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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
l/.S. Chemical Safety Board
CSB Complied With
Reporting Requirements
of the Improper Payments
Elimination and Recovery Act
for Fiscal Year 2014
Report No. 15-P-0153
May 1, 2015

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Report Contributors:
Cara Lindsey
Gloria Taylor-Upshaw
Michael D. Davis
Abbreviations
BFS
Bureau of the Fiscal Service
CSB
U.S. Chemical Safety and Hazard Investigation Board
FY
Fiscal year
IBC
Interior Business Center
IPERA
Improper Payments Elimination and Recovery Act of 2010
IPERIA
Improper Payments Elimination and Recovery Improvement Act of 2012
OIG
Office of Inspector General
OMB
Office of Management and Budget
PAR
Performance and Accountability Report
Are you aware of fraud, waste or abuse in an
EPA or CSB program?
EPA Inspector General Hotline
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Washington, DC 20460
(888) 546-8740
(202) 566-2599 (fax)
OIG Hotline@epa.gov
More information at www.epa.gov/oiq/hotline.html.
EPA Office of Inspector General
1200 Pennsylvania Avenue, NW (241OT)
Washington, DC 20460
(202) 566-2391
www.epa.gov/oig
Subscribe to our Email Updates
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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
15-P-0153
May 1, 2015
Why We Did This Review
Office of Management and
Budget guidance for
implementation of the Improper
Payments Elimination and
Recovery Act of 2010 (IPERA)
specifies responsibilities of
agencies and Inspectors
General. Agencies are required
to report on improper payments
and Inspectors General are
required to determine whether
agencies comply with IPERA.
As the Inspector General for
the U.S. Chemical Safety and
Hazard Investigations Board
(CSB), the U.S. Environmental
Protection Agency Office of
Inspector General undertook
this review of CSB's
compliance with IPERA.
This report addresses the
following CSB goal:
• Preserve the public trust by
maintaining and improving
organizational excellence.
CSB Complied With Reporting Requirements of the
Improper Payments Elimination and Recovery Act
for Fiscal Year 2014
What We Found
CSB is fully compliant with the reporting
requirements of IPERA. As required, CSB
published its Performance and Accountability
Report and posted that report and accompanying
materials on the agency website.
CSB is fully compliant
with the reporting
requirements of IPERA.
We determined that CSB does not meet the minimum dollar threshold that would
require it to perform a risk assessment of its programs and activities that are
susceptible to significant improper payments. Also, CSB determined that it is not
cost effective to conduct a recapture audit. In addition, we found that CSB was
not required to publish improper payment estimates because its program was not
assessed to be at risk for improper payments. Further, CSB was not required to
publish programmatic corrective action plans and therefore is not required to set
reduction targets. Thus, this report contains no recommendations.
We reviewed the status of prior audit recommendations from our audit of CSB's
compliance with improper payment regulations during fiscal year 2013. That
report contained three recommendations to CSB. We concluded that CSB took
sufficient action for two of those recommendations, and CSB indicated it plans to
take sufficient action for the remaining recommendation in fiscal year 2016.
Consequently, we consider that remaining recommendation resolved and will
review implementation of that recommendation during our next IPERA audit.
Noteworthy Achievements
CSB improved oversight through its interagency agreement with the U.S.
Department of the Treasury's Bureau of the Fiscal Service. In fiscal year 2014,
that bureau decided to increase its testing for improper payments to 25 percent
of the total paid invoices. The bureau provides CSB with its monthly post-audit
results and CSB reviews the monthly reports to ensure no errors are identified by
the bureau.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
The full report is at:
www.epa.gov/oig/reports/2015/
20150501-15-P-0153.pdf

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
May 1,2015
The Honorable Mark Griffon
The Honorable Manuel Ehrlich Jr.
The Honorable Rick Engler
Board Members
U.S. Chemical Safety and Hazard Investigation Board
2175 K Street, NW, Suite 400
Washington, D.C. 20037-1809
Dear Board Members:
This is our report on an audit conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency. This report represents our final position on our audit of the
reporting of improper payments by the U.S. Chemical Safety and Hazard Investigation Board (CSB).
The report contains findings that describe our results. This report represents the opinion of the OIG and
does not necessarily represent the final CSB position. CSB managers will make the final determinations
on matters in this report.
The Improper Payments Elimination and Recovery Act of 2010 and Office of Management and Budget
guidance require the Inspector General to distribute this report to the following individuals and
organizations, to whom we will provide the report under a separate transmittal:
•	Office of Management and Budget.
•	Senate Homeland Security and Government Affairs Committee.
