EPA-350-R-06-003
June 2006
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Annual Performance Report
Fiscal Year 2005
A Statistical Summary and Compendium of OIG
Performance Results and Accountability Information
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
June 1,2006
FOREWORD
I am pleased to present the fourth Annual Performance Report for the U.S. Environmental
Protection Agency (EPA) Office of Inspector General (OIG). This report presents statistical and
narrative summaries of OIG performance results for Fiscal Year (FY) 2005 compared to our annual
performance targets. It also presents cumulative OIG results for the period FY 2001 through 2005
compared to the OIG annual performance goals for the same 5-year period. It is particularly important to
consider the subsequent results of OIG activity over a longer period than 1 year, since there is a
significant time lag in recognizing environmental and human health impacts influenced by our work. The
results of our investigative activities are dependent on highly variable levels of criminal/civil activity, and a
lengthy series of prosecutive actions by the courts.
This report supplements, in greater statistical and narrative detail, the OIG summary performance
results presented in EPA's FY 2005 Performance and Accountability Report, available at
www.epa.gov/ocfopage. and provides additional items required by the Government Performance and
Results Act, such as management challenges, as well other relevant measures of performance activity.
This and prior OIG Annual Performance Reports indicate we are continuing to make significant
improvements in applying performance measures to demonstrate the impact of our work. In FY 2006, the
OIG is working to measure internal management activity and apply cost accounting to improve the
efficiency of our operations, products, and services. We are working to link OIG performance goals and
measures to specific expectations for each manager and staff member. This will improve our
understanding of how daily staff performance helps achieve organizational goals, and will enable us to
improve accountability. We will also implement a system to track the Agency's completion of agreed-
upon actions recommended by the OIG.
We rely upon our customers and stakeholders to inform us about the quality of our performance,
address risks, and add value. Please do not hesitate to contact me for any reason, as one of my personal
goals is to build constructive relationships that promote the economic, efficient, and effective delivery of
EPA's mission.
Sincerely,
Bill A. Roderick
Acting Inspector General
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Table of Contents
About the EPA OIG 1
Scoreboard of Results 3
FY 2005 Results by OIG Strategic Goal and Objective 4
GOAL 1: Contribute to Improved Human Health and Environmental Quality 4
GOAL 2: Contribute to Improved Business Practices and Accountability 6
Our People 10
Our Resources 11
Appendix 1: OIG's Top Management Challenges 12
Appendix 2: EPA's Top Management Challenges 13
Appendix 3: Looking to the Future 14
Appendix 4: OIG FY2005 Program Activity 15
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About the EPA OIG
Vision
We are catalysts for improving the quality of the environment and Government through problem prevention
and identification, and cooperative solutions.
Mission
Add value by promoting economy, efficiency, and effectiveness within EPA and the delivery of
environmental programs. Inspire public confidence by preventing and detecting fraud, waste, and abuse in
Agency operations and protecting the integrity of EPA programs.
Goals
1. Contribute to Improved
Human Health and
Environmental Quality
Objectives
• Influence programmatic and
systemic changes and actions
that contribute to improved
human health and
environmental quality.
• Add to and apply knowledge
that contributes to reducing or
eliminating environmental and
infrastructure security risks and
challenges.
• Identify recommendations, best
practices, risks, and
opportunities to leverage results
in EPA programs and among its
partners.
2. Contribute to Improved
Business Practices and
Accountability
Objectives
• Influence actions that improve
operational efficiency and
accountability, resolve public
concerns and management
challenges, and achieve
monetary savings.
• Improve operational integrity
and reduce risk of loss by
detecting and preventing
vulnerabilities to fraud, abuse,
or breach of security.
• Identify recommendations, best
practices, risks, weaknesses,
opportunities for savings, and
operational improvements.
3. Continuously Improve OIG
Products and Services
Objectives
• Improve the timeliness,
responsiveness, and value of
our products and services to
our clients and stakeholders.
• Apply technology, innovation,
leadership, and skill proficiency
for motivated staff and highly
regarded products.
• Align organization plans,
performance, measurement,
processes, and followup for a
cost-accountable results
culture.
• Maximize use of available
resources.
• Develop constructive
relationships to leverage
resources effectively and
foster collaborative solutions.
