OFFICE OF
INSPECTOR GENERAL
Semiannual
Report to Congress
October 1, 2013-March 31, 2014
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May 2014
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Index of Reporting Requirements
Inspector General Act of 1978, as amended
Requirement
Section 4(a)(2)
Section 5(a)(1)
Section 5(a)(2)
Section 5(a)(3)
Section 5(a)(4)
Section 5(a)(5)
Section 5(a)(6)
Section 5(a)(7)
Section 5(a)(8)
Section 5(a)(9)
Section 5(a)(10)
Section 5(a)(11)
Section 5(a)(12)
Section 5(a)(14-16)
Subject
Review of legislation and regulations
Significant problems, abuses and deficiencies
Significant recommendations for corrective action
Reports with corrective action not completed
Matters referred to prosecutive authorities
Information or assistance refused
List of reports issued
Summaries of significant reports
Audit, inspection and evaluation reports—questioned costs
Audit, inspection and evaluation reports—funds to be put to better use
Prior audit, inspection and evaluation reports unresolved
Significant revised management decisions
Significant management decisions with which OIG disagreed
Peer reviews conducted
Pages
33
9-32
10-26
50
9, 27-32, 35, 39
6-8
40-42
10-26
35-37, 40-42
35-37, 40-42
36-37, 43-49
None
None
51
Abbreviations
CIA
CSB
DCAA
EPA
FBI
FY
OHS
OIG
OMB
ROI
SES
Central Intelligence Agency
U.S. Chemical Safety and Hazard Investigation Board
Defense Contract Audit Agency
U.S. Environmental Protection Agency
Federal Bureau of Investigation
Fiscal Year
Office of Homeland Security
Office of Inspector General
Office of Management and Budget
Return on Investment
Senior Executive Service
Hotline
To report fraud, waste or abuse, contact us
through one of the following methods:
email: OIG Hotline@.epa.qov
phone: 1-888-546-8740
fax: 1-202-566-2599
online: http://www.epa.qov/oiq/hotline.htm
write: EPA Inspector General Hotline
1200 Pennsylvania Avenue, NW
Mailcode2431T
Washington, DC 20460
Suggestions for Audits or Evaluations
To make suggestions for audits or evaluations,
contact us through one of the following methods:
email:
phone:
fax:
online:
write:
OIG WEBCOMMENTS@.epa.qov
1-202-566-2391
1-202-566-2599
http://www.epa.qov/oiq/contact.htmltfFull
Info
EPA Inspector General
1200 Pennsylvania Avenue, NW
Mailcode2410T
Washington, DC 20460
Printed on 100 percent recycled paper (minimum 50% postconsumer)
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Message to Congress
During this semiannual reporting period, in the course of our work, the Office of
Inspector General (OIG) encountered unique circumstances that led us in some
unforeseen directions.
Sometimes one path of inquiry sent us down another. For instance, our earlier
investigation of the various frauds committed by John C. Beale, a former
U.S. Environmental Protection Agency (EPA) Senior Policy Advisor, exposed
internal control weaknesses within the agency. As a result, this period we
performed a pair of audits examining pay and travel issues—the first in a series
with more to come. As another example, as part of a broader audit of warehouse
spaces, we discovered that an EPA facility in Blue Ash, Ohio, was being used to
store more than 6 years' worth of excess paper-based publications.
Consequently, we issued an early warning report suggesting that the EPA could
put to better use the $1.5 million in annual costs.
Sometimes our efforts to root out fraud, waste and abuse were thwarted by impediments from the agency.
The most significant of these, which is ongoing, was the refusal of the EPA's Office of Homeland Security,
a unit established by the Office of the Administrator to handle national security issues, to cede or share
jurisdiction on allegations of employee misconduct and other matters for which the OIG is charged
responsibility under the Inspector General Act. On other fronts, an Office of General Counsel attorney
refused to speak with the auditors examining agencywide pay issues, creating a potential gap in
information. And auditors who requested financial statements for two pesticide funds did not receive
sufficient and timely information.
Arthur A. Elkins Jr.
But even absent a change in direction or unexpected hurdles, every OIG review is a journey to the
unknown. We adhere to specified professional standards for all audits, evaluations and investigations to
reach conclusions. During this period, we looked at issues requested by Congress; areas where the agency
can potentially achieve cost savings and improve its business practices; and those in which the EPA can
improve human health, safety and the environment.
Congressionally Requested Reviews
As a result of a congressional request, we looked at how the EPA conducts research that involves human
subjects. We found that the agency followed applicable regulations when it exposed 81 human study
subjects to concentrated airborne particles or diesel exhaust emissions. Still, we concluded that the EPA
can enhance its human studies by improving how it obtains approval for studies, communicates risk to
people who participate in those studies, and addresses adverse events in agency guidance.
Pursuant to another congressional request, we looked into a complaint from a homeowner in Texas
regarding the drinking water well associated with his home becoming contaminated with natural gas. We
concluded that the EPA Region 6's issuance of a Safe Drinking Water Act emergency order to the Range
Resources Gas Drilling Company, instructing it to investigate the groundwater and soil near its gas well
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Semiannual Report to Congress October 1, 2013—March 31, 2014
and the complainant's home, conformed to agency guidelines, regulations and policy. We recommended
that Region 6 collect and evaluate the testing results provided by Range Resources and determine whether
an "imminent and substantial endangerment" still existed.
Potential Cost Savings and Areas for Improved Business Practices
In addition to our finding regarding the EPA's inventory of excess publications at its warehouse in Blue
Ash, we identified other opportunities for costs savings and improved business practices, such as:
• The EPA collected $94,109 in ineligible costs paid to the California Air Resources Board under a
grant and may be able to recover an additional $8.77 million.
• The EPA did not provide effective oversight to ensure that purchase card holders and approving
officials complied with internal control procedures, resulting in $79,254 of prohibited, improper
and erroneous payments.
• Our review of classified documents found that the EPA's national security information could be
improperly classified without improved procedures.
• The EPA has not created formal policies and procedures for several processes that contribute to
safeguarding Personally Identifiable Information.
Human Health, Safety and the Environment
The U.S. Virgin Islands did not monitor beaches on St. Thomas and St. John for pathogens for the 2-week
period of February 3-16, 2014, due to contract issues. Based on a request from the EPA's Region 2, the
OIG evaluated the U.S. Virgin Islands' performance under a $303,000 EPA grant. As a result of our
review, the U.S. Virgin Islands restarted beach sampling on February 17, 2014, and EPA Region 2 has
begun working with the U.S. territory to address beach monitoring program deficiencies.
As a result of another investigation, a New York state laboratory that performed chemical analysis of
water and soil samples was fined $150,000 for falsifying more than 3,300 results. In another case, a
North Carolina laboratory employee entered into a $38,500 civil settlement to settle allegations related to
improperly conducting air sampling tests.
The OIG's mission, and our promise, is to ensure that the EPA and OIG remain responsible stewards of
taxpayer dollars, striving to add value, transparency and assistance to the agency in safeguarding the
health of the American people and protecting the environment.
To learn more about our accomplishments during this reporting period, read on.
Arthur A. Elkins Jr.
Inspector General
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Semiannual Report to Congress October 1, 2013—March 31, 2014
Table of Contents
About EPA and Its Office of Inspector General 1
Furthering EPA's Themes 2
Scoreboard of Results 4
Impediments to OIG Efforts 6
Significant OIG Activity 9
Beale Gets Prison Term; Additional Reviews Conducted 9
Congressionally Requested Reviews Conducted 12
Potential Cost Savings Identified 14
Other Human Health and Environment Issues 19
Agency Business Practices and Accountability 22
I nvestigations 27
Legislation and Regulations Reviewed 33
U.S. Chemical Safety and Hazard Investigation Board 34
Statistical Data 35
Profile of Activities and Results 35
Audit, Inspection and Evaluation Report Resolution 36
Hotline Activity 38
Summary of Investigative Results 39
Appendices 40
Appendix 1—Reports Issued 40
Appendix 2—Reports Issued Without Management Decisions 43
Appendix 3—Reports With Corrective Action Not Completed 50
Appendix 4—Peer Reviews Conducted 51
Appendix 5—OIG Mailing Addresses and Telephone Numbers 52
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
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, the 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 Office of Inspector General
The Office of Inspector General (OIG), established by the Inspector General Act of 1978,
as amended, 5 U.S.C. App. 3, is an independent office of the EPA that detects and
prevents fraud, waste and abuse to help the agency protect human health and the
environment more efficiently and cost effectively. OIG staff are located at headquarters
in Washington, B.C.; at the EPA's 10 regional offices; and at other EPA locations,
including Research Triangle Park, North Carolina, and Cincinnati, Ohio. The EPA
Inspector General also serves as the Inspector General for the U.S. Chemical Safety and
Hazard Investigation Board (CSB).
Our vision, mission and goals are as follows:
Be the best in public service and oversight for a better environment tomorrow.
Mission
Promote economy, efficiency, effectiveness, and prevent and detect fraud,
waste, and abuse through independent oversight of the programs and
operations of the EPA and CSB.
1. Contribute to improved human health, safety, and environment.
2. Contribute to improved EPA and CSB business practices and accountability.
3. Be responsible stewards of taxpayer dollars.
4. Be the best in government service.
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Furthering EPA's Themes
When conducting our audit and evaluation work during the first half of fiscal year (FY) 2014, we took into
account the EPA's seven themes for meeting the challenges ahead. The table below show how our audit
and evaluation reports aligned with each of the agency's themes so that we could better enable the EPA to
carry out its mission of protecting human health and the environment. These themes were set by EPA
Administrator Gina McCarthy. Some reports addressed more than one theme.
OIG-lssued Reports Issued During Semiannual Reporting Period by Theme
OIG Report
Environmental Benefits Being
Considered in Award of Great
Lakes Grants
EPA Does Not Adequately Follow
National Security Information
Classification Standards
The State of Colorado Did Not
Fully Assure That Funds
Intended to Treat Mining Wastes
and Remove Contaminants from
Water Were Effectively Spent
Fiscal Year 2013 Federal
Information Security
Management Act Report: Status
of EPA's Computer Security
Program
Early Warning Report: Internal
Controls and Management
Actions Concerning John C.
Beale Pay Issues
Early Warning Report: Internal
Controls and Management
Actions Concerning John C.
Beale's Travel
Audit of EPA's Fiscal 2013 and
2012 Consolidated Financial
Statements
Dozier Technologies, Inc. Failed
to Comply With Financial and
Management Requirements of Its
Support Services Contract
Fiscal Years 201 2 and 2011
(Restated) Financial Statements
for the Pesticides Reregistration
and Expedited Processing Fund
Fiscal Years 2012 and 201 1
(Restated) Financial Statements
for the Pesticide Registration
Fund
Response to Congressional
Inquiry Regarding the EPA's
Emergency Order to the Range
Resources Gas Drilling Company
Report
Number
14-P-0004
14-P-0017
14-R-0032
14-P-0033
14-P-0036
14-P-0037
14-1-0039
14-4-0040
14-1-0041
14-1-0042
14-P-0044
Making a
Visible
Difference in
Communities
Across the
Country
X
X
Addressing
Climate
Change and
Improving
Air Quality
Taking
Action on
Toxics and
Chemical
Activity
X
Protecting
Water:
A Precious,
Limited
Resource
X
X
X
Launching a
New Era of
State, Tribal
and Local
Partnerships
X
Embracing
EPA as a High
Performing
Organization
X
X
X
X
X
X
X
X
Working
Toward a
Sustainable
Future
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
OIG Report
Audit of American Recovery and
Reinvestment Act Cooperative
Agreement 2A-OOE85701
Awarded to the Greater Lansing
Area Clean Cities
Internal Controls Needed to
Control Costs of Emergency and
Rapid Response Services
Contracts, as Exemplified in
Region 6
EPA Needs to Improve
Safeguards for Personally
Identifiable Information
Complaints Regarding Debris
Management at the West, Texas,
Fertilizer Plant Explosion Have
Been Addressed
Ineffective Oversight of Purchase
Cards Results in Inappropriate
Purchases at EPA
EPA Did Not Conduct Thorough
Biennial User Fee Reviews
Unless California Air Resources
Board Fully Complies With Laws
and Regulations, Emission
Reductions and Human Health
Benefits Are Unknown
National Association of State
Departments of Agriculture
Research Foundation Needs to
Comply With Certain Federal
Requirements and EPA Award
Conditions to Ensure the
Success of Pesticide Safety
Education Programs
Early Warning Report: National
Service Center for Environmental
Publications in Blue Ash, Ohio,
Spent $1 .5 Million to Store
Excess Publications
EPA's Information Systems and
Data Are at Risk Due to
Insufficient Training of Personnel
With Significant Information
Security Responsibilities
EPA Needs to Improve
Management of the Cross-Media
Electronic Reporting Regulation
Program in Order to Strengthen
Protection of Human Health and
the Environment
Improvements to EPA Policies
and Guidance Could Enhance
Protection of Human Study
Subjects
Quick Reaction Report: EPA
Oversight Needed to Ensure
Beach Safety in U.S. Virgin
Islands
Report
Number
14-R-0088
14-P-0109
14-P-0122
14-P-0123
14-P-0128
14-P-0129
14-R-0130
14-P-0131
14-P-0132
14-P-0142
14-P-0143
14-P-0154
14-P-0155
Making a
Visible
Difference in
Communities
Across the
Country
X
X
X
Addressing
Climate
Change and
Improving
Air Quality
X
X
X
Taking
Action on
Toxics and
Chemical
Activity
X
X
Protecting
Water:
A Precious,
Limited
Resource
X
Launching a
New Era of
State, Tribal
and Local
Partnerships
X
Embracing
EPA as a High
Performing
Organization
X
X
X
X
X
X
X
X
Working
Toward a
Sustainable
Future
X
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Scoreboard of Results
Scoreboard of OIG FY 2014 Performance Results (First Half)
Compared to FY 2014 Annual Performance Goal Targets
Our work is designed to help the EPA reduce risk, improve practices and program operations, and save
taxpayer dollars so that the agency can better protect the environment. The information below shows the
taxpayers' return on investment for the work performed by the EPA OIG during the first half of FY 2014.
All results reported in FY 2014, from current and prior years' work, are based on the annual performance
goals and plans established through implementation of the Government Performance and Results Act.
