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Report Contributors: Stacey Banks
Charles Brunton
Dan Engelberg
Tim Roach
Gerry Snyder
Abbreviations
CFR Code of Federal Regulations
CWA Clean Water Act
EPA U.S. Environmental Protection Agency
OIG Office of Inspector General
USACE U.S. Army Corps of Engineers
Cover photo: Peat mining in a wetlands area in Region 8. (EPA photo)
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write:
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To make suggestions for audits or evaluations,
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fax: 1-202-566-2599
online: http://www.epa.g0v/0ig/c0ntact.html#Full Info
write: EPA Inspector General Hotline
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Mailcode 2431T
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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
14-P-0191
April 16, 2014
Why We Did This Review
Our objective was to
determine how the
U.S. Environmental Protection
Agency (EPA) verifies that the
application of the wetlands
protection and restoration
guidelines achieves "no net
loss" of wetlands. The Clean
Water Act Section 404
regulatory program addresses
the discharge of dredged or fill
materials in the waters and
wetlands of the United States.
One of the EPA's roles in this
program is to review and
comment on individual permit
applications submitted to the
U.S. Army Corps of
Engineers. In its fiscal year
2013 Annual Plan, under the
Section 404 regulatory
program, EPA reported
"no net loss" of wetlands for
fiscal years 2009 through
2011.
This report addresses the
following EPA theme:
• Protecting water: A
precious, limited resource.
EPA Needs to Clarify Its Claim of
"No Net Loss" of Wetlands
What We Found
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 mitigation projects
succeed.
The EPA attempts to verify that the application
of the wetlands protection and restoration
guidelines furthers the goal of "no net loss" by comparing the total acres of
wetland impacts to the total acres planned for mitigation in the U.S. Army Corps of
Engineers' Section 404 permits. However, performance reporting in the EPA's
2013 annual plan does not inform readers of the assumption that all mitigation
projects meet performance standards. Performance standards are the
ecologically-based standards that the U.S. Army Corps of Engineers personnel
will use to determine whether a compensatory mitigation project is achieving its
objectives. Not clearly communicating such assumptions hampers the public's
understanding of the EPA's actual performance in protecting wetlands.
The EPA can improve
performance reports by
indicating that achieving
"no net loss" is based on the
assumption that all
mitigation projects will meet
performance standards.
Recommendation and Planned Corrective Actions
We recommend that the Assistant Administrator for Water clarify on the wetlands
measure definitions webpage and in future annual performance reporting that
"no net loss" of wetlands is based upon an assumption that mitigation projects
contained in Clean Water Act Section 404 permits will meet performance
standards. The agency agreed with the recommendation and provided acceptable
corrective actions. The recommendation is resolved.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2014/
20140416-14-P-0191.pdf
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
April 16, 2014
MEMORANDUM
SUBJECT: EPA Needs to Clarify Its Claim of "No Net Loss" of Wetlands
Report No. 14-P-0191
FROM: Arthur A. Elkins Jr.
TO:
Nancy K. Stoner, Acting Assistant Administrator
Office of Water
This is our report on the subject evaluation conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). This report contains findings that describe the problems
the OIG has identified and corrective actions the OIG recommends. This report represents the opinion of
the OIG and does not necessarily represent the final EPA position. Final determinations on matters in
this report will be made by EPA managers in accordance with established audit resolution procedures.
The EPA office having primary responsibility for the issues evaluated in this report is the Office of
Water's Office of Wetlands, Oceans and Watersheds.
Action Required
This report's recommendation was agreed to and resolved. Therefore, no final response to this report is
needed. If you wish to provide a final response to this report, it 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.
If you or your staff have any questions regarding this report, please contact Carolyn Copper,
Assistant Inspector General for Program Evaluation, at (202) 566-0829 or copper.carolyn@epa.gov;
or Dan Engelberg, Director, Water Evaluations, at (202) 566-0830 or engelberg.dan@epa.gov.
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Purpose
The purpose of this review was to determine how the U.S. Environmental
Protection Agency (EPA) verifies that the application of the wetlands protection
and restoration guidelines achieves "no net loss" of wetlands.
