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Semiannual
Report to Congress
April 1, 2014-September 30, 2014
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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)
Index of Reporting Requirements
Inspector General Act of 1978, as amended
Subject Pages
Review of legislation and regulations 50
Significant problems, abuses and deficiencies 15-47, 53
Significant recommendations for corrective action 15-39, 53
Reports with corrective action not completed 68
Matters referred to prosecutive authorities 40-48, 54, 58
Information or assistance refused 7-10, 52
List of reports issued 59-62
Summaries of significant reports 15-39, 53
Audit, inspection and evaluation reports—questioned costs 54-56, 59-62
Audit, inspection and evaluation reports—funds to be put to better use 54-56, 59-62
Prior audit, inspection and evaluation reports unresolved 55-56, 63-67
Significant revised management decisions None
Significant management decisions with which OIG disagreed None
Peer reviews conducted 69
Abbreviations
CSB
EPA
FAR
FBI
FOIA
FY
OIG
OHS
OMB
SES
U.S. Chemical Safety and Hazard Investigation Board
U.S. Environmental Protection Agency
Federal Acquisition Regulation
Federal Bureau of Investigation
Freedom of Information Act
Fiscal Year
Office of Inspector General
Office of Homeland Security
Office of Management and Budget
Senior Executive Service
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1200 Pennsylvania Avenue, NW (2431T)
Washington, DC 20460
(888) 546-8740
(202) 566-2599 (fax)
OIG Hotline@epa.gov
More information at www.epa.gov/oig/hotline.html.
EPA Office of Inspector General
1200 Pennsylvania Avenue, NW (241OT)
Washington, DC 20460
(202) 566-2391
www.epa.gov/oig
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Message to Congress
In this semiannual report to Congress, the Office of Inspector General (OIG)
demonstrates its commitment to furthering the goals, strategies and best
practices of the U.S. Environmental Protection Agency (EPA) by articulating
areas in which the agency can do better. You will read about where the OIG
focused its work, what we found and some of the challenges faced along the
way.
Catch 'em Doing Good
A new "Agency Best Practices" feature showcases examples of commendable
EPA efforts that can be applied elsewhere in the agency. For instance, during
our review of Region 10's management of Puget Sound grants, we found that
the region had developed a Financial and Ecosystem Accounting Tracking Arthur A. Elkins Jr.
System report that enables project officers to more easily determine the status of outputs and deliverables
for tasks and subtasks, whether tasks are being accomplished as planned, and whether funds are being
spent appropriately. The implementation of such a report beyond Region 10 could have nationwide
benefits.
Monitoring Work on Climate Change
Several OIG reports during this semiannual period addressed the important topic of climate change,
concluding that the EPA has focused little attention on reducing methane emissions from pipelines in the
natural gas distribution sector, needs to address internal weaknesses warranting a quality-assurance
review, and should develop and implement a plan to assess whether the National Petroleum Refinery
Initiative led to sustained improvement in compliance and reductions in pollution among refineries.
Audits Related to the Bea/e Case
The OIG continued a series of audits in connection with internal control weaknesses relating to frauds
committed by former EPA employee John C. Beale. During this semiannual period, we issued reports on the
agency's retention incentive payments and its process for handling official passports. Simultaneously, in the
interests of transparency and improving our own activities, auditors reported on the OIG's own activities on
those fronts. We found that both the agency and the OIG needed to better comply with retention incentive
pay guidance, as well as strengthen passport controls to protect employees' sensitive personally identifiable
information.
Human Health, Safety and the Environment
I visited EPA regional offices in Boston, Philadelphia, Denver, Seattle, Kansas City and New York City,
where I met with senior agency officials and toured environmental justice, Brownfields and Superfund
sites. These visits generated new ideas for audits and evaluations, supported the work we are already
doing, and personalized the mission of the OIG for both EPA and community leaders across the country.
Several OIG reports from this period—including one associated with the EPA's handling of hazardous
chemicals being discharged into water, another emphasizing the need for improved EPA oversight of
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Alternative Asbestos Control Method experiments, and a third stressing the need for the agency to work
with states in the Gulf of Mexico hypoxic zone—further illustrate how we assist the agency in carrying
out its mission to protect human health and the environment.
Impediments to OIG Independence
The "Impediments to OIG Efforts" section of this report provides an overview of our ongoing
disagreements with the EPA's Office of Homeland Security (OHS) and other ways that the agency failed
to cooperate with OIG work.
During the semiannual period, the OHS continued to withhold critical information about matters within
the OIG's purview involving threats, employee misconduct and computer intrusions.
The OIG also continued to face audit work impediments involving the U.S. Chemical Safety and Hazard
Investigation Board (CSB), which were outlined during my June 19 testimony before the House
Committee on Oversight and Government Reform (HOGR). Although we issued a "Seven-Day Letter" to
the CSB Chairman to obtain documents as part of an ongoing investigation, CSB continued to ignore the
issuance of the letter and refused to provide the requested documents until directed by the HOGR
Chairman to do so. After reviewing the documents provided, the OIG concluded that CSB had
substantially, but still not fully, complied with our document request.
Another impediment involved EPA Region 4's failure to notify the OIG that more than 100 laptop
computers had been stolen or that many cameras were missing and had been pawned. Agency actions that
limit, condition or delay OIG access have profoundly negative consequences for our work. We continue
to urge the EPA Administrator to issue an agencywide cooperation memo that sets forth clear,
unambiguous and strong language on the requirement and expectation of cooperation with the OIG.
The independence of federal Inspectors General depends upon complete, unfiltered and timely access to all
information and materials available to the agency that relate to OIG oversight activities. In an August 5 letter
sent to both HOGR and the Senate Homeland Security and Government Affairs Committee, I joined 46 other
Inspectors General to express concerns about how federal agencies had impeded access to employees and
records. We asked Congress to reaffirm its intent and use available powers to enforce access when agencies
refuse to comply. I expressed similar sentiments when I testified at a September hearing before HOGR.
Return on Investment
Based on annual performance goals and plans established through the implementation of the Government
Performance and Results Act, the OIG exceeded performance targets in all four of its established goals
for fiscal year 2014. In terms of the all-important performance goal dealing with the monetary return on
investment as a percentage of budget, the OIG reported $380 million in savings, a $7.35 return on
investment for every $ 1 spent by the OIG.
Arthur A. Elkins Jr.
Inspector General
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Table of Contents
About EPA and Its Office of Inspector General 1
Furthering EPA's Goals and Strategies 2
Scoreboard of Results 5
Impediments to OIG Efforts 7
Dispute Resolution 11
Agency Best Practices Noted 13
Significant OIG Activity 15
Climate Change 15
Freedom of I nformation Act 18
Other Human Health and Environment Issues 20
Agency Business Practices and Accountability 31
I nvestigations 40
Other Activities 49
U.S. Chemical Safety and Hazard Investigation Board 52
Statistical Data 54
Profile of Activities and Results 54
Audit, Inspection and Evaluation Report Resolution 55
Hotline Activity 57
Summary of Investigative Results 58
Appendices 59
Appendix 1—Reports Issued 59
Appendix 2—Reports Issued Without Management Decisions 63
Appendix 3—Reports With Corrective Action Not Completed 68
Appendix 4—Peer Reviews Conducted 69
Appendix 5—OIG Mailing Addresses and Telephone Numbers 70
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Semiannual Report to Congress
April 1, 2014—September 30, 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
April 1, 2014—September 30, 2014
Furthering EPA's Goals and Strategies
When conducting our audit and evaluation work during the second half of fiscal year (FY) 2014, we
initially took into account the EPA's seven themes set by EPA Administrator Gina McCarthy for meeting
the challenges ahead, so that we could better enable the EPA to carry out its mission of protecting human
health and the environment. During the semiannual reporting period, the EPA adopted its FYs 2014-2018
Strategic Plan that includes five strategic goals and four cross-agency strategies, and we started measuring
our results based on those goals/strategies. The first table below shows how our audit and evaluation
reports aligned with each of the agency's themes; the second table shows how subsequent reports aligned
with the agency's new goals/strategies.
OIG-lssued Reports — Linkage to EPA Themes
EPA Needs to Continue to Improve Controls for Improper
Payment Identification (14-P-0171)
EPA Needs to Demonstrate Whether It Has Achieved the Goals
It Set Under the National Petroleum Refinery Initiative
(14-P-0184)
EPA Needs to Clarify Its Claim of "No Net Loss" of Wetlands
(14-P-0191)
Chemical Import Data May Help EPA Identify Facilities That
Need to File or Update Risk Management Plans (14-N-0239)
Audit of EPA Passport Controls (14-P-0243)
EPA OIG's Compliance With EPA Passport Guidance
(14-P-0244)
EPA Compliance With Retention Incentive Regulations and
Policies (14-P-0245)
EPA DIG Compliance With Retention Incentive Regulations and
Policies (14-P-0246)
EPA Employees Did Not Act Consistently With Agency Policy in
Assisting an EPAGrantee (14-P-0247)
Briefing Report: Review of EPA's Process to Release Information
Under the Freedom of Information Act (14-P-0262)
Making a Visible
Difference in
Communities
Across the
Country
Addressing
Climate
Change and
Improving
Air Quality
X
Taking
Action on
Toxics and
Chemical
Activity
X
Protecting
Water:
A Precious,
Limited
Resource
X
X
Launching a
New Era of
State, Tribal
and Local
Partnerships
Embracing
EPA as a High
Performing
Organization
X
X
X
X
X
X
Working
Toward a
Sustainable
Future
OIG-lssued Reports — Linkage to EPA Goals and Strategies
OIG Report
EPA Has Not Implemented Adequate
Management Procedures to Address
Potential Fraudulent Environmental Data
(14-P-0270)
Weak Management of a Climate Change
Services Contract Creates Risk EPA Did
Not Receive Services for Which It Paid
(14-P-0272)
New Jersey Department of Environmental
Protection Needs to Meet Cooperative
Agreement Objectives and Davis-Bacon
Act Requirements to Fully Achieve
Leaking Underground Storage Tank
Goals (14-R-0278)
Climate
Change/
Air
Quality
X
Protecting
America's
Waters
X
Cleaning
Communities/
Sustainable
Development
X
X
Safe
Chemicals/
Preventing
Pollution
Enforcing
Laws/
Ensuring
Compliance
Working
Toward
Sustainable
Future
Making
Difference in
Communities
State, Tribal,
Local and
International
Partnerships
X
Embracing
EPA as High-
Performing
Organization
X
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
OIG Report
EPA Has Made Progress in Assessing
Historical Lead Smelter Sites But Needs
to Strengthen Procedures (14-P-0302)
Wells Band Council Needs to Improve Its
Accounting System to Comply With
Federal Regulations (14-2-0316)
EPA Should Improve Oversight and
Assure the Environmental Results of
Puget Sound Cooperative Agreements
(14-P-0317)
Unliquidated Obligations Resulted in
Missed Opportunities to Improve Drinking
Water Infrastructure (14-P-0318)
No Indications of Bias Found in a Sample
of Freedom of Information Act Fee
Waiver Decisions But the EPA Could
Improve Its Process (14-P-0319)
Follow-Up Report: EPA Improves
Management of Its Radiation Monitoring
System (14-P-0321)
Impact of EPA's Conventional Reduced
Risk Pesticide Program Is Declining
(14-P-0322)
EPA Is Not Fully Aware of the Extent of
Its Use of Cloud Computing Technologies
(14-P-0323)
Improvements Needed in EPA Efforts to
Address Methane Emissions From
Natural Gas Distribution Pipelines
(14-P-0324)
EPA Met or Exceeded Most Internal
Climate Change Goals, But Data Quality
and Records Management Procedures
Need Improvement (14-P-0325)
Cloud Oversight Resulted in
Unsubstantiated and Missed
Opportunities for Savings, Unused and
Undelivered Services, and Incomplete
Policies (14-P-0332)
Increased Emphasis on Strategic
Sourcing Can Result in Substantial Cost
Savings for EPA (14-P-0338)
EPA Needs to Improve Contract
Management Assessment Program
Implementation to Mitigate Contracting
Vulnerabilities (14-P-0347)
Nutrient Pollution: EPA Needs to Work
With States to Develop Strategies for
Monitoring the Impact of State Activities
on the Gulf of Mexico Hypoxic Zone
(14-P-0348)
EPA Can Help Consumers Identify
Household and Other Products with Safer
Chemicals by Strengthening Its "Design
for the Environment" Program
(14-P-0349)
EPA's Risk Assessment Division Has Not
Fully Adhered to Its Quality Management
Plan (14-P-0350)
Audits on EPA Recovery Act-Funded
Diesel Emission Reduction Act
Assistance Agreements Reported
Programmatic and Management
Challenges (14-P-0355)
Climate
Change/
Air
Quality
X
X
X
X
Protecting
America's
Waters
X
X
X
Cleaning
Communities/
Sustainable
Development
X
Safe
Chemicals/
Preventing
Pollution
X
X
X
Enforcing
Laws/
Ensuring
Compliance
Working
Toward
Sustainable
Future
X
Making
Difference in
Communities
X
X
State, Tribal,
Local and
International
Partnerships
X
Embracing
EPA as High-
Performing
Organization
X
X
X
X
X
X
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
OIG Report
Recipient Subawards to Fellows Did Not
Comply With Federal Requirements and
EPA's Involvement in Fellow Selection
Process Creates the Appearance EPA
Could Be Circumventing the Hiring
Process (14-P-0357)
Quality Control Review of EPA Office of
Inspector General Reports Issued in
Fiscal Year 201 3 (14-N-0358)
EPA's Alternative Asbestos Control
Method Experiments Lacked Effective
Oversight and Threatened Human Health
(14-P-0359)
More Action Is Needed to Protect Water
Resources From Unmonitored Hazardous
Chemicals (14-P-0363)
EPA Needs to Improve Its Process for
Accurately Designating Land as Clean
and Protective for Reuse (14-P-0364)
Climate
Change/
Air
Quality
X
Protecting
America's
Waters
X
Cleaning
Communities/
Sustainable
Development
X
Safe
Chemicals/
Preventing
Pollution
X
Enforcing
Laws/
Ensuring
Compliance
X
Working
Toward
Sustainable
Future
X
Making
Difference in
Communities
State, Tribal,
Local and
International
Partnerships
Embracing
EPA as High-
Performing
Organization
X
X
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Scoreboard of Results
Scoreboard of OIG FY 2014 Performance Results
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 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
Reported: 324
(131% of goal)
Supporting measures
306 Environmental and management actions implemented or improvements made
17 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
Target: 687
Reported: 944
(137% of goal)
action)
Supporting measures
766 Environmental and management recommendations or referrals for action
57 Environmental and management certifications, verifications and validations
31 Environmental and management risks and vulnerabilities identified
90 External awareness briefings, training or testimony given
Annual Performance Goal 3:
Monetary return on investment - potential monetary return on investment as percentage (125%) of budget
Target: 125% return on
investment
Reported: $380.0 million
(734% return on
investment)
Supporting measures (dollars in millions)
$54.5 Questioned costs
$321.7 Recommended efficiencies, costs saved
$3.8 Fines, penalties, settlements and restitutions
Annual Performance Goal 4:
Criminal, civil and administrative actions reducing risk or loss/operational integrity
Target: 125
Reported: 213
(170% of goal)
Supporting measures
19 Criminal convictions
50 Indictments, informations and complaints
3 Civil actions
76 Administrative actions (other than debarments or suspensions)
54 Suspension or debarment actions
11 Allegations disproved
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Other (no targets established)
Savings and recommendations sustained from current and prior periods:
• $29.8 million in questioned costs sustained
• $292.4 million in cost efficiencies sustained or realized
• 368 recommendations sustained (78% of recommendations issued)
Total reports issued:
• 66 reports issued by OIG
• 300 reports issued by Single Auditors
American Recovery and Reinvestment Act of 2009 Activity Results - Cumulative from 2/09 through 9/14
Recovery Act funds expired on 9/30/12 but OIG oversight work continued during FY 2014
• 61 Recovery Act reports issued
• 176 Recovery Act awareness briefings/outreach sessions
• 97 Recovery Act complaints received
• $61.84 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 April 1, 2014—September 30, 2014
Impediments to OIG Efforts
Office of Homeland Security Withholds Critical Information
The EPA's Office of Homeland Security (OHS) is an administratively created component
of the EPA that serves as the agency's central liaison with intelligence and homeland
security agencies. OHS continues to impede the OIG by withholding critical information
about a variety of activities conducted by OHS—or information in the possession of
OHS—about matters within OIG purview. Prior to and continuing through this
semiannual reporting period, OHS refused access to information when OIG requested it,
and failed to refer certain information to the OIG. Among these matters are classified
threat information against EPA employees and facilities, employee misconduct, cyber
intrusions, and matters which OHS defines as "intelligence" or national security
information even though OIG employees have the requisite security clearances for access
to that information.1
Threats Against EPA Employees and Facilities Impeded
The OIG's ability to investigate threats against EPA employees and facilities has
been impeded by OHS' refusal to share certain information with the OIG. During
this semiannual period, OHS and OIG began meeting to discuss threat issues, and
OHS has shared non-classified information related to threats. However, OHS has
not provided the OIG with classified threat information. A critical element of
OIG jurisdiction is the safety and security of EPA employees, facilities and
assets, and the withholding of such information from the OIG places all EPA
employees and facilities at greater risk of harm or damage.
Employee Misconduct Investigations Impeded
The OIG's ability to conduct employee misconduct investigations has been
impeded by OHS' operation as an unauthorized de facto law enforcement
organization, as well as OHS' refusal to share information related to potential
criminal and administrative misconduct by EPA employees and contractors.
OHS has no law enforcement authority yet employs a criminal investigator
whose status, as a law enforcement officer, has even been questioned in a legal
memorandum by an attorney in the EPA's Office of Enforcement and
Compliance Assurance. Notwithstanding, OHS has not only engaged in
investigative activities but has relied on a memorandum of understanding with
1 After the end of this semiannual reporting period, on October 15, 2014, the EPA Administrator notified the
Inspector General that the agency will change its position on access by OIG to intelligence information shared
between the Federal Bureau of Investigation and OHS. The extent of this change, and its implementation
instructions to the agency, have not yet been clarified.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
the Federal Bureau of Investigation (FBI) to exclude the OIG from certain
investigations.2
Computer Intrusion Investigations Impeded
The OIG's ability to investigate computer intrusions has been impeded by OHS
not sharing with the OIG classified information concerning attempted intrusions.