•	House Committee on Oversight and Government Reform.
•	U.S. Comptroller General.
Because this report contains no recommendations, you are not required to respond to this report.
However, if you submit a response, it will be posted on the OIG's public website, along with our
memorandum commenting on your response. Your response should be provided as an Adobe PDF file
that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as
amended. The final response should not contain data that you do not want to be released to the public;
if your response contains such data, you should identify the data for redaction or removal along with
corresponding justification.
We will post this report to our website at http://www.epa.gov/oig.
Sincerely,
Arthur A. Elkins Jr.

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CSB Complied With Reporting Requirements of the
Improper Payments Elimination and Recovery Act
for Fiscal Year 2014
15-P-0153
Table of C
Purpose		1
Background		1
Scope and Methodology		2
Noteworthy Achievements		3
Results of Audit		3
CSB Complies With PAR and Financial Statement Requirement for
Improper Payments		3
CSB Programs Do Not Meet Risk Assessment Threshold Requirement
for Improper Payments		4
CSB Determined It Is Not Cost Effective to Conduct a
Payment Recapture Audit		5
CSB Not Required to Publish Estimates, Report on Agency Actions,
and Publish Annual Reduction Targets		5
Prior Year Recommendations Status		6
CSB Response and OIG Evaluation		7
Appendices
A CSB Response to Draft Report	 8
B Distribution	 10

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Purpose
Our objective for this audit was to determine the U.S. Chemical Safety and
Hazard Investigation Board's (CSB's) compliance with the improper payments
legislation for fiscal year (FY) 2014 and to follow up on FY 2013 improper
payments audit findings and recommendations.
Background
CSB is an independent federal agency charged with investigating industrial
chemical accidents. Headquartered in Washington, DC., the agency's board
members are appointed by the President and confirmed by the Senate. CSB is
authorized by the Clean Air Act Amendments of 1990 and became operational in
January 1998.
The Improper Payments Elimination and Recovery Act of 2010 (IPERA) was
signed into law on July 22, 2010, amending the Improper Payments Information
Act of 2002. Office of Management and Budget (OMB) guidance requires
agencies to report on improper payments and Inspectors General to review agency
reporting. The U.S. Environmental Protection Agency's Office of Inspector
General (OIG) is the Inspector General for CSB.
IPERA requires that each agency periodically review and identify all programs
and activities that may be susceptible to significant improper payments. The
review should be performed for each program and activity that the agency
administers at least once every 3 fiscal years. For agencies already performing a
risk assessment every 3 years, agencies may apply to the OMB Director for a
waiver from the requirement and continue their 3-year risk assessment cycle.
OMB Memorandum M-15-02, Appendix C to Circular A-123, Requirements for
Effective Estimation and Remediation of Improper Payments, issued October 20,
2014, defines an improper payment as:
... any payment that should not have been made or that was made
in an incorrect amount under statutory, contractual, administrative
or other legally applicable requirements. Incorrect amounts are
overpayments or underpayments made to eligible recipients....
An improper payment may also include any payment made to an
ineligible recipient or for an ineligible good or service, or
payments for goods or services not received.... [W]hen an
agency's review is unable to discern whether a payment was
proper as a result of insufficient or lack of documentation, this
payment must also be considered an improper payment.
The Inspector General should determine whether the agency is in compliance
under IPERA and submit its results to Congress. The Inspector General shall
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evaluate the agency's assessment of the level of risk associated with the high-
priority programs and the quality of the improper payments estimates and
methodology. The report should also clearly state the agency's compliance status
and indicate which of the six requirements the agency complied with and which
requirements the agency did not comply with. Compliance means that the agency:
•	Published a Performance and Accountability Report (PAR) for the most
recent fiscal year and posted that report and any accompanying materials
required by OMB on the agency website.
•	Conducted a program-specific risk assessment for each program or
activity (if required).
•	Published improper payment estimates for all programs and activities
identified as susceptible to significant improper payments under its risk
assessment (if required).
•	Published programmatic corrective action plans in the PAR (if required).
•	Published and is meeting annual reduction targets for each program
assessed to be at risk and estimated for improper payments (if required and
applicable).
•	Reported a gross improper payment rate of less than 10 percent for each
program and activity for which an improper payment estimate was
obtained and published in the PAR.
If an agency does not meet one or more of these requirements, it is not compliant
under IPERA.
Inspectors General may evaluate (1) the accuracy and completeness of agency
reporting, and agency performance in reducing and recapturing improper
payments; and (2) agency efforts to prevent and reduce improper payments and
recommendations for actions to further improve the agency's or program's
performance in reducing improper payments, including corrective actions and
internal controls.
