X,      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
          |                    WASHINGTON, D.C. 20460

   ^t PRCrtt0


                                   August 4, 2005

                                                          OSWER Directive 9275.1-16


MEMORANDUM

SUBJECT:   Management of Special Accounts

FROM:      Susan E. Bromm, Director   /s/
             Office of Site Remediation Enforcement (OSRE)

             Michael B. Cook, Director  /s/
             Office of Superfund Remediation & Technology Innovation (OSRTI)

             Lorna M. McAllister, Director  /s/
             Office of Financial Management
             Office of the Chief Financial Officer (OCFO)

TO:          Superfund Division Directors, Regions I - X


PURPOSE

       The purpose of this memorandum is to promote tracking and management of special
account funds used for Superfund cleanups. In response to recommendations of the 120-Day
Study, EPA agreed to issue guidelines to improve the management and use of special accounts.
This memorandum provides a framework for managing special accounts and describes a long-
term process for improved management of and reporting of special account data. An essential
element in the management of special accounts is to determine how funds have, and will, be
used. Managing and tracking the use of special account funds will assist internal management
and facilitate reporting to outside stakeholders. Each EPA Region should provide to EPA
Headquarters certain interim information (as described in this memorandum) on the management
of its special accounts by August 30, 2005.  This submission will provide EPA Headquarters
with the special accounts information that is necessary in order to respond to Congressional,
OMB, and OIG inquiries.

       For the long-term, this memorandum outlines a new framework for entering and
maintaining special account information in  CERCLIS and the development of a Special

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Accounts Management Report (the SAM Report), which is a new reporting tool that will draw
special accounts data from CERCLIS and the Financial Data Warehouse.  Each EPA Region
should provide comments to EPA Headquarters regarding the SAM Report template by August
30, 2005.

FRAMEWORK FOR MANAGING SPECIAL ACCOUNTS

       EPA maintains more than 500 Superfund special accounts, which constitute a significant
source of funding within the Superfund program.  It is essential to maximize the use of these
resources, not only to reserve appropriated resources for Superfund sites that do not have the
benefit of a special account, but also to identify opportunities to return special account resources
to the Trust Fund when they are no longer needed at the site. Although regional efforts to
manage special accounts have been quite successful, there has been no systematic approach for
capturing and reporting decisions concerning the use of special  accounts, or for determining
when special account resources may be returned to the Trust Fund.

       Under current EPA policy, regional staff from the program, counsel, and finance offices
coordinate decision making regarding the establishment, management, and use of special
accounts. The involvement of all three offices is critical to ensure that these settlement proceeds
are used to effectuate cleanup. For example, the program is primarily responsible for
determining when to use a special account to finance cleanup efforts. Counsel is responsible for
ensuring the special account funds are available as a settlement incentive, and that the uses of
such funds are consistent with the agreement terms under which they were received. The finance
office ensures that the funds are available and used in a manner consistent with EPA policy.

REQUEST FOR INTERIM INFORMATION

       While the SAM Report and CERCLIS infrastructure are being established, each EPA
Region should provide interim information on its special accounts so that EPA Headquarters
may respond,  in the short term, to inquiries regarding the use of special accounts.  EPA
Headquarters will  send each EPA Region an Excel spreadsheet with pre-populated account-
specific data for each special account  Each EPA Region should fill in the remaining
information directly onto the spreadsheet for each site and submit the spreadsheets to Bob
Polin, OSRE, by August 30, 2005. Below is a sample of the form that will be provided to each
EPA Region for each special account.

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Interim Special Accounts Information

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Field Name
Special Account Number
EPA Site ID
CERCLIS Site Name
SSID
Language That Defines the Use of the Account
Remaining Account Balance
Amount Retained as Settlement Incentive
Projected Use FY 20062
Projected Use FY 2007
Projected Use beyond FY 2007
Data
Provided by HQ
Provided by HQ
Provided by HQ
Provided by HQ
[To be provided by the Regional Counsels]1
Provided by HQ
[Dollar amount to be provided by the
Regions]
Action:
[CERCLIS code(s)
to be provided by
the Regions]
Action:
[CERCLIS code(s)
to be provided by
the Regions]
Action:
[CERCLIS code(s)
to be provided by
the Regions]
Planned Obligation:
[Dollar amount(s) to
be provided by the
Regions]
Planned Obligation:
[Dollar amount(s) to
be provided by the
Regions]
Planned Obligation:
[Dollar amount(s) to
be provided by the
Regions]
        1  See Paragraphs 55 - 64 of the 2001 Revised Model RD/RA Consent Decree for the model language
regarding the use of special accounts. If the model language was used, simply indicate "Model Language used" in
this field. If the Model Language was not used, please identify in this field any deviations from the model language
regarding the use of special account funds.