Annual Performance Goal 1:
Environmental and business outcome actions taken or realized by the EPA (based on OIG recommendations)
Target: 248 (adjusted)
Reported: 92
(37. 10% of goal)
Supporting measures
84 Environmental and management actions implemented or improvements made
7 Critical congressional and public concerns addressed
1 Legislative or regulatory change made
Annual Performance Goal 2:
OIG environmental and business output recommendations, awareness briefing or testimony (for agency action)
Target: 687 (adjusted)
Reported: 369
(53.71% of goal)
Supporting measures
296 Environmental and management recommendations or referrals for action
1 1 Environmental and management certifications, verifications and validations
6 Environmental and management risks and vulnerabilities identified
56 External awareness briefings, training or testimony given
Annual Performance Goal 3:
Monetary return on investment (ROI) - potential monetary ROI as percentage (125%) of budget
Target: 125% ROI
Reported: $69.8 million*
(102% ROI)
Supporting measures (dollars in millions)
$39.31 Questioned costs
$28.11 Recommended efficiencies, costs saved
$2.44 Fines, penalties, settlements and restitutions
Annual Performance Goal 4:
Criminal, civil and administrative actions reducing risk or loss/operational integrity
Target: 125
Reported: 86
(68.80% of goal)
Supporting measures
10 Criminal convictions
24 Indictments, informations and complaints
1 Civil action
27 Administrative actions (other than debarments or suspensions)
1 8 Suspension of debarment actions
6 Allegations disproved
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Semiannual Report to Congress October 1, 2013—March 31, 2014
Other (no targets established)
Savings and recommendations sustained from current and prior periods:
• $6.4 million in questioned costs sustained (17% of costs questioned)
• $0.18 million in cost efficiencies sustained or realized (21% of cost efficiencies claimed)
• 138 recommendations sustained (65% of recommendations issued)
Total reports issued: 156
• 26 reports issued by OIG
• 130 issued by Single Auditors
American Recovery and Reinvestment Act of 2009 Activity Results - Cumulative from 2/09 through 3/14
Recovery Act funds expired on 9/30/12 but OIG oversight work continued during FY 2014
• 59 Recovery Act reports issued
• 176 Recovery Act awareness briefings/outreach sessions
• 97 Recovery Act complaints received
• $61.846 million in potential monetary benefits (e.g., questioned costs, fines, savings, etc.)
Sources: OIG Performance Measurement and Results System and Inspector General Enterprise Management System.
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Semiannual Report to Congress October 1, 2013—March 31, 2014
Impediments to OIG Efforts
In August 2009, then EPA Administrator Lisa P. Jackson issued an all-hands
memorandum stressing the need for agency employees to give full cooperation to the
OIG. In July 2013, the Inspector General asked EPA senior leadership to issue a new
all-hands memorandum stressing the need for employees to cooperate with the OIG.
The OIG was assured that this new memorandum would soon be issued. To date, a new
memorandum has not been issued, and instances of agency failure to cooperate with the
OIG continue to occur. Examples follow.
Office of Homeland Security
The OIG has made numerous attempts to work collaboratively on matters of mutual concern
with the EPA's Office of Homeland Security (OHS) on employee misconduct, threats and
intrusions into EPA computer networks and systems. As highlighted below, however, the
OIG has encountered resistance and a lack of cooperation from OHS.
• In 2012, OHS entered into an agreement with the Federal Bureau of Investigation
(FBI) whereby OHS is designated as the agency's single point of contact on
certain EPA investigations. The agreement was made without OIG input or
knowledge. As a consequence, OHS has not informed the OIG of certain
employee misconduct cases that fall within OIG investigative jurisdiction. For
example, we learned in one case in mid-2013 that OHS had been conducting an
investigation in coordination with the FBI concerning alleged misconduct of an
EPA employee. OHS failed to notify or coordinate with the OIG about it, and the
OIG only became aware of the case through its own contact with the FBI.
• OHS has attempted to prevent agency employees from communicating with the
OIG by employing nondisclosure agreements. In one case, the OIG learned that
OHS had certain agency employees sign "nondisclosure agreements" in
June 2013 that directed the employees not to disclose information to anyone,
including the OIG.
• The OIG learned of a potential threat to the EPA from a report shared by the
U.S. Secret Service. The report apparently had been prepared by the Secret Service
at the request of OHS in July 2013. The potential threat information came from an
individual with an extensive and violent criminal history, including weapons and
drug charges. OHS had not shared this important information with the OIG or with
agency security officials. Once the information was brought to the OIG's attention,
the OIG immediately notified the Security Management Division and the
Administrator's protective detail, and interviewed the subject.
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Semiannual Report to Congress October 1, 2013—March 31, 2014
As recent tragic events demonstrate, it is imperative that the OIG and OHS work
collaboratively on threat-related information. The failure to collaborate could not only result
in the failure to thwart a potential attack on an EPA employee or facility, but could place
OIG agents in high risk and hazardous situations.
Office of the Chief Financial Officer
During the financial statement audits of the FYs 2013 and 2012 Pesticide Reregistration
and Expedited Processing Fund and Pesticide Registration Fund, the OIG encountered
several impediments to obtaining information from the agency and completing audits in a
timely manner. The Office of the Chief Financial Officer's Office of Financial
Management made a decision at the start of the audit, in February 2014, not to provide
the OIG with financial statements. Officials said their purpose was to streamline the
financial statement preparation process by eliminating separate financial statements for
the two funds. In lieu of the statements, they provided a financial summary with no
support explaining how the figures were derived. The OIG made several inquiries with
the Office of Financial Management regarding the information provided, including
requests for further information, and questioning whether additional information was
forthcoming. Subsequently, the Office of Financial Management started to provide
information on a piecemeal basis. However, most of that information provided no value
to the audits and did not support the financial summaries for the two funds. The OIG also
experienced delays regarding the Office of Financial Management's responses to our
inquiries throughout the audit.
During our review of internal controls subsequent to the investigation of the John C.
Beale matter, it took approximately 3 months to obtain information on time and
attendance as well as computer usage. This wait delayed the completion of various audits
undertaken in response to congressional requests. In particular, the Office of the Chief
Financial Officer provided four different reports on pay issues, each of which the OIG
found to have problems regarding accuracy and completeness.
Office of Chemical Safety and Pollution Prevention
During the financial statement audits of the FYs 2013 and 2012 Pesticide Reregistration
and Expedited Processing Fund and Pesticide Registration Fund, the OIG also
experienced significant delays in obtaining supporting documentation and responses to
our inquiries from the Office of Chemical Safety and Pollution Prevention's Office of
Pesticide Programs. The Office of Pesticide Programs did not have documentation readily
available for us to complete our collection sample testing. Further, there were
disagreements between the Office of Financial Management and the Office of Pesticide
Programs regarding who should provide information to us for various matters, which
caused delays in the OIG obtaining the information.
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Semiannual Report to Congress October 1, 2013—March 31, 2014
Office of General Counsel
During our review of internal controls subsequent to the John C. Beale investigation, an
EPA Office of General Counsel staff attorney involved with the Beale matter declined to
be interviewed, as is required under Section 6(a) of the Inspector General Act. To our
knowledge, the agency has not taken any action with respect to this attorney.
As a result of this refusal, we were limited in our ability to determine the Office of
General Counsel's involvement in, knowledge of, and actions taken related to the Beale
matter. For example, the timing and extent of the Office of General Counsel's
involvement in contacting the EPA's OHS is unknown.
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Significant OIG Activity
Beale Gets Prison Term; Additional Reviews Conducted
John C. Beale
John C. Beale Sentenced to 32 Months in Prison for Multiple Frauds
John C. Beale, a former Senior Policy Advisor for the EPA, was sentenced on
December 18, 2013, to serve 32 months in prison following a plea agreement in
which he admitted perpetrating multiple frauds to avoid performing his EPA job
while still being paid. Beale also was sentenced to pay $886,186 in restitution
and a forfeiture judgment of $507,207. He will serve 2 years of
probation upon release from prison.
"Today's sentencing closes the sordid chapter of John Beale's numerous and
egregious fraudulent activities perpetrated against the federal government
over a very long period of time," said EPA Inspector General Arthur A.
Elkins Jr. on the day of the sentencing. "While this chapter has ended, we
have started a new one in which the Office of Inspector General is actively
looking at the EPA's sloppy internal controls and management actions that
enabled Mr. Beale's frauds to occur."
Beale was employed by the EPA from 1989 until April 30, 2013. He was assigned to the
Office of Air and Radiation. For much of his time at the EPA, Beale was a Senior Policy
Advisor. His duties included assisting in the planning, policy implementation, direction
and control of EPA programs, and he attended international conferences in foreign
countries. In August 2000, Beale was promoted to a senior-level employee, making him
among the highest-paid, non-elected federal government employees. For more than a
dozen years, Beale collected pay from the EPA while claiming he was out of the office
working on a project for the Central Intelligence Agency (CIA) as well as other efforts.
In fact, Beale was not working for the CIA or the EPA but was at home attending to
personal business. Over a 13-year period, Beale was absent from his EPA duties for about
2!/2 years but drew a salary and benefits.
Beale continued to receive a 25-percent retention bonus for 10 years after the bonus expired.
In September 2011, a retirement party was held for Beale, but a year later an EPA manager
discovered that Beale was still receiving a paycheck. Beale also claimed he needed a
reserved parking space at the EPA, at a total cost of about $8,000, due to the malaria he said
he contracted while serving in the U.S. Army in Vietnam, but Beale never served in Vietnam
or contracted malaria. Beale also received travel expenses for research that could have been
done at his EPA office, and he inappropriately traveled first class and stayed at hotels that far
exceeded allowed government lodging rates.
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Semiannual Report to Congress October 1, 2013—March 31, 2014
OIG Leaders Testify Before Congress on John C. Beale Matter
EPA OIG Inspector General Elkins and Patrick Sullivan, the Assistant Inspector
General for Investigations, both testified on October 1, 2013, before the
U.S. House of Representatives' Committee on Oversight and Government
Reform regarding the Beale case.
"Once my office learned about the serious allegations made against Mr. Beale, the OIG's
Office of Investigations immediately launched and quickly completed a successful
investigation of what you will certainly agree to be an egregious and almost unbelievable
case," Elkins told the committee members.
Sullivan told the committee that the OIG investigation had included interviews of more
than 40 individuals and the examination of thousands of documents. He went into
extensive detail on the various improprieties that occurred, and noted that "The Office of
Investigations continues to determine the extent of potential administrative misconduct of
other senior EPA employees whose failure to exercise due diligence allowed this fraud
scheme to occur and continue unchecked for as long as it did."
In addition, both Sullivan and Elkins pointed out that the OIG had started audit work to
research underlying causes and internal control weaknesses at the EPA that enabled Beale
to perpetuate his fraud for an extended period of time. "As a result of this investigation,
the OIG's Office of Audit has mobilized to aggressively assess the various internal
control issues at the EPA that allowed this highly troubling scenario to occur," Elkins
told the committee members. During the semiannual reporting period, the OIG issued two
early warning reports addressing internal control weaknesses, as discussed below.
Audit Report Notes Internal Control Issues Concerning
John C. Beale's Pay
An OIG early warning report issued in December 2013 at the request of a
member of the U.S. Senate's Committee on Environment and Public Works
found that the fraud committed by Beale was enabled by ineffective internal
controls and a lack of management attention at the EPA.
Internal controls that the EPA had in place did not identify and/or prevent abuses related to:
• Retention bonuses.
• Pay in excess of statutory limits.
• Time and attendance.
Agency managers did not take timely, effective action to address Beale's retention bonus
and pay in excess of statutory limits even though the managers were presented with these
10
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Semiannual Report to Congress October 1, 2013—March 31, 2014
issues in July 2010. Management said they had believed that Beale's pay issues were an
administrative matter they did not consider a priority to address. The EPA's insufficient
internal controls over timekeeping facilitated Beale's time and attendance abuses.
In response to our report, the agency identified internal control improvements that could
be made. These improvements included modification to the time-and-attendance system
to ensure managers approve individual employee timecards, quarterly review of time-
and-attendance records to confirm time is being entered and approved properly, and a
quarterly review to determine whether an employee is receiving a retention bonus or has
been paid over the statutory pay cap.
(Report No. 14-P-0036, Early Warning Report: Internal Controls and Management
Actions Concerning John C. Beale 's Pay Issues, December 11, 2013)
Audit Report Notes Issues Related to John C. Beale's Travel
Another OIG early warning report issued at the request of a member of the
U.S. Senate's Committee on Environment and Public Works noted that a lack of
management oversight and weak internal controls enabled Beale's travel abuse.
Beale's travel abuse included using premium (first) class travel, incurring expenses above
per diem amounts, and charging questionable travel and transportation costs.
Contributing factors to the abuse were limited review of vouchers or receipts, questions
raised about Beale's travel being dismissed, expenses not being questioned because
Beale's reviewing official was a peer, and concern that Beale's behavior and travel
expenses were supported by another senior executive.
In response to our report, the agency identified internal control improvements that could
be made to prevent or detect travel-related abuses. The agency noted that, since 2012,
vouchers for travel other than coach must include an approved waiver and 100-percent
review before payment. Effective November 2013, the EPA indicated that eligibility
regarding medical documentation supporting premium class travel waivers is to be
confirmed. Starting in the second quarter of FY 2014, the agency said second line
supervisors are to approve lodging amounts that exceed a designated percentage. Also,
management indicated that by February 2014 internal control assessments would be
completed for travel in the areas of premium class travel above the government rate travel
reimbursement and executive travel approvals.
(Report No. 14-P-0037, Early Warning Report: Internal Controls and Management
Actions Concerning John C. Beale's Travel, December 11, 2013)
11
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Congressionally Requested Reviews Conducted
An EPA human
subjects air pollution
test chamber.
(EPA OIG photo)
In addition to the two reports regarding John C. Beale, the OIG issued two other reports
in response to congressional requests during the semiannual reporting period.
Improvements Could Enhance Protection of Human Study Subjects
The EPA can enhance its human studies by improving how it obtains approval
for studies, communicates risk to people who participate in EPA studies, and
addresses adverse events in EPA guidance.
The EPA must follow applicable regulations and obtain approval— including
from a biomedical Institutional Review Board and the EPA Human Studies
Research Review Official—to conduct human research studies. The EPA needs
to obtain informed consent from human study subjects before exposing them to
pollutants. The agency is also required to address adverse events and report
them. These measures are intended to properly protect study subjects.