This inhibits the OIG's ability to conduct computer intrusion investigations,
which could endanger the EPA's computer network.
On May 7, 2014, the U.S. House of Representative's Committee on Oversight and
Government Reform received testimony from the EPA Deputy Administrator and OIG
officials about actions taken by OHS that have interfered with the work of the OIG.
Following that hearing, a series of meetings between the OIG, Office of the
Administrator and OHS took place, including one with the FBI.
To better understand the nature and scope of OHS investigative activities that may fall
within OIG purview, on May 8, 2014, the Assistant Inspector General for Investigations
made a written request of the Deputy Administrator to:
"...direct the [OHS] to immediately provide to OIG OI [Office of
Investigations] a complete briefing on all threat information in the
possession of OHS... direct appropriate personnel within OHS to meet
with OIG OI and OIG Office of Counsel personnel, as soon as possible,
but no later than Wednesday, May 14, 2014."
Moreover, the Assistant Inspector General requested:
"[fjor the periods 2014 (to date), 2013 and 2012, how many EPA
employees and contractors were interviewed by OHS personnel ... how
many FBI Non-Disclosure Agreements (NDA) and how many OHS
NDAs did OHS personnel issue to EPA employees and contractors ...
how many times did OHS personnel pull EPA employees' or contractors'
emails ... [and] how many formal "811" referrals has EPA made to the
FBI? ..."
The EPA has yet to provide the requested briefing or the information on OHS' activities.
2 The change by the agency on its position does not address or solve the interference with OIG authorities and
responsibilities created by the unauthorized investigative activities by the OHS criminal investigator.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
In June 2014, the Administrator proposed certain "procedures" to govern the OIG-OHS
relationship. However, the "procedures" memorandum continues to place obstacles to the
OIG's unfettered access to OHS information and does not recognize the OIG's proper
role to work with the FBI on all investigations involving employee misconduct.
Throughout this semiannual reporting period, it has remained the EPA's position that it
can and will determine whether to provide the OIG any information that the agency
defines as "intelligence." That is not consistent with Section 6(a)(l) of the Inspector
General Act of 1978, as amended (5 U.S.C. App. 3), which mandates that the OIG have
unfettered access to "all" agency information.
These continuing obstructions violate the Inspector General Act and create unacceptable
obstacles to the OIG's mission. Agency actions that limit, condition or delay OIG access
have profoundly negative consequences. They make the OIG less effective and encourage
other agency components or personnel to resist cooperation with the OIG. Lack of
cooperation stifles the work of the OIG. Moreover, the American taxpayers, the Congress
and the agency do not receive the full benefit of an unimpeded, objective review of the
nation's investment in the programs and operations of the EPA.
Region 4 Failed to Notify OIG of Missing Computers
In 2012, EPA Region 4 was the victim of the theft of 72 computers valued at $84,842.
However, upon discovery of the missing computers, EPA Region 4 failed to notify the
OIG of the missing computers.
In 2013, an anonymous complainant informed the OIG that EPA Region 4 had failed to
report the large computer theft to the OIG. The OIG launched a criminal investigation
that resulted in the arrest and indictment of a former contractor employee, who later
entered apleato two felony counts of Theft of Government Property, 18 U.S.C. § 641.
This investigation led to another investigation of a region employee for the theft of
cameras valued at $3,118. The employee has been indicted and trial is pending. The
investigation also found that the region's Property Custodial Officer falsely certified to
the inventory of the cameras. The region suspended the employee who stole the cameras
for 30 days and issued a letter of warning to the Property Custodial Officer.
The region's failure to report the computer theft to the OIG caused delay in the OIG
launching that investigation. It could have precluded that investigation altogether, as well
as the subsequent camera theft investigation, but for the anonymous complaint. In
addition, while the region agreed in 2013 to revise its property management procedures to
include reporting thefts to the OIG, it has not yet done so.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Clear Message From Administrator on Cooperation With OIG Needed
In 2009, former Administrator Lisa 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 provided agency senior leadership an updated memorandum and asked
that the Administrator issue a new all-hands cooperation memorandum. The OIG was
assured that this new memorandum would soon be issued. However, to date, this has not
occurred and, as indicated above, instances of agency failure to cooperate with OIG work
have been occurring. The OIG believes that an unambiguous and strong message is
needed from the Administrator to the entire EPA workforce setting forth the requirement
and expectation of cooperation with, and the providing of access to, the OIG.
Inspector General Testifies on Impediments and Seeks Support
On September 10, 2014, EPA Inspector General Arthur A. Elkins Jr. testified before the
Committee on Oversight and Government Reform, House of Representatives, regarding
impediments. The title of his presentation was "Is it Necessary to Clarify or Strengthen
the Inspector General Act of 1978?"
Mr. Elkins testified on the importance of an OIG's access to agency records, and he
pointed out how he and 46 other Inspectors General had submitted a letter to the House
committee (as well as the Senate Homeland Security and Government Affairs
Committee) on August 5, 2014, regarding the denial of access. He noted that the letter
provides examples of "the troubling push-back many of us have been seeing from our
respective agencies denying us mandated access to agency employees and records."
Mr. Elkins then discussed several problems the EPA OIG has encountered with both the
EPA (see above) and with the CSB (discussed in a later section, on CSB).
To address the question as to whether the Inspector General Act needs to be strengthened
or clarified, Mr. Elkins said that the act as written "is quite strong and quite clear," and the
problem he and other Inspectors General face is in the implementation and enforcement of
the authority they already have. He pointed out that the Inspector General Act hinges on
the cooperation of an agency with its Inspector General.
In his conclusion, Mr. Elkins noted: "I therefore urge this committee to look at
enforcement mechanisms for the access and cooperation already required. The standard is
fine; the ability to ignore the standard without consequence is the problem."
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Dispute Resolution
Contrary to OIG Legal Positions, Deputy Administrator Decides
Additional Profit to Contractor of $1.5 Million Is Appropriate
In August 2014, as part of the dispute resolution process, the then EPA Deputy
Administrator ruled against two OIG recommendations concerning how profit can
be paid to contractors under time and materials contracts. Additional profit of
$1.5 million for no additional work was in question.
The OIG evaluated the EPA's management of contract EPS90804, which was awarded
by EPA Region 9 in September 2008 for professional architect/engineer, technical and
management services. EPA OIG Report No. 13-P-0209, Opportunities for EPA-Wide
Improvements Identified During Review of a Regional Time and Materials Contract,
issued April 4, 2013, found that the contract included a clause that allowed the contractor
to be paid additional profit beyond allowed profit in the fixed hourly rates. This clause
provided for profit of 4.00 percent applicable to subcontracts only. Through April 27,
2012, the EPA had paid over $1.5 million under this clause.
Two recommendations in the OIG report addressed this issue. One was that Region 9
remove the profit clause or terminate the contract so that Region 9 no longer had to pay
profit on subcontracts, and recover the profit paid. The other recommendation concerned
removing any similar clauses from other contracts and recovering the related profits paid.
EPA officials disagreed with our two recommendations and, according to EPA
procedures in EPA Manual 2750, the EPA Deputy Administrator was required to resolve
that dispute. The OIG contended that the contract in question did not contain a required
Federal Acquisition Regulation (FAR) clause that forbade paying profit to a prime
contractor for materials. Specifically, the FAR does not allow profit to be paid on
materials and the FAR considers subcontracts on time and material contracts to be
materials. Thus, the EPA violated the FAR because it paid profit outside of that in the
fixed hourly rates.
In response to the OIG's evaluation and legal positions, EPA officials forwarded a series
of legal arguments. They argued that an EPA acquisition clause—similar to the missing
FAR clause but which did not prohibit paying profit on materials—took precedence over
the more restrictive FAR clause. However, as the OIG pointed out, the agency clause
used was outdated, and the FAR—which is the overriding federal acquisition regulation
for all agencies—states that no agency acquisition clause can contradict a FAR clause. A
second EPA legal argument was that the $1.5 million overpayment was a "premium" and
not "profit." However, the OIG pointed out that this is a semantic distinction with no
meaning. Further, the contract and invoices referred to the payment as "profit."
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Nonetheless, on August 4, 2014, the then EPA Deputy Administrator determined that the
EPA did not have to follow the OIG recommendations to recover the funds and remove
this clause from other contracts.
Materials relating to OIG and EPA legal arguments are at
http://www.epa.gov/oig/reports/2014/13-P-0209 ResolutionMaterials.pdf.
and also at http://www.epa.gov/oig/reports/2014/13-P-0209_Resolution_Meeting.pdf
The former Deputy Administrator's decision is available on the OIG's public website at
http://www.epa. gov/oig/reports/2014/13 -P-
0209 DeputvAdministratorFinalDisputeResolutionDecision.pdf.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Agency Best Practices Noted
During the semiannual reporting period, several reports that we issued noted
"best practices" that could be applied by others in the agency. Examples of several best
practices follow.
• During our review of Region 10's management of Puget Sound grants, we found
that the region had developed the Financial and Ecosystem Accounting Tracking
System report. The EPA and the grant recipients are responsible for completing
specific areas of information in the reports. Specifically, recipients completed
information related to (1) funds spent to date; (2) funds drawn down by the EPA;
(3) issues or questions where response from the EPA is needed; (4) budget
discrepancies; (5) dates, status and remarks for tasks and subtasks; (6) challenges
and solutions; and (7) highlights, lessons learned and reflections. This report
enables project officers to more easily determine the status of outputs and
deliverables for tasks and subtasks, as well as actions taken by the recipient and
whether tasks are being accomplished as planned and funds are being spent
appropriately. The implementation of such a report currently used by Region 10
could be beneficial if used nationwide. (Report No. 14-P-0317)
• As a result of our report on the effectiveness of the EPA's programs in
preventing and addressing contamination of surface water from hazardous wastes
passing through publicly owned treatment works, the EPA Office of Water
indicated it will issue a memorandum to the regions and notify approved
pretreatment states describing best practices for how the National Pollutant
Discharge Elimination System permits and the pretreatment programs coordinate.
This memorandum will include information on how to access information
reported by industries per the Code of Federal Regulation on discharges sent to
publicly owned treatment works, including Toxic Release Inventory data and
notifications of substances which, if otherwise disposed of, would be hazardous
waste. This best practice will describe how such data are used by permit writers
and pretreatment program personnel to properly address such pollutants.
(Report No. 14-P-0363)
• An EPA OIG review sought to determine steps the EPA and states in the
Mississippi Watershed are taking to reduce nutrients that contribute to the Gulf of
Mexico hypoxic zone (such a zone is an area with very low oxygen that can
cause severe decrease in marine life). As a result of our recommendation, the
EPA has initiated action to work with states and other federal organizations to
develop and enhance monitoring and assessment systems that will track the
environmental results of state nutrient reduction activities, including their
contribution to reducing the size of the Gulf of Mexico hypoxic zone. This will
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Semiannual Report to Congress April 1, 2014—September 30, 2014
include a shared reporting network of sites with long-term nutrient monitoring
and streamflow records to analyze changes in nutrients and sediments overtime.
Such collaborative efforts could be beneficial in addressing similar problems
elsewhere. (Report No. 14-P-0348)
• We conducted an evaluation to determine what actions the EPA has taken to
reduce methane emissions from leaking pipelines in the natural gas distribution
sector. The Office of Air and Radiation agreed with our recommendation to
develop and implement a strategy to address the financial and policy barriers to
repairing methane leaks from distribution pipelines, including partnering with
state organizations. The office indicated it will enhance its collaboration with the
Environmental Council of the States to identify opportunities to reduce methane
emissions. For example, the office noted it is a partner in the council's Shale Gas
Caucus and will use that forum to engage in broader discussions with states about
methane emissions from the natural gas sector. Other offices should try to
enhance their collaborative efforts with other organizations when beneficial and
appropriate. (Report No. 14-P-0324)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Significant OIG Activity
Climate Change
Methane Emissions From Natural Gas Pipelines Should Be Reduced
The EPA has focused little attention on reducing methane emissions from
pipelines in the natural gas distribution sector. Methane emissions impact climate
change through pipeline leaks, and we estimate that more than $192 million in
natural gas was lost in 2011 due to such leaks—a cost borne by consumers.
Methane is a potent greenhouse gas with a global warming potential 25 times more than
carbon dioxide. In 2013, President Obama issued the Climate Action Plan, which states
that "curbing emissions of methane is critical to our
overall effort to address global climate change." The
2013 plan called for the EPA, in conjunction with
other federal agencies, to develop a comprehensive
interagency strategy to address methane emissions.
A damaged natural gas distribution pipeline.
(U.S. Department of Transportation photo)
The EPA does not currently regulate methane
emissions from the distribution sector and has not
partnered with the Pipeline and Hazardous Materials
Safety Administration, which regulates pipeline
safety, to control methane leaks. The EPA has a
voluntary program to address methane leaks—Natural
Gas STAR—but its efforts through this program have resulted in limited reductions. This
is due largely to financial and policy barriers, including disincentives for distribution
companies to repair nonhazardous leaks.
We recommended that the EPA work with the Pipeline and Hazardous Materials Safety
Administration to address methane leaks. We also recommended that the EPA develop a
strategy to address financial and policy barriers that hinder reductions; establish
performance goals and track performance against those goals; and incorporate new data
from external studies, as appropriate, to improve estimates of methane emissions from
distribution pipelines. The agency agreed with some but not all of our recommendations.
(Report No. 14-P-0324, Improvements Needed in EPA Efforts to Address Methane
Emissions From Natural Gas Distribution Pipelines, July 25, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
EPA Needs to Demonstrate Whether It Has Achieved
National Petroleum Refinery Initiative Goals
The EPA did not determine whether the National Petroleum Refinery Initiative
achieved the compliance goals it set.
The EPA intended its National Petroleum Refinery Initiative to improve compliance and
reduce harmful air pollutants or emissions within the petroleum refinery industry through
company wide consent decrees or legally binding agreements. Petroleum refineries account
for significant releases of pollutants into the environment; these pollutants contribute to
smog, acid rain and climate change. These pollutants
also contribute to bioaccumulation in mammals and fish
eaten by humans, and other human health problems.
In 2006, the EPA assessed whether companies were
making progress toward the established emission-
reduction goal. Since that time, the agency had not
analyzed the available facility data to determine whether
the initiative achieved the emissions-reduction goal.
Since 2007, the EPA reduced resources dedicated to the
initiative and work on the initiative declined, and the
EPA did not determine whether the initiative achieved
its sustained compliance goal.
A petroleum refinery has multiple connection points
that represent potential sources of emissions leaking
into the environment. (EPA photo)
We recommended that the EPA develop and implement a plan to assess whether the
National Petroleum Refinery Initiative led to sustained improvement in compliance and
sustained reductions in pollution among refineries. We also recommended that the EPA
report the results of its efforts to the public. The agency agreed with our
recommendations and corrective actions are underway.
(Report No. 14-P-0184, EPA Needs to Demonstrate Whether It Has Achieved the Goals It
Set Under the National Petroleum Refinery Initiative, April 15, 2014)
EPA Facilities Adhered to Most Climate Change Agency Goals
EPA facilities adhered to most federal climate change agency goals, although
data quality and records management can be improved.
The congressional Bicameral Task Force on Climate Change requested that we assess the
EPA's implementation of policies that address climate change at EPA facilities to ensure
the EPA was meeting its goals; the task force sent similar requests to nearly 70 Inspectors
General.
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
EPA's 2012 Strategic Sustainability
Performance Plan report is at:
http://vwvw.epa.qov/oaintrnt/
documents/sspp2012 508.pdf
(Source: EPA website)
The EPA exceeded its climate change goals related to water use,
greenhouse gas emissions and renewable energy. Out of 25 agencies
reporting, the EPA was one of only three that received a green
scorecard on the Office of Management and Budget's (OMB's)
FY 2013 sustainability scorecard, and has achieved a green scorecard
for the last 3 years. The EPA is on track to meet its 2020 greenhouse
gas reduction goals.
However, we identified several internal weaknesses, and
recommended that the EPA establish procedures to conduct a quality-
assurance review of the Strategic Sustainability Performance Plan
data provided by its contractor and EPA program offices. We also
recommended that the agency develop and implement procedures for
maintaining and securing records associated with production of the
annual Strategic Sustainability Performance Plan. The agency agreed
with our recommendations and provided a corrective action plan.
(Report No. 14-P-0325, EPA Met or Exceeded Most Internal Climate
Change Goals, But Data Quality and Records Management
Procedures Need Improvement, July 29, 2014)
Rooftop solar panels supply "green" electricity to the EPA's National Health
and Environmental Effects Research Laboratory in Corvallis, Oregon.
(Source: EPA website)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Freedom of Information Act
EPA Offices Have Freedom of Information Act Processes
Each EPA regional and headquarters office has processes for addressing
Freedom of Information Act (FOIA) requests.
The FOIA is a law that governs access to U.S. government records, and we conducted
this review to determine how EPA offices and regions decide what requested information
to release under FOIA.
While FOIA processes at EPA regions and headquarters vary, the processes all lead to a
decision to release or hold information based on an evaluation of the request and the
exemptions and exclusions prescribed in the FOIA. To ensure consistency in the
processes used throughout the agency, the EPA's Office of Environmental Information
approved agencywide interim FOIA procedures in September 2013 and planned to
finalize the procedures by the end of September 2014.
Breakdown of FOIA requests received/denied (FYs 2010-2012)
FY
2012
2011
2010
3-Year Total
Requests
received
9,689
10,123
10,409
30,221
Partial grants/
partial denials
609 (6.29%)
676 (6.68%)
607 (5.83%)
1,892(6.26%)
Full denials
(based on exemptions)
96 (0.99%)
94 (0.93%)
100(0.96%)
290 (0.96%)
Source: EPA FOIA Annual Reports.
Our briefing report recommended that the agency finalize its FOIA procedures as
planned, and that Senior Information Officials in each region and at headquarters
program offices certify that their FOIA procedures are consistent with the agency's final
procedures. The agency agreed with our recommendations.
(Report No. 14-P-0262, Briefing Report: Review of EPA 's Process to Release
Information Under the Freedom of Information Act, May 16, 2014)
EPA Could Improve Its Process for FOIA Fee Waiver Decisions
The EPA should address variability in FOIA fee waiver request response time
and clarify what requesters must demonstrate to receive a fee waiver to improve
customer service and lessen any perception of differential treatment.