        2  For FY 2006, FY 2007 and beyond, Regions should insert each applicable CERCLIS response action
code (e.g. PA, SI, RI, FS, CO (RI/FS), RD, RA, RV, BD (PRP RI/FS), BE (PRP RD), BF (PRP RA), BB (PRP
Removal), SI, OM, etc.) in the "Action" field and should insert the accompanying dollar amount for each activity in
the Planned Obligation field (e.g. "Action: RI/FS" and Planned Obligation "$500,000").

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SPECIAL ACCOUNT DATA MANAGEMENT

       Design of the SAM Report

       The SAM Report is a tool under development that will provide a centralized source for
viewing, via the Web, information about sites with special accounts and for reviewing regional
decisions concerning the use of these accounts.  A draft template, which illustrates the type of
information intended for the report, is attached at the end of this memorandum. Please review
the template for the report for its usefulness and provide any comments by August 30,
2005, to Bob Polin, OSRE.

       By using the SAM Report, and keeping its information updated, each EPA Region will
be able to more quickly determine and explain whether special account resources are available
for use, the purposes for which the resources may be used, and opportunities for reclassification
or transfer of resources back to the Trust Fund.  The SAM Report will also contain data that can
be used to describe how special accounts have been used in support of site cleanup.

       Since most response actions are generally not completed within a year-long period, each
EPA Region should modify its planning practices to update special account status information
regularly and should review the SAM Report at least annually.  To ensure that the SAM Report
will provide up-to-date information and can be used as an effective management tool, each EPA
Region  should consider updating special account information at the following decision points:
(a) creation of a special account, (b) a decision to use the special account funds to finance a
response action (e.g., remedial design, remedial action), (c) creation of a PRP disbursement
account, (d)  disbursement from the special account, (e) certification that the site is construction
complete, (f) reclassification of special account funds,  (g) transfer of special account funds to the
Trust Fund, and/or (h) closure of the special account.3

       Most of the programmatic and financial  information for the SAM Report is currently
available from CERCLIS, IFMS or from reports that the EPA Regions or the Cincinnati Finance
Center can generate.  Other information, such as specific settlement language defining
authorized uses of the special account, will require new input from the EPA Regions.  The
intention is to expand CERCLIS to allow for the entry  of any "new" data that are  not currently
collected through a pre-existing national database.

       CERCLIS Data and the SAM Report

       Planning data for the use of special account resources is one of the most important
elements of the information to be presented in the SAM Report.  Planning information such as
planned start and complete dates, and  planned obligation data that account for the totality of the
special account balance (less payroll and resources to be returned to the Trust Fund) need to be
       3  By the end of fiscal year 2005, EPA Headquarters will provide a memorandum outlining additional
guidelines for reclassification and processes for special account closure.

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entered into CERCLIS and maintained on a regular basis. As part of the annual Regional
workplanning process ("FY 2006 Superfund Response and Enforcement Work Planning," May
31, 2005, OSWER Directive 9200.3-34), OSRTI requested that the EPA Regions enter into
CERCLIS data regarding planned special account obligations for FY 2006 by July 8, 2005.
Regions should consider these data when completing the attached spreadsheets for FY 2006.
Each EPA Region should enter planned obligation data for the use of all available special
account funds for each site for a 10 year period commencing with FY 2006. Due to potential
uncertainties regarding the future use of these funds, EPA Regions should use the ALT planning
code until reimbursable authority for use of these resources is approved.

       Although most information in the SAM Report is already captured in CERCLIS, IFMS,
or other databases, the SAM Report also will contain information that is not currently available
in any database format.  The list below highlights new fields to be created in CERCLIS to collect
this information4:
Draft Data Fields to Be Created in CERCLIS
New CERCLIS Field
Settlement Language that Defines the Use of the Special Account
Date of Last Account Planning Analysis
Amount in Special Account Being Retained as Settlement Incentive
Amount in Special Account that is Currently Unobligated
Amount of Resources and Purposes for Resources to Be Used Beyond 10
Years
Total Amount of Resources Projected to be used for Payroll and Travel
Amount available for Re-classification
Amount available for transfer to the Trust Fund
Explanation of
Requested
Information
Summarize any
differences from the
"model" language
regarding the use of
special account funds.
TBD
TBD
To be downloaded from
Cincinnati Finance
Center database
TBD
TBD
TBD
TBD
       4 The wording of these fields may change and other fields added in order to conform to existing CERCLIS
parameters.  However, this chart identifies the scope of the information tracking that will be added to CERCLIS.