During our review conducted as a result of a congressional request, we found
that the EPA followed applicable regulations when it exposed 81 human study
subjects to concentrated airborne particles or diesel exhaust emissions in five
EPA studies conducted during 2010 and 2011. However, we identified
improvements that could be made. For example, the EPA's policies and guidance
do not address when the EPA Human Studies Research Review Official's
approval is needed for significant study modifications. Also, while the EPA's consent
forms met regulatory requirements, exposure risks were not always consistently
represented, and the EPA did not include information on long-term cancer risks in its
diesel exhaust studies' consent forms. The EPA's policy, guidance and consent forms do
not establish the agency's clinical follow-up responsibilities for adverse events. Further,
the policy and guidance of the EPA's National Health and Environmental Effects
Laboratory did not state that it was using the University of North Carolina at Chapel
Hill's Institutional Review Board's adverse event definitions and reporting timeframes.
We recommended that the EPA establish procedures for obtaining approval of significant
study modifications, ensure consent forms consistently address pollutant risks and
include any known or likely carcinogenic effects, update its guidance to include EPA
clinical follow-up responsibilities, clearly state adopted adverse event definitions and
reporting timeframes, and address a number of other recommendations. The EPA's
planned corrective actions and completion dates meet the intent of the recommendations.
(Report No. 14-P-0154, Improvements to EPA Policies and Guidance Could Enhance
Protection of Human Study Subjects, March 31, 2014)
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Semiannual Report to Congress October 1, 2013—March 31, 2014
EPA Acted Properly in Issuing Emergency Order to Drilling Company
We concluded that EPA Region 6's issuance of a Safe Drinking Water Act
emergency order to the Range Resources Gas Drilling Company, instructing it to
investigate the groundwater and soil near its gas well in Texas, conformed to
agency guidelines, regulations and policy.
In August 2010, a homeowner in Parker County, Texas, complained to Region 6 that the
drinking water well associated with his home had become contaminated with natural gas
and requested assistance. The homeowner indicated that he
had contacted the Texas Railroad Commission but the
commission had not been able to resolve his issues.
Region 6, in consultation with the Railroad Commission,
conducted testing. Test results showed levels of methane
that presented a potential explosion hazard and benzene
levels above the EPA's published maximum contamination
levels. The research identified two hydraulic fracturing gas
wells operated by Range Resources as the likely sources for
contamination based on their location, timing of operation
. _ ._ , , and gas characteristics. However, the Texas Railroad
Outside the Range Resources Butler
and Teal hydraulic fracturing well sites. Commission did not share the EPA's conclusion that the
(EPA OIG photo) gas wens caused the well contamination.
On December 7, 2010, Region 6 issued an emergency order under a provision of the Safe
Drinking Water Act. The order required Range Resources to conduct additional research
on the source and extent of contamination, provide drinking water to affected residents,
and develop a plan to mitigate aquifer contamination. Range Resources did not fully
comply with the order and legal actions ensued. After reaching a nonbinding agreement
with the company for additional testing, the EPA withdrew the order in March 2012.
Our review, conducted as a result of a congressional request, found that EPA Region 6's
issuance of the emergency order conformed to agency guidelines, regulations and policy.
We recommended that Region 6 collect and evaluate the testing results provided by
Range Resources and determine whether an "imminent and substantial endangerment"
still existed. We also recommended that Region 6 inform affected residents about the
present status of the contamination and any Region 6 planned actions. The agency agreed
with our recommendations and noted corrective actions taken or planned.
(Report No. 14-P-0044, Response to Congressional Inquiry Regarding the EPA 's
Emergency Order to the Range Resources Gas Drilling Company, December 20, 2013)
13
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Potential Cost Savings Identified
EPA Warehouse in Ohio Spent $1.5 Million to Store
Excess Publications
During our review of EPA warehouses, we found that the EPA's National Service
Center for Environmental Publications in Blue Ash, Ohio, stored an extensive
amount of excess publications, resulting in our issuing an early warning report to
have the agency take immediate action.
The Blue Ash warehouse maintains and distributes the EPA's environmental publications
in hard copy, CD ROM and other multimedia formats. However, we found that the EPA
was storing more than 6 years' worth of publications at the
warehouse. In December 2013, the warehouse had an
inventory of more than 18 million publications but
averaged only about 3 million publications shipped on a
yearly basis. Consequently, the EPA is tying up funds by
storing and caring for excess stock, and we believe that the
agency can put as much as $1.5 million to better use by
reducing its inventory of excess publications.
Following EPA OIG visits to the Blue Ash warehouse and
several follow-up discussions with staff, the warehouse
reported that it recycled almost 2 million items, consisting
of more than 140 tons of material, between June and
October 2013.
Rows of boxed publications at the EPA
warehouse operated by a contractor in
Blue Ash, Ohio. (EPA OIG photo)
(Report No. 14-P-0132, Early Warning Report: National Service Center for
Environmental Publications in Blue Ash, Ohio, Spent $1.5 Million to Store Excess
Publications, March 11, 2014)
California Air Board Faces Potential $8.86 Million Repayment
The California Air Resources Board claimed costs under an EPA cooperative
agreement that did not comply with the agreement's terms and conditions. The
EPA already has collected $94,109 for ineligible costs paid, and may recover an
additional $8.77 million.
The board received an American Recovery and Reinvestment Act grant from the EPA to
repower eight existing switch-yard locomotives with new engines. During our review, we
found material weaknesses in the board's compliance with laws, regulations, and terms
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Semiannual Report to Congress October 1, 2013—March 31, 2014
and conditions of the cooperative agreement. Specifically, the board did not comply with
the requirement of the cooperative agreement and the Energy Policy Act of 2005 to scrap
or remanufacture old engines. The board also did not accurately report jobs
created or retained, or provide actual emissions reduction calculations as
required. Further, the board paid contract costs that were not in accordance
with contract terms.
We recommended that EPA Region 9 disallow and recover ineligible costs
of $94,109 claimed under the cooperative agreement and require the board
to establish internal controls prior to any future awards. The grantee repaid
the $94,109 to the EPA. Further, the board's contractor—BNSF Railway
An example of a switch-yard Company—also signed an agreement to scrap or remanufacture the replaced
locomotive. (EPA photo)
engines. We recommended that the region verify that the board and BNSF
comply with the agreement and document the scrap or remanufacture, and recover the
federal share of $8,771,891 claimed if the board violates the November 2013 agreement.
(Report No. 14-R-0130, Unless California Air Resources Board Fully Complies With
Laws and Regulations, Emission Reductions and Human Health Benefits Are Unknown,
March 6, 2014)
Colorado Grant Has Questioned Costs Totaling $2,593,495
The Colorado Department of Public Health and Environment generally complied
with state and federal procurement policies and procedures regarding an
American Recovery and Reinvestment Act grant received from the EPA.
However, the grantee did not always complete analysis and bid proposal
requirements, resulting in $2,593,495 in questioned costs.
EPA Region 8 awarded Colorado $18,888,888 for remediation of the Summitville Mine
Superfund site, including construction of a water treatment facility. An audit conducted
by an independent accounting firm on behalf of the EPA OIG found that the grantee
generally complied with policies and procedures. However, the review found that
Colorado did not always comply with cost or price analysis requirements, and did not
include all required language in bid proposals.
The report recommended that the EPA have the grantee take various corrective actions,
and that the EPA recover questioned costs of $2,593,495 or have the grantee provide
documentation to support grantee actions. The grantee only agreed that it had omitted
some required contract language and did not propose any corrective actions.
(Report No. 14-R-0032, The State of Colorado Did Not Fully Assure That Funds Intended
to Treat Mining Wastes and Remove Contaminants From Water Were Effectively Spent,
November 19, 2013)
15
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Inappropriate Charge Card Purchases of $79,254 Noted
The EPA did not provide effective oversight to ensure that purchase card holders
and approving officials complied with internal control procedures, resulting in
$79,254 of prohibited, improper and erroneous purchases.
For FY 2012, the EPA's 1,370 active cardholders
transacted more than $29 million in purchases. Of
$152,602 in transactions sampled, we found $79,254 of
prohibited, improper and erroneous purchases that had
not been detected. These included the purchase of gym
memberships, meals for an awards recognition
ceremony, and gift cards.
A government purchase card.
(General Services Administration
photo)
We recommended that the EPA implement regular transaction reviews, provide
additional training, and revise the Contracts Management Manual to more specifically
address erroneous and illegal purchases. The EPA's planned corrective actions addressed
all of our recommendations. The EPA began taking action to improve the oversight of
purchase cards and is considering other improvements.
(Report No. 14-R-0128, Ineffective Oversight of Purchase Cards Results in Inappropriate
Purchases at EPA, March 4, 2014)
EPA Asked to Recover $571,626 in Grant Funds From Association
The financial management and procurement system of the National Association
of State Departments of Agriculture Research Foundation did not meet certain
federal requirements and conditions pertaining to a $3.6 million EPA cooperative
agreement award. As a result, we asked the EPA to recover $571,626 of
potentially unallowable costs.
The association received an EPA grant to support national and international pesticide
safety education programs for agricultural workers. However, the association's financial
management system did not meet certain federal requirements and conditions of the EPA
award. As a result, we questioned $275,650. The association did not document its
procurement selection process or provide
documentation to support any cost or price
analysis performed on its project management
subcontract as required by the Code of Federal
Regulations. In addition, the association's written
procurement policy lacked procedures to ensure
compliance with the Code of Federal Regulations.
As a result, we questioned $295,976. We also
Pesticides being applied to a field. (EPA photo)
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Semiannual Report to Congress October 1, 2013—March 31, 2014
identified an unresolved issue pertaining to potentially unallowable costs of $118,324
drawn under a prior EPA award. The costs, recorded as a refundable advance, represent
funds received as of year-end but not yet earned.
We recommended that the EPA disallow and recover $571,626. We also recommended
that the EPA require the association to recalculate its indirect cost rates, and establish
controls to ensure that its financial management and procurement systems comply with
requirements. In addition, we recommended that certain special conditions be included
for all active and future EPA awards to the association until the association meets all
applicable federal requirements. The association did not agree with the OIG findings and
recommendations, but the association did modify its subcontract for project management
services and its written procurement procedures. The EPA agreed with the OIG
recommendations and said it would work with the association to resolve the issues.
(Report No. 14-P-0131, National Association of State Departments of Agriculture
Research Foundation Needs to Comply With Certain Federal Requirements and EPA
Award Conditions to Ensure the Success of Pesticide Safety Programs, March 10, 2014)
Costs Claimed for Greater Lansing Grant Generally Not Allowable
A review found that grant costs claimed by the Greater Lansing Area Clean Cities
were generally not allowable. Two contracts with conflicts of interest were
awarded, resulting in $805,769 in claimed costs being questioned.
The EPA awarded the grantee $1,670,325 under the American Recovery and Reinvestment
Act to retrofit 364 public school buses with emission reduction equipment and replace
10 public school buses with lower-emission vehicles. An audit conducted by an independent
accounting firm on behalf of the EPA OIG found that the grantee complied with
procurement procedures and Recovery Act requirements, and met all grant objectives.
However, the review found two contracts with conflicts of interest that resulted in the
questioning of $805,759 in claimed costs. The report also indicated the grantee's accounting
system needed to better identify costs by project.
The report recommended that Region 5 require the grantee to recover questioned costs of
$805,759. The report also recommended that Region 5 verify that the grantee's accounting
system was adequate for providing accurate and complete disclosure of financial results
prior to any future award. The grantee disagreed with the findings and recommendations.
Region 5 disagreed with the accounting system issue and stated that the region did not have
sufficient information to comment on the conflict of interest issue.
(Report No. 14-R-0088, Audit of American Recovery and Reinvestment Act Cooperative
Agreement 2A-OOE85701 Awarded to the Greater Lansing Area Clean Cities,
January 9, 2014)
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Semiannual Report to Congress October 1, 2013—March 31, 2014
EPA Did Not Conduct Thorough Biennial User Fee Reviews
The EPA did not conduct thorough biennial user fee reviews for FYs 2008-2009
and 2010-2011, and did not review all agency programs to determine whether
they should assess fees for government services they provide. Consequently, the
EPA may not have recovered all program costs.
The Chief Financial Officers Act of 1990 directs agencies to review, on a biennial basis,
the agency's fees and other charges for services provided to determine whether additional
fees should be assessed. The EPA did not sufficiently conduct cost reviews, report
biennial review results to the Office of Management and Budget (OMB), request user fee
exceptions by letter to OMB, or review all programs for fee potential. We identified an
EPA program—the Office of Water's National Pollutant Discharge Elimination System
permit program—with the potential to charge fees up to $8.9 million per year to recover
its costs of providing a service.
We recommended that the Chief Financial Officer discuss biennial user fee results in the
Agency Financial Report, coordinate requests for an exception to charging fees, and
request fee exception programs to provide complete fee and cost information. We also
recommended that the Office of Water conduct an analysis to determine the EPA's full
cost of issuing National Pollutant Discharge Elimination System permit fees and
determine whether it should charge fees for the permits or request an exception to fees.
The agency agreed with our initial and revised recommendations.
(Report No. 14-P-0129, EPA Did Not Conduct Thorough Biennial User Fee Reviews,
March 4, 2014)
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Other Human Health and Environment Issues
Beaches in U.S. Virgin Islands Not Monitored for 2 Weeks
The U.S. Virgin Islands did not monitor beaches on St. Thomas and St. John for
pathogens for the 2-week period of February 3-16, 2014, due to contract issues.
Based on a request from the EPA Region 2 Regional Administrator, the OIG evaluated
the U.S. Virgin Islands performance under the Beaches Environmental Assessment and
Coastal Health Act of 2000. The U.S. Virgin Islands accepted an EPA grant of $303,000
for FYs 2013 and 2014 for the weekly monitoring of 43 beaches on the islands of St.
Croix, St. John and St. Thomas. Under the grant, the U.S. Virgin Islands is responsible
for analyzing monitoring results and informing the public of any beach contamination.
From February 3-16, 2014, the U.S. Virgin Islands did not have 23 beaches on
St. Thomas and St. John monitored to identify any harmful levels of contamination in the
water. The lapse in sampling created risk that
the public was exposed to unsafe levels of
bacteria and the environment may have been
endangered. Region 2 was unaware that the
U.S. Virgin Islands' contract with the
company collecting beach monitoring
samples had lapsed, or that the U.S. Virgin
Islands had not paid the company for
sampling work since July 2012. Although the
U.S. Virgin Islands provided public notice by
issuing press releases to two local
newspapers regarding the lack of monitoring,
those notices may not have been adequate notice for tourists who may not read the local
newspapers.
The U.S. Virgin Islands restarted beach sampling on February 17, 2014. We
recommended that the EPA Region 2 immediately take steps to ensure that beach
monitoring and public notification meet EPA guidelines and that the U.S. Virgin Islands
has a sustainable beach monitoring program in place. The agency agreed with our
recommendations and has begun working with the U.S. Virgin Islands to address beach
monitoring program deficiencies.
