorities should be clearly
articulated and distinguished from state-specific and EPA-specific priorities.
There is not a list of mandatory PPA elements. The most effective PPAs, however,
contain several key elements, as set out by a joint EPA-state work group3 in 2004. These
recommended "essential elements" are listed below. [Note: the number in parentheses
after each essential element denotes the percentage of 2008 PPAs that include that
particular element.]
A description of environmental conditions (24%), priorities (88%), and strategies
(79%);
• Performance measures for evaluating environmental progress (50%);
• A process for joint evaluation on how well the PPA is working and an agreement
to implement any needed improvements that are identified (76%);
A description of the structure/process for mutual accountability, including a clear
definition of roles of each party in carrying out the PPA (76%) and an overview
of how resources will be deployed to accomplish the work (41%); and
• A description of how the priorities in the PPA align with those in EPA Strategic
Plan (53%), and/or the state's own strategic (or other related) plan (71%).
Incorporating each of these elements still allows for a wide range of PPAs, although it
may not be feasible for some PPAs to include all the essential elements. The essential
elements may be covered at different levels of detail depending on what is appropriate for
a particular state. There is also room for variation in content (e.g., PPAs that cover all
programs or just a few programs), as well as in organizational structure and format. In
3 State-EPA Planning Alignment/PPA Work Group, now the Partnership and Performance Work Group.
NEPPS National Guidance FY 2011
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order to clarify the role of each party in carrying out the PPA, to the extent possible, both
state and EPA commitments should be delineated.
With these elements, the PPA can become the unifying agreement that sets out the
relationship between EPA and the state and how they expect to work together to
implement the strategies for achieving the goals and objectives in the agreement.
3. Identify collaborations to improve state-EPA business processes and promote
continuous improvement (for example, by applying LEAN, Kaizen, Value Stream
Mapping (VSM) and Six Sigma techniques).
Continuous improvement is one of the core principles of the original NEPPS agreement.
Viewing the state-EPA working relationship through that particular lens has led to proven
improvements in the quality and efficiency of delivered services and programs. LEAN,
Kaizen, VSM, and Six Sigma techniques have been successfully used to improve state
and EPA programs and processes such as air and water permitting, Brownfields, Leaking
Underground Storage Tanks, and Wetlands. Regions are asked to review the areas of
federal-state interaction and identify collaborations to improve efficiency and eliminate
waste, using the appropriate business process improvement techniques. Regions should
review and apply successful state-regional LEAN exercises, as appropriate.
4. Advance Performance Partnership principles through effective collaboration
with states on policy and implementation issues, making full use of the issue
resolution process to ensure that requests for flexibility and innovation are
addressed and resolved at the highest levels (i.e., RA, AA, DA).
The NEPPS issue resolution process (which includes various informal and formal steps
culminating in a final decision by the Deputy Administrator) for raising and resolving
broad policy and implementation issues related to Performance Partnerships is outlined in
EPA's Best Practices Guide for Performance Partnership Grants4. This is especially
appropriate in situations involving denial of a state's request for flexibility and innovation
in a PPG.
5. Explain and advocate for the use of PPAs and PPGs (including PPAs serving as
PPG workplans) as tools for implementing Performance Partnership principles
within EPA and with states and tribes.
PPAs and PPGs are valuable tools enabling states to gain greater flexibility in how they
use and manage the funds they receive from EPA. PPGs allow states to direct resources
where they are needed most, implement strategies that cut across program boundaries, or
try other innovative solutions to environmental problems. PPAs are discussed in objective
# 2 above.
4 A direct link to the Guide can be found in the Highlights box on the NEPPS home page at
http://www.epa.gov/ocir/nepps/.
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For instance, states use funds from one program area to address a budget shortfall in
another, and meet cost-share requirements by using overmatch from one program to
cover the match from another. Using PPG flexibility, states hire temporary personnel,
fund emergency activities such as hurricane response, address permit backlogs, and
support staff training and travel. They use PPGs to fund multi-media inspections and
permitting, sector compliance/enforcement initiatives, and data system improvements
such as participating in the National Environmental Data Exchange Network.5
Goal II: Implement the Administrator's priorities through PPAs, PPGs and other
EPA-state and EPA-tribal agreements.
Objectives:
1. Children's health: regions should use the NEPPS process to leverage funds and
activities to advance children's health.
Regional programs must ensure that policies, programs, activities, and standards address
disproportionate risks to children. Opportunities to advance children's health issues
include: sponsoring joint meetings with counterparts in state environmental departments
and health departments to facilitate coordinated actions to better protect children's
environmental health; developing region-wide strategies to focus on addressing critical
children's health issues within each region.
2. Environmental justice: regions should work with states to advance
environmental justice by improving environmental conditions and public health in
minority, low-income and other vulnerable communities.