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OIG Product and Service Lines for Strategic Areas of Performance
Performance Audits
and Evaluations
• Air
• Water
• Land
• Cross Media
Financial/
Systems Audits
• Business Systems
Financial Statements
• Contracts
• Assistance
Agreements
• Computer Security
Investigations
• Financial Fraud
• Program Integrity
• Employee Integrity
• Laboratory Fraud
• Computer Crimes
Linking Our Work to Outcomes and Impacts
Public Liaison/
Advisory/Analysis
• Legislation/Regulation
Review
• Control Assessments
• Public Inquiry/
Outreach
• President's Council on
Integrity and Efficiency
All of our work is planned based on the anticipated contribution to influencing resolution of the Agency's
major management challenges, reducing risk, improving practices and program operations, and saving
taxpayer dollars, leading to positive human health and environmental impacts and attaining EPA's Strategic
Goals.
Planning Starts With the End In Mind
We measure the return on our investment by how efficiently our resources are converted into products,
and how effectively our products drive outcomes.
Logic Model Example
Resources
• Staff
• Contracts
• Technology
• Training
• Travel
• Leadership
<
N
Products/
Services
• Audits
• Evaluations
• Investigations
• Special Analysis
• Consulting
• Legislation/
Regulation
Reviews
^ — 1
^
I Outputs
• Recommendations
• Referrals to DOJ
• Best Practices
• Risks Identified
• Management
Challenges
Identified
Intermediate
Outcomes
• Savings/
Recoveries
• Process/Policy
Changes
• Indictments/
Convictions
• Certifications
• Civil Judgments
• Legislative/
Regulatory
Changes
• Administrative
Action
Impact
Outcomes
• Environmental
Risks Reduced
• Improved
Efficiency
• Examples of
Environmental
Improvement
• Examples of
Health
Improvement
• Operational Risks
Reduced
Efficiency Ratio
Cost/Activity
Effectiveness Ratio
Outputs/Impacts
Performance Presented in a Hierarchy of Related Measures
The performance results in this report are presented in a hierarchy, starting with several summaries and a
scorecard, followed by detailed measures and examples of results by goal for FY 2004, and as cumulative
totals for FY 2001- 2004, toward accomplishing the OIG Strategic Goals. We collected the information
presented in this report from the OIG's Performance Measurement and Results System (PMRS) and the
Inspector General Operational Reporting (IGOR) system, both dependent upon input by OIG staff, and
from EPA's Integrated Financial Management System.
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Scoreboard of Results
Results Compared to FY 2005 Annual Performance Goal Targets
All results reported in FY 2005, from current and prior years' work, in OIG Performance Measurement
and Results System. (Except where noted, information verified and subject to OIG Data Quality Policy.)
Strategic Goals; With Government Performance and
Results Act Annual Performance Targets Compared
to FY 2005 Results Reported
Supporting Measures
Goal 1. Contribute to Improved Human Health and Environmental Quality
Environmental Improvements/Actions/Changes Q
• Target: 45
• Reported: 35 (78%)
Environmental Risks Reduced or Eliminated Q
• Target: 23
• Reported: 35 (152%)
Environmental Recommendations, Best Practices, Q
Risks Identified
• Target: 95
• Reported: 112 (118%)
0 Legislative changes/decisions
5 Regulatory changes/decisions
27 EPA policy, process, practice changes
1 Examples of environmental improvement
2 Best environmental practices implemented
1 5 Environmental risks reduced/eliminated
1 Certifications/validations/verifications
19 Critical congressional/public issues addressed
60 Environmental recommendations
34 Environmental best practices identified
1 8 Environmental risks identified
Goal 2. Improve EPA's Management, Accountability, and Program Operations
Return on Investment: Potential dollar return as Q
percentage of OIG budget ($50.5 million)
• Target: $75.8 million (150%)
• Reported: $143.8 million (285%)
Criminal, Civil, and Administrative Actions Reducing (~)
Risk of Loss/Operational Integrity
• Target: 80
• Reported: 125 (156%)
Improvements in Business/Systems/Efficiency Q
• Target: 220 3
• Reported: 724 (329%)
Recommendations, Best Practices, Challenges Q
Identified
• Target: 800 3
• Reported: 1119 (140%)
(dollars in millions)
$ 79.5 Questioned costs 1
$ 1 3.4 Recommended efficiencies, costs saved 2
$ 50.9 Fines, recoveries, settlements
15 Criminal convictions
23 Indictments/informations/complaints
4 Civil judgments/settlements/filings
83 Administrative actions
47 Policy process, practice, control changes
306 Corrective actions on FMFIA/mgt. challenges
24 Best practices implemented
325 Certifications/validations/verifications
9 Allegations disproved
1 3 Critical congressional or public management
concerns addressed
1059 Recommendations
35 Best practices identified
8 FMFIA/management challenges identified
17 Referrals for OIG or Agency action
Goal 3. Continuously Improve OIG Products and Services (Internally Reported - Not Audited)
Partners in collaborative products/services 358
Requests to testify at hearings/presentations 40
Management innovations implemented 1 6
Assignments performed by request/mandate 93%
FTE usage rate 94%
• Savingsfrommgt. improvements $60,000
• Products electronically accessible 90%
• PC IE projects/activities led 5
• Legs/regs/policies reviewed /timely 40/100%
• Expiring funds used 99.9%
1 Includes $0.9 million of costs resolved priorto report issuance, not in resolution process
2 Includes $0.1 million of savings from investigations, not in resolution process
3 Targets increased since the last Semiannual Report to Congress to reflect Single Audit results
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FY 2005 Results by OIG Strategic Goal and Objective
GOAL 1: Contribute to Improved Human Health and Environmental Quality
Targets and Results for Goal 1 Objectives
500
Targets Results
Environmental
Improvements,
Actions, Changes
Targets Results
Environmental or
Infrastructure Risks
Reduced or Eliminated
Data obtained from
IGOR and PMRS.