(Report No. 14-P-0155, Quick Reaction Report: EPA Oversight Needed to Ensure
Beach Safety in U.S. Virgin Islands, March 31, 2014)
A view of Magen's Bay in St. Thomas. (EPA OIG photo)
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Semiannual Report to Congress October 1, 2013—March 31, 2014
Environmental Benefits Being Considered for Great Lakes Grants
Spurred by the OIG's audit findings alerting it to potentially misdirected grants,
EPA Region 5 took prompt action to ensure that Great Lakes Shoreline Cities
Green Infrastructure grants will support lakewide management plan activities and
result in the reduction of discharges to the Great Lakes, although the grant
announcement could have been more specific.
The EPA invited 22 cities to submit applications for Great Lakes infrastructure grants to
fund projects to reduce urban runoff and sewer overflows, and gave out $8.5 million in
grants. The EPA OIG received a hotline complaint that the
grants were only being awarded based on population and
potential environmental benefits was not the primary
factor.
While the grant announcement did not specifically require
proposed projects to support lakewide management plan
activities as identified in the competition exemption,
Region 5 management agreed that the announcement
View of Chicago, a Great Lakes shoreline city. should have been more specific. To address the issue,
(EPA photo) Region 5 developed criteria for staff to use when
reviewing grant applications, including how each
proposed project will support lakewide management plan goals and result in reducing
discharges. Since Region 5 took action to address the issue noted, the report contained no
recommendations.
(Report No. 14-P-0004, Environmental Benefits Being Considered in Award of Great
Lakes Grants, November 5, 2013)
Complaints Regarding Debris at Texas Explosion Site Addressed
Although debris was removed from a Texas explosion site and "dumped" nearby
without state or EPA knowledge, as alleged in a hotline complaint, the debris was
identified as non-hazardous and was appropriately managed by the state.
On April 17, 2013, an explosion occurred at the Adair Grain Inc. Fertilizer Plant site in
West, Texas, killing 14 people and injuring about 200. EPA Region 6 staff provided
oversight of responsible party removal actions to address environmental threats.
The complaint alleged that possibly hazardous debris was removed from the site and
"dumped" onto two private properties across the road. Although we substantiated that
there were two debris piles, they were not found to be hazardous. EPA and state staff said
the debris was removed and put at the two properties without their knowledge by another
20
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
federal agency. The complaint also alleged that there was a leaking water main below the
two debris piles that could have contained contamination, and although we substantiated
the allegation, the water main was disconnected after the explosion.
We noted that the EPA Region 6 report of its response oversight activities incorrectly
stated that the city of West rather than a water supply company managed the water main,
and EPA Region 6 corrected the report reference.
According to state staff, debris removal at the two properties is complete. The debris
removed was tested, found to be non-hazardous, and appropriately recycled or disposed.
(Report No. 14-P-0123, Complaints Regarding Debris Management at the West, Texas,
Fertilizer Plant Explosion Have Been Addressed, February 24, 2014)
Damaged volumetric tanks and equipment at the Adair Grain Inc.
Fertilizer Plant in West, Texas. (EPA photo)
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Agency Business Practices and Accountability
EPA Needs to Better Follow National Security Information
Classification Standards
Our review of both originally and derivatively classified documents generated
by three offices found that the EPA's national security information could be
improperly classified without improved procedures.
Original Classification: The initial
determination to classify is made by an
original classification authority; in the
EPA, the Administrator is the sole
original classification authority.
Derivative Classification: Others in
the EPA can classify information
derivatively on the basis of source
documents already classified or
classification guides.
We reviewed the EPA's classified national
security information practices as required by the
Reducing Over-Classification Act. Of the two
originally classified documents reviewed, portions
of one needed different classification levels and
the other contained numerical data that were
incorrectly transferred from another document.
Also, three proposed guides were in the approval
process for 12 months when it must take no more
than 30 days. In addition, the declassification
process needs clarity since one pending declassification request also had been in the
approval process for almost a year when it should take no more than 60 days. Regarding
derivatively classified documents, none of the 19 such documents reviewed completely
met requirements.
We recommended that EPA organizations correct originally and derivatively classified
documents as needed, improve training, and develop a process to address declassification
requests. We also recommended that the EPA submit a single, unclassified classification
guide for approval. The agency agreed with our recommendations except for the one to
develop a process for approving classification guides.
(Report No. 14-P-0017, EPA Does Not Adequately Follow National Security Information
Classification Standards, November 15, 2013)
EPA Needs to Improve Personally Identifiable Information Safeguards
The EPA has not created formal policies and procedures for several processes
that contribute to the safeguarding of Personally Identifiable Information. Without
proper controls, the information is vulnerable to unauthorized access and misuse.
The EPA must safeguard individuals' privacy in a manner consistent with the Privacy
Act, the E-Government Act of 2002 and other federal requirements. However, we found
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Semiannual Report to Congress October 1, 2013—March 31, 2014
that the EPA did not have sufficient policies and procedures or sufficient management
oversight. Consequently, the agency did not ensure that employees were aware of their
responsibilities for protecting sensitive information. The EPA was using an inaccurate list
of systems with Personally Identifiable Information. Also, EPA training only covered a
portion of the necessary topics.
We recommended that the EPA implement a "rules and consequences" procedure for
safeguarding Personally Identifiable Information, develop and implement a process for
maintaining an accurate and current listing of systems that contain sensitive Personally
Identifiable Information, and implement a process to train individuals who access
Personally Identifiable Information. The agency concurred with our recommendations
and provided corrective action plans.
(Report No. 14-P-0122, EPA Needs to Improve Safeguards for Personally Identifiable
Information, February 24, 2014)
Controls for Emergency Contracts Need Improvement
Review of task order files and invoices for Region 6 Emergency and Rapid
Response contracts disclosed that infrequent internal control reviews and
inadequate staffing hamper the region's ability to prevent and detect many
contract management shortcomings, resulting in higher contract costs.
Region 6 had two Emergency and Rapid Response Services contracts that provide
cleanup personnel, equipment and materials to contain, recover or dispose of hazardous
substances; analyze samples; and conduct site restoration. As of October 2012, Region 6
issued 174 task orders under the two contracts totaling $77.6 million in expenditures.
We identified two conditions that resulted in higher costs to the government:
• One prime contractor was applying a general and administrative indirect rate to
its team subcontractors' other direct costs, which went against the prime
contractor's proposal and indirect cost rate letter.
• Both prime contractors were receiving additional profit because the fixed labor
rates negotiated between the EPA and prime contractors were based solely on the
prime's labor rates.
We recommended that Region 6 require procurement personnel to conduct internal
control reviews twice a year, address issues related to subcontract other direct costs in the
existing contracts, and require that proposals for future contracts include subcontractor
rates as required. Region 6 concurred with some but not all of our recommendations.
(Report No. 14-P-0109, Internal Controls Needed to Control Costs of Emergency and
Rapid Response Service Contracts, as Exemplified in Region 6, February 4, 2014)
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Semiannual Report to Congress October 1, 2013—March 31, 2014
EPA Earns Unqualified Opinion on Financial Statements
We rendered an unqualified opinion on the EPA's Consolidated Financial
Statements for FYs 2013 and 2012, meaning that the statements were fairly
presented and free of material misstatements. However, we noted several
significant deficiencies:
• The EPA overstated Superfund State Contract credits.
• The EPA's high number of accounting corrections indicates an internal control
weakness.
• Internal controls over the EPA's accountable personal property inventory process
need improvements.
• Software was improperly recorded in the Compass Financials accounting system.
• The EPA needs to improve access control procedures for key financial systems.
• The EPA needs to improve processes for following up on identified network
vulnerabilities.
We also noted a noncompliance issue with the Federal Financial Management
Improvement Act. We found that the agency had a high number of accounting corrections
due to posting model and other system errors at the transaction level. The high number of
accounting corrections indicates an internal control weakness.
The agency agreed with most of our findings and recommendations. However, the agency
did not agree that the number of accounting corrections was high. The agency posted
more than 100 journal entries to correct posting model errors; just one of those entries
involved 206 transactions. Thus, while we do not believe the noncompliance rose to the
level of substantial noncompliance, we consider the number of errors at the transaction
level to be high and an internal control weakness.
(Report No. 14-1-0039, Audit of EPA 's Fiscal 2013 and 2012 Consolidated Financial
Statements, December 16, 2013)
Pesticide Funds Earn Unqualified Opinions
We rendered unqualified, or clean, opinions on the FYs 2012 and 2011 financial
statements (restated) for two funds the EPA uses to collect pesticide fees.
The Pesticide Registration Improvement Act authorized the 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 fund
were fairly presented and free of material misstatement. However, we noted two material
weaknesses in internal controls. The EPA materially overstated the expenses from other
appropriations that support the fund because the agency does not have an effective system
to accurately accumulate such costs. The EPA also materially understated fund payroll
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Semiannual Report to Congress October 1, 2013—March 31, 2014
liabilities covered by budgetary resources as well as related payroll expenses included in
gross costs. The agency agreed with our recommendations and initiated or agreed to
initiate sufficient corrective actions. (Report No. 14-1-0042, Fiscal Years 2012 and 2011
(Restated) Financial Statements for the Pesticide Registration Fund, December 17, 2013)
To expedite reregistering older pesticides and assessing them against modern health and
environmental testing standards, Congress authorized the 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 fund were
fairly presented and free of material misstatement. However, we noted the same two
material weaknesses in internal controls that we had noted regarding the Pesticide
Registration Fund (see above). The agency agreed with our recommendations and
initiated or agreed to initiate sufficient corrective actions. (Report No. 14-1-0041,
Fiscal Years 2012 and 2011 [Restated] Financial Statements for the Pesticides
Reregistration and Expedited Processing Fund, December 17, 2013)
EPA Needs to Improve Electronic Reporting Procedures
The EPA lacked documented procedures that reflect current operations of the
Cross-Media Electronic Reporting Regulation program. An absence in
management controls could lead the EPA to receive electronic documents that
are unacceptable in administrative or judicial enforcement proceedings.
The EPA information systems receiving electronic reports for programs that states, tribes
or local governments are authorized to manage must meet Cross-Media Electronic
Reporting Regulation standards. This requirement is intended to reduce the cost and
burden of electronic reporting while maintaining corporate and individual responsibility.
The EPA has neither implemented monitoring activities to verify an electronic reporting
system's functionality before and after approval nor implemented processes to ensure the
system's applications are completed, reviewed and approved within required timeframes.
The EPA also lacked formal written processes to ensure consistency in making
determinations for submitted applications. We found that 20 percent of reviewed
applications lacked explicit support for determinations.
We recommended that the EPA create a process to verify a state's compliance with the
electronic reporting program, and implement a completeness review process consistent
with the program and develop internal guidance. The EPA's planned corrective actions
addressed all of the recommendations and are also developing a new management system
that will allow electronic reporting stakeholders to monitor their applications through the
review process.
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Semiannual Report to Congress October 1, 2013—March 31, 2014
(Report No. 14-P-0143, EPA Needs to Improve Management of the Cross-Media
Electronic Reporting Regulation Program in Order to Strengthen Protection of Human
Health and the Environment, March 21, 2014)
Information Systems and Data at Risk Due to Insufficient Training
The EPA lacks an information security role-based training program that defines
specific training requirements for personnel with significant information security
responsibilities.
The E-Government Act of 2002 requires federal agency information technology security
personnel to maintain sufficient training and knowledge to conduct their duties. An audit
conducted by an independent accounting firm on behalf of the EPA OIG found that
implementation of the EPA's information security training program is hindered by
inconsistent assignment of information security roles across various EPA offices. The
current training program does not consider specific needs of technical and managerial
personnel responsibilities for implementing information security. As a result, training
may be insufficient to ensure personnel are trained on key information security roles.
The report recommended that the agency define key information security aspects and
duties for each security role, provide additional training options, standardize terminology
and definition of responsibilities, and provide clearer delineation of responsibilities. The
EPA agreed with the recommendations and is taking corrective action.
(Report No. 14-P-0142, EPA 's Information Systems and Data Are at Risk Due to
Insufficient Training of Personnel With Significant Information Security Responsibilities,
March 21, 2014)
EPA's Computer Security Program Should Be Improved
Our annual review of the EPA's implementation of the Federal Information
Security Management Act for FY 2013, submitted to OMB, disclosed that
improvements should be made.
The EPA has established an agencywide information security program that assesses the
security state of information systems that is consistent with requirements. However, the
EPA should improve processes for timely remediation of scan result deviations; address
risks from an organizational, mission and business, and information system perspective;
and obtain sufficient assurance that security controls for contractor systems are effectively
implemented and comply with guidelines. We briefed the agency on our results.
(Report No. 14-P-0033, Fiscal Year 2013 Federal Information Security Management Act
Report: Status of EPA 's Computer Security Program, November 26, 2013)
26
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Investigations
Significant Investigations
Man Gets 14 Years in Prison for Part in New Jersey Kickback Scheme
On March 3, 2014, Gordon D. McDonald, of Berlin, New Jersey, was sentenced
in the U.S. District Court of New Jersey to 14 years in prison, followed by 1 year
of supervised release, for his involvement in a kickback and bid rigging scheme
related to two Superfund sites. In addition, McDonald was ordered to pay a
$50,000 fine. The amount of restitution is pending.
On September 30, 2013, following a 2-week trial, a jury found McDonald—a project
manager with Sevenson Environmental Services Inc.—guilty of engaging in bid rigging,
kickback and fraud conspiracies with three subcontractors at two New Jersey Superfund
sites—Federal Creosote in Manville and Diamond Alkali in Newark. He also was convicted
of engaging in an international money laundering scheme, major fraud against the United
States, accepting illegal kickbacks, committing two tax violations and obstruction of justice.
The various conspiracies took place from about December 2000 to April 2007. As part of
the conspiracies, McDonald and co-conspirators accepted kickbacks from subcontractors
in exchange for the award of subcontracts for the two sites. McDonald provided
co-conspirators with bid prices of their competitors, which allowed them to submit higher
prices and still be awarded the subcontracts. In exchange for his assistance, McDonald
was paid more than $1.5 million in kickback payments. McDonald also accepted
kickbacks in exchange for the award of subcontracts at the Federal Creosote site where he
conspired to rig bids and allocate subcontracts at inflated prices for supplies and services.