Regional programs should work with states to advance policies, programs and activities
that address risks to minority, low-income and other vulnerable communities.
Opportunities to advance environmental justice include: developing region-wide
strategies through joint meetings with state counterparts to focus on addressing critical
environmental justice issues, e.g., lead poisoning, asthma, air and water pollution from
CAFOs, and multiple or cumulative exposures to air pollution within each region.
3. States and tribal nations bear important responsibilities for the day-to-day
mission of environmental protection, but they are faced with declining tax revenues
and fiscal challenges. Strong partnerships and accountability are more important
than ever. EPA must do its part to support state and tribal capacity and, through
strengthened oversight, ensure that programs are consistently delivered nationwide.
A. Regions are encouraged to strategically use PPAs to organize and articulate
mutual compliance and enforcement (C/E) priorities, and ensure the alignment of
commitments in PPGs and other categorical grant workplans to achieve those goals.
5 More examples of how states have used PPGs can be found at
http://www.epa.gov/ocir/nepps/speeches_publications.htm.
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The annual planning process with states for C/E is an integral part of state-EPA planning,
and should reflect the shared accountability of EPA and states in protecting the
environment and public health. Historically, C/E has not been consistently included in
the NEPPS planning process. State-EPA C/E commitments were often developed
through a different process and memorialized in separate agreements or workplans.
During the last 5-10 years, a number of regions and states have included C/E plans and
priorities in strategic PPAs and linked them to commitments in PPGs and individual state
grant agreements. Therefore, as a best practice, regions are encouraged to organize and
articulate C/E priorities and commitments through the NEPPS process to achieve more
comprehensive, integrated and flexible work planning, especially during this time of
scarce resources and state budgetary constraints.
Enforcement topics should be incorporated into the overall programmatic discussions
about priorities, resources and annual commitments in developing PPGs, categorical
grant workplans, and PPAs serving as grant workplans. National, regional and state
enforcement priorities should be discussed with the goal of identifying the most
significant sources and the most serious violations. Regions and states should consider
all available options for addressing the most important work within the available
resources, including work sharing, innovative approaches, as well as traditional
compliance and enforcement tools. Grant workplans should include a clear identification
of performance expectations, commitments on targeting, inspection coverage based on
the various media Compliance Monitoring Strategies and the flexibilities within each, and
the need for timely and appropriate enforcement on the most serious violations at
significant sources. Annual commitments should also include corrective actions that have
been identified in programmatic reviews as well as the State Review Framework. Finally,
regions and states should discuss pilots of innovative approaches for addressing less
serious violations that do not directly impact the environment or public health.
B. To support state and tribal capacity, regions are encouraged to explore creative
new ways to partner with states and tribes that will augment the progress made
through NEPPS.
The regions, for example, can extend the Performance Partnership vision and goals to
other agencies that receive EPA funds in order to more fully leverage EPA's resources
and those of other agencies to address environmental priorities, such as agriculture and
public health agencies. In addition, regions can assess the feasibility of developing other
innovative, high-level joint agreements that focus on specific environmental problems
(e.g., climate change, agriculture, mercury).
4. Ensure that the following priorities are included in regional-state planning
discussions (Note: NPM guidance from OAR, OW, OECA, OPPTS, and OSWER
details these priorities with greater specificity):
• Taking Action on Climate Change
• Improving Air Quality
• Assuring the Safety of Chemicals
NEPPS National Guidance FY 2011 11
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• Cleaning Up Our Communities
• Protecting America's Waters
Goal III: Foster programmatically sound and fiscally responsible PPG management
practices.
Objectives:
1. Ensure the timeliness of state grants: it is a priority for the Agency to ensure the
timely award of continuing environmental program (CEP) grant funds.
Delays in awarding PPGs (and other state grants) create a variety of problems that affect
the states' ability to implement programs. It is a priority for the Agency to ensure the
timely award of continuing environmental program (CEP) grant funds.6 This is
particularly important during the economic downturn when many states are experiencing
budget shortfalls and therefore rely heavily on CEP grant funding. The timely award of
state grants continues to be a priority for the Agency. For FY 2011, EPA will issue
additional guidance through an Advice of Allowance Letter or communications from
OGD, and, as appropriate, provide goals and strategies for the timely award of FY 2011
CEP grants.
2. Implement EPA's Grants Policy Issuance 08-05: Burden Reduction for State
Grants (Section C.2 in particular).
This policy codifies and summarizes actions EPA has taken to address major grant-
related issues identified under the Agency's State Reporting Burden Reduction Initiative.
Section C.2 applies to the reporting frequency of each program included in a PPG (see:
Grants Policy Issuance (GPI) 08-05: Burden Reduction for State Grants. In addition, the
ECOS-EPA Burden Reduction Subgroup meets on an ongoing basis to address reductions
in state reporting burdens. Regions are encouraged to incorporate adopted burden
reduction efforts as widely as possible.