Scope and Methodology
We conducted this compliance audit from November 2014 to March 2015 in
accordance with generally accepted government auditing standards, issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.
To determine whether CSB is compliant with IPERA, we reviewed CSB's
FY 2014 PAR and accompanying materials. We interviewed, held discussions
with, and exchanged emails with CSB officials. We reviewed CSB's analysis of
the U.S. Department of the Treasury's Bureau of the Fiscal Service (BFS) reports
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on its testing to ensure increased testing is implemented to reduce the risk that
some improper payments go undetected. We also followed up on our prior-year
audit recommendations.
Noteworthy Achievements
CSB has an interagency agreement with BFS. BFS decided to increase its testing
for improper payments to 25 percent of the total CSB paid invoices. BFS provides
CSB with its monthly post-audit results. CSB reviews BFS's monthly reports to
ensure no errors are identified by BFS in its sample. CSB has provided the OIG
with BFS's monthly post-payment audit results from April through October 2014.
CSB also provided us with documentation that shows CSB reviews the monthly
audits and tracks the results of those audits. The monthly audit reports provided to
the OIG did not identify any improper payments.
Results of Audit
CSB is fully compliant with IPERA reporting requirements, which require all
agencies to periodically review all programs and activities that may be susceptible
to significant improper payments. As required, CSB published its PAR on its
website. We determined that CSB programs do not meet the minimum risk
assessment threshold that would require CSB to perform a risk assessment or the
related requirements. Also, CSB performed an analysis justifying that it would not
be cost effective to perform a recovery audit on CSB's programs and activities for
which it expends $1 million or more annually.
In our FY 2013 improper payments report, we made three recommendations.
We will close two of those recommendations because CSB has taken actions to
comply. For the third recommendation—that CSB's payroll and benefits go
through the portal to comply with IPERA, and that CSB track and document
reviews of improper payments to help prevent or eliminate future improper
payments—CSB did not agree with this recommendation. After we received the
formal response to our draft report, CSB provided an email with additional
information that resolved this recommendation. CSB has completed part of the
corrective action and plans to complete the remaining corrective actions next year.
CSB Complies With PAR and Financial Statement Requirement for
Improper Payments
IPERA Section 3(a)(3)(A) requires all agencies to publish and post on their website
the PAR for their most recent fiscal year. The PAR, as described by OMB
Circular A-l 1 Section 200.21, is an annual report of agency performance. The
report contains the agency's audited financial statements and information on efforts
to achieve goals during the past fiscal year. In its FY 2014 PAR, CSB stated:
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[t]he CSB has not identified any significant risk with improper
payments. However, we recognize the importance of maintaining
adequate internal controls to ensure proper payments, and our
commitment to the continuous improvement in the overall
disbursement management process remains strong. In FY 2014, the
CSB continued our agreement with the Bureau of the Fiscal Service
(BFS) to process financial transactions, make administrative
payments, and prepare various financial reports. This agreement
promotes the accuracy of our financial records and payments.
Based on our audit, we determined that CSB is compliant with this IPERA
requirement.
CSB Programs Do Not Meet Risk Assessment Threshold Requirement
for Improper Payments
IPERA Section 2(a)(3)(A)(ii) requires that agencies conduct a specific risk
assessment for each identified program and activity that is susceptible to significant
improper payments in excess of $10 million of all program or activity payments
made during the fiscal year reported and 1.5 percent of program outlays. IPERA
Section 2(f)(2) defines a payment as
... any payment that should not have been made or that was made in
an incorrect amount (including overpayments and underpayments)
under statutory, contractual, administrative, or other legally applicable
requirement; and (B) includes any payment to an ineligible recipient,
any payment for an ineligible good or service, any duplicate payment,
any payment for a good or service not received (except for such
payments where authorized by law), and any payment that does not
account for credit for applicable discounts.
Our review of CSB's FY 2014 payments determined that CSB does not meet the
requirement for the risk assessment threshold of $10 million in improper
payments and 1.5 percent of program outlays. As a result, CSB is not required to
perform the risk assessment. We found that CSB's estimated FY 2014 payments
are $10,213,014, as shown in Table 1.
Table 1: CSB estimated payments
Activity
Amount
Percentage
FY 2014 estimated payments
(includes salaries and benefits)
$10,213,014
92.85%
Interagency and unobligated balance
$786,986
7.15%
Total
$11,000,000
100.00%
Source: OIG analysis of CSB data.