In a related matter, another person involved in the case was given additional jail time. On
October 16, 2013, James E. Haas Jr., a former representative of a New Jersey subcontractor,
was sentenced to 6 months in prison to be followed by 24 months of supervised release.
He also was ordered to pay his outstanding restitution of $48,732. Haas already had served
33 months in jail following a February 2010 sentencing, and was given the additional prison
time due to parole violations.
To date, nine individuals and three companies have been convicted or pleaded guilty in
the ongoing investigation related to the two Superfund sites, and more than $6 million in
criminal fines and restitution have been imposed. The clean-up for the two sites was
partly funded by the EPA. Under an interagency agreement between the EPA and the
27
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Semiannual Report to Congress October 1, 2013—March 31, 2014
U.S. Army Corps of Engineers, prime contractors oversaw the removal, treatment and
disposal of contaminated soil, as well as other operations, at the sites.
This case is being conducted with the Internal Revenue Service Criminal Investigation
Division.
Professor Sentenced to 33 Months in Jail for Grant Fraud
On November 26, 2013, Ademola L. Ejire, a professor at Shaw University in
Raleigh, North Carolina, was sentenced in the U.S. District Court for the
Eastern District of North Carolina to 33 months in jail to be followed by 24 months
of supervised release after pleading guilty to mail fraud. He also was ordered to
pay $470,139 in restitution to the EPA.
From 2001 to 2012, Ejire managed the EPA Research Apprenticeship Program at Shaw
University. An EPA grant provided funding for high school students who have an interest
in science and math. At the end of the application process, students who meet the
academic and attendance criteria in the eighth grade can apply for entry in the program,
and 10 to 12 students are chosen to enter the program in the ninth grade.
From 2001 to July 2012, by submitting falsified timesheets, Ejire fraudulently
represented that his wife was an employee of Shaw University working as the EPA
program coordinator for the EPA grant and that his children were participants in the EPA
grant. The scheme enabled Ejire to fraudulently obtain about $470,000. This
misappropriation of the funds provided for the Research Apprenticeship Program not
only violated the trust of the American taxpayer, it deprived students an opportunity to
receive all of the benefits of the program.
This case was conducted jointly with the FBI and the U.S. Postal Inspection Service.
Florida Contractor Sentenced to Jail for Kickback Scheme
Faustin Denis entered a guilty plea to four counts of conflict of interest/solicitation
of a gift and was sentenced to 30 days in jail to be followed by 2 years of
probation. The plea was made November 26, 2013, in a Florida court. Denis also
was ordered to pay $25,000 for the costs of the investigation and prosecution.
From 2004 to 2008, Denis, through his company APAC Group, received more than
$22 million in contracts from the city of Opa-Locka, Florida, to do street and sidewalk
repairs and maintenance. Some of the funding came from EPA grant funds. APAC
allegedly received its contracts through a bribery and money laundering scheme concocted
by Opa-Locka's public works director and a city engineering consultant, who demanded
kickbacks from Denis. APAC would win contracts from the city because it would put in
28
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Semiannual Report to Congress October 1, 2013—March 31, 2014
unreasonably low bids that did not accurately reflect prices. After the contract started,
Denis would put in change orders to increase prices from 150 to 200 percent. That extra
money allegedly went into the pockets of Denis and other fraud participants.
Additionally, on February 3, 2014, two other participants entered pleas of nolo contendere
to charges of conflict of interest and solicitation of a gift. Each was sentenced to 24 months
of probation and ordered to pay $2,500 to cover the cost of the investigation.
This case is being conducted jointly with the FBI, the Miami-Dade Police Department, and
the Miami Dade County Commission on Ethics and Public Trust.
Alaska Tribal Official and Brother Get Jail Terms for Theft
Lori Ann Clum, of Anchorage, Alaska, was sentenced to 18 months in jail, to be
followed by 3 years of probation, after pleading guilty to theft from a tribal
organization. She also was ordered to pay $150,000 in restitution. Further,
Clum's brother, James Kramer, was sentenced to 8 months in prison, followed by
1 year of probation, and was ordered to pay a $2,000 fine.
On January 6, 2014, Clum was sentenced in the U.S. District Court of Alaska for theft
from the Native Village of Tatitlek. In April 2008, Clum was voted out of office as the
President of the village but refused to acknowledge the election. She continued to
maintain control over the village bank accounts until April 2009. During this time, she
paid herself duplicate paychecks, took significant cash withdrawals, and wrote checks to
herself totaling more than $200,000. This amount included a $20,000 cash withdrawal
that she gave to her brother, James Kramer, which he used for personal expenses. Kramer
pleaded guilty on January 17, 2014, to failure to file an income tax return.
The Native Village of Tatitlek receives the majority of its funding from federal sources,
including the EPA.
This case was conducted jointly with the FBI and Internal Revenue Service Criminal
Investigation Division.
New York Laboratory Fined $150,000 for Mailing False Results
Upstate Laboratories Inc. of East Syracuse, New York, was fined $150,000 for
falsifying more than 3,300 laboratory results from 2008 through 2010.
After pleading guilty, Upstate Laboratories was sentenced on January 8, 2014, in the
U.S. District Court for the Northern District of New York, for committing mail fraud
related to the falsification of laboratory results from 2008 through 2010. In addition to the
$150,000 fine, the lab was placed on 5 years' probation. Although Upstate Laboratories
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Semiannual Report to Congress October 1, 2013—March 31, 2014
has gone out of business, the court ordered it to prepare an environmental compliance
plan and permit government inspections, should it ever resume business operations.
Upstate Laboratories performed chemical analysis of water and soil samples supplied by
public and private clients. Certain analyses were required to be performed within
specified timeframes ("holding times") after the samples were obtained due to the
potential for chemical degradation. Upstate Laboratories further promised to use required
procedures to ensure that the samples did not degrade. However, from 2008 through
2010, Upstate Laboratories engaged in the routine "backdating" of sample results where
employees changed the dates when the samples were analyzed to make it appear that
analysis had occurred within the required time periods when in fact they had not. Upstate
Laboratories thereafter prepared false and fraudulent analysis reports representing that the
samples were properly analyzed within required time frames and that the results were
valid when they were not.
This case was conducted jointly with the EPA Criminal Investigation Division.
Probation Ordered in Gulf Oil Spill Case for Destroying Evidence
On January 21, 2014, Anthony Badalamenti, of Katy, Texas, was sentenced in
the U.S. District Court for the Eastern District of Louisiana to 1 year of probation,
100 hours of community service and a $1,000 fine for destroying evidence
related to the 2010 Gulf of Mexico oil spill.
Badalamenti, a former manager for Halliburton Energy Services Inc., was convicted of
destroying evidence in the aftermath of the BP Exploration and Production Inc.'s massive
2010 Deepwater Horizon oil spill in the Gulf of Mexico. Badalamenti was the cementing
technology director for Halliburton, BP's cement contractor on the Deepwater Horizon
drilling rig. Badalamenti instructed two Halliburton employees to delete data from
separate runs of computer simulations on centralizers, which were used to keep the casing
centered in the wellbore. The data could have supported BP's decision to use six
centralizers instead of 21. Halliburton notified the Justice Department about the deletion
of the data, which could not be recovered.
The investigation was conducted by the Deepwater Horizon Task Force, which includes
investigators from a number of federal and state organizations, including the EPA OIG.
30
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Civil Settlement Reached in Air Sampling Case
A former contractor analyst entered into a $38,500 civil settlement with the
U.S. Attorney's Office, Eastern District of North Carolina, to settle allegations that
he improperly conducted laboratory tests.
From June 2006 until January 2010, the analyst was employed by a laboratory that had
been contracted by the EPA to analyze air-monitoring samples collected under the Air
Toxic Monitoring Initiative. The air samples originated from air monitors located
nationwide, including around schools. The laboratory discovered the analyst was
manually integrating continuing calibration verifications so that the scientific instruments
used to conduct the analysis would pass the quality control requirements. The improper
manual integrations allowed the Gas Chromatograph/Mass Spectrometer instruments to
pass the quality control requirements while analyzing the air samples. When this situation
was discovered, the laboratory fired the analyst and voluntarily reported the discovery to
the EPA. Previously, the laboratory reached a $97,508 civil settlement.
EPA Employee Suspended for Letting Relative Use Laptop
An EPA employee was suspended for 14 days as a result of an investigation into
administrative misconduct. The investigation did not disclose evidence to substantiate the
allegation that the employee engaged in private business during duty hours or used
government resources in furtherance of a private business. However, the investigation did
disclose a deliberate computer security violation in that the employee allowed a relative
to use his government-issued laptop for personal use. The employee admitted to
providing his logon ID and password to his relative and permitted the relative to use his
government-issued laptop during off-duty hours to search the Internet.
Significant Reports of Investigation Issued for Action
SES Employee Uses EPA Resources to Conduct Private Business
An OIG Report of Investigation disclosed that a Senior Executive Service (SES)-level
employee used EPA resources to operate three private businesses, sold products to EPA
colleagues and subordinates, and recommended a friend for employment to a company
that had contracted with the EPA. We also noted that a relative of the SES employee,
who is also an EPA employee, received cash awards from the subject's operating budget
rather than the operating budget of the program office for which the relative was
working.
The OIG conducted the investigation of the SES-level employee based on allegations of
administrative misconduct. Six allegations were investigated, of which four were
substantiated and two were unsubstantiated. On December 20, 2013, the OIG provided a
31
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Report of Investigation to the employee's manager. On February 6, 2014, the manager
notified the OIG in writing that she was reviewing the Report of Investigation, working
with the Office of General Counsel and OIG investigators, and conducting independent
fact finding. Additional investigative material was provided to the manager on February 7
to assist the manager in her decision regarding what action may be appropriate.
EPA Employee Uses Government Purchase Card to Purchase iPad
An OIG investigation determined that an employee used a government purchase card to
purchase an Apple iPad for personal use at a cost of $805. The investigation concluded
that the employee acted alone in this activity and it was an isolated incident, as no
additional evidence of malfeasance was discovered. On December 16, 2013, the
employee's supervisor was briefed on the facts and circumstances pertaining to the
investigation. A Report of Investigation also was provided to the manager, who is
considering this matter for possible administrative action.
Closed Employee Integrity Cases
Statistics on employee integrity investigation cases closed during the semiannual
reporting period follow.
Pending 10/1/13
Open
Closed
Pending 3/31/14
Political
appointees
6
1
2
5
SES
6
3
0
9
GS-14/15
18
7
1
24
GS-13 and
below
36
12
9
39
Misc
5
0
4
1
Total
71
23
16
78
Pending Employee Misconduct Cases as of 3/31/14
I Political Appointees
I SES
I GS 14/15
GS 13 and below
I Misc
"Misc" includes unknown subjects and contractor employees.
32
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Legislation and Regulations Reviewed
Section 4(a) of the Inspector General Act requires the Inspector General to review
existing and proposed legislation and regulations relating to the program and operation of
the EPA and to make recommendations concerning their impact. We also review drafts of
OMB circulars, memorandums, executive orders, program operations manuals, directives
and reorganizations. 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 20 proposed changes to legislation, regulations, policy, procedures
or other documents that could affect the EPA or the Inspector General, and provided
comments on one.
33
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
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. The 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 Inspector General to serve as the Inspector
General for the CSB. As a result, the EPA OIG has the responsibility to audit, evaluate,
inspect and investigate the CSB's programs, and to review proposed laws and regulations
to determine their potential impact on the CSB's programs and operations. Details on our
work involving the CSB are available at http://www.csb.gov/inspector-general.
CSB Earns Unmodified Opinion on Financial Statements
The firm that audited the CSB's financial statement for FYs 2013 and 2012 on behalf of the
EPA OIG rendered an unmodified opinion on the statements, meaning that they were fairly
presented and free of material misstatements. The auditing firm found no matters involving
CSB internal controls that it considered to be a material weakness, and the firm found no
instances of noncompliance. Thus, the report made no recommendations. (Report No.
14-1-0038, Audit of the U.S. Chemical Safety and Hazard Investigation Board's Fiscal Years
2013 and 2012 Financial Statements, December 16, 2013)
34
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Statistical Data
Profile of Activities and Results
Audit and evaluation operations
OIG reviews
October 1,2013-
March 31, 2014
($ in millions)
Questioned costs *
Recommended efficiencies *
Costs disallowed to be recovered
Costs disallowed as cost efficiency
Reports issued by OIG
Reports resolved
(Agreement by agency officials
to take satisfactory corrective actions)'
$30.1
$28.1
$0.1
$0.18
26
99
Audit and evaluation operations
Reviews performed by Single Audit Act auditors
Questioned costs *
Recommended efficiencies *
Costs disallowed to be recovered
Costs disallowed as cost efficiency
Single Audit Act reviews
Agency recoveries
Recoveries from audit resolutions
of current and prior periods
(cash collections or offsets to
future payments) ***
October 1,2013-
March31,2014
($ in millions)
$9.2
$0.0
$6.3
$0.0
130
$0.7
Investigative Operations
Total Fines and Recoveries ****
Cost Savings
Cases Opened During Period
Cases Closed During Period
Indictments/Informations of
Persons or Firms
Convictions of Persons or Firms
Civil Judgments/Settlements/Filings
October 1, 2013-
March31,2013
($ in millions)
$2.293
$0.232
56
51
24
10
1
Questioned costs and recommended efficiencies are
subject to change pending further review in the audit
resolution process.
Reports resolved are subject to change pending
further review.
Information on recoveries from audit resolutions is
provided by the EPA's Office of Financial
Management and is unaudited.
Fines and recoveries resulting from joint
investigations.
35
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Audit, Inspection and Evaluation Report Resolution
Status report on perpetual inventory of reports in resolution process
for semiannual period ending March 31, 2014
Report category
A. For which no management
decision was made by
October 1,201 3*
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management
decision was made during the
reporting period
E. For which no management
decision was made by
March 31, 201 4
F. Reports for which no
management decision was
made within 6 months of
issuance
No. of
reports
145
156
99
244
156
88
109
Report issuance
($ in thousands)
Questioned
costs
$40,481
39,310
0
79,791
28,201
51,590
27,923
Recommended
efficiencies
$13,425
28,110
0
41,535
3,314
38,221
10,111
Report resolution costs
sustained
($ in thousands)
To be
recovered
$6,510
6,414
0
612,958
6,414
6,544
0
As
efficiencies
$8,822
177
0
8,999
177
8,822
0
Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this
report and our previous semiannual report results from corrections made to data in our audit tracking system.