The EPA Deputy Administrator requested a review to determine whether EPA fee waiver
determinations under FOIA were completed in a timely and unbiased manner. FOIA
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
states that agency records will be furnished without any charge or at a reduced charge if
disclosure of the information is in the public interest because it is likely to contribute
significantly to public understanding of government operations or activities, and it is not
primarily in the commercial interest of the requester. We evaluated 1,077 EPA FOIA fee
waiver denials issued between October 2009 and June 2013.
Factors the EPA must consider in evaluating fee waiver requests
Whether the subject of the requested records concerns "the operations or activities of
the government."
Whether the disclosure is "likely to contribute" to an understanding of government
operations or activities. The disclosable portions of the requested records must be
meaningfully informative about government operations or activities in order to be "likely
to contribute" to an increased public understanding of those operations or activities.
Whether disclosure of the requested information will contribute to "public
understanding." The disclosure must contribute to the understanding of a reasonably
broad audience of persons interested in the subject, as opposed to the individual
understanding of the requester (presumption for news media).
Whether the disclosure is likely to contribute "significantly" to public understanding of
government operations or activities.
Whether the requester has a commercial interest that would be furthered by the
requested disclosure.
Whether any identified commercial interest of the requester is sufficiently large, in
comparison with the public interest in disclosure, that disclosure is "primarily in the
commercial interest of the requester." FOIA offices ordinarily will presume that when a
news media requester has satisfied the public interest standard, the public interest will
be the interest primarily served by disclosure to that requester.
Source: Code of Federal Regulations (40 CFR § 2.107).
We found that the EPA responded to fee waiver requests, on average, within 12 business
days, and the time it takes the EPA to respond to fee waiver requests has remained fairly
consistent. On fee waiver appeals, we found that over 71 percent of decisions reviewed
exceeded the EPA's processing goal of 20 business days. For more than half of the
denials (585 of 1,062), the EPA indicated the requester did not adequately describe how
disclosure of the requested information would contribute to public understanding. We
found no indications of bias in the fee waiver decisions we reviewed.
We recommended that the EPA examine and address the reasons for variability in
response times for FOIA fee waiver decisions and appeals and clarify what requesters
must demonstrate under each factor to receive a fee waiver. The EPA agreed with our
recommendations.
(Report No. 14-P-0319, No Indications of Bias Found in a Sample of Freedom of
Information Act Fee Waiver Decisions But the EPA Could Improve Its Process,
July 16, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Other Human Health and Environment Issues
EPA Needs to Address Discharge of Hazardous Chemicals Into Water
The EPA does not have adequate controls to address discharge of hazardous
chemicals from publicly owned treatment plants into water resources.
Sewage treatment plants receive permits from EPA and states for discharges to surface
waters, such as lakes and streams, which establish pollutant monitoring requirements.
However, hazardous chemicals discharged to sewers are not
regulated under EPA regulations; rather, they are regulated
under the Clean Water Act, which focuses on a list of 126
priority pollutants that does not include many hazardous
chemicals.
Management controls put in place by the EPA to regulate and
control hazardous chemical discharges from sewage
treatment plants to water resources have limited
effectiveness. The EPA's regulations are not effective in
controlling the discharge of hundreds of hazardous chemicals
to surface waters. Sewage treatment plant staff do not
monitor for hazardous chemicals discharged by industrial
users. This is due to a general regulatory focus on the priority
pollutants list that has not been updated since 1981, limited
monitoring requirements, limited coordination between EPA
offices, a lack of tracking of hazardous waste notifications from industrial users, or a lack
of knowledge of discharges reported by industrial users. Consequently, the EPA may not
be aware of chemical discharges that can potentially contaminate water resources.
We recommended that the EPA develop a format for sharing annual Toxics Release
Inventory data, develop a list of chemicals beyond the priority pollutants list for inclusion
in permits, confirm compliance with the hazardous waste notification requirement, and
track required submittals of toxicity tests and violations. The EPA designed the
Discharge Monitoring Report Pollutant Loading Tool to provide access to surface water
discharge and other data. All recommendations are resolved.
(Report No. 14-P-0363, More Action Is Needed to Protect Water Resources From
Unmonitored Hazardous Chemicals, September 29, 2014)
The Stickney Water Reclamation Plant, Cicero,
Illinois. (EPA OIG photo)
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Alternative Asbestos Control Experiments Need Improved Oversight
For more than a decade, the EPA conducted Alternative Asbestos Control
Method research without appropriate oversight or an agreed research goal. This
resulted in wasted resources and the potential exposure of workers and the
public to unsafe levels of asbestos.
In 1999, the city of Fort Worth, Texas, proposed an alternative method to demolish
asbestos-containing buildings. In 2003, the EPA took over and renamed the effort the
Alternative Asbestos Control Method. The EPA spent almost
$2.3 million in contractor costs and expenses and $1.2 million in
research staff time from 2004 through 2012. However, these figures
represent only a portion of the costs, since the agency did not track
contributions from outside organizations or EPA staff time by
project.
The high dollar cost, potential public health risks, and failure of the
An example of the beginning stage of Alternative Asbestos Control Method experiments to provide
the Alternative Asbestos Control reliable data and results were management control issues that the
Method process. (EPA photo)
agency needed to address. The OIG found that EPA offices did not
conduct the research under a controlled and defined agency process, disregarded research
guidance designed to ensure quality, and agreed not to enforce environmental laws during
the research when other legal means for conducting the research were available.
The OIG recommended that the EPA improve research oversight by tracking project
costs and contributions, and by reviewing and resolving internal EPA comments. We also
recommended that the EPA establish a process for the review of alternative regulatory
emission control method submissions, and establish and follow standard procedures.
Except for a system to track actual costs, the agency generally provided acceptable
corrective actions.
(Report No. 14-P-0359, EPA's Alternative Asbestos Control Method Experiments Lacked
Effective Oversight and Threatened Human Health, September 25, 2014)
Improved Procedures Needed to Address Fraudulent Lab Data
The EPA's policies and procedures for responding to potentially fraudulent
laboratory data are out of date or unimplemented. Given the EPA's reliance on
laboratory data and the potential impacts of fraudulent data going unaddressed,
the EPA needed to strengthen program controls and processes.
The EPA relies on external laboratories to provide environmental testing data and results.
The EPA defines laboratory fraud as "the deliberate falsification of analytical and quality
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
assurance results." Fraudulent data can impact the public's trust in the EPA and could
have serious implications for protecting human health and the environment.
We found that the EPA lacked a due diligence process for potential fraudulent
environmental data. The agency's three policies and procedures that address how to
respond to fraudulent data were all out of date or unimplemented. Our survey of EPA
regional offices disclosed that a majority of respondents were unaware there was a policy,
and approximately 50 percent expressed the need for such policies and procedures. The
EPA did not plan to issue a revised policy until FY 2017. This created the risk that EPA
staff will fail to properly communicate information regarding fraudulent data to the
appropriate program offices and data users.
We recommended that the EPA incorporate a process to respond to instances of
fraudulent data into its current policy until the revised policy is issued, and provide the
proper training to relevant staff. The EPA agreed with our recommendations.
(Report No. 14-P-0270, EPA Has Not Implemented Adequate Management Procedures to
Address Potential Fraudulent Environmental Data, May 29, 2014)
Value of Measures for Designating Sites for Reuse Questioned
The EPA's lack of controls over designating sites as protective and ready for
reuse calls into question the reliability and value of the designations for protecting
human health.
EPA developed Cross-Program Revitalization Measures to promote and communicate its
cleanup accomplishments and benefits of restoring contaminated properties to
environmental and economic vitality. Site designations include "protective for people"
and "ready for anticipated use."
Total number of ready for anticipated use sites
as of September 30, 2013
Program
Superfund
Resource Conservation and
Recovery Act Corrective Action
Brownfields
Underground Storage Tank
Total
Number of ready for
anticipated use sites
662
904
1,694
437,914
441,174
Source: Office of Solid Waste and Emergency Response
program data and accomplishment reports.
The EPA has limited controls for
verifying or testing the accuracy of Cross-
Program Revitalization Measures
information that states and grantees
provide to show sites are protective for
people and ready for anticipated use. The
EPA also does not have adequate controls
to verify that these designations continue
to be valid and the sites remain protective
in the long term. Some sites were
prematurely designated ready for
anticipated use. Further, the Underground
Storage Tank program has the fewest
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
EPA controls for accurate ready for anticipated use designations, even though sites for
that program represent 99 percent of the more than 400,000 sites the EPA has designated
as ready for anticipated use. As a result of the conditions noted, the reliability and value
of the ready for anticipated use measure are marginal.
We recommended that the EPA improve controls over its guidance, review and reporting
of Cross-Program Revitalization Measures. The agency agreed with some but not all of
our recommendations.
(Report No. 14-P-0364, EPA Needs to Improve Its Process for Accurately Designating
Land as Clean and Protective for Reuse, September 29, 2014)
Improvements Needed in Assessing Historical Lead Smelter Sites
EPA has made progress in assessing historical lead smelter sites, but
improvements in guidance and procedures for managing contaminated sites
could result in a more efficient and effective use of limited resources, and public
health and economic benefits.
Smelting produces lead by melting and separating the lead from metal and nonmetallic
contaminants and reducing oxides to elemental lead, which is then refined in furnaces.
The EPA's 2012 Lead Smelter Strategy focuses on 464 lead smelter sites identified in
2001 as "Eckel" sites. These sites are located primarily in urban
areas throughout the nation. The EPA's 2012 strategy was
developed to ensure that all Eckel sites be assessed for potential
hazardous waste that may pose a threat to human health and the
environment.
The EPA took more than 12 years to complete preliminary site
assessment work at the 464 Eckel sites. Delays occurred because
the sites were not submitted to the EPA through the public
petition process. The EPA's ability to work on Eckel sites was
also impacted by a backlog of more than 2,200 potentially
contaminated sites. As a result, the EPA's regional efforts to
assess Eckel sites were inconsistent. In addition, the EPA lacked sufficient tracking,
transparency and guidance with regard to the technical aspects of addressing Eckel sites.
Further, the EPA did not effectively convey details to the public concerning its lengthy
efforts and the challenges it faced in addressing the Eckel sites.
We recommended that the EPA establish a clear process for handling potential
contaminated sites not referred to the EPA by a public petition, and that the EPA
re-evaluate its guidance to ensure that regions are able to efficiently spend resources
EPA removal action at the former
Loewenthal Metals Corp. lead smelter
in Chicago, Illinois. (EPA photo)
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Semiannual Report to Congress April 1, 2014—September 30, 2014
addressing the highest priority sites. The EPA agreed with our recommendations and
provided acceptable corrective actions.
(Report No. 14-P-0302, EPA Has Made Progress in Assessing Historical Lead Smelter
Sites But Needs to Strengthen Procedures, June 17, 2014)
Chemical Import Data May Help Identify Facility Risks
The EPA may want to use chemical import data to determine whether facilities
have sufficient risk management plans in place in the case of an accidental
release at a facility using or storing substances at or above threshold levels.
As required by the Clean Air Act, the EPA issued the risk
management program rule that required stationary sources that
have more than the threshold quantity of 140 toxic or flammable
substances onsite in any one process to implement a risk
management program, to include a plan. Between October 2008
and March 2012, accidents at 323 facilities caused over
$264 million in damages, 14 worker fatalities, over 330 worker
injuries, and over 64,000 people being sheltered in place.
Truck trailer for transporting chlorine Data obtained during another review showed large shipments of
parked at a risk management program- potentially harmful chemicals—including anhydrous ammonia
regulated chlorine repacking facility in . ,
Arizona (CSB photo) and chlorine—to U.S. ports and facilities for which facilities may
need to prepare or revise a risk management plan. Without the
plans, facilities may not be taking adequate measures to prevent accidents or mitigate the
consequences of accidents, and may not have sufficient information for first responders.
The following situations indicate the possible need to prepare or revise a plan:
• Imports of chemicals above the reporting threshold to facilities with no plan.
• Return shipments of large empty containers to facilities with no plan.
• Imports of chemicals in amounts greater than that reported in the facility's plan.
• Large shipments of chemicals for which consignee information was not available.
We made no formal recommendations, but encouraged the agency to use the information
we developed to determine whether the facilities we identified need to prepare or revise
risk management plans.
(Report No. 14-N-0239, Chemical Import Data May Help EPA Identify Facilities That
Need to File or Update Risk Management Plans, April 28, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
"Design for the Environment" Program Can Be Strengthened
We found that the EPA's "Design for the Environment" program can be
strengthened to better help consumers identify safer household and other products.
For more than 15 years, the Design for the Environment Safer Product Labeling Program
has labeled products that meet the criteria to be considered safer for families and the
environment. According to the EPA, the program's logo means that the product contains
only those ingredients that pose the least concern among chemicals in their class.
Applicable products include car care products, carpet cleaners, dish and hand soaps, floor
care products, laundry detergents, and glass cleaners.
We found that the current Design for the Environment logo does not
adequately communicate to consumers that the product is a safer
product. We also found a risk that an EPA endorsement of labeled
products may be implied by the current logo, but an EPA
endorsement is not allowed. The EPA also lacks sufficient controls
over the use of the program's logo by former program participants,
which can be misleading for consumers. Further, we found that the EPA asserts that
Design for the Environment products are cost effective, but this has not been determined
or reviewed.
U.S.EWV
We recommended that the EPA improve the Design for the Environment logo,
periodically review program participants' compliance with partnership agreements, and
remove from the EPA's website statements implying that Design for the Environment
products are cost effective. The agency agreed with all of our recommendations and has
initiated corrective actions.
A stationary air
monitor in Alabama.
(EPA OIG photo)
(Report No. 14-P-0349, EPA Can Help Consumers Identify Household and Other
Products With Safer Chemicals by Strengthening Its "Design for the Environment'
Program, September 9, 2014)
Improvements Increase EPA's Ability to Assess Radiation
Threats
Our follow-up review on the EPA's nationwide radiation monitoring system,
known as "RadNet," found that the agency has taken sufficient corrective
action and, as a result, has increased the coverage and effectiveness of its
stationary air monitoring network.
The EPA's nationwide radiation monitoring system is designed to measure
ambient levels of radiation in the environment and large-scale releases of
radiation. We conducted a follow-up review of our 2012 audit of the radiation
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Semiannual Report to Congress April 1, 2014—September 30, 2014
network system to determine whether the EPA had completed the eight recommendations
outlined in that prior report.
We found that the EPA generally took sufficient action. The EPA increased the number
of air monitors installed from 124 to 132, and the agency has eight additional monitors
available for installation. Based on recent weekly status reports, an average of
92.9 percent of installed monitors were operating, compared to only 80 percent in March
2011. As of April 22, 2014, the EPA completed all required actions and properly entered
the data into its official tracking system. We made no further recommendations.
(Report No. 14-P-0321, Follow-Up Report: EPA Improves Management of Its Radiation
Monitoring System, July 22, 2014)
Impact of EPA's Reduced Risk Pesticide Program Has Declined
The number of reduced-risk pesticides registered has declined over the last
10 years, and the decline will continue if barriers are not reduced.
The Conventional Reduced Risk Pesticide Program succeeded in bringing reduced-risk
pesticides to market. More than 727 reduced risk pesticide uses have been approved and
account for approximately 22 percent of farm acres treated in the United States each year.
The 2004 implementation of the Pesticide Registration
Improvement Act established required timelines for the review of
all pesticide registration applications. However, this reduced the
overall benefit of the Conventional Reduced Risk Pesticide
Program. Prior to the act, the average time for a regular New Active
Ingredient approval was 38 months, compared to 14 months for a
Conventional Reduced Risk Pesticide Program approval, allowing
Agricultural chemicals being applied. participants to get their products to market up to 2 years faster.
(EPA photo) After the passage of the Pesticide Registration Improvement Act,
this benefit fell to 6 months or less. In addition, the act also
implemented pesticide registration service fees, where the Conventional Reduced Risk
Pesticide Program registration process cost the same as a regular registration. These actions
contributed to the decline in registration of reduced-risk pesticides.
We recommended the EPA reduce participation barriers for the Conventional Reduced
Risk Pesticide Program by seeking statutory authority from Congress to reduce
application fees, as well as other actions. The EPA agreed with our recommendations and
has proposed acceptable corrective actions.
(Report No. 14-P-0322, Impact of EPA 's Conventional Reduced Risk Pesticide Program
Is Declining, July 24, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
EPA Needs to Work With States in Gulf of Mexico Hypoxic Zone
The EPA is working to reduce size of the Gulf of Mexico hypoxic zone principally
by encouraging states to develop and implement nutrient reduction strategies,
but the EPA needs to work more with the states to develop monitoring strategies.
Hypoxia is the term used to describe an area with low oxygen, which results in conditions
adverse to most aquatic life. The hypoxic zone in the Gulf of Mexico forms every
summer as a result of excess nutrients that flow from the
31 states and two Canadian provinces of the Mississippi-
Atchafalaya River Basin, and seasonal stratification of gulf
waters. The EPA's approach to reducing the Gulf hypoxic zone
is based upon a task force of states developing and
implementing nutrient reduction strategies.
We evaluated the effectiveness of the EPA's actions to
establish nutrient water quality standards, and found that states
had not been motivated to create these standards because doing
so is costly and often unpopular with various constituencies.
Additionally, the EPA has not held the states accountable for
milestone commitments nor had the agency adequately used its
authority to promulgate water quality standards for the states.
The Mississippi-Atchafalaya River Basin
and the hypoxic zone in the Gulf of Mexico
(Map courtesy of the Mississippi River Gulf
of Mexico Watershed Nutrient Task Force)
We recommended that the EPA work with task force members in the Mississippi River
Watershed to develop and enhance monitoring and assessment systems that will track the
environmental results of state nutrient reduction activities. The EPA agreed with our
recommendation and presented acceptable corrective actions.
(Report No. 14-P-0348, Nutrient Pollution: EPA Needs to Work With States to
Develop Strategies for Monitoring the Impact of State Activities on the Gulf of Mexico
Hypoxic Zone, September 3, 2014)
Improvements Needed for Puget Sound Cooperative Agreements
Overall, EPA Region 10 effectively administered Puget Sound cooperative
agreements and monitored project progress, but we noted that improvements
should be made in administering and monitoring recipient activities.