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CSB Determined It Is Not Cost Effective to Conduct a
Payment Recapture Audit
IPERA Section 2(h)(2)(A) requires that each agency shall conduct recovery audits
with respect to each program and activity of the agency that expends $1 million or
more annually, if conducting such audits would be cost effective. OMB
Memorandum M-15-02, Part ID, implements the requirements of Section 2(h) of
IPERA. The OMB memorandum defines a payment recapture audit—also known
as a recovery audit—as a review and analysis of an agency's or program's
accounting and financial records, supporting documentation, and other pertinent
information supporting its payments, that is specifically designed to identify
overpayments. A payment recapture audit program is an agency's overall plan for
risk analysis and the performance of payment recapture audits and recovery
activities. According to OMB, a cost-effective payment recapture audit is one in
which the benefits (i.e., recaptured amounts) exceed the costs (e.g., staff time and
resources, or payments to an audit contractor) associated with implementing and
overseeing the program. Agencies should consider the following criteria in
determining whether a payment recapture audit is cost effective:
•	The likelihood that identified overpayments will be recaptured.
•	The likelihood that the expected recoveries will be greater than
the costs incurred to identify the overpayments.
In February 2012, CSB provided an analysis to determine the cost effectiveness of
performing a recapture audit on all activities with annual outlays in excess of
$1 million. CSB concluded that a recapture audit program would notbe cost
effective because the cost benefit of conducting a recovery audit would yield a
negative return. CSB notified OMB, and OMB did not reply to CSB on its analysis.
Since CSB made this determination in February 2012, CSB should perform
another analysis in FY 2015; at such time, CSB should consider including payroll
and benefits to its analysis.
CSB Not Required to Publish Estimates, Report on Agency Actions,
and Publish Annual Reduction Targets
IPERA Section 3 (a)(3)(C) requires agencies to publish improper payment
estimates for all programs and activities identified as susceptible to significant
improper payments under its risk assessment in the accompanying materials to the
annual financial statements of the agency. CSB did not have significant improper
payments identified and therefore is not required to publish improper payment
estimates. CSB did not meet the threshold of $10 million of all program or
activity payments made during the fiscal year reported and 1.5 percent of program
outlays—in fact, CSB's improper payments amounted to $901. As a result, CSB
was not required to report a gross improper payment rate of less than 10 percent.
When compiling plans to reduce improper payments, agencies are to set reduction
targets for future improper payment levels and a timeline within which the targets
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will be reached. Reduction targets must be approved by the OMB Director. CSB
was not required to implement a corrective action plan and therefore is not
required to set reduction targets.
Prior Year Recommendations Status
The OIG had performed an audit of CSB's compliance with the Improper
Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) during
FY 2014. 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, issued April 10, 2014, had three recommendations.
In Recommendation 1, we recommended that CSB establish access to the Do Not
Pay portal and use that portal. CSB agreed with this recommendation and has
established access to the Do Not Pay portal and is using the portal. We will close
this recommendation upon issuance of the final report.
In Recommendation 2, we recommended that CSB's payroll and benefits go
through the portal to comply with IPERIA, and that CSB track and document
reviews of improper payments to help prevent or eliminate future improper
payments. CSB did not agree with this recommendation. CSB stated in response
to our request for the recommendation status that:
[ajccording to OMB, CSB's payroll and benefit payments comply
with IPERIA. In addition, formal tracking of improper payments is
not an efficient or effective manner to address the infrequent
problems CSB has experienced.
CSB has an interagency agreement with the Department of the Interior's
Interior Business Center (IBC) to provide an array of payroll and personnel
processing applications and services, and human resources and human capital
services. In additional discussions with CSB on its review of IBC errors, CSB
stated:
... [it] anticipates that IBC will make occasional errors that are
outside of CSB's control. Therefore, as part of our on-going budget
tracking we reconcile IBC payroll data to our budget projections to
ensure employees are properly paid. If a discrepancy is identified,
CSB follows up with IBC via phone or e-mail to resolve.
IPERIA Section 5(a)(1) requires each agency to review prepayment and pre-
award procedures and ensure that a thorough review of available databases with
relevant information on eligibility occurs to determine program or award
eligibility and prevent improper payments before the release of any federal funds.
We believe that payroll and benefits should go through the portal prior to the
release of funds to prevent improper payments. In addition, CSB should track and
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document improper payments for trends and estimates of potential improper
payments. After we received the formal response to our draft report, CSB stated
in an email that IBC system and payroll staff confirmed all IBC client salary
payment files are run through Treasury's Do Not Pay portal. IBC plans to modify
the Service Level Agreement for FY 2016 to include language that describes
responsibility for improper payments. Also, CSB informed us it will keep a log to
track its improper payments. This recommendation is resolved based on
information provided by CSB in response to our draft report. CSB has completed
part of the corrective action and plans to complete the remaining corrective
actions next year. We will review implementation during our next IPERA audit.