Targets Results
Environmental
Recommendations, Best
Practices, Risks Identified
In response to a recommendation in a 2003 OIG report, Significant Modifications Needed to Ensure
Success of Fort Worth Asbestos Demolition Method, EPA's National Center for Environmental
Innovation issued a memorandum that provides peer review guidance for EPA innovation projects. This
memorandum requiring peer review is an important step toward ensuring that innovation projects protect
human health and the environment. (Air)
An OIG investigation resulted in a deferred prosecution agreement with a California environmental
services corporation to settle allegations that the company falsified environmental analysis data. In
accordance with the terms of the agreement, prosecution and any civil actions will be deferred for a
period of 48 months, providing the company abides by the conditions of the agreement, including
implementing a rigorous quality control process and donating $1.1 million to the Environmental Project
and the Environmental Circuit Prosecutor Project for environmental enforcement, education, and
training in the State of California. After the company successfully completes the deferred prosecution
program set out in the agreement, the Government will close its case and not file any criminal or civil
actions. (Laboratory Fraud)
Three changes, which strengthened the cap-and-trade program for reducing emissions from coal-
fired electric utilities, were made to the Clean Air Mercury Rule. As a result of issues raised in
the OIG report, Additional Analysis of Mercury Emissions Needed Before EPA Finalizes Rules
for Coal-Fired Electric Utilities, a small emitters exemption and safety valve price limit on
allowances were deleted from the rule. In addition, allowances for utilities located on tribal lands
were included. (Air)
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An OIG review, Progress Made in Monitoring Ambient Air Toxics, But Further Improvements Can
Increase Effectiveness, found air toxics monitoring was conducted in only 10 percent of the 50 census
tracts with the estimated highest cumulative cancer risks from air toxics exposure. As a result of OIG
recommendations, EPA has included an additional ranking factor for local monitoring projects, which
considers the level of risk posed by air toxics in a local area applying for a monitoring grant. Awarding
monitoring grants to high risk areas will help those areas develop strategies to reduce the public's
exposure and risk. (Air)
As recommended by an OIG report, Efforts to Manage Backlog of Water Discharge Permits
Need to Be Accompanied by Greater Program Integration, EPA is continuing efforts to improve
water quality by addressing NPDES permit backlog and overall program integration with point
source programs that support the permit program, national NPDES permit backlog GPRA
measures and management, and NPDES permit program and backlog management on the State
level. (Water)
The Department of Homeland Security relies on EPA to support the sampling operations for the
Bio Watch program, an early-warning system designed to detect the release of biological agents in the
air. An OIG report, EPA Needs to Fulfill Its Designated Responsibilities to Ensure Effective
BioWatch Program, identified oversight of sampling operations, assessing alternative technologies, and
consequence management planning as areas needing improvement in the BioWatch program. EPA
agreed with the report and has begun working with regions to address issues identified. (Cross-Media)
As a result of recommendations in a 2004 OIG report, States Making Progress on Source Water
Assessments, But Effectiveness Still to Be Determined, EPA's Office of Ground Water and Drinking
Water issued new guidance on program measures to better determine results of source water protection
strategies and activities. In addition, EPA issued guidance on disseminating source water information to
balance security and public right-to-know concerns. (Water)
An OIG report, EPA Region 10 Needs to Improve Oversight of Remediation Activities at the
Hanford Superfund lOOK-Area, recommended that the Region 10 Administrator monitor progress
toward meeting K Basin milestones, including spent nuclear fuel removal, and take appropriate
enforcement actions if milestones are not completed in a timely manner. Complete removal of the spent
nuclear fuel was completed in October 2004. This significant achievement has reduced risks of
radionuclide releases to the air, soil, ground water, and Columbia River. (Land)
In responding to the Hurricane Katrina disaster, the EPA Administrator required EPA senior
management to read the 2003 OIG report, EPA's Response to the World Trade Center Collapse, for