Since 2010, federal funds totaling approximately $110 million have been appropriated for
Puget Sound in Washington state, and to meet estuary program goals to develop and
implement a Comprehensive Conservation and Management Plan. In 1987, Puget Sound
was given priority status in amendments to the Clean Water Act and was included as one
of the original programs in the National Estuary Program.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Overall, EPA Region 10 effectively
administered cooperative agreements
and monitored project progress to
determine whether proposed outputs
and outcomes were achieved. However,
we noted that improvements should be
made in administering and monitoring
recipient activities. Specifically, we The state of Washington's Puget Sound.
found that Region 10: (EPA OIG photo)
• Did not consistently ensure that Puget Sound cooperative agreements met
administrative requirements.
• Should improve oversight of subaward monitoring policies and activities, and
lead organization oversight of subawards.
We recommended that the Region 10 Administrator meet with project officers and grant
specialists to discuss the results of this review and reinforce compliance with agency
policies for documenting, following up and resolving oversight activities. We also
recommended that the Region 10 Administrator ensure that grant specialists and project
officers receive needed training. The agency agreed with all recommendations and
provided corrective action plans and completion dates.
(Report No. 14-P-0317, EPA Should Improve Oversight and Assure the Environmental
Results of Puget Sound Cooperative Agreements, July 15, 2014)
EPA's Risk Assessment Division Needs to Improve Quality Plan
The Risk Assessment Division within the EPA's Office of Pollution Prevention
and Toxics adhered to some but not all aspects of its current Quality
Management Plan. Without a robust quality management system, environmental
and human health policy decisions may rest on a faulty foundation.
The Risk Assessment Division uses and implements quality management policies during
chemical risk assessments. The goal of the quality management system is to provide a
foundation to "ensure that environmental data are of sufficient quantity and quality to
support the data's intended use."
The Risk Assessment Division did not fully implement key aspects of its plan related to
training, internal audits and plan revisions. The division had not provided formal quality
assurance training or conducted internal quality assurance audits. Moreover, the division
had not revised its Quality Assurance Annual Report and Work Plan or Quality
Management Plan when changes occurred to its program activities that involve major risk
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
assessment responsibilities. Additionally, unlike other agency offices, the division does
not post its Quality Management Plan online as a good business practice.
We recommended the development of formal quality assurance training, the conducting
of internal quality assurance audits and training needs assessments, and ensuring that
relevant Quality Management Plans are updated when needed. The EPA agreed with our
recommendations and has proposed acceptable corrective actions.
(Report No. 14-P-0350, EPA 's Risk Assessment Division Has Not Fully Adhered to Its
Quality Management Plan, September 10, 2014)
EPA Did Not Timely Respond to Grantee's Data Request
Our review of a hotline complaint disclosed that although two of the alleged
complaints were not substantiated, an Office of Water employee and an
immediate supervisor did not provide a timely response to an EPA grantee's
requests for fish-contamination data.
ATTENTION
00 Hot t*t ">'»
A sign containing a fish-consumption
advisory. (EPA photo)
The OIG received a hotline complaint alleging that an Office of
Water employee interfered with a grant funded by the Office of
Research and Development and awarded in April 2011. Our findings
did not substantiate two of the allegations—that the employee asked
the Office of Water to terminate the grant, and directed an EPA
contractor not to publish data on mercury and selenium levels in fish.
However, we did find that the Office of Water employee and an
immediate supervisor did not respond in a timely manner to the EPA
grantee's requests for fish-contamination data that the Office of
Water obtained from an EPA contractor in 2008. We also found that
despite the Office of Research and Development project officers'
awareness of the problem, they provided limited assistance to the
EPA grantee in obtaining the requested data. As a result, for 8 months, EPA employees
withheld data that could have contributed to the scientific understanding of mercury and
selenium interactions in fish. Further, there was a 4-year delay in making the 2008 data
available to the general public.
We recommended that the agency develop standard operating procedures that detail how
staff are to comply with the EPA's Scientific Integrity Policy requirement to provide
timely responses to requests for information from the media, public and scientific
community. Agency action officials provided acceptable corrective actions or plans.
(Report No. 14-P-0247, EPA Employees Did Not Act Consistently With Agency Policy in
Assisting an EPA Grantee, May 9, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Peat mining in a wetlands area in
Region 8. (EPA photo)
EPA Needs To Clarify Its "No Net Loss" of Wetlands Claim
The EPA reported "no net loss" of wetlands for FYs 2009 through 2011 for the
Clean Water Act Section 404 regulatory program. The EPA needs to clarify that
its claim of "no net loss" of wetlands is based on projections of future results from
mitigation projects, because not all planned mitigation projects actually succeed.
The EPA reported "no net loss" of wetlands for FYs 2009 through 2011 under the Clean
Water Act Section 404 regulatory program, which addresses the discharge of dredged or
fill materials in these waters and wetlands of the United States.
The EPA attempts to verify that the application of the wetlands
guidelines furthers the goal of "no net loss" by comparing the
total acres of wetland impacts to the total acres planned for
mitigation. However, performance reporting in the EPA's 2013
annual plan does not inform readers of the assumption that all
mitigation projects meet performance standards. Not clearly
communicating such assumptions hampers the public's
understanding of the EPA's actual performance in protecting
wetlands.
We recommended that the EPA indicate on its wetlands measure definitions webpage and
in future annual plan performance reporting that achieving "no net loss" is based upon an
assumption that wetlands mitigation projects meet performance standards. The agency
agreed with our recommendation and provided acceptable corrective actions.
(Report No. 14-P-0191, EPA Needs to Clarify Its Claim of "No Net Loss" of Wetlands,
April 16, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Agency Business Practices and Accountability
Emphasis on Strategic Sourcing Can Save $30 to $60 Million Annually
The EPA has been slow in implementing strategic sourcing efforts and could save
$30 to $60 million annually by fully implementing its strategic sourcing program.
The federal government spends approximately $500 billion on goods and services each
year to support its mission, and one initiative to maximize efficiencies and achieve cost
savings in the procurement process is the Federal Strategic Sourcing Initiative. The
General Services Administration issued multiple governmentwide procurement vehicles
for commonly purchased commodities so that agencies could place orders against them.
The EPA has been slow in implementing strategic sourcing efforts, such as conducting
spend analyses and developing controls to ensure maximum agency participation, due to a
lack of commitment in the early stages of the initiative and by proceeding cautiously as
experience was gained. Of the four solutions offered (print management, wireless services,
office supplies and domestic delivery), the EPA only participated in the office supplies and
domestic delivery solutions. As a result, the EPA has been missing out in cost saving
opportunities and improved efficiencies in its procurement processes. An agency study
identified the value of strategic sourcing and estimates that, with a fully staffed strategic
sourcing office, it can achieve potential annual cost savings of $30 to $60 million.
We recommended that the EPA develop a plan of action to strategically source wireless
services and print management and that a price comparison analysis be performed to
ensure the best possible pricing is negotiated. We also recommended that the EPA
develop and implement policies and procedures. The EPA agreed with our
recommendations and provided a corrective action plan.
(Report No. 14-P-0338, Increased Emphasis on Strategic Sourcing Can Result in
Substantial Cost Savings for EPA, August 26, 2014)
Unliquidated Obligations Resulted in Missed Opportunities to
Improve Drinking Water Infrastructure
Despite agency and state efforts, $231 million of Drinking Water State Revolving
Fund dollars remained idle, loans were not issued, and communities were not
able to implement needed drinking water improvements.
The Safe Drinking Water Act Amendments of 1996 established the Drinking Water State
Revolving Fund to provide states with a financing mechanism for ensuring safe drinking
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Semiannual Report to Congress April 1, 2014—September 30, 2014
water to the public. Since the program's inception in 1996, the EPA awarded over
$15.5 billion in capitalization grants to states, but $2 billion has remained unliquidated.
We found that the EPA and the five states we reviewed took many actions to reduce
Drinking Water State Revolving Fund unliquidated balances, but those actions have not
reduced balances to the goal of below 13 percent of the cumulative federal capitalization
grants awarded. The five states reviewed—California, Connecticut, Hawaii, Missouri and
New Mexico—executed small numbers of loans each
year and did not maximize the use of all resources,
including capitalization grants. State programs were
not adequately projecting the fund resources that
would be available in the future to enable the states to
anticipate the amount of projects needed to be ready
for loan execution in a given year. As a result,
$231 million of capitalization grant funds remained
A wastewater treatment plan in Stratford, Connecticut. . ,, , .
(EPA photo) lc"e, loans were n°t issued, and communities were not
able to implement needed improvements.
We recommended that the EPA require states with unliquidated obligations that exceed
the 13-percent-cutoff goal to project future cash flows to ensure funds are expended as
efficiently as possible and to develop guidance for states on what projects are to be
included on the fundable lists. The EPA agreed to take sufficient corrective actions on
most of the recommendations.
(Report No. 14-P-0318, Unliquidated Obligations Resulted in Missed Opportunities to
Improve Drinking Water Infrastructure, July 16, 2014)
Weak Management of a Service Contract Creates Risk for EPA
Since the EPA awards millions of federal dollars to contractors every year, the
agency must have robust oversight and management controls to prevent waste
and unnecessary spending. Our review of an EPA time-and-materials contract
disclosed areas for improvement.
Our review of a time-and-materials contract, "Technical and Outreach Support Services
for Domestic and Global Climate Initiatives and Global Climate Change Programs,"
found that the EPA did not have a process to verify that contractor personnel have the
skill level to satisfy contract requirements. Specifically, our review of a task order found
the following:
• The task order did not list any employees named in reviewed invoices.
• The EPA repeatedly modified the task order to increase funding, from an initial
estimate of $310,917 to more than $2 million.
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
• The contracting officer's representative for the task order accepted the
contractor's deliverables without documenting a review of the contractor's
personnel qualifications in comparison with the labor categories invoiced.
• The task order was closed out without all deliverables being met.
The OIG also found that the official contract file was incomplete, and the determination
and findings document did not properly justify the use of a time-and-materials contract.
In addition, there was almost no contract management after the contract was awarded.
We made recommendations to improve, implement or address agency oversight of
contractor personnel, subcontractors, activities and invoices under time-and-materials
contracts. The EPA agreed with some recommendations, but disagreements remain.
(Report No. 14-P-0272, Weak Management of a Climate Change Services Contract
Creates Risk EPA Did Not Receive Services for Which It Paid, May 30, 2014)
Questioned Costs of $390,000 Noted for Tribal Grant
The accounting system for the Wells Band Council of Wells, Nevada, did not
comply with federal regulations for its EPA grant, resulting in $390,000 of
questioned costs and a proposed high-risk designation for the grantee.
In 2010, the EPA awarded $532,334 to the Wells Band Council under the agency's
Indian Environmental General Assistance Program to help the tribal organization develop
and establish an environmental protection program.
However, we found that the council did not timely
submit Federal Financial Reports to support cash
draws of $390,000, and we thus could not evaluate
travel and equipment costs incurred. Also, the
council's timekeeping methods and procedures, as
well as its financial management system, were not in
compliance with federal regulations.
The Wells Band Council Environmental Program Office
in Wells, Nevada. (EPA OIG photo)
We recommended that EPA Region 9 recover
$390,000 drawn under the grant unless the council
can provide adequate documentation to support its
costs. We also recommended that the region
designate the council as a high-risk grantee. EPA and the council agreed to take
corrective actions, although the council expressed concerns about being designated a
high-risk grantee.
(Report No. 14-2-0316, Wells Band Council Needs to Improve Its Accounting System to
Comply With Federal Regulations, July 14, 2014)
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Semiannual Report to Congress April 1, 2014—September 30, 2014
EPA and EPA OIG Need to Comply With Retention Incentive Pay
Guidance
The EPA and EPA OIG need to determine whether evidence exists to justify a
retention incentive and, if such an incentive was unjustified, recover any retention
incentive payments made to employees.
In August 2013, a member of the U.S. Senate asked the EPA OIG to initiate work in
connection with a fraud committed by John C. Beale, a former Senior Policy Advisor
with the EPA's Office of Air and Radiation. Although the EPA had authorized retention
incentive pay to Beale until 2003, the agency continued to make payments to him until
2013. Since the audit of the agency's retention incentive payments disclosed issues that
impact the EPA OIG, a separate internal audit of the OIG's retention incentive payments
was also conducted.
The audits disclosed that both the EPA and EPA OIG did not comply with Office of
Personnel Management regulations or agency policies on retention incentive pay. For the
agency, we found that of the 13 employees paid retention incentives totaling $667,376
from 2006 through 2013, no documentation of the required annual recertification was
available for 10 of the employees. One employee received retention incentive pay for
4 years beyond the date of a promotion. The audit of the EPA OIG found that for the two
employees who received $64,204 in retention incentives from 2006 through 2009, there
was no documentation of annual recertification from 2008 through 2009.
We recommended that the agency and EPA OIG determine whether evidence exists to
justify a retention incentive and, if such an incentive was unjustified, recover any
retention incentive payments made to employees. The agency and the EPA OIG agreed
with our recommendations. The agency has since initiated a collection process for two
cases that involved overpayment.
(Report No. 14-P-0245, EPA Compliance With Retention Incentive Regulations and
Policies, May 2, 2014; and Report No. 14-B-0246, EPA OIG Compliance With Retention
Incentive Regulations and Policies, May 2, 2014)
EPA and EPA OIG Need to Strengthen Passport Controls
Both the EPA and EPA OIG need to strengthen controls for official passports to
protect employees' sensitive personally identifiable information.
As noted above, in August 2013, a member of the U.S. Senate asked the EPA OIG to
initiate work in connection with a fraud committed by John C. Beale. One of the areas
audited by the EPA OIG was the agency's process for handling official passports. Since
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Semiannual Report to Congress April 1, 2014—September 30, 2014
the audit of the agency's passport process disclosed issues that impact the EPA OIG, a
separate internal audit of the OIG's passport process was also conducted.
The audits disclosed that both the EPA and EPA OIG were not in compliance
with agency guidance governing the control and security of sensitive
personally identifiable information associated with official passports issued to
agency employees. Of the 417 passports purported to be in the EPA Office of
International and Tribal Affairs' possession, 199 could not be located. The
audit also found that the Office of International and Tribal Affairs was not
enforcing its own passport guidance of having staff return passports after
international travel. Further, our audit of the EPA OIG disclosed that the OIG
did not have any policies and procedures associated with the issuance, control
ab; r -d *<*»"<* °f °fMai »->*"«•
contractor in Landover,
Maryland. (EPA OIG photo) We recommended that the EPA develop a plan to identify official passports
issued to agency employees and ensure that passports not currently being used
for travel be returned to the agency for proper storage or cancellation. We recommended
that the OIG identify all official passports issued to OIG employees and request that all
official passports be returned to the Office of International and Tribal Affairs for proper
storage or cancellation. Both the agency and the OIG accepted all recommendations.
(Report No. 14-P-0243, Audit of EPA Passport Controls, May 1, 2014; and Report No.
14-B-0244, EPA OIG's Compliance With EPA Passport Guidance, May 1, 2014)
EPA's Processes for Converting to the Cloud Should Be Improved
The EPA developed processes to monitor cloud vendors, but controls for the
EPA's cloud computing initiatives are incomplete and need improvement. The
EPA paid $2.3 million for services that were not fully rendered or did not comply
with federal requirements, and the agency did not have reasonable assurance
that its cloud initiatives will be effective, efficient and in compliance.
Cloud computing describes a broad movement to treat information technology services as
a commodity with the ability to dynamically increase or decrease capacity to match usage
needs. In December 2010, the U.S. Chief Information Officer issued a "Cloud First"
policy requiring that agencies default to cloud-based solutions for new information
technology deployments when a secure, reliable and cost-effective cloud option exists.
Our review noted the following problems:
• The EPA's cost-benefit analysis did not adhere with guidance.
• The EPA paid full price for services not performed.
• The EPA entered into a contract that could not be used to host applications
because it did not meet federal requirements.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
• The EPA had not performed an analysis to determine whether it would be in the
EPA's best interest to convert its internal infrastructure.
• The EPA did not implement a strategy to evaluate its entire portfolio of
information technology applications to determine which applications can be
consolidated, retired or moved to the cloud.
We recommended that the EPA undertake a number of corrective actions to address
deficiencies in the EPA's cloud computing initiatives. While the agency agreed to take
action on two recommendations, nine recommendations remain unresolved.
(Report No. 14-P-0332, Cloud Oversight Resulted in Unsubstantiated and Missed
Opportunities for Savings, Unused and Undelivered Services, and Incomplete Policies,
August 15, 2014)
EPA Is Not Fully Aware of Its Use of Cloud Computing Technologies
Our review disclosed management oversight concerns highlighting the need for
the EPA to strengthen its catalog of cloud vendors and processes to better
manage vendor relationships and ensure compliance with federal security
requirements.
The OIG conducted this review as part of a governmentwide initiative sponsored by the
Council of the Inspectors General on Integrity and Efficiency, which developed a survey.
The OIG selected the current contract for the Office of Water's Permit Management
Oversight System for testing. That system enables the EPA to track general and tribal
permits at a summary level.
Our audit work disclosed management oversight concerns regarding the EPA's use of
cloud computing technologies. In particular, we found:
• The EPA did not know when its offices were using cloud computing.
• The oversight process for prime contractors needs improvement.
• There is no assurance that the EPA has access to the subcontractor's cloud
environment.
• The subcontractor is not compliant with the Federal Risk and Authorization
Management Program.
The EPA agreed that the information provided in the Council of the Inspectors General
on Integrity and Efficiency matrix was correct, and the agency submitted responses.
(Report No. 14-P-0323, EPA Is Not Fully Aware of the Extent of Its Use of Cloud
Computing Technologies, July 24, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
A retrofitted school bus.
(EPA photo)
Common Themes Noted in Prior Audits of Diesel Emissions Grants
During six prior audits on grants funded by the American Recovery and
Reinvestment Act of 2009 for Diesel Emissions Reduction Act projects, we found
common problems related to meeting project objectives, having adequate
financial management systems, and meeting Recovery Act requirements.
The EPA awarded $294 million in Recovery Act funds under the Diesel Emissions
Reduction Act program for 160 grants, which included $29 million in federal funds for
grants covered by our six previous reports. For the six prior reports, we determined that:
• Four of the six recipients did not meet all objectives of grant awards.