3. Build regional and state capacity to accommodate revisions to state grant
workplans and performance measures.
In FY 2011 EPA remains committed to strengthening our oversight and reporting of
results from state grants, not only linking state grant workplan commitments to EPA's
strategic plan, but also enhancing transparency and accountability. EPA and the states
will continue working in FY 2011 to achieve this through two related efforts:
6 All of the CEPs listed in 40 CFR Part 35 Subpart A are subject to the timeliness policy except: Nonpoint
Source Management (Section 319(h)); State Underground Storage Tanks (Section 2007(f)(2)); Pollution
Prevention (Section 6605); Water Quality Cooperative Agreements (Sectionl04(b)(3)); State Wetlands
Development (Section 104(b)(3)); and Water Quality Planning (Sections 205(g) and 205(j)(2), and the
monitoring portion of Water Pollution Control (Section 106).
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State Grant Workplans: The Agency's long-term goal is for EPA and the states to
achieve greater consistency in workplan formats. To achieve that goal, the Office of
Grants and Debarment (OGD) will convene a state/EPA workgroup of grant practitioners
to develop a menu of formats for EPA and states to use when negotiating workplans for
the 14 identified categorical grant programs. In developing these formats, the workgroup
will build upon the results of the FY 2009 State Grant Workplan Pilot.
The formats will be available for use beginning with the FY 2011 grants cycle. In
consultation with the practitioners' workgroup, and recognizing that the formats will need
to be phased in over time, OGD will develop performance metrics to ensure that 100% of
workplans under the 14 categorical grant programs use one of the approved formats by no
later than the FY 2013 grants cycle. If a particular state agency has difficulties under
state law in adopting one of the established formats, OGD will work with the affected
region and NPM to resolve the issue. Please contact Howard Corcoran, OGD, at 202-
564-1903, or Jennifer Bogus, OGD, at 202-564-5294, should you have any questions.
State Grant Performance Measures (formally known as State Grant Template Measures):
The current set of measures flagged as State Grant Template Measures in the Annual
Commitment System (ACS) will be retained for FY 2011 reporting. As in FY 2010, the
use of the template to capture results for these measures is not required. However,
reporting on the results remains the responsibility of the regions and states. The Agency
and members of ECOS have had ongoing discussions as to whether there is utility in
identifying a set of common measures that reflect the primary functional work areas
under each of the 14 categorical grants. Issues that have been raised include how the
Agency would capture and use these measures. In FY 2011, the Agency, in consultation
with ECOS, will evaluate the workplan initiative discussed above and determine whether
it sufficiently enhances transparency and accountability such that developing a common
set of measures is unnecessary. Please contact Margo Padgett, OCFO/OPAA, at 202-
564-1211 should you have any questions.
4. Ensure the proper management of grant unliquidated obligations (ULO).
The Office of Inspector General (OIG) has recommended that EPA designate the
management of unliquidated obligations, including the management of grant unliquidated
obligations, as a weakness under the Federal Managers' Financial Integrity Act. As EPA
develops a policy to address the OIG's concerns, it is important for regions and states to
ensure that PPG funds are efficiently utilized to accomplish the priority environmental
activities identified in grant workplans. The OGD contact for the ULO policy is
Alexandra Raver, who can be reached at (202) 564-5296.
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Appendix A
Grant Programs Eligible for Performance Partnership Grants
Grant Program
Air Pollution Control - CAA 105
Radon Assessment and Mitigation -TSCA 306
Water Pollution Control - CWA 106
Water Nonpoint Source Implementation CWA 319
Wetlands Development Grants Program - CWA 104(b)3
(competitive)
Water Quality Cooperative Agreements - CWA 104(b)3
(competitive)
Public Water System Supervision --SDWA 1443(a)
Underground Injection Control - SDWA 1443(b)
Hazardous Waste Management - SWDA 301 1 (a)
Brownfields Response - CERCLA 128(a)*
Pesticides Program Implementation - FIFRA 23 (a) 1
Lead-Based Paint Activities - TSCA 404(g)
Toxic Substances Compliance Monitoring - TSCA
Pesticides Cooperative Enforcement - FIFRA 23 (a) 1
Environmental Information Exchange Network* -
Authority in EPA Appropriations Acts
Pollution Prevention Initiatives - PPA 6605 (competitive)
Sector Program (compliance/enforcement)* (competitive)
Pesticide Applicator Certification and Training
Indian Environmental General Assistance Program
State Underground Storage Tanks
Required
Match
Greater of MOE
or 40%**
50%
MOE
40%
25%
0%
25%
25%
25%
0%
0%
0%
25%
0%
0%
50%
0%
50%
0%
25%
* Program added to list of grants eligible for PPGs after publication of the Part 35 rule.
** MOE = Maintenance of Effort level.
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