tD S7/|.	15-P-0006
*  *	U.S. Environmental Protection Agency	October 20,2014
sS?
Office of Inspector General
At a Glance
Why We Did This Review
We conducted this evaluation
to determine whether the
U.S. Environmental Protection
Agency's (EPA's) oversight of
state and local Clean Air Act
Title V programs' fee revenues
is effective in identifying and
obtaining corrective actions for
issues related to collecting,
retaining and allocating fee
revenues. Title V was expected
to, among other things, improve
compliance and enforcement of
states' air pollution programs.
Title V permit fees are used to
implement and enforce the
permitting program, including
acting on new permit
applications and revisions or
renewals of existing permits;
monitoring facility compliance;
taking enforcement actions for
noncompliance; performing
monitoring, modeling and
analysis; tracking facility
emissions; and preparing
emissions inventories.
This report addresses the
following EPA goals or
cross-agency strategies:
	Addressing climate change
and improving air quality.
	Protecting human health
and the environment by
enforcing laws and
assuring compliance.
	Launching a new era of
state, tribal, local and
international partnerships.
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/2014/
20141020-15-P-0006.pdf
Enhanced EPA Oversight Needed to Address Risks
From Declining Clean Air Act Title V Revenues
Weaknesses in the
EPA's oversight of
Title V revenues and
expenditures jeopardize
program implementation
and, in turn, compliance
with air regulations for
many of the nation's
largest sources of air
pollution.
What We Found
We found significant weaknesses in the EPA's
oversight of state and local Title V programs' fee
revenue practices. While some EPA regions had
worked to resolve issues, we found annual Title V
program expenses often exceeded Title V
revenues, and both had generally been declining
over the 5-year period we reviewed (2008-2012).
For example, our survey of nine of the nation's
largest permitting authorities showed that annual
Title V revenues were not sufficient to cover annual
Title V expenses 62 percent of the time from 2008 to 2012. Specifically, we noted
a $69 million shortfall out of $672 million in expenses incurred by these
authorities from 2008-2012. Also, four of the nine permitting authorities used or
said they could use non-Title V revenue to fund their Title V programs, a practice
not allowed by the Code of Federal Regulations (CFR) under the 40 CFR
Part 70. In some instances the EPA was aware of these issues, but corrective
actions had either not been taken or were insufficient. EPA's oversight has been
hampered by:
	Lack of a national strategy for conducting oversight of Title V fees.
	Outdated guidance.
	Lack of financial or accounting expertise among EPA program staff.
	Reluctance by some regions to pursue formal corrective actions.
The agency's weaknesses in identifying and obtaining corrective actions for
Title V revenue sufficiency and accounting practices, coupled with declining
resources for some permitting authorities, jeopardizes state and local Title V
program implementation. These weaknesses also increase the risk of permitting
authorities misusing funds and operating in violation of the requirements of
40 CFR Part 70. Periodic monitoring of facility compliance, one aspect of Title V
used by the EPA and authorized Title V programs to protect human health and
the environment, could be adversely impacted by insufficient funding.
Recommendations and Planned Agency Corrective Actions
We recommend that the EPA assess, update and re-issue its 1993 Title V fee
guidance as appropriate; establish a fee oversight strategy to ensure consistent
and timely actions to identify and address violations of 40 CFR Part 70;
emphasize and require periodic reviews of Title V fee revenue and accounting
practices in Title V program evaluations; address shortfalls in staff expertise as
regions update their workforce plans; and pursue corrective actions, as
necessary. The agency agreed with all recommendations and provided corrective
action plans that meet the intent of the recommendations.

-------