lessons learned. As a result, two specific actions were taken by EPA. EPA decided to 1) disclose
information publicly as soon as it was received and judged to be sound, supportable information; and 2)
ensure that risk decisions were based on sound science. In particular, EPA convened a meeting of the
EPA Science Advisory Board over the 2005 Labor Day weekend to review and comment on EPA's
sediment sampling plan in the aftermath of Katrina. (Air)
EPA Region 4 launched a new Atlantic Steel redevelopment Web site as a result of recommendations in
an OIG report, Review of Changes to the Atlantic Steel Transportation Control Measure. The Web
site includes a forum for public comment. (Air)
A 2004 OIG report, Stronger Leadership Needed to Develop Environmental Measures for Clean
Water State Revolving Fund, stated that the Agency was unable to measure environmental results
from actions taken to utilizing resources from the Clean Water State Revolving Fund (CWSRF) and
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recommended that EPA develop and track environmental measures for the CWSRF. As a result, the
Office of Water issued a grant for States to work on developing environmental measures for CWSRF
projects. One of the new performance activity measures in EPA's FY 2006 national water program
guidance would measure the number of State revolving loan fund programs that have instituted means
of measuring the loans' outcomes. (Assistance Agreements)
• In the OIG report, Substantial Changes Needed in Implementation and Oversight of Title V Permits
If Program Goals Are To Be Fully Realized, concerns with five key aspects of Clean Air Act Title V
operating permits were identified: permit clarity, statements of basis, monitoring provisions, annual
compliance certifications, and practical enforceability. Of 11 report recommendations for environmental
improvement, EPA has implemented actions resolving 7 recommendations. (Air)
• Region 4 took actions to address community concerns regarding site cleanup as a result of the 2004
OIG report, Review of Actions at Escambia Treating Company Site, Pensacola, Florida. The
region conducted public meetings with the Escambia community in February 2005, updated the
Community Involvement Plan, and sent a copy of the plan to the site repository in Pensacola, Florida.
(Public Liaison)
• As a result of a recommendation in the OIG report, Ombudsman Review of the Marjol Battery Site,
Throop, Pennsylvania, EPA and the Pennsylvania Department of Environmental Protection agreed to
take corrective action at the Marjol Battery Site. They agreed to drill nine additional holes at the site to
evaluate the potential for mine fires, which had been a concern for the borough and nearby residents.
(Public Liaison)
GOAL 2: Contribute to Improved Business Practices and Accountability
Cumulative Potential Dollar Return From Questioned Costs, Efficiencies, Savings, Fines, and Recoveries
$700
$600
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EPA changed its requirements for screening contractor employee candidates as a result of the OIG
investigation of Intertek Testing Services. The Agency's new requirement that contractors check the
Excluded Parties Listing System (EPLS), as part of the screening process for employee candidates on
certain types of EPA contracts, was approved by the Office of Management and Budget on April 4.
2005. The EPLS contains the names of parties who have been excluded from Federal procurement and
nonprocurement programs. (Laboratory Fraud)
For a third consecutive year, EPA has earned a "green light" designation among Federal agencies for its
financial management. The OIG rendered an unqualified, or clean, opinion on EPA's financial
statements for FY 2004. The OIG continues to recommend improvements to EPA's internal controls.
Agency actions on OIG recommendations have led to continuous improvements in EPA's financial
reporting, contributing to the public's trust in EPA. (FinancialManagement)
Based on recommendations in the OIG report, EPA Needs to Compete More Assistance Agreements,
EPA revised Order 5700.5 (now Order 5700.5A1, effective January 15, 2005) emphasizing that EPA
should first seek ways to compete assistance agreements before it decides that competition is not
possible. The Order additionally clarifies the requirements for noncompetitive justifications by improving
definitions and providing examples, defines possible conflicts of interest when evaluating and awarding
competitive assistance agreements, requires all reviewers for each competition to certify in writing that
they are free from conflicts of interest, and reinforces grants management officer responsibilities.
