s O \
! 32 *
Kry
PRO^
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Early Warning Report:
National Service Center for
Environmental Publications
in Blue Ash, Ohio,
Spent $1.5 Million to Store
Excess Publications
Report No. 14-P-0132
March 11, 2014

-------
Report Contributors:	Debra C off el
Teren Crawford
Michael D. Davis
Kevin Haas
Leah Nikaidoh
Abbreviations
U.S. Environmental Protection Agency
National Service Center for Environmental Publications
Office of Inspector General
EPA
NSCEP
OIG
Cover photo: An inside view of the EPA warehouse operated by a contractor in
Blue Ash, Ohio. The image shows rows of boxed publications.
(EPA OIG photo)
Hotline
To report fraud, waste or abuse, contact
us through one of the following methods:
email:	OIG Hotline@epa.gov
phone:	1-888-546-8740
fax:	1-202-566-2599
online:	http://www.epa.gov/oiq/hotline.htm
write: EPA Inspector General Hotline
1200 Pennsylvania Avenue, NW
Mailcode 2431T
Washington, DC 20460
Suggestions for Audits or Evaluations
To make suggestions for audits or evaluations,
contact us through one of the following methods:
email:
OIG WEBCOMMENTS@epa.oov
phone:
1-202-566-2391
fax:
1-202-566-2599
online:
http://www.epa.qov/oiq/contact.html#Full Info
write:
EPA Inspector General

1200 Pennsylvania Avenue, NW

Mailcode 241OT

Washington, DC 20460

-------
^EDSX
* JL \
Ksffei
%pR0^
U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
14-P-0132
March 11, 2014
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
leases a warehouse in Blue
Ash, Ohio, from the General
Services Administration. The
warehouse is partially occupied
by the National Service Center
for Environmental Publications
(NSCEP). The NSCEP
maintains and distributes the
EPA's environmental
publications in hard copy,
CD ROM and other multimedia
formats. Inventory ranges from
workbooks for schools to
technical manuals.
We are conducting an audit to
determine the extent to which
the EPA's personal property
stored in select warehouse
space is being used effectively,
accounted for, and disposed of
by the agency. As a result of
our warehouse visits, we are
issuing this early warning report
on the NSCEP because our
concerns required immediate
attention.
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/
20140311-14-P-0132.pdf
Early Warning Report: National Service Center
for Environmental Publications in Blue Ash, Ohio,
Spent $1.5 Million to Store Excess Publications
What We Found
Our initial research of operations at the NSCEP
warehouse in Blue Ash raised significant concerns
about the number of publications stored at the
facility versus the number of publications shipped
from the facility each year. In particular:
The EPA could put over
$1.5 million to better use
by reducing its inventory
of excess publications at
the NSCEP.
	The NSCEP filled the warehouse with a considerable amount of printed
material.
	The NSCEP needs to improve implementation of plans to reduce inventory.
The agency is storing more than 6 years of publications at the warehouse.
As of December 6, 2013, the warehouse had an inventory of 18,406,848
publications but averaged only 2,949,643 publications shipped on a yearly basis.
Consequently, the EPA is tying up funds by storing and caring for excess stock at
an annual cost of up to $1.2 million. Additional costs include warehouse activities
and other direct costs, plus up to $359,000 in leasing costs.
We had observed another EPA warehouse operating as a long-term storage
facility filled with considerable amounts of unusable furniture and other items.
This was noted in a prior EPA Office of Inspector General (OIG) report, Early
Warning Report: Main EPA Headquarters Warehouse in Landover, Maryland,
Requires Immediate EPA Attention (Report No. 13-P-0272), issued May 31,
2013. The Landover report questioned the effectiveness of EPA oversight.
We believe that the agency should evaluate its publication-storage requirements
to determine appropriate adjustments based on average shipments to customers,
as well as appropriate adjustments based on providing shipments in a timely
manner, to ensure effective storage utilization.
Agency Actions Taken
Following EPA OIG visits to the Blue Ash warehouse and several follow-up
discussions with staff, the NSCEP reported that it recycled almost 2 million items,
consisting of more than 140 tons of material, between June and October 2013.