Background
The environmental and human health value of wetlands is significant. Wetlands
provide ecosystem services such as reducing damage caused by flooding;
moderating global climate conditions; and functioning as natural filtration for
sources of drinking water. The U.S. Fish and Wildlife Service estimates that up to
43 percent of threatened and endangered species rely directly or indirectly on
wetlands for survival. The Service's most recent 5-year wetlands inventory report1
indicates that the United States lost approximately 62,300 acres of wetlands
between 2004 and 2009.
The Clean Water Act (CWA) Section 404 regulatory program addresses the
disposal of dredged or fill materials in the waters and wetlands of the United
States. In 1980, the EPA and the U.S. Army Corps of Engineers (USACE) issued
wetlands guidelines2 to provide the substantive environmental standards for
evaluating Section 404 permit applications. The USACE implements the
guidelines as part of its authority to issue or deny permits. Under the guidelines,
the USACE is also responsible for monitoring compensatory mitigation plans
within Section 404 permits. As part of the permitting process, a permittee must
obtain USACE approval of "performance standards" for mitigation projects
before a Section 404 permit is issued. These are the ecologically-based standards
that USACE personnel will use to determine whether a compensatory mitigation
project is achieving its objectives.
The EPA may review the public notices issued by the USACE and provide
comments, as appropriate, to the USACE. In 2008, the USACE and EPA issued
revised regulations, establishing standards and criteria to be used for all types of
compensatory mitigation. Compensatory mitigation refers to the restoration,
establishment, enhancement, or in certain circumstances preservation of wetlands,
streams or other aquatic resources for the purpose of offsetting unavoidable
adverse impacts.
Since 1989, the EPA's goal in this program has been to achieve "no net loss" of
wetlands. In the fiscal year 2013 Annual Plan, the EPA reported "no net loss" of
wetlands in the 404 regulatory program for fiscal years 2009 through 2011.
1 U.S. Department of Interior, U.S. Fish and Wildlife Service, Status and Trends of Wetlands in the Conterminous
United States 2004 to 2009, September 2011.
2 The guidelines are published in Title 40 of the Code of Federal Regulations (CFR), Part 230 - Section 404(b)(1),
Guidelines For Specification Of Disposal Sites For Dredged Or Fill Material.
14-P-0191
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The EPA office having primary responsibility for the issues evaluated in this
report is the Office of Water's Office of Wetlands, Oceans and Watersheds.
Scope and Methodology
We reviewed Section 404 of the CWA, regulations, performance reporting under
the EPA's 2013 Annual Plan, and the EPA's National Water Program Guidance.
We also reviewed memorandums of agreement between the USACE and EPA to
gain an understanding of how regulations and guidance are implemented. We also
interviewed staff and managers from the EPA's Office of Water and EPA
Regions 2 and 5 about the EPA's activities under Section 404. We selected these
regions because they contain states that have a variety of wetlands and some of
the highest percentages of wetland losses. We also interviewed managers in the
USACE's Section 404 program and staff from the Environmental Law Institute.
We conducted our review from January 2013 to February 2014 in accordance
with generally accepted government auditing standards. Those standards require
that we plan and perform our review to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our
objectives. We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our objective.
Results of Review
The EPA attempts to verify that the application of the wetlands protection and
restoration guidelines furthers the goal of "no net loss" by comparing the total
acres of wetland impacts to the total acres planned for mitigation in the USACE's
Section 404 permits. However, this comparison is based on the EPA's assumption
that all wetlands mitigation projects will meet performance standards. Not all
mitigation projects meet these standards. For example, in a 2011 report about
North Carolina wetlands mitigation projects3, it was reported that"... no single
mitigation provider, mitigation type or geographic region achieved complete
success according to the standards approved in mitigation plans." Specifically, the
report noted that 74 percent of the mitigation projects attained the mitigation goals
established in the Section 404 permits. Because the EPA's performance reporting4
does not inform readers of this assumption, the Office of Inspector General
concluded that the EPA's reporting of "no net loss" of wetlands hampers the
public's understanding of the EPA's actual performance in protecting wetlands.
The EPA should indicate in 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.
3 Compensatory stream and wetland mitigation in North Carolina: An evaluation of regulatory success.
North Carolina Department of Environment and Natural Resources Division of Water Quality, March 2011.