• Five of the six recipients did not have financial management systems that met all
federal requirements.
• Four of the six recipients did not meet Recovery Act requirements.
The six prior audits included recommendations, but this new report
contains no new recommendations because the limited sample of the six
prior reports may not be sufficiently representative. Further, as a result of
our prior report, the EPA has already made changes to Diesel Emissions
Reduction Act grant oversight to reduce future risk.
(Report No. 14-R-0355, Audits on EPA Recovery Act-Funded Diesel
Emission Reduction Act Assistance Agreements Reported Programmatic
and Management Challenges, September 15, 2014)
Mitigation of Contract Management Vulnerabilities Needed
The EPA's Contract Management Assessment Program's implementation of
OMB requirements may be hindered due to ambiguous guidance, the EPA's
organizational structure, and a lack of resources.
The Contract Management Assessment Program is a system of controls designed to
measure operational awareness and to determine how well the EPA's contracting
organizations support their respective mission requirements while meeting their other
responsibilities. Assessments performed under the program are designed to identify
weaknesses in internal controls or systemic vulnerabilities.
We found that contracting organizations within the EPA—both at headquarters and in the
regions—are implementing the Contract Management Assessment Program to varying
degrees. Required submissions were not always submitted timely, some annual reports
did not contain all of the required elements, and policy did not incorporate a process to
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Semiannual Report to Congress April 1, 2014—September 30, 2014
address noncompliance. As a result, it is questionable whether the program can be fully
and optimally implemented.
We recommended that the EPA revise policy to correct ambiguities and strengthen
accountability, implement organizational changes, and evaluate whether resources
allocated are sufficient. The agency agreed to take corrective action for all
recommendations except the one regarding organizational changes.
(Report No. 14-P-0347, EPA Needs to Improve Contract Management Assessment
Program Implementation to Mitigate Contracting Vulnerabilities, September 2, 2014)
EPA Needs to Continue Improving Improper Payment Identification
The EPA was compliant with the Improper Payments Elimination and Recovery
Improvement Act in FY 2013 for the reporting of improper payments, but we
noted needed improvements regarding State Revolving Fund procedures.
In our review of EPA efforts to reduce improper payments, we found that EPA regional
offices were not following State Revolving Fund standard operating procedures nor
completing all required fields of the transaction testing worksheet. We found several
errors and inconsistencies in the EPA's process for collecting data on improper payments,
which raises concern regarding the accuracy of improper payments reported. The EPA
understated the improper payments for grants in the FY 2013 Annual Financial Report by
$16,086 because the accounts receivable and disallowed costs were not reconciled prior
to reporting improper payments.
We recommended that the EPA coordinate with regions to address where differences
occurred between improper payments tested and reported, provide regional staff with the
current transaction testing worksheet, and establish a system for tracking the recovery of
improper payments. The agency concurred with all recommendations.
(Report No. 14-P-0171, EPA Needs to Continue to Improve Controls for Improper
Payment Identification, April 10, 2014)
Several Issues Regarding Fellowship Cooperative Agreement Noted
We did not find anything that would indicate the Association of Schools of Public
Health improperly used federal funds or did not meet objectives for the EPA
cooperative agreement received, but we did note issues regarding subawards
being made to fellows and EPA involvement in the fellows' selection process.
The EPA awarded a cooperative agreement to the Association of Schools of Public
Health so that the association could place recent graduates into 1 - or 2-year fellowships at
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Semiannual Report to Congress April 1, 2014—September 30, 2014
the EPA, during which the fellows would be mentored by EPA experts. We did not find
anything regarding the improper use of funds or the association not meeting the
objectives of the cooperative agreement. However, we did note the following two issues:
• The association made subawards to the fellows but individuals are ineligible as
subgrantees under the Code of Federal Regulations.
• The EPA's involvement in the selection process for fellowship candidates creates
the appearance that the EPA could be circumventing the hiring process and
recruiting fellows in place of permanent employees.
We recommended that the EPA determine the proper vehicle to be used to ensure
subawards comply with applicable federal requirements, and obtain an Office of General
Counsel opinion on how the EPA should be involved in the selection of fellows. The
agency agreed with our recommendations and provided corrective actions.
(Report No. 14-P-0357, Recipient Subawards to Fellows Did Not Comply With Federal
Requirements and EPA 's Involvement in Fellow Selection Process Creates the
Appearance EPA Could Be Circumventing the Hiring Process, September 17, 2014)
New Jersey Did Not Fully Meet Cooperative Agreement Requirements
The New Jersey Department of Environmental Protection did not fully meet the
objectives of an American Recovery and Reinvestment Act cooperative
agreement.
The EPA awarded a $4.8 million cooperative agreement to New Jersey to assess and
clean up petroleum releases from leaking underground storage tank sites. An audit
conducted by an independent accounting firm on behalf of the EPA OIG found that the
state's environmental department had adequate financial management systems and
complied with state procurement policies and procedures. However, regarding Davis-
Bacon Act provisions, the state under-reported the number of jobs created and retained
for one of the quarters sampled. Also, the department did not fully meet cooperative
agreement objectives or have a formal process for work plan modifications.
Recommendations were made for EPA Region 2 to have the New Jersey Department of
Environmental Protection establish improved internal controls and improve Davis-Bacon
Act compliance, and the state and Region 2 have taken or are taking necessary actions.
(Report No. 14-R-0278, New Jersey Department of Environmental Protection Needs to
Meet Cooperative Agreement Objectives and Davis-Bacon Act Requirements to Fully
Achieve Leaking Underground Storage Tank Goals, June 4, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Investigations
Significant Investigations
Recovery Act-Funded Project Violates Buy American Provision
On May 28, 2014, the U.S. Attorney's Office of the Northern District of New York,
along with the EPA OIG, reached a civil settlement with a firm for $500,000 to
settle allegations that the firm falsely certified compliance with the Buy American
provision of the American Recovery and Reinvestment Act of 2009.
The project, which began in 2009, called for the construction of a water pump station for
the village of Briarcliff Manor, New York. The project was undertaken by Jett Industries
of Colliersville, New York. The steel used to manufacture a bladder surge tank was to be
made exclusively in the United States according to the Buy American provision of the
Recovery Act contract. However, although several Jett employees learned that the tank
Jett ordered had been manufactured in France and expressed concern about Buy
American violations, Jett nevertheless installed the tank. A Jett employee later used a Jett
computer to create a certification, purportedly from the tank's manufacturer, which
falsely asserted that the French-made tank had been manufactured in the United States,
and used that false certification to obtain payment. As part of the settlement, Jett accepted
responsibility for its actions and agreed to make the project fully compliant.
Indictments, Jail Term Given for Fraud at Montana Reservation
Two former officials of the Stone Child College in Montana were indicted for
taking bribes and awarding contracts at the Rocky Boy Indian Reservation, while
a third person has been sentenced to jail in relation to the case.
Frank Henry, former Facilities Department Manager for the college, and his wife,
Melody Henry, former President of the college, were indicted on August 22, 2014, and
September 22, 2014, respectively. The federal grand jury indictment accused the Henrys
of accepting payments from Hunter Burns and his company, Hunter Burns Construction,
after awarding the company contracts and payments for work at the college. The
indictment specified that the couple approved payments of $530,242 to Hunter Burns
Construction and solicited and received about $242,273 in payments from the company.
The payments involved EPA grant funds given to the Rocky Boy Indian Reservation.
Hunter Burns was sentenced on July 10, 2014, to 2 months in prison followed by 4 years
of home detention for his role in a conspiracy to give kickbacks in exchange for federally
funded contracts. Burns and Hunter Burns Construction were also ordered to pay
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Semiannual Report to Congress April 1, 2014—September 30, 2014
$125,000 in fines and sentenced to 42 months' probation. On April 28, 2014, Burns'
former partner, James Howard Eastlick Jr., pleaded guilty to bribery of an official of an
Indian Tribal Government Receiving Government Funding. Several others from on and
off the reservation have pleaded guilty to, been convicted of or are facing charges
alleging fraud, bribery, embezzlement and corruption at the reservation.
This case is being conducted by the Montana Guardian Task Force, which is made up of
the FBI; the Internal Revenue Service; and the OIGs of the Department of the Interior,
Department of Health and Human Services, Department of Agriculture, and EPA.
Nigerian Man Admits Role in Computer Hacking Scheme
On June 10, 2014, Abiodun Adejohn of Nigeria pleaded guilty before the
U.S. District of Court of New Jersey to one count of conspiracy to commit wire
fraud related to a computer hacking scheme.
Using "phishing" computer intrusion attacks directed to more than 7,500 federal
employees, Adejohn and others compromised the EPA and nine other U.S. government
agency email systems, resulting in the theft of employees' user names and Webmail
access credentials. "Hacked" employee credentials and email accounts were subsequently
used by Adejohn and others to create customer accounts with General Services
Administration vendors and make or attempt to make fraudulent purchases totaling over
$1 million using fraudulently obtained credit card information. The total value of losses
and/or theft attempts in the ongoing investigation is currently estimated at or about
$2 million. Adejohn has admitted his role in the scheme and has already entered into a
plea agreement to provide restitution in the amount of $937,000. Sentencing is to follow.
This case is being conducted with the FBI and the OIGs of the General Services
Administration, Department of Commerce, Department of the Interior and Department of
Defense.
Former EPA Contract Security Guard Pleads Guilty to Death Threat
On May 6, 2014, a former EPA contract security officer was sentenced in District
of Columbia Superior Court to 9 months' probation and served 10 days in jail for
threats made to a former colleague.
In 2013, the former contract security officer called a security desk located in an EPA
headquarters building and asked for a female security contractor by name. When he
spoke to her he threatened to kill her and identified himself by his last name. The OIG
conducted an investigation, subpoenaed phone records, and arrested the former contract
security officer for threatening to cause bodily harm. Incident to the arrest, two firearms
and ammunition were seized from the former contract security officer's residence.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Fugitive Wanted for Wire Fraud and Smuggling
On August 7, 2014, the International Criminal Police Organization (INTERPOL)
issued a Red Notice—an international arrest warrant—for the arrest of Heon
Seok Lee for violations of the American Recovery and Reinvestment Act
"Buy American" provision.
Lee served as President of KTurbo Inc. in the Republic of Korea, and President of its
subsidiary KTurbo USA Inc., with an office and warehouse in Illinois. From January
2010 to February 2011, Lee directed others to procure contracts for KTurbo to provide
centrifugal turbo blowers to municipal wastewater treatment facilities receiving Recovery
Act funds from the EPA. Lee and others sent at least five email communications to
U.S. municipal wastewater treatment facilities falsely representing that KTurbo would
manufacture and deliver the municipalities' turbo blowers in compliance with the "Buy
American" provision of the Recovery Act. Lee had three shipments of a total of nine
turbo blowers sent to the KTurbo facility in Illinois from Korea. The blowers arrived in
the United States largely assembled but were affixed with "Assembled in USA" placards.
Lee and others did not intend to perform substantial transformation of the turbo blowers
and was subsequently indicted in the Northern District of Illinois on five counts of wire
fraud and three counts of smuggling. In total, Lee and others intended to fraudulently
obtain over $1.3 million in Recovery Act funds.
This case is being conducted with the International Criminal Police Organization, the
Department of Homeland Security and the U.S. Department of Justice.
Former New Jersey Subcontractor Sentenced for False Statements
On July 7, 2014, Victor Boski, former co-owner of National Industrial Supply LLC,
was sentenced in the U.S. District Court of New Jersey to 12 months of probation
and 50 hours of community service, and fined $5,000, for his involvement in a
kickback scheme related to two New Jersey Superfund sites.
Boski was sentenced pursuant to his guilty plea to a violation of one count of false
statement. Boski made material false statements to EPA Suspension and Debarment
officials while explaining the role he and his company played in a kickback scheme.
National Industrial Supply was a subcontractor in the cleanup of the Federal Creosote site
in Manville and the Diamond Alkali site in Newark. The cleanup for the two sites was
partly funded by the EPA.
Boski and his firm were previously sentenced in 2011 for their role in the kickback
scheme. Boski at that time was given 36 months of probation and ordered to pay a
$25,000 fine and $50,000 in restitution, jointly and severally with other co-conspirators.
Other individuals and companies have been convicted or pleaded guilty in the ongoing
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Semiannual Report to Congress April 1, 2014—September 30, 2014
investigation related to the two sites, and more than $6 million in criminal fines and
restitution have been imposed.
This case is being conducted with the Internal Revenue Service Criminal Investigation
Division.
BP Found Grossly Negligent in Deepwater Horizon Disaster
On September 4, 2014, BP Exploration and Production Inc. was found grossly
negligent by the U.S. District Court for the Eastern District of Louisiana in
connection with the 2010 Deepwater Horizon incident in the Gulf of Mexico.
During the drilling of the Macondo Well by the Deepwater Horizon Drilling Rig,
BP experienced numerous well control events that caused delays in completion of the
project and resulted in cost overruns of $1 million per day. Although BP reached the
primary sands at a level approximately 2,000 feet short of the original plans, another
100 feet of depth was needed to ensure it had accessed the primary reservoir. BP decided
to drill the extra 100 feet knowing the well was in a very fragile condition with no
allowance for additional pressure on the formation.
In a document titled "Findings of Fact and Conclusions of Law, Phase One Trial," the
federal judge found the decision to drill the extra 100 feet at the bottom of the hole to be
"dangerous" and "motivated by profit." The judge concluded that this additional drilling
was the initial link in the chain of events which resulted in the blowout and explosion that
caused the deaths of 11 men as well as the massive oil spill that polluted the Gulf of
Mexico. The next two phases of trial will determine the quantity of oil spilled that BP is
liable for as well as monetary fines and penalties.
This case is being conducted by the Department of Justice Civil Fraud Task Force, which
includes the EPA OIG.
Multiple Debarments Result From State Revolving Fund Bid Inquiry
Thirty five individuals and entities were debarred from participation in federally
funded projects after EPA OIG queries revealed that one of the proposed awardees
on a Florida contract was under indictment for corruption-related offenses.
A firm submitted a bid to conduct emergency water service interconnect upgrades for the city
of Coral Springs, Florida, which received a State Revolving Fund award from the EPA in
excess of $471,000 to complete the project. After solicitation of bids, but prior to contract
awards, the city learned that the proposed awardee was under indictment for corruption-
related offenses. The city sought guidance from the Florida Department of Environmental
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Protection as to whether the proposed awardee could be barred from bidding on or accepting
the contract associated with the city's State Revolving Fund projects.
Queries by the EPA OIG revealed that the president of the proposed awardee and
15 other individuals were charged with violations of Florida State criminal statutes
related to unlawful compensation (bribery), conspiracy and money laundering. Although
no evidence of criminal conduct was found related to the proposed Coral Springs
projects, the EPA OIG investigation identified additional subjects and entities of concern
and the EPA Office of Suspension and Debarment debarred 35 individuals and entities.
The debarments ranged for periods of 3 to 5 years. Two additional subjects agreed to
voluntary exclusions from participation in federally funded projects and two others were
suspended pending debarment.
Former Tribal Environmental Resources Director Debarred for Fraud
On May 6, 2014, Ian Kanair, former Director of Environmental and Natural
Resources for the Snoqualmie Indian Tribe, was debarred from participation in
federally funded projects for 3 years after an EPA OIG investigation revealed he
fraudulently misused $35,397 in EPA grant funds awarded to the tribe.
Kanair's salary and the funds he used to operate the Environmental and Natural
Resources program for the tribe were EPA grants that were for program development.
On occasion, Kanair would request and receive travel and training advances for one
conference, not attend the conference, and then claim that he used the advanced funds to
attend a different conference. The EPA determined that Kanair was reimbursed by the
tribe with EPA funds for expenses totaling $35,397 that he should not have claimed. This
was because the expenses were not authorized under the grant or were double billed,
inflated or not actually incurred at all.
Former IT Contractor Indicted for Theft of Government Property
On April 2, 2014, a former information technology contractor in Region 4 was
indicted by a federal grand jury in the Northern District of Georgia charging him
with theft of government property over $1,000.
In 2012, personnel in EPA Region 4, headquartered in Atlanta, Georgia, discovered that
72 computer devices (laptops, tablets and desk tops), valued at $84,842, were
stolen/missing from the information technology department in EPA Region 4. Contact
with manufacturers disclosed that one of the missing/stolen items had been registered
online, and an OIG interview of the identified buyer disclosed that the computer was
purchased via Ebay. Approximately 30 computers linked to the missing EPA computers
were sold via Ebay. The owners of the EBay account provided details of their purchase of
the computers from an individual subsequently identified as the EPA contractor.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
This case is being conducted jointly with the Federal Protective Service and U.S. Army
Criminal Investigation Division.
EPA Employee Suspended for Theft of Government Cameras
On May 3, 2014, one EPA Region 4 employee received a 30-day suspension for
the theft of government cameras valued at $3,118 and another employee
received a letter of warning for falsifying an annual inventory report in relation to
the stolen cameras.
Following the theft of a large number of computers in Region 4, the EPA conducted an
inquiry into all missing property listed by Region 4 over the previous 2-year period.
During this review, several cameras listed as missing were identified as being pawned at
a local pawn shop. The perpetrator was identified as a GS-12 Public Affairs Specialist
assigned to Region 4 who subsequently confessed to seven instances of theft. Further, an
EPA Region 4 Property Custodian was found to have certified the presence of the
cameras in question even though one of the cameras had been pawned 6 months prior to
the inventory; the custodian later admitted to not physically inventorying the property.
The employee who stole the cameras received a 30-day suspension and the Property
Custodian received a letter of warning. Also, the employee who stole the cameras has
been indicted by a Georgia grand jury, and a plea or trial is pending.
EPA Employee Allowed to Perform No Work and Collect Pay
A Senior Executive Service (SES)-level employee and a supervisor in the EPA allowed
an employee to work from home for 20 years while producing limited work products.
The supervisor admitted that he allowed the employee to stay home and not perform any
work for the EPA while the employee collected full pay and benefits for approximately
6 years, costing the government over $600,000. The supervisor stated that it was easier to
allow this arrangement than go through the medical retirement process for the employee
and to deal with the employee union, which represents this employee. The employee and
SES-level person retired prior to administrative action being taken and the supervisor was
put on administrative leave and barred from the EPA premises on July 31, 2014.