(Assistance Agreements)
To improve the efficiency and effectiveness of solving regional environmental issues, Region 6 has
finalized partnership guidelines and issued elevation protocols with three of its States: New Mexico,
Oklahoma, and Texas. These agreements, promoting collaboration and disagreement resolution between
Region 6 and its States, resulted from earlier OIG recommendations to Region 6 in a 2003 report, EPA
Region 6 Needs to Improve Oversight of Louisiana Environmental Programs. In response to that
report, the Region established new procedures with Louisiana and subsequently decided to implement
the same procedures with all of its States. (Assistance Agreements)
Based on a 2004 OIG report, EPA Prepared to Implement Strategic Human Capital Management
Activities But Challenges Remain, EPA is incorporating measures in its Annual Plan and Annual
Report that reflect achievement of the Agency's human capital strategies. Moreover, EPA's budget
process now includes human capital management considerations such as how resource changes may
impact the Human Capital Strategic Plan and, specifically, how proposed FTE changes impact mission
critical competencies, skill mix, and local human capital plans. (Business Systems)
As a result of a joint investigation with the Federal Bureau of Investigations, Johnny Lee Napier pled
guilty to embezzling Federal funds. He was sentenced to 9 months in prison, 3 years probation and
ordered to pay a $104,000 fine. Napier was the project manager on three grants awarded by EPA to
train and certify people in asbestos and lead paint removal. (Financial Fraud)
Harry B. Still, Jr., a former general manager of the Bay Minette Utilities Board, Bay Minette, Alabama,
pled guilty to filing a false statement under the Clean Water Act. Still, who filed a false discharge
monitoring report with the Alabama Department of Environmental Management, was sentenced to 12
months probation and was ordered to pay a $3,000 fine. The OIG conducted the investigation jointly
with the Federal Bureau of Investigation, EPA Criminal Investigation Division, and Alabama Attorney
General's Office. (Laboratory Fraud)
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Cumulative Actions to Improve Agency Management, Accountability, and Public Confidence
2000
1500
1000
500
Targets Results
Criminal, Civil,
Administrative
Actions
Targets Results
Improve Business
Processes and
Resolve Public
Concerns
Targets Results
Recommendations, Best
Practices, Management
and FMFIA Challenges
Identified
FY 2005 target revised for Improved Business Processes and Addressing Public Concerns from 105 to 220
FY 2005 target revised for Recommendations, Best Practices, Challenges/Risks Identified from 220 to 800
Data obtained from
IGOR and PMRS.
Tetra Tech, Inc., while admitting no wrongdoing, agreed to pay more than $400,000 to settle allegations
that it overbilled costs on its Government contracts. The OIG investigation found that Tetra Tech billed
estimated rates that were in excess of the actual costs for computer services and reproduction costs.
(Financial Fraud)
As a result of an OIG investigation, Antoine Michael Perry, a former EPA contractor employee, was
found guilty of using a computer to cause damage. Perry was sentenced to 4 months in prison, 3 years
of probation including 4 months home detention, and ordered to pay $5,000 in restitution to EPA. The
investigation determined that after Perry's employment with the contractor was terminated, Perry
gained access to the EPA network and deleted files, changed user passwords, and turned the system
off. (Computer Crimes)
An employee of Boyko Petroleum Services, Michael Klusaritz, received 21 months in prison and was
ordered to pay more than $ 112,000 in restitution for mail fraud and making false statements. The OIG
and EPA Criminal Investigation Division, in a joint investigation, determined that Klusaritz caused Boyko
to prepare and mail fraudulent environmental test reports in connection with the Underground Storage
Tank Closure Reports. The reports were falsified to make it appear that no contamination existed.
Thus, Boyko's customers could avoid expenses that would have been incurred if contamination had
been detected. (Financial Fraud)
The OIG continues to operate a Technical Vulnerability Assessment Laboratory (TVAL) within the
Office of Investigations. The TVAL is a cooperative effort that involves the OIG Offices of
Investigations and Audit and includes EPA's Office of Environmental Information and information
security community. By performing its assessments of networks for vulnerabilities and weaknesses in-
house, the Agency recognizes cost savings on each assessment and gains more expertise in information
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system security. Recent assessments included the Agency payroll and travel systems, as well as a
complete assessment of a regional network of over 2,200 computers. As a result of the assessments,
some of which disclosed severe or high-level vulnerabilities, the Agency immediately took corrective
actions. (Computer Crimes)
The OIG questioned $21.2 million in expenditures related to EPA grants awarded to the Puerto Rico
Environmental Quality Board during a 5-year period that ended June 30, 2003. Questioned costs were
based on the results of Single Audit Act reviews. (Assistance Agreements)
The OIG reported, in Region 10's Grant for Alaska Village Safe Water Program Did Not Meet EPA
Guidelines, that six ineligible projects totaling $4.8 million were included in the grant award and needed
to be removed. The OIG recommended that Region 10 suspend work under the grant until all pre-
award steps are completed and controls are established to ensure that Region 10 fulfills all EPA
requirements before awarding grants. (Assistance Agreements)
EPA awarded over $25.9 million to Oregon under a cooperative agreement for remedial redesign,
remedial action, and long-term response action at a former wood-treating facility, the McCormick
and Baxter Superfund site in Portland, Oregon. The OIG recommended in its report, Oregon
Department of Environmental Quality Reported Outlays under Cooperative Agreement
V99060103, that EPA revoke the State's self-certification of its procurement systems, require
Oregon to make other improvements, and disallow questioned costs of over $2 million.