36
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Table 1: Inspector General-issued reports with questioned costs for semiannual period ending
March 31, 2014 ($ in thousands)
Report category
A. For which no management decision was made by
October 1,201 3**
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 31, 201 4
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
31
10
41
9
4
5
24
16
Questioned
costs *
$40,481
39,310
79,791
28,201
6,414
21,787
51,590
27,923
Unsupported
costs
$28,238
9,398
37,636
13,466
6,313
7,513
24,170
14,771
Questioned costs include unsupported costs.
Any difference in number of reports and amounts of questioned costs between this report and our previous
semiannual report results from corrections made to data in our audit, inspection and evaluation tracking system.
Table 2: Inspector General-issued reports with recommendations that funds be put to better use
for semiannual period ending March 31, 2014 ($ in thousands)
Report Category
A. For which no management decision was made by October 1, 2013 *
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. Forwhich no management decision was made by March 31, 2014
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
17
4
21
5
3
2
0
10
8
Dollar
value
$13,425
28,110
41,535
12,958
6.414
6,544
0
38,221
10,111
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, 2014, 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
45
10
0
19
3
77
Percentage
58
13
0
25
4
100
37
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Hotline Activity
The following table shows EPA OIG hotline activity regarding complaints of fraud, waste and abuse
in EPA programs and operations during the semiannual reporting period ending March 31, 2014.
Semiannual period
(October 1,2013-
March 31, 2014)
Issues open at the beginning of the period
Inquiries received during the period
Inquiries closed during the period
Inquiries pending at the end of the period
132
119
95
156
Issues referred to others
OIG offices
EPA program offices
Other federal agencies
State/local agencies/other
86
22
4
7
To report fraud, waste and abuse, contact us through one of the following methods:
Email: OIG_Hotline(g),epa.gov
Phone: 1-888-546-8740
Fax: 1-202-566-2599
Online: http://www.epa.gov/oig/hotline.htm
Write: EPA Inspector General
1200 Pennsylvania Avenue, NW
Mailcode2431T
Washington, DC 20460
38
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Summary of Investigative Results
Summary of investigative activity during reporting period
Cases open as of October 1 , 201 3 *
Cases opened during period
Cases closed during period
Cases pending as of March 31 , 201 4
216
56
51
221
* Adjusted from prior period.
Investigations pending by type as of March 31, 2014
Contract fraud
Assistance
agreement fraud
Employee integrity
Program integrity
Computer crimes
Threat
Retaliation
Other
Total
Superfund
10
0
3
4
0
0
0
3
20
Management
14
17
30
16
2
1
1
10
91
Split
funded
12
6
43
9
6
5
0
7
88
Recovery
Act
5
10
0
4
0
0
0
1
20
CSB
0
0
2
0
0
0
0
0
2
Total
41
33
78
33
8
6
1
21
221
Results of prosecutive actions
Criminal indictments/informations/complaints
Convictions
Civil judgments/settlements/filings
Deportations
Fines and recoveries (including civil)
Prison time
Prison time suspended
Home detention
Probation
Community service
EPA OIG only
3
1
1
0
$1,431,993
32 months
0 months
0 months
24 months
200 hours
Joint*
21
9
0
0
$860,202
234 months
0 months
0 months
252 months
100 hours
Total
24
10
1
0
$2,292,195
266 months
0 months
0 months
276 months
300 hours
'With another federal agency.
Administrative actions
Suspensions
Debarments
Other administrative actions
Total
Administrative recoveries
Cost avoidance
EPA OIG only
7
8
25
40
$2,311
$0
Joint*
3
0
2
5
$148,342
$232,104
Total
10
8
27
45
$150,653
$232,104
'With another federal agency.
39
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Semiannual Report to Congress
October 1, 2013—March 31, 2014
Appendices
The Inspector General Act of 1978, as amended, 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.
Questioned Costs
Report No.
Report Title
Date
Ineligible Unsupported Unreasonable
Costs Costs Costs
Federal
Recommended
Efficiencies
PERFORMANCE REPORTS
14-P-0004
14-P-0017
14-P-0033
14-P-0036
14-P-0037
14-P-0044
14-P-0109
14-P-0122
14-P-0123
14-P-0128
14-P-0129
14-P-0131
14-P-0132
14-P-0142
14-P-0143
14-P-0154
14-P-0155
Environmental Benefits in Award of Great Lakes Grants
Following National Security Information Classification Standards
FY 2013 Federal Information Security Management Act Report
Controls and Actions Concerning John C. Beale Pay Issues
Controls and Actions Concerning John C. Beale Travel
Congressional Inquiry on Range Resources Gas Drilling Company
Emergency and Rapid Response Service Contracts in Region 6
Safeguards for Personally Identifiable Information
Complaints Regarding Debris at West, Texas, Plant Explosion Site
Oversight of Purchase Cards
Biennial User Fee Reviews
NASDARF Compliance Related to Pesticide Education Programs
National Service Center Environmental Publications, Blue Ash, Ohio
EPAs Information Systems and Data and Security Responsibilities
Cross-Media Electronic Reporting Regulation Program
Policies and Guidance for Protecting Human Study Subjects
EPA Oversight of Beach Safety in U .S. Virgin Islands
TOTAL PERFORMANCE REPORTS = 17
Nov. 05, 2013
Nov. 15, 2013
Nov. 26, 2013
Dec. 11,2013
Dec. 11,2013
Dec. 20, 201 3
Feb. 04, 2014
Feb. 24, 2014
Feb. 24, 2014
Mar. 04, 2014
Mar. 04, 2014
Mar. 10, 2014
Mar. 11,2014
Mar. 21,2014
Mar. 21,2014
Mar. 31,2014
Mar. 31,2014
$0
0
0
0
0
0
0
0
0
0
0
689,950
0
0
0
0
0
$689,950
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
0
0
0
0
0
0
0
0
79,000
17,800,000
0
0
0
0
0
0
$17,879,000
SINGLE AUDIT REPORTS
14-3-0001
14-3-0002
14-3-0003
14-3-0005
14-3-0006
14-3-0007
14-3-0008
14-3-0009
14-3-0010
14-3-0011
14-3-0012
14-3-0013
14-3-0014
14-3-0015
14-3-0018
14-3-0019
14-3-0020
14-3-0021
14-3-0022
14-3-0023
14-3-0024
14-3-0025
14-3-0026
14-3-0027
14-3-0028
14-3-0029
14-3-0030
14-3-0031
14-3-0034
14-3-0035
14-3-0043
Delbarton, West Virginia, Municipality of- FY2012
Moundsville, West Virginia, Municipality of - FY 2012
Sun Valley Public Service District, West Virginia - FY 2012
Puerto Rico Aqueduct and Sewer Authority - FY 201 2
Northern Mariana Islands, Commonwealth of the - FY 201 1
Bloomington, Illinois, City of- FY 2012
Ironton, Ohio, City of- FY 2011
Ottawa, Illinois, City of- FY 2012
Dayton, Ohio, University of - FY 2012
Benton Harbor, Michigan, City of- FY2012
Lansing, Michigan, City of- FY2012
Great Lakes Commission, Michigan - FY 2012
Blue Island, Illinois, City of- FY 201 2
Southfield, Michigan, City of - FY 2012
Southwest Detroit Environmental Project, Michigan - FY 2012
Park Forest, Illinois, Village of- FY 2012
Cass County, Missouri, Public Water Supply District #1 0 of
Marquette, Michigan, City of- FY2012
Clean Fuels Ohio, Ohio- FY 201 2
Grand Valley Metropolitan Council, Michigan - FY 2012
Downriver Community Conference, Michigan - FY 201 2
Oconto Falls, Wisconsin, City of - FY 2012
Machias, Maine, Town of- FY 2012
Winchester, Connecticut, Town of - FY 201 1
Leominster, Massachusetts, City of- FY 201 1
Chattahoochee Valley Water Supply District, Alabama - FY 2012
Taunton, Massachusetts, City of- FY 2012
Clayton-Camp Point Water Commission, Illinois - FY 2012
New Haven, West Virginia, Municipality of- FY 2012
New Bedford Harbor Develop. Commission, Massachusetts - FY 2012
Cape Charles, Virginia, Municipal Corporation of- FY 2012
Nov. 05, 2013
Nov. 05, 2013
Nov. 05, 2013
Nov. 06, 2013
Nov. 06, 2013
Nov. 12, 2013
Nov. 12, 2013
Nov. 12, 2013
Nov. 12, 2013
Nov. 12, 2013
Nov. 12, 2013
Nov. 12, 2013
Nov. 13, 2013
Nov. 14, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 18, 2013
Nov. 19, 2013
Nov. 19, 2013
Dec. 10, 2013
Dec. 10, 2013
Dec. 17, 2013
$0
0
0
0
48,670
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
32,273
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
40
-------
Semiannual Report to Congress
October 1, 2013—March 31, 2014
Questioned Costs
Report No.
14-3-0045
14-3-0046
14-3-0047
14-3-0048
14-3-0049
14-3-0050
14-3-0051
14-3-0052
14-3-0053
14-3-0054
14-3-0055
14-3-0056
14-3-0057
14-3-0058
14-3-0059
14-3-0060
14-3-0061
14-3-0062
14-3-0063
14-3-0064
14-3-0065
14-3-0066
14-3-0067
14-3-0068
14-3-0069
14-3-0070
14-3-0071
14-3-0072
14-3-0073
14-3-0074
14-3-0075
14-3-0076
14-3-0077
14-3-0078
14-3-0079
14-3-0080
14-3-0081
14-3-0082
14-3-0083
14-3-0084
14-3-0085
14-3-0086
14-3-0087
14-3-0089
14-3-0090
14-3-0091
14-3-0092
14-3-0093
14-3-0094
14-3-0095
14-3-0096
14-3-0097
14-3-0098
14-3-0099
14-3-0100
14-3-0101
14-3-0102
14-3-0103
14-3-0104
14-3-0105
14-3-0106
14-3-0107
14-3-0108
14-3-0110
14-3-0111
14-3-0112
Report Title
Brawley, California, City of -FY 201 2
Fort Bend Fresh Water Supply District No. 1 , Texas - FY 2012
Neosho, Missouri, City of - FY 2012
Missouri System, Missouri, University of- FY2012
Gardner, Kansas, City of- FY 2012
Pearl River, Louisiana, Town of- FY 2012
Stockton, Missouri, City of - FY 2012
Trenton, New Jersey, City of - FY 2012
Boston Redevelopment Authority, Massachusetts - FY 2012
Los Angeles Department of Water and Power, California - FY 201 2
Titusville, Florida, City of- FY 201 2
Jackson County Commission, Alabama - FY 201 1
Portland, Indiana, City of- FY2012
Saint Paul Regional Water Services, Minnesota - FY 2012
Central Iron Range Sanitary Sewer District, Minnesota - FY 2012
Unadilla, New York, Village of- FY 201 1
Cayuga County Water and Sewer Authority, New York - FY 201 2
Paynesville, Minnesota, City of- FY2012
Montville, Connecticut, City of - FY 2012
Conservation Law Foundation Inc., Massachusetts - FY 2012
St. Croix Chippewa Indians of Wisconsin, Wisconsin - FY 2012
Alexander City, Alabama, City of - FY 201 1
Valley, Alabama, City of- FY 201 1
Houghton-Keweenaw Conservation District, Michigan - FY 2012
Howey-ln-The-Hills, Florida, Town of- FY 2012
Moultrie, Georgia, City of- FY2012
Two Harbors, Minnesota, City of- FY 2012
Jones County, Georgia - FY 2012
Somerset, Kentucky, City of - FY 2012
Western Mason Water District, Kentucky - FY 201 0
Wadena, Minnesota, City of - FY 2012
Bayfield, Wisconsin, City of - FY 2012
Freeport, Illinois, City of- FY 201 2
Lewisburg, West Virginia, Municipality of- FY 2012
Southwestern Water District, West Virginia - FY 2012
Branch County, Michigan
Tulare, California, City of - FY 2012
Allegan, Michigan, City of- FY2012
Greater Portland Council of Governments, Maine - FY 201 1
Leelanau County, Michigan FY2012
Emory University, Georgia - FY 2012
Barrackville, West Virginia, Town of- FY 2012
Southwestern Pennsylvania Water Authority, Pennsylvania- FY2012
Oakdale, Louisiana, City of - FY 2012
Pleasant Point Passamaquoddy Tribal Council, Maine - FY 201 1
Melbourne, Florida, City of - FY 201 2
Cullman, Alabama, City of- FY2012
Partners Healthcare Systems and Affiliates, Massachusetts - FY 2012
Duluth, Minnesota, City of- FY2012
Madison Lake, Minnesota, City of- FY 2012
Mountain Lake, Minnesota, City of- FY 201 2
NewRichland, Minnesota, City of- FY 201 2
Newfolden, Minnesota, City of- FY2012
Puerto Rico, Environmental Quality Board, Commonwealth of
Commonwealth Utilities Corporation, MP - FY 2012
U.S. Virgin Islands -FY 2011
New Albany, Indiana, Civil City of- FY 201 1
Allegan County, Michigan - FY 2012
Bogalusa, Louisiana, City of - FY 2012
Canby, Minnesota, City of- FY 2012
Clinton, Iowa, City of-FY 2012
Huntingdon, Pennsylvania, Borough of-FY 2012
Passenger Vessel Association Inc. - FY 2014
Maryland Coastal Bays Foundation Inc., Maryland - FY 2012
Smyrna, Delaware, Town of- FY 2012
Stewart, Minnesota, City of-FY 201 2
Date
Dec. 20, 2013
Dec. 20, 2013
Dec. 20, 2013
Dec. 20, 201 3
Dec. 30, 201 3
Dec. 30, 201 3
Dec. 30, 201 3
Dec. 30, 2013
Dec. 30, 2013
Dec. 30, 2013
Dec. 30, 2013
Dec. 30, 201 3
Dec. 30, 201 3
Dec. 30, 201 3
Dec. 30, 201 3
Dec. 30, 2013
Dec. 30, 2013
Dec. 30, 2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Dec. 31,2013
Jan. 03, 2014
Jan. 03, 2014
Jan. 06, 2014
Jan. 06, 2014
Jan. 06, 2014
Jan. 06, 2014
Jan. 06, 2014
Jan. 06, 2014
Jan. 07, 2014
Jan. 07, 2014
Jan. 14, 2014
Jan. 14, 2014
Jan. 14, 2014
Jan. 14, 2014
Jan. 15, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 27, 2014
Jan. 28, 2014
Jan. 28, 2014
Jan. 29, 2014
Jan. 29, 2014
Jan. 29, 2014
Jan. 31, 2014
Jan. 31, 2014
Feb. 07, 201 4
Feb. 07, 2014
Feb. 14, 2014
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
18,000
0
0
0
0
0
0
0
0
493,099
0
0
0
0
0
0
0
0
0
0
0
0
Federal
Unsupported Unreasonable Recommended
Costs Costs 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
8,592,959
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
41
-------
Semiannual Report to Congress
October 1, 2013—March 31, 2014
Questioned Costs
Report No.
