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*.	U.S. Environmental Protection Agency	14-P-0129
f ftJL \	Office of Inspector General	March 4 2014
^	At a Glance
Why We Did This Review
We performed this audit to
determine whether the
U.S. Environmental Protection
Agency (EPA) conducts
biennial reviews of the
agency's user fees and
royalties programs, and
reviews all agency programs
to determine whether fees
should be assessed for
government services they
provide.
The Chief Financial Officers
Act of 1990 (CFO Act) directs
the Chief Financial Officer
(CFO) to review, on a biennial
basis, the agency's fees and
other charges for services
provided. Office of
Management and Budget
(OMB) Circular A-25 provides
for federal user fee reviews.
The EPA's Office of the Chief
Financial Officer (OCFO)
oversees the EPA program
offices' biennial user fee
reviews.
This report addresses the
following EPA theme:
• Embracing EPA as a high
performing organization.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2014/
20140304-14-P-0129.pdf
EPA Did Not Conduct Thorough
Biennial User Fee Reviews
What We Found
The EPA did not conduct thorough biennial user
fee reviews for fiscal years 2008-2009 and 2010-
2011, and did not review all agency programs to
determine whether they should assess fees for
government services they provide. The EPA did
not fully comply with the requirements to:
The EPA may not have
recovered all program costs
and collected millions of
dollars that could have been
available to reduce the
federal budget deficit.
•	Conduct cost reviews to determine the full cost of providing a service.
•	Report biennial review results to OMB.
•	Request user fee exceptions by letter to the OMB Director.
•	Review all programs for fee potential.
The EPA's OCFO did not fully oversee the biennial reviews or provide internal
review guidance, and the EPA's program offices were not fully aware of biennial
review requirements. Consequently, the EPA may not have recovered millions of
dollars in program costs and collected funds that could have been available to
reduce the federal budget deficit. We identified an EPA program—the Office of
Water's National Pollutant Discharge Elimination System (NPDES) program—with
the potential to charge fees up to $8.9 million per year to recover its costs of
providing a service.
The EPA began improving its biennial review process with the fiscal years 2012-
2013 review by issuing a biennial user fee review guide, training user fee program
personnel on biennial reviews, and increasing headquarters oversight of reviews.
Recommendations and Planned Agency Corrective Actions
We recommend that the CFO discuss biennial user fee results in the Agency
Financial Report, coordinate requests for an exception to charging fees, and
request fee exception programs to provide complete information about program
fees and costs and help determine whether fees should be assessed. We also
recommend that the Office of Water conduct an analysis to determine the EPA's
full cost of issuing NPDES permits and determine whether it should charge fees
for the permits. We had also recommended that the Office of Water propose a
regulation to allow the EPA to charge NPDES permit fees, as appropriate.
The agency concurred and provided acceptable corrective actions and milestone
completion dates for all recommendations except one—to propose a regulation to
allow the EPA to charge NPDES permit fees. We revised our recommendation by
removing the proposal for a regulation to charge NPDES fees and adding the
option for requesting an exception to fees, to which the Office of Water agreed.

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