(Assistance Agreements)
EPA awarded three cooperative agreements to the Natural Resources Defense Council (NRDC)
totaling over $3 million. The OIG questioned over $ 1.4 million of reported outlays because the NRDC
did not maintain the necessary documentation to fully support its reported costs, as required by Federal
regulations. As a result of the OIG report, Natural Resources Defense Council Reported Outlays
Under EPA Cooperative Agreements CX82546101, CS82675101, and XA83033101, the NRDC
has implemented new time-keeping procedures to require employees to account for all work activities.
(Assistance Agreements)
An EPA grant recipient, the Health Effects Institute, did not maintain documentation, as required by
Federal regulations, to support over $2 million in reported costs. EPA awarded over $ 18.7 million to
the Health Effects Institute to conduct and evaluate research and testing related to the health effects
of emissions from automobiles and other environmental pollutants. The OIG questioned the $2 million
in a report, Reported Outlays Under EPA Grant R828112-01 Health Effects Institute, and
recommended that EPA take steps to ensure the recipient addresses its financial management
weaknesses. (Assistance Agreements)
At the request of EPA OIG, the Defense Contract Audit Agency (DCAA) performed audits of EPA
contracts that resulted in over $1.2 million of sustained recommended efficiencies and questioned costs.
The OIG DCAA monitoring team identified an additional $2.1 million of questioned costs and
efficiencies included in the DCAA audits. (Contracts)
EPA's current Response Action Contracts assign to EPA a disproportionate share of the risk of cost
overruns; expose EPA to the risk of loss of funds through litigation; limit competition; and forego
potential cost savings associated with other approaches to contracting, such as Performance-Based
Service Acquisition. EPA generally agreed with recommendations in the OIG report, Response Action
Contracts: Structure and Administration Need Improvement, for improving the contract structure and
administration of Response Action Contracts. (Contracts)
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Our People
Progress in Filling Skill Gaps From FY 2004 to FY 2005
The OIG is making significant progress in implementing its Human Capital Plan to align its staffing skill
mix to match the its strategic goals and product lines. During FY 2005, the OIG was able to satisfy better
than 76 percent of its identified skill gaps, which at one time were reported as an OIG Management Level
Weakness (Challenge).
Series Skill Gap
Program Analyst 47
Criminal Investigator 16
Financial Auditor 13*
Social Scientist 17
Environmental Scientist 8
ITAuditor 9
Computer Specialist 3
Operations Research Specialist 3
TOTAL 116
Progress Filling Gap
43
13
11*
10
3
3
2
1
86
Percent of Gap Filled
91%
81%
85%
59%
38%
33%
66%
33%
76%
* The skill gap for Financial Auditor represented excess staff; progress involved a redistribution of staff.
FY 2005 OIG Parity With the Civilian Labor Force
The OIG is 92.2 percent in parity with the civilian labor force.
FY 2006 OIG Diversity Compared to the Civilian Labor Force
Amer Indian Females
Amer Indian Males
Asian Females
Asian Males
Hispanic Females
Hispanic Males
Black Females
Black Males
White Females
White Males
0 5 10 15 20 25 30 35 40
45
The OIG workforce overall is 91.2 percent in relative parity with the civilian labor force for the designated
categories. Staff categories where the OIG has significant under-representation are White Females and
Hispanic Males and Females.
10
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Our Resources
OIG FY 2005 Resource Use and Allocation
FY2004 Appropriation -Final Utilization Rate
Account $ Appropriation Available
Management $36,587,700
Superfund 13,136,037
TOTAL $49,723,737
$ Appropriation Used
$36,580,750
13,118,367
$49,699,117
% $ Appropriation Used
100.0%
99.9%
100.0%
FY 2005 Appropriation Usage
Account $ Appropriation Available
Management $37,646,400
Superfund 12,896,000
TOTAL $50,542,400
$ Appropriation Used
$37,270,463
12,336,477
$49,606,940
% $ Appropriation Used
99.0%
95.7%
98.1%
FY 2005 FTE Usage
Account
Management
Superfund
TOTAL
FY 2005 FTE Available
274.0
94.0
368.0
FY 2005 FTE Used
271.1
86.9
358.0
% FTE Budget Used
98.9%
92.4%
97.3%
FY 2005 Distribution of Funds Used By Object Class
WCF
$5,092,973 1
Contracts
$4,330,441 ~\
Expenses
Awards
|" $346,272
TOTAL $49,606,940
FY 2005 Distribution of FTEs Used: Total 358
IG Counsel
7.8
Mission Systems
20.5
Human Capital
39.1
Planning, Analyis & Results
11.7
Cong/Public Liaison
20.6
Program Evaluation
84.8
Investigations
60.2
11
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Appendix 1: OIG's Top Management Challenges
OIG Management Challenges
In FY 2005, for the seventh straight year, the OIG reported no material weaknesses under the Federal
Managers Financial Integrity Act. Further, the OIG continues to make progress in addressing reported
OIG-level weaknesses. The weaknesses identified in FY 2004 were not fully resolved in FY 2005
because of their complexity.