-------
^EDSrx
|	\	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
|	|	WASHINGTON, D.C. 20460
PRO^^0
THE INSPECTOR GENERAL
March 11, 2014
MEMORANDUM
SUBJECT: Early Warning Report: National Service Center for Environmental Publications
in Blue Ash, Ohio, Spent $1.5 Million to Store Excess Publications
Report No. 14-P-0132
FROM: Arthur A. Elkins Jr.
TO:	Craig E. Hooks, Assistant Administrator
Office of Administration and Resources Management
The U.S. Environmental Protection Agency (EPA), Office of Inspector General, is conducting an audit
to determine the extent to which the EPA's personal property stored in select warehouse space is being
used effectively, accounted for, and disposed of by the agency (Project No. OA-FY13-0248). This early
warning report provides information obtained during our review of operations at the National Service
Center for Environmental Publications (NSCEP), located at the Blue Ash, Ohio, warehouse facility.
While we continue our ongoing audit of select warehouse spaces, we believe the agency should
immediately address operational issues found at the NSCEP Blue Ash warehouse facility, as discussed in
this early warning report.
The EPA office responsible for addressing the findings and issues in this report is the Office of
Administration and Resources Management - Cincinnati.
If you or your staff have any questions, please contact Richard Eyermann, acting Assistant Inspector
General for Audit, at (202) 566-0565 or evermann.richard@epa.gov; or Mike Davis, Director,
Efficiency Audits, at (513) 487-2363 or davis.michaeld@epa.gov.

-------
U.S. EPA
Office of Inspector General
I
Early Warning Report: National Service Center for
Environmental Publications in Blue Ash, Ohio,
Spent $1.5 Mi lion to Store Excess Publications
March 11, 2014
Report No. 14-P-0132

-------
Background
The U.S. Environmental Protection Agency (EPA) leases from the General Services Administration a
115,000-square-foot facility in Blue Ash, Ohio. The facility is divided into two separate operating
spaces managed by different contractors at a lease cost of $551,795 per year.
One contract, awarded in 2010, manages the area of the warehouse for storing excess property
used by various offices in the area, such as furniture and electronics, at a cost of up to $153,000
per year.
The second contract, awarded in 2011, manages the National Service Center for Environmental
Publications (NSCEP) covered in this report. The NSCEP stores printed material, such as technical
manuals and marketing items, at a cost of up to $1.2 million per year.

U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL

-------
Summary of Results for NSCEP
NSCEP's operations at the Blue Ash warehouse raised
significant concerns regarding the amount of publications
being stored at the facility versus what is shipped each year.
In particular:
	NSCEP filled the warehouse with a considerable
printed material, including many years worth of
	The NSCEP needs to improve implementation of plans to reduce inventory.
We observed another EPA warehouse operating as a long-term storage faci ity filled
with considerable amounts of furniture and other items. This was noted in a prior EPA
Office of Inspector General (OIG) report (Report No. 13-P-0272, issued May 31, 2013).
The effectiveness of the EPA's oversight needs to be improved.

1 jcfc *
1
k U.S. ENVIRONMENTAL PROTECTION AGENCY
" OFFICE OF INSPECTOR GENERAL

[.

~J
amount of
agency pub cations.

-------
Criteria
	Federal Property & Administrative Services Act of 1949 - Agencies shall:
-	Continuously survey property under their control to determine what may be
excess property;
-	Transfer or dispose of such property as promptly as possible; and
-	As far as practicable, make reassignments of property among activities within the
agency when such property is determined to be no longer required.
	Office of Management and Budget Memo M-12-12 - Agencies must make more
efficient use of the government's real estate assets.
	Office of Management and Budget Circular A-123 - Agencies must establish controls
that reasonably ensure funds, property and other assets are safeguarded against
waste, loss, unauthorized use or misappropriation

U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL

-------
Storing Excess Publications
As of December 6, 2013, the NSCEP had more than
6 years worth of publications on hand. The NSCEP had:
	An nventory of 18,406,848 publications available.
	Shipped an average (last three fiscal years) of
2,949,643 publications yearly.
These numbers indicate that the NSCEP has an
inventory turnover rate of materials on hand that
far exceeds the demand.
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL

-------
Inventory Management
The NSCEP, in our opinion:
	Has an inventory management belief that it is
better to have more than enough products on hand
than to try to manage with just the amount of
stock needed (that is, a culture of print-store-ship
rather than print then ship).
	Is tying up funds in storing and caring for
excess stock at a current annual contractor cost
of up to $1.2 million, and up to $359,000 for the
leased space.


-------
Agency Actions Taken
After the OIG's initial visit in June 2013 and discussions on
potential conditions found, the NSCEP reported that it recycled
almost 2 million items, consisting of more than 140 tons of
material, between June and October of 2013.
Mm
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL

-------
Conclusion
We believe that the agency should evaluate its publication
storage requirements to effectively determine appropriate
adjustments based on average shipments provided to
customers, as well as based on providing such shipments in
a timely basis to ensure effective storage utilization.
A full OIG report will be issued at the completion of our audit.
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL

-------
Distribution
Appendix A
Office of the Administrator
Deputy Administrator
Assistant Administrator for Administration and Resources Management
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 Administration and Resources Management
Director, Office of Administration, Office of Administration and Resources Management
Director, Office of Policy and Resource Management, Office of Administration and
Resources Management
Director, Cincinnati Office of Administration and Resources Management
Deputy Director, Office of Policy and Resource Management, Office of Administration and
Resources Management
Audit Follow-Up Coordinator, Office of Administration and Resources Management
14-P-0132
9

-------