4 United States Environmental Protection Agency, FY2013 Annual Plan, p. 107, Performance Measure 4E.
14-P-0191
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Recommendation
We recommend that the Assistant Administrator for Water:
1. Clarify on the wetlands measure definitions webpage and in future annual
plan performance reporting that "no net loss" of wetlands is based upon an
assumption that mitigation projects contained in CWA Section 404
permits will meet performance standards.
Agency Response and OIG Comment
The agency agreed with our recommendation. The agency said it updated its
National Water Program Guidance for the fiscal year 2015 Proposed Program
Measure, so that the text now reads: "In partnership with the U.S. Army Corps of
Engineers, states and tribes achieve 'no net loss' of wetlands each year under the
Clean Water Act Section 404 regulatory program. ('No net loss' of wetlands is
based on requirements for mitigation in CWA 404 permits and not the actual
mitigation attained.)." In addition, the agency committed to clarifying the
wetlands measure on the Office of Water's performance webpage when the 2013
End of Year report is posted on March 31, 2014. The Office of Water later revised
the completion date to May 12, 2014. The recommendation is resolved.
14-P-0191
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Status of Recommendations and
Potential Monetary Benefits
POTENTIAL MONETARY
BENEFITS (In $000s)
Claimed Agreed-To
Amount Amount
webpage and in future annual plan performance for Water
reporting that "no net loss" of wetlands is based
upon an assumption that mitigation projects
contained in CWA Section 404 permits will meet
performance standards.
RECOMMENDATIONS
Planned
Rec. Page Completion
No. No. Subject Status1 Action Official Date
1 3 Clarify on the wetlands measure definitions 0 Assistant Administrator 05/12/14
1 0 = Recommendation is open with agreed-to corrective actions pending.
C = Recommendation is closed with all agreed-to actions completed.
U = Recommendation is unresolved with resolution efforts in progress.
14-P-0191
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Appendix A
Agency Response to Draft Report
MEMORANDUM
SUBJECT: Response to Office of Inspector General Draft Report/Proj ect
No. OPE-FY13-0008
"EPA Needs to Clarify Its Claim of 'No Net Loss' of Wetlands," dated March 3,
2014
FROM: Nancy K. Stoner
Acting Assistant Administrator
TO: Arthur A. Elkins, Jr.
Inspector General
Thank you for the opportunity to respond to the issues and recommendation in the subject audit
report. Following is a summary of the U.S. Environmental Protection Agency's overall position,
along with its position in agreement on each of the report recommendations. We have provided
high-level planned corrective actions and estimated completion dates.
AGENCY'S OVERALL POSITION
Factual accuracy of the Draft Report: The draft report is factually accurate. "No net loss" of
wetlands is based upon an assumption that mitigation projects contained in CWA Section 404
permits will meet performance standards. The Office of Water concurs with the finding.
Corrective actions already initiated or planned:
• A clarification was made under the National Water Program Guidance for FY2015 Proposed
Program Measure, so that the text now reads: "In partnership with the U.S. Army Corps of
Engineers, states and tribes, achieve 'no net loss' of wetlands each year under the Clean
Water Act Section 404 regulatory program. ('No net loss' of wetlands is based on
requirements for mitigation in CWA 404 permits and not the actual mitigation attained.)"
• Clarify measure on OW performance web page: Measure will be clarified when the 2013 End
of Year report is posted on March 31, 2014
14-P-0191
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AGENCY'S RESPONSE TO REPORT RECOMMENDATIONS
Agreements
No
Recommendation
High-Level Intended Corrective
Action(s)
Estimated
Completion by
FY
1
Clarification under FY 15
NWPG
Add clarifying statement
Complete
2
Clarification on OW
performance web page
Add clarifying statement
Mar. 31, 2014
CONTACT INFORMATION
If you have any questions regarding this response, please contact Jim Pendergast, Acting
Director, Wetlands Division, Office of Wetlands, Oceans, and Watersheds on (202) 566-0398 or
Sineta Brown on (202) 564-3666.
Attachments
cc: Michael H. Shapiro
Gregory Peck
Timothy Fontaine
Macara Lousberg
Marilyn Ramos
Michael Mason
14-P-0191
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Distribution
Office of the Administrator
Assistant Administrator for Water
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Principal Deputy Assistant Administrator for Water
Audit Follow-Up Coordinator, Office of Water
14-P-0191
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