OIG-Level Weakness
Records Management
Human Resource Systems (Includes Skill Gaps)
IGOR (Information Technology)
OIG Intranet/Internet
Product Timeliness and Quality
Followup on Corrective Actions
Background Investigation/Security Process
FY 2003
S
S
s
s
s
s
s
FY2004
s
FY2005
S
In FY 2005, the OIG took the following steps to improve management controls:
• Developed policies and/or procedures on annual planning, OIG Internet and Intranet, reviewing report
resolution status, followup policy, and post closeout followup.
• Procuring and overseeing the development and implementation of The Inspector General Enterprise
Resources (TIGER) information system.
• Revised the Training Information System (TIS) to track continuing professional education for staff.
• Improved procedures for handling legal matters, including Freedom of Information Act requests.
• Utilized success indicators developed by OPM to assess our performance.
• Issued the fourth OIG Annual Performance Report demonstrating specific progress on OIG's Strategic
Goals, including a balanced scorecard of financial, customer service, timeliness, and effectiveness
measures.
• Developed the Law Enforcement Tracking System (LETS) to provide a consolidated repository of
information necessary to ensure compliance with the requirements for Statutory Law Enforcement
Authority.
• Completed the quality assurance reviews of Office of Investigations (OI) Northeastern Resource
Center (NERC), October 2004, and OI Headquarters, November 2004, under the OI Inspection
Program.
• Conducted periodic inventories of (issued and stored) firearms, badges, credentials, and other law
enforcement equipment.
• Implemented a reorganization of the immediate office of the Inspector General.
• Performed an OIG-wide comprehensive review of the OIG Purchase Card System.
• OIG staff completed the self-study courses "Information Security Awareness" and "Interacting with
Contractors."
• Instituted a new organization-wide assignment evaluation process, including developing of an assignment
assessment database.
• Developed a prototype for organization-wide activity process and performance metrics leading to an
executive dashboard and subordinate management productivity controls.
12
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Appendix 2: EPA's Top Management Challenges
Historical Perspective Top Management Challenges as Reported by OIG
Below is the list of Top Management Challenges that the OIG has reported to EPA each year since 2003.
While EPA is making progress in resolving its Major Management Challenges, several have been
longstanding problems. The following table shows which challenges have been listed from 2003 through
2005 and their relationship to the President's Management Agenda.
EPA's Top Major Management Challenges
Reported by the OIG
Linking Mission and Management: Development of more
outcome-based strategic and annual targets in collaboration
with partners.
Agency Efforts in Support of Homeland Security: Implementing
a strategy to effectively coordinate and address threats.
Superfund Evaluation and Policy Identification: Improving the
usefulness of internal evaluations, and implementing program
policy decisions.
Information Resources Management and Data Quality: Improving
the quality of data used to make decisions and monitor progress.
EPA's Use of Assistance Agreements to Accomplish Its Mission:
Improving the management of the billions of dollars of grants
awarded by EPA.
Challenges in Addressing Air Toxics Program: Reducing air toxic
emissions by improving measurement of risk assessment and
progress.
Human Capital Management: Implementing a strategy that
will result in a competent, well-trained, and motivated workforce.
Information Security: Protecting information systems by
preventing intrusion and abuse of systems, and protecting
integrity of data.
FY
2003
S
S
S
s
s
s
s
FY
2004
*
s
s
s
s
s
s
s
FY
2005
*
s
s
s
s
s
s
s
Link to President's
Management Agenda
Integrating
Performance
& Budget
E-Gov
Financial
Performance
Human Capital
E-Gov
In FY 2004 and 2005 Working Relationships with the States was consolidated in "Linking Mission to Management"
13
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Appendix 3: Looking to the Future
FY 2005 OIG Performance Targets (with targets FY 2006 - 2008)
Crosswalk between OIG Strategic Plan Objectives/Measures & EPA Annual Performance Plan Goals (APGs)
OIG STRATEGIC GOALS/ EPA OIG APG
2006
2007
2008
FY 2005 OIG GOAL 1 /EPAAPG1: Improve human health and environmental quality by identifying 80
recommendations, risks, or best practices; contributing to reduction or elimination of 18 environmental
risks; and 42 changes or actions influencing positive environmental or health impacts.
