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*. U.S. Environmental Protection Agency	14-1-0041
| jD, % Office of Inspector General	December 17, 2013
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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 Pesticide
Reregistration and Expedited
Processing Fund (known as the
FIFRA Fund) financial
statements.
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 theme:
 Embracing EPA as a high
performance organization.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2014/
20131217-14-1-0041.pdf
Fiscal Years 2012 and 2011 (Restated) Financial Statements for
the Pesticides Reregistration and Expedited Processing Fund
EPA Receives an Unqualified Opinion
We rendered an unqualified, or clean, opinion on the EPA's Pesticides
Reregistration and Expedited Processing Fund financial statements for fiscal
years (FYs) 2012 and 2011 (restated), meaning they are fairly presented and free
of material misstatement.
Internal Control Material Weaknesses Noted
We noted two material weaknesses in internal controls.
The agency
corrected material
misstatements due to
weaknesses in
internal controls we
identified.
EPA materially overstated the expenses from other
appropriations that support the FIFRA fund. This
occurred because the agency does not have an
effective system to accurately accumulate and
report costs incurred by other appropriations in
support of FIFRA Fund activities. This overstatement resulted in a material
overstatement of the total costs of the FIFRA Fund by $19.6 million in
FY 2012 and $4.8 million in FY 2011.
EPA materially understated the FIFRA fund payroll liabilities covered by
budgetary resources as well as related payroll expense included in gross
costs. The agency's practice of transferring employees and related expenses
and liabilities from FIFRA to the Environmental Programs and Management
Fund for cash flow reasons led to the understatement. The FY 2011 payroll
liabilities covered by budgetary resources for FIFRA was $1,713,000, while
the FY 2012 payroll liabilities covered by budgetary resources was zero.
Compliance With Applicable Laws and Regulations
The agency was in compliance with applicable laws and regulations.
Recommendations and Planned Agency Corrective Actions
The agency agreed with our findings and our recommendations. The agency
corrected the financial statements to reflect the proper expenses paid by other
appropriations and to reflect the proper payroll liability amounts. The agency will
also develop a process to ensure accurate allocations of expenses from other
appropriations and carefully review and comment on the draft and final versions
of the FIFRA financial statements prior to their submission to the Office of
Inspector General. The agency will also closely monitor the payroll liability
amounts.

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