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       EPA Headquarters intends to work closely with the Superfund Information Management
Coordinators and Superfund Budget Coordinators over the next several months to define more
precisely the CERCLIS data requirements for these new fields.

SCHEDULE

       EPA Headquarters' goal is to create the new special accounts tracking fields in CERCLIS
and finalize the format of, and access to, the SAM Report by December 31, 2005.  Upon
integration of the new fields, EPA Headquarters will notify the EPA Regions and ask that they
populate the new fields by March 31, 2006.  The following schedule reflects the plans for this
entire project:
Implementation Schedule
Date
August 30, 2005
August 30, 2005
December 3 1,2005
March 3 1,2006
May 3 1,2006
Action
EPA Regions return completed forms to Bob Polin, OSRE
EPA Regions provide comments on SAM Report template to Bob
Polin, OSRE
EPA Headquarters completes development of CERCLIS fields and
SAM Report
EPA Regions complete entry of remaining data into CERCLIS
EPA can generate a SAM Report for each Special Account
 CONCLUSION

       Active planning for the use of special account funds throughout the life-cycle of a
Superfund site will promote the effective management of special accounts. By establishing the
SAM Report and regularly updating the underlying information it contains, EPA will be able to
more actively and effectively (a) manage each special account, (b) manage and assess the special
accounts program as a whole, (c) generate insightful reports and (d) provide special accounts
information to other interested parties.

PURPOSE AND USE OF THIS DOCUMENT

       This guidance is a reference document for issues involving management of special
accounts and should be read in conjunction with all prior special account guidance documents.
This guidance and any internal procedures adopted as a result of its implementation is intended
exclusively as guidance for employees of the EPA. It is not intended and cannot be relied upon
to create any rights, substantive or procedural, enforceable by any party.  EPA reserves the right
to act at variance with this document and change it at any time without public notice.

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      If you have any questions related to issues presented in this guidance, please contact Bob
Polin, OSRE (202-564-4292), Joan Harrigan-Farrelly, OSRTI (703-603-8749), Leslie Kelley-
Huffman, OCFO (policy) (202-564-4805), or Connie Ely, OCFO (reporting) (513-487-2075).
CC:    Office of Regional Counsel Superfund Branch Chiefs
       Regional CERCLA Program Branch Chiefs
       Regional Finance Office Branch Chiefs
       OSRTI Branch Chiefs
       OCFO Branch Chiefs
       OSRE Branch Chiefs

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           ATTACHMENT 1
Special Accounts Management Report Template

A.
1.
2.
3.
B.
1.
2.
3.
C.
1.
2.
3.
4.
D.
1.
2.
3.
4.
5.
6.
REGION
SPECIAL ACCOUNT SITE SUMMARY
Account Information
Special Account Name:
Special Account
#:
Superfund Site Name:
Language that Defines the Use of the
Account:
Date Established:
EPA SSID:
Site
ID:
Source Document:
Deposit Information
Deposits (non-interest)
Interest Deposits
(annual)
Total Deposits
Date(s):
Date(s):
Amount(s):
Amount(s):
Amount:
Historic Use Of Special Account
Action(s) Funded by
Account
Total Amount Net
Obligated:
Reclassification(s) :
Transfer(s) to Trust
Fund:
CERCLIS
Action:
Net Amount Obligated:
Total Unliquidated Obligations:
Amount:
Amount:
Date:
Date:
Projected Uses Of Special Account (should total to Account Balance)
Date of Last Account Planning Analysis:
Amount to be Retained as Settlement Incentive for PRPs:
Account Balance (including interest and commitments):
Projected CERCLIS
Actions (each year
through 10 years)
Projected Future Use of
Account Beyond 10
Years
Action:
Action:
OU: Start Completion Planned Amounts:
Date: Date: Obligation
BFYs:
Amount:
Projected Total Amount to be Used for Payroll and Site Travel:

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REGION
SPECIAL ACCOUNT SITE SUMMARY
7.
8.
9.
E.
1.
F.
1.
Projected Amount
Available for
Reclassification:
Projected Amount
Available for Transfer to
the Trust Fund:
Projected Date for Reclassification:
Projected Date for Transfer:
Projected Date of Closure of Special Account:
Status of Clean-Up
Clean-Up Status by OU OU: Cleanup Status:
Contact
Name:
Title/Office:
Telephone:

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