Objective Measures and Targets:
• Environmental Improvements/Changes/ Actions (legislative,
regulatory, policy, directives, best practices, environmental, or health
improvements): Intermediate Outcome and Outcome Measures
• Environmental Risks Reduced/Eliminated Certifications,
Verifications, Validations: Outcome Measures
• Recommendations, Risks, or Best Practices Identified: Output
Measures
50
28
105
55
33
115
58
38
120
business and progiam operations
FY 2005 OIG GOAL 2 / EPA APG 2: Improve EPA's
recommendations, potential savings, and recoveries for 150% annu al investment
better business operations; and 80 criminal, civil, or administrative
by identifying 240
n OIG; 100 actions for
actions reducing risk of loss/integrity.
Objective Measures and Targets:
• Potential Dollar Return on Savings, Questioned Costs, Improved
Business Practices, Recoveries, Fines, Settlements: Outcome
Measures
• Criminal, Civil Administrative Actions Reducing or Eliminating Risk
of Loss and Operational/Data Integrity: Intermediate Outcome
Measures
• Improvements in Business/Systems/Efficiency (Actions Taken on
Mgt Challenges, Certifications, Best Practices, Policies,
Regulations): Outcome Measures
• Recommendations Made or Weakness, Best Practices Identified:
Output Measures
* Revised to account for inclusion of Single Audits
150%
ROI
80
225*
820*
150%
ROI
80
230*
840*
150%
ROI
80
240*
860*
14
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Appendix 4: OIG FY 2005 Program Activity
Audit/Evaluation Activity and Agency Action
Investigative
Reports Issued
• Reviews Performed by OIG 65
• Reviews by Another Federal Agency 305
• Single Act Audit Reviews 245
TOTAL Reports 615
• Questioned Costs $79.5M
• Cost Efficiencies $13.4M
• Reports Resolved (from currents prior years) 263
• Agency Recoveries (from current & prior years) $ 1.3M
Investigations Opened 157
Investigations Closed 141
Pending Investigations as of 9/30 218
Indictments of Persons/Firms (arrests) 23
Conviction of Persons/Firms 15
Administrative Action EPA Employees/Firms 83
Civil Judgments 4
Allegations Disproved 9
Fines and Recoveries
(including civil & savings) $50.9M
Audit Resolution
(Dollars in Millions)
Other
Recommendations as Costs
• With no management decision start FY05
• Issued in FY05
• Agreed to by management or
value of nonawards
• Not agreed to by management or
value of nonawards
• With no management decision, end FY05
Percent of total agreed to by management
Questioned Efficiencies
$53.20* $3.58"
$47.27 $9.01
$ 4.51
$ 5.14
$ 89.60
4.5%
$4.00
$0.00
$9.50
29.2%
Audits with no Federal action as of 9/30/05 which
are over 365 days past issuance date 125
Reports for which no management decision was
made within six months of issuance at 9/30/05 39
Audit Resolution Reported by EPA
• Audits with management decisions but
without final action beginning FY05
• Audits for which management decisions
were reached in FY05
• Total audits pending final action
during FY05
• Final action taken during FY05
• Audits without final action end of FY05
(Carried as opening balance in FY06)
Percent Audit $ Value Final Action Taken FY05 9.7%
luestioned
$ 74.30
$ 4.50
$ 78.50
$ 7.60
$71.20
Efficiencies
$0.00
$2.90
$2.90
$0.90
$2.00
Hotline Complaints Received 474
Hotline Complaints Opened 27
Hotline Complaints Closed 18
Public Inquiries Addressed 138
Legislative/Regulatory Items Reviewed 40
President's Council on Integrity and
Efficiency (PCIE) Projects Led/Developed 5
310%
$1.1 M was recategorized from questioned costs to cost
efficiencies during FY05
15
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Forquestions, comments, orto obtain copies of this report,
please contact any of the following:
Eileen McMahon
Assistant Inspector General for Congressional and Public Liaison
(202) 566-2546
McMahon.Eileen@epa.gov
Howard Cantor
Assistant Inspector General for Planning, Analysis, and Results
(202) 566-2649
Cantor.Howard@epa.gov
U.S. Environmental Protection Agency
Office of Inspector General
1200 PennsylvaniaAve., NW(2410T)
Washington, DC 20460
(202) 566-0847
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