14-3-0113
14-3-0114
14-3-0115
14-3-0116
14-3-0117
14-3-0118
14-3-0119
14-3-0120
14-3-0121
14-3-0124
14-3-0125
14-3-0126
14-3-0127
14-3-0133
14-3-0134
14-3-0135
14-3-0136
14-3-0137
14-3-0138
14-3-0139
14-3-0140
14-3-0141
14-3-0144
14-3-0145
14-3-0146
14-3-0147
14-3-0148
14-3-0149
14-3-0150
14-3-0151
14-3-0152
14-3-0153
14-3-0156
Report Title
Virginia, Minnesota, City of- FY2012
Community Action Duluth, Minnesota- FY2012
Brooke County Public Service District-Sewer, West Virginia - FY 201 2
Friends of the Cheat Inc., West Virginia - FY 2012
Whitemarsh Township, Pennsylvania- FY 2010
Winnebago, Minnesota, City of- FY2012
Austin, Texas, City of- FY 2012
Cornell, Wisconsin, City of- FY2012
Illinois, Illinois, University of- FY2012
Caddo Mills, Texas, City of- FY 2012
Lake Livingston Water Supply/Sewer Service Corp., Texas - FY 2012
Baxter, Iowa, City of FY 201 2
Topeka, Kansas, City of- FY 201 1
UNO Research and Technology Foundation, Inc., Louisiana - FY 2012
Oconto County, Wisconsin - FY 201 2
Necedah, Wisconsin, Village of- FY 2012
Grand Portage Band of Chippewa Indians, Minnesota - FY 201 2
Lower Sioux Indian Community, Minnesota - FY 2012
Highland County, Ohio- FY 2012
New Lisbon, Wisconsin, City of- FY2012
Forest County Potawatomi Community, Wisconsin - FY 2012
Questa, New Mexico, Village of- FY 2012
Logansport, Louisiana, City of - FY 2012
Rensselaer, Indiana, City of - FY 2012
Redevelop. Authority Montgomery County, Pennsylvania - FY 2012
Marysville, Pennsylvania, Borough of- FY2012
Freedom Township Water/Sewer Authority, Pennsylvania - FY 2012
Loyalsock Township, Pennsylvania - FY 2012
Mansfield, Louisiana, City of - FY 2012
Minneapolis Park and Recreation Board, Minnesota - FY 2012
North Koochiching Area Sanitary District, Minnesota - FY 2012
Batesville, Arkansas, City of - FY 2012
Mid-Atlantic Regional Air Management Assoc., Maryland - FY 201 2
TOTAL SINGLE AUDIT REPORTS = 130
Date
Feb. 14, 2014
Feb. 14, 2014
Feb. 14, 2014
Feb. 14, 2014
Feb. 18, 2014
Feb. 18, 2014
Feb. 19, 2014
Feb. 19, 2014
Feb. 20, 2014
Feb. 26, 2014
Feb. 26, 2014
Feb. 26, 201 4
Feb. 26, 201 4
Mar. 17, 2014
Mar. 17, 2014
Mar. 17, 2014
Mar. 19, 2014
Mar. 19, 2014
Mar. 19, 2014
Mar. 19, 2014
Mar. 19, 2014
Mar. 19, 2014
Mar. 24, 2014
Mar. 24, 2014
Mar. 25, 2014
Mar. 25, 2014
Mar. 25, 2014
Mar. 25, 201 4
Mar. 26, 2014
Mar. 26, 2014
Mar. 26, 2014
Mar. 28, 2014
Mar. 31,2014
Ineligible
Costs
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5,243
0
0
0
0
0
0
0
0
0
0
0
0
$597,285
Federal
Unsupported Unreasonable Recommended
Costs Costs 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
$8,592,959
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
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
14-1-0038
14-1-0039
14-1-0041
14-1-0042
CSB Fiscal Years 2013 and 2012 Financial Statements
EPA Fiscal Years 2013 and 2012 Financial Statements
FY 2012 Pesticides Reregistration and Expedited Processing Fund
FY 2012 Pesticides Registration Fund
TOTAL FINANCIAL STATEMENT REPORTS = 4
Dec. 16, 2013
Dec. 16, 2013
Dec. 17, 2013
Dec. 17, 2013
$0
0
0
0
$0
$0
0
0
0
$0
$0
0
0
0
$0
$0
0
0
0
$0
ATTESTATION REPORTS
14-4-0040 Dozier Technologies Inc. Support Services Contract
TOTAL ATTESTATION REPORTS = 1
Dec. 17, 2013
$0
$0
$0
$0
NON-AUDIT REPORTS
14-N-0016 Compendium of Unimplemented Recommendations as 9/30/13 Nov. 15,2013 $0 $0
TOTAL NON-AUDIT REPORTS = 1 $0 $0
AMERICAN REINVESTMENT AND RECOVERY ACT OF 2009 REPORTS
14-R-0032 Colorado Treating Mining Wastes and Removing Water Contaminants Nov. 19,2013 $2,593,495 $0
14-R-0088 Grant Awarded to Greater Lansing Area Clean Cities Jan.09,2014 0 805,759
14-R-0130 Grant Awarded to California Air Resources Board Mar.06,2014 8,866,000 0
TOTAL AMERICAN REINVESTMENT AND RECOVERY ACT $11,459,495 $805,759
OF 2009 REPORTS = 3
$0
0
0
$0
$0
0
0
$0
TOTAL REPORTS ISSUED = 156
$12,746,730
$9,398,718
$0
$17,879,000
42
-------
Semiannual Report to Congress
October 1, 2013—March 31, 2014
Appendix 2—Reports Issued Without Management Decisions
For Reporting Period Ended March 31, 2014
The Inspector General Act of 1978, as amended, requires a summary of each audit report issued before the
commencement of the reporting period for which no management decision had been made by the end of the
reporting period, an explanation of the reasons such management decision had 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 follow-up status as of March 31, 2014.
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 the 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: A revised corrective action plan has been created by the Office of Administration and Resources
Management to address the outstanding recommendations. The memo was sent to the OIG on April 1, 2014. The
revised corrective action plan addressed both corrective actions (2-1 completed February 19, 2014, and 3-1 completed
September 30, 2013). The memo thus certifies that all actions have been completed. Upon acceptance by the OIG, the
Office of Administration and Resources Management will send a formal certification memo to the Chief Financial
Officer.
OIG Follow-Up Status: None provided.
Report No. 11-P-0722, EPA Should Prepare and Distribute Security Classification Guides, September 29, 2011
Summary: This report evaluated the scope and nature of the EPA's classified national security information
infrastructure and its ability to provide information to those who need it. The OIG found that the EPA has not
established any official classification guides even though EPA Administrators have taken original classification
actions. The EPA's National Security Information Handbook requires that a classification guide be developed for each
system, plan, program or project that involves classified information. The OIG recommended that the Administrator
ensure the preparation, review and approval of appropriate security classification guides that conform to the
requirements of Executive Order 13526, Classified National Security Information, and the EPA's National Security
Information Handbook. We also recommended that the Administrator ensure the distribution of classification guides to
users of the EPA's originally classified information and to program offices that work in related subject areas. The
Office of Administration and Resources Management, which responded on behalf of the agency, did not agree with
the report's conclusions and the recommendations are unresolved.
Agency Explanation: This audit is currently on hold per the OIG in order for the National Homeland Security Research
Center to determine what classification guides should be used.
OIG Follow-Up Status: Resolution on hold - beyond agency control.
Report No. 13-P-0398, Improved Contract Administration Needed for Customer Technology Solutions
Contract, September 16, 2013
Summary: This review found that the EPA did not use performance standards to measure cost outcomes, as stated
by OMB, Federal Acquisition Regulations and agency guidelines. Also, the EPA did not complete any of the required
contractor performance evaluation reports, maintain required contract administration documents, or have policies in
place that would require performance metrics and standards to be linked to cost outcomes and procedures to ensure
43
-------
Semiannual Report to Congress October 1, 2013—March 31, 2014
contract administrators maintain sufficient documents in the official contract files. The EPA's ineffective contract
administration may have hindered the ability of EPA staff to ensure that the contractor successfully met agency
needs, as well as its ability to determine whether the EPA achieved the best value for the $85 million expended on
the Working Capital Fund contract.
Agency Explanation: Due to disagreements between the agency and the OIG on several of the recommendations,
audit resolution meetings are continuing to be held to determine whether the sides can come to a mutual agreement
on how to proceed. Per information from Office of General Counsel attorneys on March 28, 2014, they have not met
with OIG counsel on the outstanding issues, but anticipate reaching out to them in April 2014.
OIG Follow-Up Status: None provided.
Office of Grants and Debarment
Report No. 12-3-0007, Cascade Sierra Solutions, Eugene, Oregon - FY 2010, October 11, 2011
Summary: This review found that internal controls over project/customer file documentation are deficient. It was
difficult for the recipient to timely substantiate evidence of compliance for installation of verified technologies for EPA
and U.S. Department of Energy grants. The review also found that personnel had limited knowledge of generally
accepted accounting principles, specifically as they relate to accounting for financial receivables, loan fees and
allowance for losses. Due to the internal control findings reported by the single auditor and the inability of the
recipient's accounting system to ensure that federal costs are allowable under its grants, we questioned $2,767,077
in reported EPA federal expenditures.
Agency Explanation: Resolution is on hold and beyond agency control.
OIG Follow-Up Status: Resolution is on hold and beyond agency control.
Report No. 12-4-0224, Examination of Costs Claimed Under Cooperative Agreement X7-83325501 Awarded to
Kathleen S. Hill, January 23, 2012
Summary: We found that the recipient did not have a financial management system that met federal standards.
The recipient did not have adequate controls to ensure that costs claimed were in accordance with Code of Federal
Regulations requirements. The recipient's cash draws did not comply with 40 Part 30 requirements or the terms and
conditions of the cooperative agreement. As a result, we questioned $80,721 of the $726,587 claimed under the
cooperative agreement.
Agency Explanation: The National Policy, Training and Compliance Division Deputy Director issued the Office of
Grants and Debarment's management decision on March 31, 2014. Of the questioned $80,721 in costs, $46,940
were determined to be allowable and the remaining $33,781 to be disallowed. The recipient will have 30 days to
appeal the decision.
OIG Follow-Up Status: No response.
Report No. 12-R-0749, Examination of Costs Claimed Under EPA Cooperative Agreement 2A-83440701
Awarded Under the Recovery Act to Cascade Sierra Solutions, Eugene, Oregon, September 4, 2012
Summary: Cascade Sierra Solutions' financial management system did not support that funds drawn are reasonable
and allocable in accordance with applicable laws and regulations. In particular, the grantee's financial management
system pertaining to cash draws, revolving fund accounting, project costs and progress reporting did not meet the
requirements of the Code of Federal Regulations, and procurements did not meet competition cost and price analysis
requirements. Reporting of the number of jobs created or retained with Recovery Act funds did not comply with the
OMB guidance. As a result, we were unable to provide an opinion on the financial resources, related liabilities,
revenue, expenses and residual balances. Therefore, we questioned the $9 million drawn as unallowable costs.
Agency Explanation: Resolution on hold.
OIG Follow-Up Status: Resolution is on hold and beyond agency control.
44
-------
Semiannual Report to Congress October 1, 2013—March 31, 2014
Report No. 13-3-0121, Cascade Sierra Solutions, Eugene, Oregon - FY 2011, January 29, 2013
Summary: The single auditor reported growing concern regarding issues with the recipient. We continue to
recommend that the recipient maintain high risk status. We also questioned all EPA expenditures, totaling almost
$3 million, due to significant compliance issues, including the recipient's ability to account for its Clean Diesel
Revolving Loan expenditures.
Agency Explanation: Resolution is suspended as of July 10, 2013, due to the OIG's ongoing investigation of Cascade
Sierra Solutions.
OIG Follow-Up Status: Resolution is on hold and beyond agency control.
Report No. 13-P-0341, Lead Remediation Association of America, August 6, 2013
Summary: The OIG found that the Lead Remediation Association of America's financial management system did not
meet the standards established under the Code of Federal Regulations. The association's accounting system data
were not updated timely. The association also made cash draws and submitted its final federal financial report using
the grant budget amounts rather than actual costs incurred. In addition, the association did not maintain source
documentation to support the costs incurred or claimed as required. We also found that the association did not meet
the grant objectives as outlined in the approved workplan. As of the date of OIG's report—2 years after the grant
period end date of June 30, 2011—the association had not produced the required DVDs, provided evidence of
brochure distribution, or completed the required training and workshops. As a result of the issues noted, the OIG
questioned the $249,870 claimed and recommended recovery of the $249,882 drawn under the grant.
Agency Explanation: Resolution on hold. The OIG contacted the Office of Grants and Debarment and requested that
it suspend work on this audit due to an OIG investigation of the Lead Remediation Association of America.
O/G Follow-Up Status: Resolution is on hold and beyond agency control.
Financial Analysis and Rate Negotiation Service Center
Report No. 06-4-00165, National Academy of Sciences—FY 2006 Indirect/Other Direct Costs System,
September 27, 2006
Summary: In the Defense Contract Audit Agency's (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: Resolution on hold. Resolution of audit results is not the EPA's responsibility but the responsibility
of the Department of Defense. Therefore, an expected resolution date cannot be determined at this time.
O/G Follow-Up Status: Resolution on hold pending receipt of additional information.
Report No. 07-1-00061, Lockheed Martin Services Group—FY 12/31/2004 I/C, April 10, 2007
Summary: DCAA questioned $34,708,911 in claimed direct costs and proposed indirect costs. Further, DCAA did not
audit $338,864,655 in claimed direct and indirect costs for assist audits not yet received or for received assist audit
reports, the impact of which on the contractor's cost objectives has not yet been calculated. Additionally, DCAA
upwardly adjusted $48,224,805 in claimed base costs. The 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: Resolution on hold. Resolution of audit results is not the EPA's responsibility but the responsibility
of the Department of Defense. Therefore, an expected resolution date cannot be determined at this time.
OIG Follow-Up Status: Resolution on hold pending receipt of additional information.
