September 22, 2016
*	 U.S. Environmental Protection Agency	16-F-0322
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At a Glance
Why We Did This Review
The Food Quality Protection
Act requires that we perform an
annual audit of the financial
statements for the Pesticides
Reregistration and Expedited
Processing Fund, known as the
FIFRA (Federal Insecticide,
Fungicide, and Rodenticide
Act) Fund.
The U.S. Environmental
Protection Agency (EPA) is
responsible for reassessing the
safety of older pesticide
registrations against modern
health and environmental
testing standards. To expedite
this reregistration process,
Congress authorized the EPA
to collect fees from pesticide
manufacturers. The fees are
deposited into the FIFRA Fund.
Each year, the agency
prepares financial statements
that present financial
information about the fund,
along with information about
the EPA's progress in
reregistering pesticides.
This report addresses the
following EPA goal or
cross-agency strategy:
 Embracing EPA as a high-
performing organization.
Send all inquiries to our public
affairs office at (202) 566-2391 or
Listing of OIG reports.
Fiscal Years 2014 and 2013 Financial
Statements for the Pesticides Reregistration
and Expedited Processing Fund
Due to the material
weakness in internal
controls noted, the agency
cannot provide reasonable
assurance that financial
data provided for the
FIFRA Fund accurately
reflect the agency's
financial activities and
Disclaimer of Opinion
We rendered a disclaimer of opinion on the
FIFRA Fund financial statements for fiscal year
(FY) 2014, meaning that we were unable to
obtain sufficient evidence to determine if they
were fairly presented and free of material
misstatement. We had previously rendered an
unmodified, or clean, opinion on the EPA's FIFRA
Fund financial statements for FY 2013, meaning
they were fairly presented and free of material
Internal Control Material Weakness Noted
We noted a material weakness in that the EPA cannot adequately support
$34 million of its FY 2014 FIFRA Fund costs. The EPA's Office of Pesticide
Programs receives its funding both from fees paid by pesticide manufacturers
and from amounts appropriated by the Congress. In FY 2014, the EPA allocated
its pesticide funding to use appropriated amounts, which would expire, and
retained funding received from fees. Therefore, significant payroll amounts paid
from appropriations were not charged directly to the FIFRA Fund or other
pesticide programs. This resulted in the loss of the audit trail for reporting
separate costs and liabilities for the FIFRA Fund and other pesticide programs.
Compliance With Applicable Laws and Regulations
In FY 2014, the EPA chose to significantly exceed the statutory target set out in
FIFRA. FIFRA requires the EPA to collect pesticide maintenance fees, to the
extent practicable, of $27.8 million for each of FYs 2013 through 2017. In
FY 2014, the EPA chose to collect $28.6 million, $800,000 over the established
Agency Comments and Office of Inspector General Evaluation
The agency agreed with each of our findings and our recommendation. In
October 2015, the Office of Chemical Safety and Pollution Prevention eliminated
the practice of averaging to offset over- or-under-collection of maintenance fees
from previous years, and plans to set the per-product maintenance fee at an
amount that is designed to collect the target amount of fees authorized by
Congress. The recommendation will remain open until we can confirm FY 2016
maintenance fee collections.