Lack of Due Diligence Allows EPA Employee to Commit Fraud
An SES-level employee responsible for the oversight and approval of time and
attendance records and travel vouchers for John C. Beale lacked due diligence and cost
the government $184,193. The OIG investigation determined that the SES-level person
who reviewed and approved time and attendance and travel for Beale and other senior
executives in the Office of Air and Radiation lacked due diligence in exercising EPA
duties. Beale is a former Senior Policy Advisor for the EPA who had pleaded guilty to
multiple frauds.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
EPA Employee Ordered to Pay Back Over $5,000 to EPA for Theft
Administrative action was taken against an EPA employee for stealing more than $5,000
of grant funds from a U.S.-Mexico border program. The employee diverted grant funds
by creating inappropriate invoices. The OIG investigated 13 allegations of employee
misconduct and 11 were substantiated. The employee accepted the charges on May 28,
2014, and agreed to pay back over $5,000 to the EPA and a two-grade demotion, which
will result in a 2-year cost savings to the agency of $68,000.
SES Employee Had Subordinates Perform Outside Activities
An SES-level employee had EPA employees who reported to her conduct activities that
were outside the scope of their official EPA duties and directly assisted her in personal
activities. After admitting to having employees perform the outside activities—including
parking her car and getting her lunch—the SES-level employee retired from federal
service on April 3, 2014, prior to any administrative action being taken by the EPA.
Pending Reports of Investigation
Reports of Investigation to EPA for Which
Administrative Action Has Not Been Communicated to OIG
The OIG Office of Investigations issues Reports of Investigation to the EPA to
notify the agency of facts surrounding cases of employee misconduct. In each
case, the OIG requests that the EPA advise the OIG within 30 days of
administrative action taken or proposed. In some cases, the EPA requests an
extension before rendering a decision. Below is a list of cases where the EPA's
decision regarding administrative action has not been communicated to the OIG.
CASE 1, Report of Investigation to EPA Office of Administration and Resources
Management, November 25, 2013: The investigation revealed information to support
the allegation that a GS-15 EPA employee engaged in private business activities with
contract employees during official work time, used a government position to assist a
contract employee's attempt to gain federal employment with the EPA, and may have
misused government property and acted in a manner unbecoming a federal employee
with a contract employee.
CASE 2, Report of Investigation to EPA Office of Research and Development,
December 16, 2013: The investigation revealed information to support the allegation that
a GS-13 EPA employee improperly used an EPA purchase card to order an iPad for
personal use.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
CASE 3, Report of Investigation to EPA Office of Administration and Resources
Management, December 20, 2013: The investigation revealed information to support
the allegation that an SES-level EPA employee sold products from three businesses to
EPA subordinates and EPA colleagues in EPA office space during office hours; used
EPA resources, including the employee's office, laptop computer, Blackberry and EPA
email system, in furtherance of these business activities; the employee's child, an intern
in an EPA student summer hire program, was paid two EPA cash performance awards
totaling approximately $790 with funds that originated directly from the employee's
operating budget; and recommended a friend and an acquaintance for employment to a
company that had contracted to conduct work for the Office of Administration and
Resources Management. During the period of this investigation, this employee received a
Presidential Meritorious Rank Award for $33,928.
CASE 4, Report of Investigation to EPA Office of Air and Radiation, March 7,
2014: The investigation revealed information to support the allegation that a GS-13 EPA
employee participated in outside work activity and provided consulting services to
organizations external to the EPA without the requisite approval from the Deputy Ethics
Official.
CASE 5, Report of Investigation to EPA Office of Air and Radiation, April 17, 2014:
An SES-level employee responsible for the oversight and approval of time and
attendance records and travel vouchers for John C. Beale lacked due diligence and cost
the government $184,193.
CASE 6, Report of Investigation to EPA Office of Chemical Safety and Pollution
Prevention, May 6, 2014: The investigation revealed information to support the
allegation that an EPA contractor assaulted an EPA colleague.
CASE 7, Report of Investigation to EPA Office of Chemical Safety and Pollution
Prevention, June 10, 2014: The investigation revealed information to support the
allegation that a GS-13 EPA employee violated the Code of Federal Regulations and
EPA administrative policies with the viewing and downloading of pornographic materials
as well as various movies and video clips with an EPA-issued computer through the EPA
network during core working hours.
CASE 8, Report of Investigation to EPA Office of Administration and Resources
Management, July 16, 2014: The investigation revealed information to support the
allegation that a GS-14 EPA employee violated Federal Acquisition Regulations by
making technical decisions that were outside the employee's authority by authorizing
contract employees to telework and attempting to influence a fellow EPA employee to
authorize payment of invoices to the contractor that the colleague questioned.
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Closed Employee Integrity Cases
Statistics on employee integrity investigation cases closed during the semiannual
reporting period follow.
Pending 4/1/14
Open
Closed
Pending 9/30/14
Political
appointees
5
0
1
4
SES
9
5
3
11
GS-14/15
24
10
10
24
GS-13 and
below
39
9
7
41
Misc.
1
2
1
2
Total
78
26
22
82
I Political Appointees
I SES
14/15
113 and below
Misc
48
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Other Activities
OIG Visits Multiple Sites to Generate Ideas for Audits and Evaluations
To gain a further understanding of the important and diversified work done by the
EPA and obtain new ideas for audits and evaluations to help the agency operate
more efficiently and better protect human health and the environment, Inspector
Arthur A. Elkins Jr. visited a number of regions during the semiannual reporting
period. In addition to visiting sites, Mr. Elkins met with high-level regional officials,
including Regional Administrators, and also met with his own OIG staff.
In April 2013, Mr. Elkins visited Region 3, headquartered in Philadelphia, Pennsylvania.
During his trip, he visited the Overbrook Environmental Education Center, a facility in
the city that receives environmental justice and other EPA grants. The organization
engages in a number of environmentally oriented efforts.
In May 2014, Mr. Elkins went to the Region 1 office in Boston, Massachusetts, and
visited the City Manager's office in Chelsea, Massachusetts. During the trip, Mr. Elkins
learned about the city of Chelsea's efforts in such areas as environmental
justice and Brownfields, and he visited a new waterfront park and a former
metal site that had been remediated and redeveloped. Also in May, the
Inspector General visited Region 5, headquartered in Chicago, Illinois.
During that Region 5 trip, Mr. Elkins went to Minnesota and met with the
President of the Minnesota Pollution Control Agency in Minneapolis to
discuss various issues faced by that organization.
Inspector General Elkins (left)
and Region 1 Administrator
CurtSpalding (center) talk
with Jay Ash, Chelsea City
Manager. (EPA OIG photo)
In June 2014, the Inspector General went to Region 8 in Denver,
Colorado. One stop was City Lights, a Denver Urban Gardens project that
converted a former Brownfields site in a low-income neighborhood into a
healthy community garden. Another Region 8 stop was to Granata Farms,
a cutting-edge sustainability park and demonstration garden. Also in June,
the Inspector General visited the OIG's office in Cincinnati, Ohio, during
which time he went to the Experimental Streams Facility in the city, and also made a trip
to the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan.
In July 2014, Mr. Elkins visited the Region 10 office in Seattle, Washington, during
which time he visited the Tacoma, Washington, Asarco Superfund redevelopment site as
well as the Port of Tacoma, where the EPA is involved in reducing diesel emissions.
In September 2014, during a trip to the Region 7 offices, Mr. Elkins met with
representatives of the U.S. Attorney's Office forthe District of Kansas; visited several
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Semiannual Report to Congress April 1, 2014—September 30, 2014
environmental justice sites in the Kansas City, Missouri, area; and met with the President
of the National Environmental Justice Advisory Council in Kansas City, Missouri. At the
end of September, the Inspector General then visited the Region 2 offices in New York,
New York, during which time he toured the New Town Creek Site—a creek that
separates the city's boroughs of Brooklyn and Queens and is one of the most polluted
bodies of water in the nation.
OIG Can Use Imaging Technology to Assess Cleanup Effectiveness
We determined that hyperspectral imaging is a useful tool for assisting the OIG in
conducting reviews to assess conditions and effectiveness of cleanup actions at
Superfund and other sites.
Hyperspectral imaging is a type of remote sensing technology, similar to satellite
imaging, used on an airborne sensor that records reflected and emitted electromagnetic
energy. The data can assist in identifying and analyzing environmental conditions and
certain contaminants. Starting in 2007, in coordination with the
U.S. Geological Survey, the OIG assessed the feasibility of using this
technology at more than 40 sites.
Our work showed that hyperspectral imaging is useful in identifying
vegetative stress on land related to the presence of certain heavy metals,
such as lead and arsenic, and also in identifying debris. When the
imaging indicated little vegetative stress, we also found that sites were
An Airborne Real-Time Cueing generally also free of any significant residual contamination. Therefore,
Hyperspectral Enhanced J
Reconnaissance sensor. the OIG may use hyperspectral imaging as an oversight tool in the future.
(U.S. Geological Survey photo) We communicated the results of this work to the agency.
(Report No. 14-N-0360, Hyperspectral Imaging Can Be a Useful Tool for Office of
Inspector General Reviews Focused on Contaminated Land, September 26, 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 11 proposed changes to legislation, regulations, policy, procedures
or other documents that could affect the EPA or the Inspector General, and provided
comments on three.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Quality Control Review Shows Areas for OIG Improvements
An internal quality control review conducted by the EPA OIG of its audit and
evaluation reports issued during FY 2013 found that the OIG continued to make
improvements but still had areas to address.
The OIG continued to make improvements regarding documentation of workpaper
reviews. Supervisory reviews were better documented, and staff better documented
responses to supervisory comments. Nonetheless, the OIG still needs to:
• Reduce workpaper length by having each workpaper address just one step.
• Include the proper elements on indexing.
• Better attribute draft sources and ensure sources contain up-to-date information.
• Properly report the beginning and end dates for all reports.
The Deputy Inspector General agreed to make the suggested changes.
(Report No. 14-N-0358, Quality Control Review of EPA Office of Inspector General
Reports Issued in Fiscal Year 2013, September 25, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 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.
Impediments Noted During Congressional Testimony
On June 19, 2014, Inspector General Elkins testified before the U.S. House of
Representative's Committee on Oversight and Government reform regarding
impediments to audit work that the EPA OIG has experienced with CSB.
On September 5, 2013, the EPA OIG had issued a Seven-Day letter to the CSB Chairman
regarding CSB's refusal to provide requested documents to the OIG as part of an ongoing
investigation regarding the identification of whistleblowers who had filed confidential
complaints to the CSB's Office of Special Counsel.
"By refusing to provide the requested information, the CSB is preventing the EPA OIG
from conducting a complete investigation. In turn, we are precluded from providing
Congress with a meaningful report on all of the CSB's activities," Mr. Elkins noted
during his testimony. The Inspector General further pointed out that CSB had still not
acted subsequent to the issuance of the Seven-Day letter, and "we look to Congress to
support the EPA OIG by directing the CSB to produce the requested records."
Also, Mr. Elkins pointed out that, in February 2013, the EPA OIG had received a new
complaint alleging that CSB officials were using nongovernmental email accounts to
conduct official CSB business. "However, the CSB refused, and to this day continues to
refuse, to provide the documents the EPA OIG requested and has determined are
necessary for this investigation into those CSB activities," Mr. Elkins further testified.
In addition, on August 5, 2014, Mr. Elkins and 46 other Inspectors General submitted a
letter to Congress noting concerns regarding denial of access, and the letter cited the
restrictions on access to records that the EPA OIG had encountered with CSB.
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Semiannual Report to Congress April 1, 2014—September 30, 2014
CSB Did Not Comply With Requirements for Improper Payments
CSB did not implement some of the preventative measures required by the
Improper Payments Elimination and Recovery Improvement Act of 2012.
The 2012 act intensifies efforts to have agencies identify, prevent and recover improper
payments. The CSB was not fully compliant with the act's reporting requirement to
review prepayment and pre-award procedures, and did not ensure that a thorough review
of available databases occurs to prevent improper payments before the release of any
federal funds. Specifically, CSB did not use the "Do Not Pay" portal and did not have
testing provisions. CSB was compliant with the remaining reporting requirements, such
as publishing its Performance and Accountability Report and financial statements on its
website.
We recommended that the CSB establish access to the Do Not Pay portal and use that
portal to address the reporting deficiencies noted, and CSB indicated it had established
access to that portal.
(Report No. 14-P-0172, U.S. Chemical Safety and Hazard Investigation Board Did Not
Comply With the Do Not Pay Requirements for Improper Payments, April 10, 2014)
CSB Complied With Federal Information Security Management Act
The firm that audited the CSB's compliance with the Federal Information Security
Management Act of 2002 determined that CSB had an information security program in
place during FY 2013 that appeared to be functioning as designed. CSB takes information
security weaknesses seriously and was performing vulnerability assessments on its
network devices and security configuration assessments on a subset of its network
devices. Thus, the report made no recommendations. (Report No. 14-P-0181,
The U.S. Chemical Safety and Hazard Investigation Board Complies With the
Federal Information Security Management Act (Fiscal Year 2013), April 10, 2014)
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Statistical Data
Profile of Activities and Results
Audit and evaluation operations
Reviews performed by OIG
($ in millions)
April 1, 2014, to
September 30, 2014
Questioned costs * $12.2
Recommended efficiencies * $293.6
Costs disallowed to be recovered $9.0
Costs disallowed as cost efficiency $292.2
Reports issued by OIG 40
Reports resolved 212
(Agreement by agency officials
to take satisfactory corrective
actions) **
FY
2014
$42.3
$321.7
$9.1
$292.4
66
321
Audit and evaluation operations
Reviews performed by Single Audit Act auditors
($ in millions)
April 1,2014, to FY
September 30, 2014 2014
Questioned costs * $3.0 $12.2
Recommended efficiencies * $0.0 $0.0
Costs disallowed to be recovered $14.3 $20.6
Costs disallowed as cost efficiency $0.0 $0.0
Single Audit Act reviews 170 300
Agency recoveries $0.2 $0.9
Recoveries from audit and
evaluation resolutions of current
and prior periods (cash collections
or offsets to future payments) ***
Investigative operations
($ in millions)
April 1,2014, to
September 30, 2014
Total fines and recoveries **** $0.1 61
Cost savings $0.130
Cost avoidances $0
Civil settlements $0.785
Cases open during period 52
Cases closed during period 50
Indictments/informations of persons 26
or companies
Convictions of persons or firms 9
Civil judgments/settlements/filings 2
FY
2014
$2.414
$0.362
$0
$0.824
108
100
50
19
3
* Questioned costs and recommended efficiencies are
subject to change pending further review in the audit
resolution process.
** Reports resolved are subject to change pending
further review.
*** Information on recoveries from audit resolutions is
provided by EPA's Office of Financial Management
and is unaudited.
**** Fines and recoveries resulting from joint
investigations.
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Audit, Inspection and Evaluation Report Resolution
Status report on perpetual inventory of reports in resolution process
for semiannual period ending September 30, 2014
Report category
A. For which no management
decision was made by
April 1,2014*
B. Which were issued during the
reporting period
C. Which were issued during the
reporting period that required
no resolution
Subtotals (A + B - C)
D. For which a management
decision was made during the
reporting period
E. For which no management
decision was made by
September 30, 2014
F. Reports for which no
management decision was
made within 6 months of
issuance
No. of
reports
144
199
129
214
208
6
107
Report issuance
($ in thousands)
Questioned
costs
$65,702
15,201
0
80,903
42,567
38,337
23,269
Recommended
efficiencies
$61,014
291,291
0
352,305
22,738
59,567
59,398
Report resolution costs
sustained
($ in thousands)
To be
recovered
$23,403
133
0
23,536
23,342
195
195
As
efficiencies
$8,817
290,823
0
299,650
290,823
8,827
8,827
Any difference in number of reports and amounts of questioned costs or recommended efficiencies between this
report and our previous semiannual report results from corrections made to data in our audit tracking system.
55
-------
Semiannual Report to Congress
April 1, 2014—September 30, 2014
Table 1: Inspector General-issued reports with questioned costs for semiannual period ending
September 30, 2014 ($ in thousands)
Report category
A. For which no management decision was made by
April 1,2014**
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
September 30, 2014
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
31
6
37
14
8
6
17
12
Questioned
costs *
$65,702
15,201
80,903
42,567
17,490
25,077
38,337
23,269
Unsupported
costs
$34,657
15,140
49,797
25,076
0
25,076
24,721
9,714
Questioned costs include unsupported costs.
Any difference in number of reports and amounts of questioned costs between this report and our previous
semiannual report results from corrections made to data in our audit, inspection and evaluation tracking system.
Table 2: Inspector General-issued reports with recommendations that funds be put to better use
for semiannual period ending September 30, 2014 ($ in thousands)
Report Category
A. Forwhich no management decision was made by April 1, 2014 *
B. Which were issued during the reporting period
Subtotals (A + B)
C. Forwhich 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 September 30, 2014
Reports for which no management decision was made
within 6 months of issuance
No. of
reports
15
4
19
5
3
2
0
5
3
Dollar
value
$61,014
291,291
352,305
292,738
290,823
1,915
0
59,567
59,398
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 September 30, 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
55
10
0
21
3
89
Percentage
62
11
0
24
3
100
56
-------
Semiannual Report to Congress
April 1, 2014—September 30, 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 and annual period ending
September 30, 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
Issues referred to others:
OIG offices
EPA program offices
Other federal agencies
State/local agencies
Semiannual period
(April 1,2014 -
September 30, 2014)
156
156
123
189
88
50
4
14
Annual period
(October 1,201 3-
SeptemberSO, 2014)
132
275
218
189
174
72
8
21
The hotline makes it easy to report allegations of fraud, waste, abuse, mismanagement or misconduct in
the programs and operations of the EPA. Employees, as well as contractors, grantees, program
participants and members of the general public, may report allegations to the OIG.
The Inspector General Act of 1978, as amended, and other laws (such as the Whistleblower Protection
Enhancement Act of 2012) protect those who make hotline complaints. Individuals who contact the
hotline are not required to identify themselves and may request confidentiality. However, the OIG
encourages those who report allegations to identify themselves so that they can be contacted if the OIG
has additional questions. Pursuant to Section 7 of the Inspector General Act, the OIG will not disclose the
identity of an employee of the EPA who provides information unless that employee consents or the
Inspector General determines that such disclosure is unavoidable during the course of the investigation,
audit or evaluation. As a matter of policy, the OIG will provide comparable protection to employees of
contractors, grantees and others who provide information to the OIG and request confidentiality.