In Recommendation 3, we recommended that CSB document its analysis of
BFS's reports on its testing and ensure increased testing is implemented to reduce
the risk that some improper payments go undetected. CSB partially agreed with
this recommendation. CSB stated in response to our request for the
recommendation status that:
BFS shifted to 25% post payment reviews of all invoices in
March 2014, and began providing monthly post audit payment
results in April 2014. CSB's Director of financial operations
reviews the reports each month to ensure no errors are identified
by BFS in its sample, and that the total population of paid
invoices are to CSB vendors in reasonable amounts.
CSB provided the OIG with BFS's monthly post-payment audit results from
April through October 2014 and documentation that shows CSB reviews the
monthly audits and tracks the results of the monthly audits. The monthly audit
reports provided to the OIG did not identify any improper payments and we
believe this process to be adequate to address any potential improper payments.
We agree with the additional reviews performed by CSB and, therefore, will close
this recommendation in our system upon issuance of this report.
CSB Response and OIG Evaluation
This report did not have any recommendations. As noted above, CSB responded
to our statements in the report concerning the status of the Recommendation 2 in
our prior IPERA report. We agree with CSB planned actions, as previously
discussed, and therefore consider this recommendation resolved with the
remaining corrective actions pending. We will review implementation during our
next IPERA audit. CSB's complete response to our draft report is in Appendix A.
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Appendix A
CSB Response to Draft Report
U.S. Chemical Safety and
Hazard Investigation Board
2175 K Street, NW • Suite 650 • Washington, DC 20037-1809
Phone: (202) 261-7600 • Fax: (202) 281-7680
www.csb.gov
Rafael Moure-Eraso, Ph.D.
Board Member
Manny Ehrlich, Jr.
Board Member
Rick Engler
Board Member
Mark Griffon
Board Member
March 27, 2015
Mr. Kevin Christensen
Assistant Inspector General for Audits
Office of Inspector General
U.S. Environmental Protection Agency
Dear Mr. Christensen:
Thank you for the opportunity to review and comment on the draft report on the CSB's
compliance with the improper payments legislation for fiscal year (FY) 2014 and to
follow up on FY 2013 improper payment audit findings and recommendations. We are
pleased that you found CSB fully compliant with FY 2014 reporting requirements, and
that you are closing two of three FY 2013 year recommendations.
We are disappointed that you consider the following FY 2013 recommendation
unresolved:
Ensure CSB's payroll and benefits go through the [Do Not Pay] portal to comply
with IPERIA. Also track and review improper payments to help prevent or
eliminate future improper payments.
As we informed your staff, according to OMB the CSB's payroll and benefit payments
comply with the Do Not Pay initiative. We believe no further action is needed on this
point. However, in order to resolve this issue with your office we contacted our
personnel and payroll service provider and requested written confirmation that payroll
and benefit payments comply with the Do Not Pay initiative. We expect a response to
our request in April 2015.
As the CSB explained to your staff, we anticipate that our personnel and payroll service
provider will make occasional clerical errors that are outside of CSB's control. These
provider errors would not be caught by any database in the Do Not Pay portal. CSB
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catches these minor and infrequent errors by reconciling payroll data to budget
projections. The evidence that these errors are infrequent is the Treasury Report on
Receivables. We provided your staff with the end of year report for FY 2014, which
shows the following improper payments for FY 2014:
Name	Description	Amount
Employee 1
Wrong locality pay for step increase
$ 56
Employee 2
Inadvertent rate change by IBC
303
Employee 3
Wrong step processed when hired
542
Total

$901
While CSB believes there is little value in establishing a new tracking system to further
support that there are infrequent payment problems we will keep a log of improper
payments to resolve this issue with your office. If you or your staff have any questions
about this response, please feel free to contact me at 202-261-7639.
Sincerely,
/S/
Anna M. Brown
Audit Liaison
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Appendix B
Distribution
Board Members, U.S. Chemical Safety and Hazard Investigation Board
Managing Director, U.S. Chemical Safety and Hazard Investigation Board
General Counsel, U.S. Chemical Safety and Hazard Investigation Board
Finance Director, U.S. Chemical Safety and Hazard Investigation Board
Communications Manager, U.S. Chemical Safety and Hazard Investigation Board
Director of Administration and Audit Liaison, U.S. Chemical Safety and Hazard
Investigation Board
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