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Semiannual Report to Congress October 1, 2013—March 31, 2014
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 contracts/subcontracts that do not have indirect
ceiling rates and are impacted by the questioned indirect rates. EPA's share of questioned indirect costs totals
$133,069.
Agency Explanation: Resolution on hold. Resolution of audit results is not the EPA's responsibility but the responsibility
of the Department of Defense. Therefore, an expected resolution date cannot be determined at this time.
O/G Follow-Up Status: Resolution on hold pending receipt of additional information.
Report No. 09-1-0034, Lockheed Martin Services Group—FY 2006 Incurred Cost, November 24, 2008
Summary: DCAA questioned $23,672,344 in claimed direct and proposed indirect costs and rates. Of this, $381,582
is claimed direct costs and $23,290,762 is proposed indirect costs and rates. DCAA also did not audit $159,778,286
in claimed subsidiary and subcontracts costs. The 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: Resolution on hold. Resolution of audit results is not the EPA's responsibility but the responsibility
of the Department of Defense. Therefore, an expected resolution date cannot be determined at this time.
O/G Follow-Up Status: Resolution on hold pending receipt of additional information.
Region 1—Regional Administrator
Report No. 13-3-0360, Maiden, Massachusetts, City of- FY 2012, August 23, 2013
Summary: This review found significant deficiencies in payroll processing. There were many instances of employees
assigned to federal and state grants that were initially charged to incorrect accounts in the general ledger, requiring
significant allocation adjustments to properly charge the grant funds. Also, the city submitted the same vendor
invoices for reimbursement on two separate federal awards. The auditors questioned $970,000.
Agency Explanation: Region 1's Audit Follow-up Coordinator worked with the Region 1 State Revolving Fund program
to acquire and review the financial records pertaining to the $970,000 questioned costs. Costs have been reconciled.
Region 1 is working with the recipient to ensure it has written procedures in place so that this scenario will not occur in
the future. This audit should be closed out no later than April 30, 2014.
O/G Follow-Up Status: None provided.
Report No. 13-3-0362, Gloucester, Massachusetts, City of - FY 2012, August 28, 2013
Summary: This review found that the city of Gloucester did not obtain debarment certifications or check the excluded
parties list system for the vendor contracted with in excess of $25,000. The equipment purchased with the
congressionally mandated project funds do not contain federal identification tags to segregate them from the
equipment purchased with state or local funds. Additionally, the city's federal grant equipment records do not contain
all of the required information as prescribed in OMB Circular A-102.
Agency Explanation: Region 1 is working with the recipient to ensure all that corrective actions have been
implemented. Region 1 anticipates that this item will be closed by May 30, 2014.
O/G Follow-Up Status: None provided.
Report No. 13-3-0369, State of Rhode Island and Providence Plantation - FY 2012, August 30, 2013
Summary: The University of Rhode Island had two contracts that did not meet the cost-sharing requirements by the
end of the contract term. The total amount of cost-sharing not met during FY 2012 was $31,873. Many of the
intended benefits for improved efficiency, enhanced management information, and reduced incompatibility and
redundancy of accounting applications throughout state government have not been achieved. Also, the state did not
have adequate segregation of duties over cash receipts and disbursements, and the state needed to improve its
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Semiannual Report to Congress October 1, 2013—March 31, 2014
internal controls over recording federal revenue. Controls over capital assets can be enhanced. Although the
development of a comprehensive information systems security plan was a significant accomplishment, the state is
still deficient in ensuring that all of its critical information systems are compliant with formalized policies and
procedures. Strong change management controls are needed to ensure that standardized methods and procedures
are used for efficient handling of all application-specific changes.
Agency Explanation: The recipient has complied with all corrective actions and Region 1 said that it expects this item
will be closed out by April 2014.
O/G Follow-Up Status: None provided.
Region 4—Regional Administrator
Report No. 12-4-0499, Costs Claimed by the North Carolina Rural Economic Center Inc. Under EPA Grant No.
X96418405, May 23, 2012
Summary: This review found that the grantee did not comply with the Code of Federal Regulations regarding financial
management. The grantee did not properly allocate direct costs between state and federal funding sources.
Therefore, the EPA should recover $1,192,500 in costs questioned under the grant. The grantee failed to properly
allocate the questioned costs primarily because the EPA provided incorrect guidance and inadequately monitored the
grant. The region must recognize that the $178,556 budget revision it directed is not allocable to the EPA grant
because it shifted subcontract costs allocable to state funding sources to the EPA grant. Additionally, the grantee was
unfamiliar with federal grant regulations. We recommended that Region 4 disallow all costs paid under the grant and
recover $1,192,500. Region 4 and the grantee disagreed with our draft findings and recommendation. We evaluated
the information contained in their responses to our draft report, but did not modify our findings or recommendation.
The recommendation is unresolved with resolution efforts in progress.
Agency Explanation: Two of the three corrective actions have been completed. The third corrective action required
Region 4 to request the grantee to submit the methodology for accounting for the allocation of costs among state and
federal funding sources for the full project costs. The region has reviewed the revised allocations and determined that
the costs charged to the EPA were reasonable, allowable, supported by appropriate documentation and allocable to
the EPA. On September 5, 2013, Region 4 responded to the OIG with this additional information. Region 4 is awaiting
its review by the OIG. Region 4 expects resolution by June 30, 2014.
O/G Follow-Up Status: Response received and under review.
Report No. 13-R-0321, Projected Emission Reductions Overstated and Buy American Requirements Not Met
Under EPA Award to the Tennessee Department of Transportation, July 19, 2013
Summary: This review found that the Tennessee Department of Transportation followed most applicable laws,
regulations, and terms and conditions of the cooperative agreement in the procurement and monitoring of contracts
with the exception of the Buy American requirements of the American Recovery and Reinvestment Act.
Tennessee did not determine whether trusses used in construction of facilities by one contractor qualify as substantial
transformation. The state complied with the cooperative agreement requirements and satisfied EPA Region 4
requirements for projecting results, but the state overstated its results because it used significantly overestimated
usage assumptions in its projections rather than current usage.
Agency Explanation: Resolution on hold.
O/G Follow-Up Status: Resolution on hold awaiting additional information.
Region 6—Regional Administrator
Report No. 13-4-0296, Labor-Charging Practices at the New Mexico Environment Department, June 17, 2013
Summary: This review found that three of the four New Mexico Environment Department bureaus did not always
comply with requirements found in the Code of Federal Regulations. The Air Quality Bureau and Drinking Water
Bureau charged labor, fringe benefits and indirect costs to federal grants based upon budget allocations instead of
actual activities performed. Personnel activity reports received from the Surface Water Quality Bureau to support
charges for labor costs incurred prior to July 2006 did not meet requirements. New Mexico personnel stated that they
charged labor based upon budget allocations because they thought the practice was acceptable. EPA OIG
questioned $298,159 in labor, fringe benefits and related indirect costs claimed by the Air Quality Bureau; $2,974,318
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October 1, 2013—March 31, 2014
claimed by Drinking Water Bureau; and $2,733,798 claimed by Surface Water Quality Bureau. The OIG also
identified an additional $486,305 charged to a Drinking Water Bureau-administered grant which has not yet been
reported to the EPA.
Agency Explanation: A management decision was issued to the New Mexico Environment Department on
February 7, 2014. The issuance was delayed due to the complexity of the labor-charging finding. The expected
resolution date is December 31, 2014.
OIG Follow-Up Status: None provided.
Region 7—Regional Administrator
Report No. 13-R-0367, American Recovery and Reinvestment Act Award to Grace Hill Settlement House,
August 30, 2013
Summary: This review found that Grace Hill's financial management system did not meet federal standards. In
particular, procurements did not meet the competition or cost and price analysis requirements of the Code of Federal
Regulations. The contract administration system also did not meet the code's requirements. Unallowable costs were
not segregated and financial management data were not properly supported, labor charges did not comply with
requirements, and cash draws did not meet the immediate cash needs requirements and were not properly
documented. As a result of the issues noted, the OIG questioned $1,615,353 of the $2,250,031 claimed under the
cooperative agreement. In addition, due to a lack of adequate documentation from Grace Hill, we were unable to
determine whether Grace Hill accomplished the objective of the cooperative agreement or met the job reporting
requirements of the American Recovery and Reinvestment Act's Section 1512.
Agency Explanation: As of March 31, 2014, EPA Region 7 continues to work through the numerous findings with
personnel from the OIG, and continues to assess the vast quantity of documentation provided by the grantee in
response to the draft and final reports. Due to the complex nature of the findings, as evidenced by the 22 months the
OIG worked on the audit, a final determination has not yet been reached. Region 7 anticipates a final determination,
with OIG concurrence, to be issued by June 30, 2014.
OIG Follow-Up Status: None provided.
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 the Code of Federal
Regulations and OMB Circular A-87. We questioned $3,101,827 of the $3,736,560 in outlays reported. The tribe's
internal controls were not sufficient to ensure that outlays reported complied with federal cost principles, regulations
and grant conditions. In some instances, the tribe also was not able to demonstrate that it had completed all work
under the agreements and had achieved the intended results.
Agency Explanation: The Office of Grants and Debarment and the region are discussing contents of the proposed
final determination letter. Projected completion date is September 30, 2014.
OIG Follow-Up Status: No response received.
Region 9—Regional Administrator
Report No. 13-3-0159, Summit Lake Paiute Tribe, Nevada - FY 2010, February 19, 2013
Summary: The tribe did not file or maintain documentation of compliance for annual reports. Also, the required
SF 425 report did not cover the correct period. A similar finding was noted in the prior year audit report. The tribe
recorded deferred revenues in the amount of $804,104 and only $150,416 in available cash. The single auditor
questioned $653,688. A similar finding was noted in the prior year audit report. The tribe's operating practices did not
reflect the processes described in the approved policies and procedures manual. The tribe did not properly reconcile
its SF 425 report to the general ledger for certain awards and the single auditor questioned $20,556. The single
auditor also questioned $76,216 involving amounts paid to the General Assistance Program Director.
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Agency Explanation: Region 9 indicated it will be issuing a final decision letter on the agreed-upon procedures by
March 31, 2014. The target date for issuing the management decision letter will be by the end of the third quarter
2014.
O/G Follow-Up Status: None provided.
Report No. 13-3-0160, Summit Lake PaiuteTribe, Nevada- FY2011, February 19, 2013
Summary: The tribe did not file the quarterly narratives for the General Assistance Program. Furthermore, the tribe
was unable to locate documentation for two quarterly SF 425 reports. There were no formalized controls regarding
the security of the payroll stamp. Also, the single auditor noted issues related to pay rates. A similar finding was noted
in the prior year audit report. Budgets prepared excluded the carry-forward amounts from prior periods. Several
transactions were not supported by a purchase order or other type of approval prior to the expenditure being made.
One transaction charged to travel in the amount of $2,877 did not appear to be valid and appropriate for the granting
requirements, and the single auditors questioned that amount.
Agency Explanation: Region 9 indicated it will be issuing a final decision letter on the agreed-upon procedures by
March 31, 2014. The target date for issuing the management decision letter will be the end of the third quarter 2014.
O/G Follow-Up Status: None provided.
Report No. 13-3-0350, Wells Band Council, Nevada- FYs 2008, 2011 and 2012, August 21, 2013
Summary: This review found numerous financial statement and major program compliance findings. As a result of
significant cash management issues, we questioned as unsupported $361,027 and recommended that the council be
considered high risk, in accordance with the Code of Federal Regulations.
Agency Explanation: Resolution on hold.
O/G Follow-Up Status: None provided.
Report No. 13-P-0209, Opportunities for EPA-Wide Improvements Identified During Review of a Regional
Time and Materials Contract, April 4, 2013
Summary: This review found that EPA Region 9 did not require its contracting personnel to verify that personnel for
the contractor had the qualifications necessary to execute contract EPS90804. This may be an EPA-wide problem in
managing time and materials contracts. In addition, Region 9 contracting personnel did not consistently update the
statement of work that identifies the work it expects the contractor to perform so the EPA can use the statement of
work to monitor performance; document the review of the qualifications of contractor personnel performing the
contract tasks; document the reviews of monthly progress, contractor performance and quality of deliverables;
become familiar with the contract; and issue memorandums appointing contract officer representatives. These
practices put the EPA at risk of not receiving the level or quality of service for which it paid. Also, EPA Region 9
negotiated a prohibited profit clause in the contract, resulting in the EPA improperly paying the contractor more than
$1.5 million in additional profit.
Agency Explanation: Region 9 disagreed with the OIG on recommendations 3a and b and recommendations 4a
and b. This audit is being resolved through the agency's dispute resolution process.
O/G Follow-Up Status: None provided.
Total reports issued before reporting period for which
no management decision had been made as of March 31, 2014 = 24
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Appendix 3—Reports With Corrective Action Not Completed
In compliance with reporting requirements of Section 5(a)(3) of the Inspector General Act of 1978, as
amended, "Identification of Reports Containing Significant Recommendations Described in Previous
Semiannual Reports on Which Corrective Action Has Not Been Completed," and to help EPA and CSB
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/2014/20140430-14-N-0242.pdf) is produced semiannually for agency
leadership and Congress based on agency reports on the status of actions taken on OIG
recommendations and OIG selective verification of reported status.
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Appendix 4—Peer Reviews Conducted
The most recent peer review report on the EPA OIG was issued on May 9, 2012, by the U.S. Department
of Health and Human Services OIG. That review, covering the 3-year period ending September 30, 2011,
found that the EPA OIG system of quality control was suitably designed and complied with applicable
Government Auditing Standards. That report had given the EPA OIG a peer review rating of pass with
no deficiencies cited.
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Appendix 5—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: (703) 347-8740
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
11201 Renner Boulevard
Lenexa, KS66219
Audit/Evaluation: (913) 551-7878
Investigations: (312) 353-2507
New York
U.S. Environmental Protection Agency
Office of Inspector General
290 Broadway, Room 1520
New York, NY 10007
Audit/Evaluation: (212) 637-3049
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) 814-2367
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) 947-8711
Seattle
U.S. Environmental Protection Agency
Office of Inspector General
Mail Code OIG-173
1200 Sixth Avenue, Suite 900
Seattle, WA 98101
Audit/Evaluation: (206) 553-6906
Investigations: (206) 553-1273
Washington
U.S. Environmental Protection Agency
Office of Inspector General
Potomac Yard
2733 Crystal Drive
Arlington, VA 22202
Investigations: (703) 347-8740
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
Mailcode2431T
Washington DC 20460
fax: 202-566-2599 • phone: 1-888-546-8740
www.epa.gov/oig/hotline.htm
It's your money
It's your environment
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