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail: OIG Hotline@epa.gov write OIG EPA Hotline
phone: 1-888-546-8740 1200 Pennsylvania Ave NW
fax: 202-566-2599
online: http://www.epa.gov/oig/hotline.htm
Mailcode2431T
Washington, DC 20460
57
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Summary of Investigative Results
Summary of investigative activity during reporting period
Cases open as of April 1, 2014 *
Cases opened during period
Cases closed during period
Cases pending as of September 30, 2014
216
108
100
224
* Adjusted from prior period.
Investigations pending by type as of September 30, 2014
Contract fraud
Grant fraud
Laboratory fraud
Employee integrity
Program integrity
Computer crimes
Threat
Retaliation
Other
Total
Superfund
9
0
4
3
3
0
0
0
2
21
Management
12
18
7
32
8
1
3
1
14
96
Split funded
14
5
3
44
5
5
3
0
9
88
Recovery Act
5
9
0
0
1
0
0
0
1
16
CSB
0
0
0
3
0
0
0
0
0
3
Total
40
32
14
82
17
6
6
1
26
224
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
7
0
2
0
$785,000
0 months
0 months
0 months
0 months
0 hours
Joint*
19
9
0
0
$160,650
2 months
0 months
4 months
90 months
50 hours
Total
26
9
2
0
$945,650
2 months
0 months
4 months
90 months
50 hours
'With another federal agency.
Administrative actions
Suspensions
Debarments
Other administrative actions
Total
Administrative recoveries
Cost avoidance
EPA OIG only
4
25
44
73
$38,361
$80,335
Joint*
4
3
5
12
$33,142
$49,405
Total
8
28
49
85
$71,503
$129,740
* With another federal agency.
58
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Semiannual Report to Congress
April 1, 2014—September 30, 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
Ineligible Unsupported Unreasonable
Date Costs Costs Costs
Federal
Recommended
Efficiencies
PERFORMANCE REPORTS
14_P_0171
14-P-0172
14-P-0181
14-P-0184
14-P-0191
14-P-0243
14-P-0245
14-P-0247
14-P-0262
14-P-0270
14-P-0272
14-P-0302
14-P-0317
14-P-0318
14-P-0319
14-P-0321
14-P-0322
14-P-0323
14-P-0324
14-P-0325
14-P-0332
14-P-0338
14_p_0347
14-P-0348
14-P-0349
14-P-0350
14-P-0357
14-P-0359
14-P-0363
14-P-0364
EPA Needs to Improve Controls for Improper Payment Identification
CSB Did Not Comply With Requirements for Improper Payments
CSB Federal Information Security Management Act (FY 2013)
National Petroleum Refinery Initiative Goals Need to Be Demonstrated
EPA Needs to Clarify Claim of "No Net Loss" of Wetlands
Audit of EPA Passport Controls
EPA Compliance With Retention Incentive Regulations and Policies
EPA Employees Did Not Act Consistent With Policy in Assisting Grantee
EPA's Process to Release Information Under Freedom of Information Act
Potential Fraudulent Environmental Data Procedures Not Adequate
Services Contract at Risk of EPA Not Receiving Services for Which It Paid
EPA Needs to Strengthen Procedures for Historical Lead Smelter Sites
Improved Oversight Needed for Puget Sound Cooperative Agreements
Unliquidated Obligations for Drinking Water Infrastructure Need Improving
No Bias Found in Freedom of Information Act Fee Waiver Decisions
Follow-Up Report: EPA Improves Radiation Monitoring System
Impact of EPA's Conventional Reduced Risk Pesticide Program Is Declining
EPA Is Not Fully Aware of Its Use of Cloud Computing Technologies
Efforts to Reduce Methane Emissions From Leaking Pipes Need Improving
EPA Met or Exceeded Most Internal Climate Change Goals
Cloud Oversight Resulted in Unsubstantiated and Missed Opportunities
Increased Emphasis on Strategic Sourcing Can Result in Savings
EPA Needs to Improve Contract Management Assessment Program
EPA Needs to Work With States for Gulf of Mexico Hypoxic Zone Program
EPA Can Improve "Design for the Environment" Program
EPA's Risk Assessment Division Has Not Fully Adhered to Plan
Recipient Subawards to Fellows Did Not Comply With Federal Requirements
Alternative Asbestos Control Method Experiments Need More Oversight
Water Resources Need Protection From Unmonitored Hazardous Chemicals
Process for Designating Land as Protective for Reuse Needs Improvement
TOTAL PERFORMANCE REPORTS = 30
Apr. 10, 2014
Apr. 10, 2014
Apr. 10, 2014
Apr. 15, 2014
Apr. 16, 2014
May 01, 201 4
May 02, 2014
May 09, 2014
May 16, 2014
May 29, 2014
May 30, 2014
Jun. 17, 2014
Jul. 15,2014
Jul. 16,2014
Jul. 16, 2014
Jul. 22, 2014
Jul. 24, 2014
Jul. 24, 2014
Jul. 25, 2014
Jul. 29, 2014
Aug. 15, 2014
Aug. 26, 2014
Sep. 02, 2014
Sep. 03, 2014
Sep. 09, 2014
Sep. 10, 2014
Sep. 17, 2014
Sep. 25, 2014
Sep. 29, 2014
Sep. 29, 2014
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
0
0
0
0
0
481,819
0
0
0
169,000
0
0
230,641
0
0
0
0
0
0
0
60,000,000
0
0
0
0
0
0
0
0
$60,881,460
SINGLE AUDIT REPORTS
14-3-0157
14-3-0158
14-3-0159
14-3-0160
14-3-0161
14-3-0162
14-3-0163
14-3-0164
14-3-0165
14-3-0166
14-3-0167
14-3-0168
14-3-0169
14-3-0170
14-3-0173
14-3-0174
McKeesport, the Municipal Authority of the City of, Pennsylvania - FY 2012
Siloam Springs, Arkansas, City of- FY 2012
Johnsonburg Municipal Authority, Pennsylvania - FY 2012
Mifflin County Conservation District, Pennsylvania - FY 2012
Montour County, Pennsylvania - FY 2012
Philadelphia Authority for Industrial Development, Pennsylvania -FY 201 2
St. Joseph's Hospital Health Center, New York - FY 2012
Community Trans. Assoc. of America, District of Columbia - FY 2012
Lackawanna, Pennsylvania, County of- FY 2012
West Pittston, Pennsylvania, Borough of- FY 201 1
Connections, of McKinley County, Inc., New Mexico -FY 201 2
Iowa Regional Utilities Association, Iowa - FY 2012
Edgerton, Kansas, City of- FY 2012
Dickinson County, Kansas - FY 2012
Thralls Station Regional Sewer District, Indiana - FY 2012
Garrison Rural Water District, North Dakota - FY 2012
Apr. 01,2014
Apr. 01,2014
Apr. 01,2014
Apr. 01,2014
Apr. 01,2014
Apr. 01,2014
Apr. 07, 201 4
Apr. 07, 201 4
Apr. 07, 201 4
Apr. 07, 201 4
Apr. 07, 2014
Apr. 07, 2014
Apr. 07, 2014
Apr. 07, 2014
Apr. 09, 201 4
Apr. 09, 201 4
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
59
-------
Semiannual Report to Congress
April 1, 2014—September 30, 2014
Questioned Costs
Report No.
14-3-0175
14-3-0176
14-3-0177
14-3-0178
14-3-0179
14-3-0180
14-3-0182
14-3-0183
14-3-0185
14-3-0186
14-3-0187
14-3-0188
14-3-0189
14-3-0190
14-3-0192
14-3-0193
14-3-0194
14-3-0195
14-3-0196
14-3-0197
14-3-0198
14-3-0199
14-3-0200
14-3-0201
14-3-0202
14-3-0203
14-3-0204
14-3-0205
14-3-0206
14-3-0207
14-3-0208
14-3-0209
14-3-0210
14-3-0211
14-3-0212
14-3-0213
14-3-0214
14-3-0215
14-3-0216
14-3-0217
14-3-0218
14-3-0219
14-3-0220
14-3-0221
14-3-0222
14-3-0223
14-3-0224
14-3-0225
14-3-0226
14-3-0227
14-3-0228
14-3-0229
14-3-0230
14-3-0231
14-3-0232
14-3-0233
14-3-0234
14-3-0235
14-3-0236
14-3-0237
14-3-0238
14-3-0240
14-3-0241
14-3-0248
14-3-0249
Report
McKenzie County, North Dakota - FY 201 1
Brownsburg, Indiana, Town of- FY 2012
Dell Rapids, South Dakota, Municipality of- FY 201 1
Faulkton, South Dakota, City of- FY 2012
Martin, South Dakota, City of -FY 201 2
Herreid, South Dakota, City of - FY 201 2
Vallejo, California, City of- FY 2012
Woodland, California, City of - FY 201 2
Chesterfield, Indiana, Town of- FY 2012
Fortville, Indiana, Town of- FYs 2011 &2012
Lowell, Indiana, Town of- FY 2012
Plainfield, Indiana, Town of- FY 2012
South Whitley, Indiana, Town of-FYs2011 &2012
Vigo County, Indiana - FY 2012
Joplin, Missouri, City of- FY 2012
Shawnee County, Kansas - FY 201 2
Wentzville, Missouri, City of- FY 2012
Little Traverse Bay Bands of Odawa Indians, Michigan - FY 2012
Michigan Infrastructure & Transportation Association, Michigan - FY 2012
Muskegon Conservation District, Michigan - FY 2012
Tip of the Mitt Watershed Council, Michigan - FY 2012
Arlington, Minnesota, City of- FY 2012
Olivia, Minnesota, City of- FY 2012
Caledonia, Minnesota, City of -FY 201 2
Pelican Rapids, Minnesota, City of- FY 2012
Rushford, Minnesota, City of- FY 2012
Ironton, Ohio, City of -FY 201 2
Delaware, Ohio, City of -FY 201 2
Fairborn, Ohio, City of -FY 201 2
Cuyahoga Soil & Water Conservation District, Ohio - FY 2012
Scioto Water, Inc., Ohio- FY 2012
Bad River Band of Lake Superior Tribe of Chippewa, Wisconsin - FY 2012
Ashland, Wisconsin, City of- FY 2012
Baraboo, Wisconsin, City of- FY 2012
Burlington, Wisconsin, City of-FY 2012
Columbus, Wisconsin, City of-FY 2012
Cudahy, Wisconsin, City of-FY 2012
Elroy, Wisconsin, City of-FY 2012
Horicon, Wisconsin, City of - FY 201 2
Kenosha, Wisconsin, City of-FY 2014
Menasha, Wisconsin, City of-FY 2012
Mosinee, Wisconsin, City of-FY 2012
Park Falls, Wisconsin, City of-FY 2012
Rhinelander, Wisconsin, City of-FY 2012
Frederick, Oklahoma, City of - FY 201 1
Cockrell Hill, Texas, City of-FY 2012
Edgewood, Texas, City of - FY 201 2
Kermit, Texas, City of-FY 201 2
Robstown, Texas, City of-FY 2012
Zapata County, Texas - FY 2012
Ramona Band of Cahuilla, California - FY 201 2
Redwood Valley Little River Band of Porno Indians, California - FY 2012
Robinson Rancheria Band of Porno Indians of California - FY 201 2
Santa Rosa Rancheria Tachi Yokut Tribe, California - FY 2012
Crystal River, Florida, City of-FY 2014
Hollywood, Florida, City of-FY 201 2
Marco Island, Florida, City of-FY 201 2
Daleville, Alabama, City of - FY 2012
Millbrook, Alabama, City of - FY 2012
Montgomery, Alabama, City of-FY 2012
Apalachicola, Florida, City of- FY2012
Huntsville, Alabama, City of-FY 2012
Jasper County, Missouri - FY 2012
Richmond, California, City of-FY 2012
Passaic Valley Water Commission, New Jersey - FY 2012
Federal
Ineligible Unsupported Unreasonable Recommended
Date Costs Costs Costs Efficiencies
Apr. 09, 201 4
Apr. 09, 2014
Apr. 09, 2014
Apr. 09, 2014
Apr. 09, 2014
Apr. 09, 201 4
Apr. 11,2014
Apr. 11,2014
Apr. 14, 2014
Apr. 14, 2014
Apr. 14, 2014
Apr. 15, 2014
Apr. 15, 2014
Apr. 15, 2014
Apr. 15, 2014
Apr. 15, 2014
Apr. 15, 2014
Apr. 16, 2014
Apr. 16, 2014
Apr. 16, 2014
Apr. 16, 2014
Apr. 16, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 17, 2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 21,2014
Apr. 23, 201 4
Apr. 23, 201 4
Apr. 23, 2014
Apr. 23, 2014
Apr. 23, 2014
Apr. 24, 2014
Apr. 24, 201 4
Apr. 24, 201 4
Apr. 24, 201 4
Apr. 24, 201 4
Apr. 24, 2014
Apr. 24, 2014
Apr. 24, 2014
Apr. 24, 2014
Apr. 24, 201 4
Apr. 24, 201 4
Apr. 24, 201 4
Apr. 24, 201 4
Apr. 24, 2014
Apr. 24, 2014
Apr. 25, 2014
Apr. 25, 2014
Apr. 24, 201 4
Apr. 28, 201 4
May 08, 2014
May 08, 2014
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,200,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
60
-------
Semiannual Report to Congress
April 1, 2014—September 30, 2014
Questioned Costs
Report No.
14-3-0250
14-3-0251
14-3-0252
14-3-0253
14-3-0254
14-3-0255
14-3-0256
14-3-0257
14-3-0258
14-3-0259
14-3-0260
14-3-0261
14-3-0263
14-3-0264
14-3-0265
14-3-0266
14-3-0267
14-3-0268
14-3-0269
14-3-0271
14-3-0273
14-3-0274
14-3-0275
14-3-0276
14-3-0277
14-3-0279
14-3-0280
14-3-0281
14-3-0282
14-3-0283
14-3-0284
14-3-0285
14-3-0286
14-3-0287
14-3-0288
14-3-0289
14-3-0290
14-3-0291
14-3-0292
14-3-0293
14-3-0294
14-3-0295
14-3-0296
14-3-0297
14-3-0298
14-3-0299
14-3-0300
14-3-0301
14-3-0303
14-3-0304
14-3-0305
14-3-0306
14-3-0307
14-3-0308
14-3-0309
14-3-0310
14-3-0311
14-3-0312
14-3-0313
14-3-0314
14-3-0315
14-3-0326
14-3-0327
14-3-0328
Report
Nassau County, New York - FY 2012
Arcadia, Florida, City of - FY 201 2
Dixon, Illinois, City of- FY 2012
Rockford, Illinois, City of- FY 2012
Peoria County, Illinois -FY 2012
Karnes City, Texas, City of- FY 2012
Leominster, Massachusetts, City of - FY 201 2
Exeter, New Hampshire, Town of-FY2012
Bradford, Vermont, Town of- FY 2012
Somerset Township Municipal Authority, Pennsylvania - FY 201 2
Howard University - FY 2012
Johnstown, Pennsylvania, Redevelopment Authority of the City of- FY 2012
West Central Indiana Economic Development District, Indiana- FY 2012
Ishpeming, Michigan, City of -FY 201 2
Long Prairie, Minnesota, City of- FY 2012
Mount Vernon, South Dakota, Municipality of- FY 2012
Potlatch, Idaho, City of -FY 201 2
Ponderosa Community Club, Inc., Washington -FY 201 2
Elsa, Texas, City of -FY 201 2
R&T Water Supply Commerce Authority, North Dakota - FY 2012
Lexington-Fayette Urban County Government, Kentucky - FY 2012
Winchester, Kentucky, City of -FY 201 2
California Air Pollution Control Officers Association - FY 2012
Agriculture and Land Based Training Association, California - FY 2012
Driggs, Idaho, City of -FY 201 2
Bayou Des Cannes Water System, Louisiana - FY 201 2
Chicago Park District, Illinois - FY 2012
Liberty Hill, Texas, City of- FY 2012
West Branch Regional Authority, Pennsylvania - FY 2012
Anderson, Indiana, City of-FY 2012
Auburn, Indiana, City of-FY 2012
Bellwood, Illinois, Village of-FY 2012
Tesuque, New Mexico, Pueblo of - FY 201 2
Puerto Rico, Puerto Rico, University of-FY 201 2
New Mexico Finance Authority - FYs 201 1 & 201 2
South Suburban Mayors and Managers Association, Illinois - FY 2012
Stephenson County, Illinois - FY 2012
Clean Energy Coalition, Michigan FY 2012
Ottawa, Michigan, County of-FY 2012
Boonville, Indiana, City of-FY 201 2
Brazil, Indiana, City of-FY 2012
Columbus, Indiana, City of-FY 201 2
Connersville, Indiana, City of-FY 2012
Goshen, Indiana, City of-FY 2012
Luce Township Regional Sewer District, Indiana - FYs 201 1 & 2012
Carlsbad, New Mexico, City of-FY 201 2
Norman Water and Sewer System, Arkansas, Town of-FY 2012
Care New England Health System and Affiliates, Rhode Island - FY 201 2
New York and New Jersey, New Jersey, The Port Authority of - FY 2012
Huntington, Indiana, City of-FY 2012
Portland, Tennessee, City of-FY 2012
Anaconda Deerlodge County, Montana - FY 201 2
Valparaiso, Indiana, City of-FY 2012
DeKalb County, Indiana - FY 2012
Delaware County, Indiana - FY 201 2
Nappanee, Indiana, City of-FY 2012
Mount Vernon, Indiana, City of-FY 2012
Ligioner, Indiana, City of-FY 2012
Lawrence, Indiana, City of-FY 201 2
LaPorte, Indiana, City of-FY 2012
Seymour, Indiana, City of-FY 201 2
Guam, Government of-FY 2013
Virgin Islands Water and Power Authority, Water System of the - FY 2012
Northern Mariana Islands, Commonwealth of-FY 2013
Federal
Ineligible Unsupported Unreasonable Recommended
Date Costs Costs Costs Efficiencies
May 08, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 13, 2014
May 19, 2014
May 19, 2014
May 19, 2014
May 19, 2014
May 19, 2014
May 19, 2014
May 20, 2014
May 29, 2014
May 30, 2014
May 30, 2014
May 30, 2014
May 30, 2014
May 30, 2014
Jun.05, 2014
Jun.05, 2014
Jun.05, 2014
Jun.05, 2014
Jun.06, 2014
Jun.06, 2014
Jun.06, 2014
Jun.06, 2014
Jun. 10, 2014
Jun. 10, 2014
Jun. 11,2014
Jun. 11,2014
Jun. 11,2014
Jun. 11,2014
Jun. 11,2014
Jun. 11,2014
Jun. 12, 2014
Jun. 12, 2014
Jun. 12, 2014
Jun. 12, 2014
Jun. 12, 2014
Jun. 13, 2014
Jun. 13, 2014
Jun. 17, 2014
Jun. 17, 2014
Jun. 18, 2014
Jun. 18, 2014
Jun. 20, 2014
Jun. 23, 2014
Jun. 23, 2014
Jun. 26, 2014
Jul.02,2014
Jul.02,2014
Jul.02,2014
Jul.02,2014
Jul.02,2014
Jul.28,2014
Jul.28, 2014
Jul.30,2014
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
133,455
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
206,539
0
1,492,691
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
61
-------
Semiannual Report to Congress
April 1, 2014—September 30, 2014
Report No. Report
1 4-3-0329 Jackson County, Michigan
14-3-0330 Grand Traverse Bay Watershed Initiative, Inc., Michigan - FY 2012
14-3-0331 Conservation Law Foundation, Inc., Massachusetts -FY 201 2
14-3-0333 Sauk Suiattle Indian Tribe, Washington - FY2012
1 4-3-0334 King County, Washington - FY 201 2
14-3-0335 PUD1 of Klickitat County, Washington -FY 201 2
1 4-3-0336 Jefferson County, Washington - FY 201 2
1 4-3-0337 Rock Island, Washington, City of - FY 201 2
14-3-0339 Hammond, Indiana, City of- FY 2012
1 4-3-0340 Sweetwater, Florida, City of - FY 201 2
14-3-0341 North Bay Village, Florida -FY 201 2
1 4-3-0342 Southwest Florida Regional Planning Council, Florida - FY 2012
14-3-0343 Rocky Ford, Colorado, City of- FY 201 2
1 4-3-0344 Loveland, Colorado, City of - FY 201 2
1 4-3-0345 Manitou Springs, Colorado, City of - FY 201 2
14-3-0346 Hillsboro Beach, Florida, Town of- FY 2012
1 4-3-0351 Coalition for the Upper South Platte, Colorado - FY 201 2
1 4-3-0352 Colorado Rural Water Association, Colorado - FY 201 2
1 4-3-0353 N unn , Colorado, Town of - FY 201 2
1 4-3-0354 Decatur, Illinois, City of - FY 201 3 (8 months May to December 201 3)
1 4-3-0356 Kansas, State of - FY 201 3
14-3-0361 Nevada Irrigation District, California -FY 201 2
14-3-0362 SRC, Inc., New York- FY 2012
1 4-3-0365 Northern Cheyenne Tribe, Montana - FY 201 2
1 4-3-0366 Eureka, Montana, Town of - FY 201 2
TOTAL SINGLE AUDIT REPORTS = 170
AGREED-UPON PROCEDURES/REVIEW
14-2-0316 Wells Band Council Needs to Improve Its Accounting System
TOTAL AGREED-UPON PROCEDURE REVIEWS = 1
ATTESTATION REPORTS
14-4-0320 Apex Logistics LLC
TOTAL ATTESTATION REPORTS = 1
INTERNAL REPORTS OF DIG
1 4-B-0244 EPA OIG's Compliance With EPA Passport Guidance
1 4-B-0246 EPA DIG Compliance With Retention Incentive Regulations/Policies
TOTAL INTERAL REPORTS OF DIG = 2
NON-AUDIT REPORTS
1 4-N-0239 Chemical Import Data May Help Identify Facilities Needing Risk Plans
1 4-N-0242 Compendium of Unimplemented Recommendations as of March 31 2014
1 4-N-0358 Quality Control Review of EPA OIG Reports Issued in FY 201 3
1 4-N-0360 Hyperspectral Imaging Can Be a Useful Evaluation Tool for EPA OIG
TOTAL NON-AUDIT REPORTS = 4
AMERICAN REINVESTMENT AND RECOVERY ACT OF 2009 REPORTS
1 4-R-0278 New Jersey Department of Environmental Protection
1 4-R-0355 Audits on EPA Diesel Emission Reduction Act Assistance Agreements
TOTAL RECOVERY ACT REPORTS = 2
Date
Jul.30,2014
Jul.30,2014
Jul.30,2014
Aug. 15, 2014
Aug. 15, 2014
Aug. 19, 2014
Aug. 19, 2014
Aug. 19, 2014
Aug. 25, 2014
Aug. 25, 2014
Aug. 25, 2014
Aug. 25, 2014
Aug. 26, 2014
Aug. 26, 2014
Aug. 26, 2014
Aug. 27, 2014
Sep. 09, 2014
Sep. 09, 2014
Sep. 10, 2014
Sep. 10, 2014
Sep. 11,2014
Sep. 25, 2014
Sep. 25, 2014
Sep. 29, 2014
Sep. 29, 2014
Jul. 14, 2014
Jul. 16, 2014
May 1,201 4
May 1,201 4
Apr. 28, 201 4
Apr. 30, 2014
Sep. 25, 2014
Sep. 26, 2014
Jun.04, 2014
Sep. 15, 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
$61 ,068
$61,068
$0
0
$0
$0
0
0
0
$0
$0
0
$0
Questioned Costs
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
$3,032,685
$390,000
$390,000
$11,717,766
$11,717,766
$0
0
$0
$0
0
0
0
$0
$0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
$0
$0
$0
$0
0
$0
$0
0
0
0
$0
$0
0
$0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$0
$0
$0
$0
$0
$0
0
$0
$0
0
0
0
$0
$0
0
$0
TOTAL REPORTS ISSUED = 210
$61,068 $15,140,451
$0
$60,881,460
62
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
Appendix 2—Reports Issued Without Management Decisions
For Reporting Period Ended September 30, 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 September 30, 2014.
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: The Office of Administration and Resources Management is collaborating with the Office of
Research and Development's National Homeland Security Research Center, Office of Water, Office of Chemical
Safety and Pollution Prevention, and Office of Emergency Management to create the agency's security classification
guide. The agency expects to complete the draft guide and forward it to Office of Homeland Security by
December 31, 2014, for the Administrator's approval. The completion of this part of the process should trigger being
able to work through addressing the corrective actions.
OIG Follow-Up Status: None provided.
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
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: Per confirmation from the OIG on September 24, 2014, the OIG will consider the corrective
actions to Recommendations 1 and 2 resolved upon acceptance of the certification memo noting such. The Office of
Administration and Resources Management submitted the certification memo on September 26, 2014, and is
awaiting the OIG to enter a close date in order to take final action on the audit.
OIG Follow-Up Status: Resolution on hold—beyond agency control.
63
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Semiannual Report to Congress April 1, 2014—September 30, 2014
Office of Grants and Debarment
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: The OIG has reactivated this audit and notified Office of Grants and Debarment that it can
proceed with work on developing the management decision. The Office of Grants and Debarment will contact
principals of the Lead Remediation Association of America to obtain additional materials available for evaluation in
order to develop its management decision. The forecast date to issue the management decision for the audit is
March 30, 2015.
OIG Follow-Up Status: Resolution pending receipt of additional information.
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 Education Programs, March 10, 2014
Summary: The National Association of State Departments of Agriculture Research Foundation's financial
management system did not meet certain federal requirements and conditions of the EPA award. Specifically, the
foundation incorrectly calculated and applied indirect cost rates, reported outlays for indirect costs in excess of
recorded expenses, and drew funds that exceeded its cash needs. As a result, we questioned $275,650. The
foundation 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. The
foundation did not determine the reasonableness of costs for two subgrants as required by conditions of the award. In
addition, the foundation's written procurement policy lacked procedures to ensure compliance with the Code of
Federal Regulations. As a result, we questioned $295,976. The OIG also 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.
Agency Explanation: The Office of Grants and Debarment continues to evaluate documents provided by the
foundation and has requested additional documents from the foundation to develop the agency management decision
for the audit. The forecast date to issue the management decision for the audit is March 30, 2015.
OIG Follow-Up Status: None provided.
Report No. 14-3-0090, Pleasant Point Passamaquoddy Tribal Council, Main - FY2011, January 14, 2014
Summary: On numerous occasions, an employee was paid out of "PPG" program funds for program travel. When
reconciling these travel advances, it appears that the employee was reimbursed personally by the sponsoring
organization of the trip for the same travel, and we questioned $10,000 in ineligible costs. Also, if an employee
attended a conference as a conference speaker, the employee would be compensated by the tribe as compensation
(not vacation time), which may include overtime. The employee would also be reimbursed by the sponsoring
organization personally for this time attending for the conference as a speaker. Therefore, we questioned an
additional $8,000 as ineligible costs.
Agency Explanation: The resolution of this audit has been suspended due to another OIG investigation that is
currently underway. The region will resume resolution of this audit when given approval by the OIG's office.
OIG Follow-Up Status: Resolution on hold.
64
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
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
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: The management decision letter to the New Mexico Environment Department was signed on
January 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: Grace Hill submitted a request for a deviation to Region 7 dated July 14, 2014. Region 7's final
determination, with OIG concurrence, is on hold pending the resolution of the waiver request. Region 7 is evaluating
and consolidating Grace Hill's deviation request and plans to provide recommendations to Office of Grants and
Debarment in October 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: Region 8 is working with the recipient on draft policies and procedures as part of a multi federal
partnership with the tribe. In addition, the Office of Grants and Debarment and the region are discussing the contents
of the proposed final determination letter. Projected completion date is December 31, 2014.
OIG Follow-Up Status: No response received.
65
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Semiannual Report to Congress April 1, 2014—September 30, 2014
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
Summary: The Colorado Department of Public Health and Environment generally complied with Colorado's state
procurement policies and procedures as required by Code of Federal Regulations. However, the department did not
always comply with the cost or price analysis requirements and did not include language in bid proposals designating
the date, time and place of bid openings, as required by State of Colorado Procurement Rule R-24-103-202a-08(b).
In addition, the department did not always ensure required federal language was included in bid proposals and
contracts. As a result, we questioned $2,593,495 claimed under the cooperative agreement.
Agency Explanation: Region 8 sent a draft management decision letter to OIG for concurrence. Region 8 also has
had regular check-ins with the OIG on the on-going efforts toward resolution with the State of Colorado. The region
and OIG are sharing detailed information about the audit resolution process.
OIG Follow-Up Status: None provided.
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.
Agency Explanation: Region 9 is addressing five audits with Summit Lake—one agreed-upon procedures audit and
four single audits. Summit Lake appealed the agreed-upon procedures audit and the Regional Administrator
accepted the appeal on August 13, 2014. The tribe has 60 days to submit additional information. Region 9
Accounting and Grant staff had a site visit during the week of September 22, 2014. The documentation collected is
still under review. Two other single audits (#11-3-0150 and #11-3-0151) have also been appealed as of July 2, 2012.
Response to the tribe has been put on hold pending outcome of appeal on agreed-upon procedures. The amounts
owed on all the single audits deal with deferred revenue and will be addressed together.
OIG Follow-Up Status: None provided.
Report No. 13-3-0160, Summit Lake Paiute Tribe, 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 is addressing five audits with Summit Lake—one agreed-upon procedures audit and
four single audits. Summit Lake appealed the agreed-upon procedures audit and the Regional Administrator
accepted the appeal on August 13, 2014. The tribe has 60 days to submit additional information. Region 9
Accounting and Grant staff had a site visit during the week of September 22, 2014. The documentation collected is
still under review. Two other single audits (#11-3-0150 and #11-3-0151) have also been appealed as of July 2, 2012.
Response to the tribe has been put on hold pending outcome of appeal on agreed-upon procedures. The amounts
owed on all the single audits deal with deferred revenue and will be addressed together.
OIG Follow-Up Status: None provided.
66
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Semiannual Report to Congress April 1, 2014—September 30, 2014
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: Region 9 is working with the tribe to resolve findings. Target for issuing the management
decision letter is the first quarter of FY 2015.
O/G Follow-Up Status: None provided.
Report No. 14-3-0100, Commonwealth Utilities Corporation, MP FY2012, January 27, 2014
Summary: The Commonwealth Utilities Corporation did not conduct a physical count of capital assets in over 5 years
and has no basis to determine if the carrying value of its capital assets is accurate. Since a physical count has not
been conducted, the asset listing may include assets that have been retired, broken, idled, destroyed or stolen. We
found that of the $9,216,018 security deposits, only $9,194,457 was deposited in interest-earning accounts as of
September 30, 2012. The corporation did, however, reduce the deficiency from $2,510,880 as of September 30,
2011, to $21,561 as of September 30, 2012. Also, upon disconnection of customer accounts, security deposits were
refunded or applied to outstanding balances without regard to accrued interest earned. The aged listing of accounts
receivable as of September 30, 2012 included negative balances totaling $1,091,038. An aggregate amount of
$179,356, or 9 percent of the prepayment balance, was for prepayments made from FYs 2004 through 2009. The
corporation had not conducted physical count of capital assets in over 5 years. For one or 60 disbursements tested,
services were provided before the purchase orders were executed. Outstanding deferred dividends payable as of
September 30, 2012, amounted to $2,700,000. The corporation had not established a revolving fund pursuant to the
terms of the Memorandum of Agreement.
Agency Explanation: There are outstanding findings for 2012-01, 2012-05 and 2012-06. Region 9 is waiting for
completion of the FY 2013 audit expected to be in draft by October 2014 to resolve these findings.
O/G Follow-Up Status: None provided.
Report No. 14-R-0130, Unless California Air Resources Board Fully Complies with Laws and Regulations,
Emissions Reductions and Human Health Benefits are Unknown, March 6, 2014
Summary: Our examination disclosed material weaknesses in the California Air Resources Board's compliance with
laws, regulations, and the terms 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 the
old engines. The board also did not accurately report jobs created or retained or provide actual emissions reduction
calculations, as required under the cooperative agreement. In addition, the board paid contract costs that were not in
accordance with contract terms. The board completed the locomotive repower according to the work plan. However,
the board has not demonstrated that it met the cooperative agreement objective for achieving significant emissions
reduction as the board did not provide actual emissions benefit calculations.
Agency Explanation: On July 21, 2014, the OIG requested to extend the time to review the proposed management
decision letter to September 12, 2014. Accordingly, the date for issuance of the final management decision letter has
been delayed. Region 9 expects to issue the final management decision letter by December 29, 2014.
O/G Follow-Up Status: None provided.
Total reports issued before reporting period for which
no management decision had been made as of September 30, 2014 =15
67
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
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/2014/20141031-15-N-0008.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. Several examples follow:
• In Report No. 13-P-0152, EPA Could Improve Contingency Planning for Oil and Hazardous
Substance Response, we recommended that the Office of Solid Waste and Emergency
Response assess the resources, including On-Scene Coordinators, necessary to develop and
maintain contingency plans, and use the results of the analysis to develop a workforce plan to
distribute contingency planning resources. The EPA agreed to continue evaluation of On-Scene
Coordinator resources based on needs and responsibilities of the regions to develop the plan to
redistribute On-Scene Coordinator allocations. However, the EPA has indicated that this
recommendation was overtaken as a result of retirements, departures and the inability to hire
staff, and believes the recommendation should be evaluated in 18 months to determine whether
the recommendation is still warranted.
• In Report No. 11 -P-0701, EPA Should Update Its Fees Rule to Recover More Motor Vehicle and
Engine Compliance Program Costs, we recommended that the Office of Air and Radiation update
the 2004 fees rule to increase the amount of the Motor Vehicle and Engine Compliance Program
costs it can recover. The EPA indicated it will begin planning for a new fees rule as part of the
2013 program prioritization and budget processes, and initiate formal work on rule making early in
calendar year 2014. The agreed-to completion date is December 31, 2017.
• In Report No. 12-P-0508, EPA Inaction in Identifying Hazardous Waste Pharmaceuticals May
Result in Unsafe Disposal, we recommended that the Office of Solid Waste and Emergency
Response develop a nationally consistent outreach and compliance assistance plan to help
states address challenges that health care facilities, and others as needed, have in complying
with Resource Conservation and Recovery Act regulations for managing hazardous waste
Pharmaceuticals. The EPA agreed to develop such a plan, but indicated the proposed rule is
dependent on a number of factors such as the results of the inter- and intra-agency reviews that
must occur prior to signature and publication. Although the agreed-to completion date had been
August 31, 2013, the agency now believes it will not complete the corrective action until
February 28, 2015.
• In Report No. 13-P-0028, Improvements Needed in Estimating and Leveraging Cost Savings
Across EPA, we recommended that the Chief Financial Officer develop an agencywide policy that
defines what the agency considers cost savings, efficiencies and avoidances. The EPA agreed to
develop such policy, and the agreed-to completion date is December 31, 2015.
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
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.
The EPA OIG has received preliminary notification that Social Security Administration OIG will be
conducting a peer review of the EPA OIG audit organization for the period ending September 30, 2014.
The objective will be to determine whether, for the period under review, the EPA OIG audit organization is
complying with its system of quality control to provide it with a reasonable assurance of conformance with
applicable professional standards. The review is to be conducted according to the Council of the
Inspectors General on Integrity and Efficiency's Guide for Conducting Peer Reviews of Audit
Organizations of Federal Offices of Inspector General.
The Federal Deposit Insurance Corporation OIG began its mandated Council of Inspectors General on
Integrity and Efficiency quality assurance review of the EPA OIG Office of Investigations on January 30,
2014. The Federal Deposit Insurance Corporation OIG reviewed the Office of Investigations' organization,
law enforcement powers implementation, and standards of investigation. The formal quality assurance
report is forthcoming.
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Semiannual Report to Congress
April 1, 2014—September 30, 2014
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) 562-9865
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) 487-2363
Investigations: (513) 487-2364
Dallas
U.S. Environmental Protection Agency
Office of Inspector General (6IG)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-2733
Audit/Evaluation: (214) 665-6621
Investigations: (214) 665-2249
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) 637-3033
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: (703) 347-8740
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) 541-0517
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) 553-4032
Investigations: (206) 553-6116
Washington (Potomac Yard)
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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