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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Financial Management
Fiscal Years 2015 and 2014
Financial Statements for the
Pesticide Registration Fund
Report No. 17-F-0315 July 10, 2017
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Report Contributors: Paul Curtis
Wanda Arlington
Safiya Chambers
Robert Hairston
Sheree James
Ethel Lowery
Sheila May
Claire McWilliams
Demetrios Papakonstantinou
Cynthia Poteat
Bill Samuel
Lynda Taylor
Abbreviations
EPA U.S. Environmental Protection Agency
FMFIA Federal Managers' Financial Integrity Act
FY Fiscal Year
OIG Office of Inspector General
OMB Office of Management and Budget
PRIA Pesticide Registration Improvement Act
PRIA 3 Pesticide Registration Improvement Extension Act
U.S.C. United States Code
Cover photo: Pesticides being applied. (EPA photo)
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Office of Inspector General
July 10, 2017
At a Glance
Why We Did This Review
The Pesticide Registration
Improvement Act (PRIA)
requires that we perform an
annual audit of the Pesticide
Registration Fund (known as
the PRIA Fund) financial
statements.
To expedite the registration
of certain pesticides,
Congress authorized the
U.S. Environmental Protection
Agency (EPA) to assess and
collect pesticide registration
fees. The fees collected are
deposited into the PRIA Fund.
The agency is required to
prepare financial statements
that present financial
information about the PRIA
Fund. PRIA also requires the
establishment of decision time
review periods for pesticide
registration actions, and
requires the Office of Inspector
General to perform an analysis
of the agency's compliance
with those review periods.
This report addresses the
following EPA goal or
cross-agency strategy:
• Embracing EPA as a high-
performing organization.
Fiscal Years 2015 and 2014 Financial
Statements for the Pesticide Registration Fund
Send all inquiries to our public
affairs office at (202) 566-2391 or
visit www.epa.gov/oiq.
Listing of OIG reports.
Disclaimer of Opinion
We rendered a disclaimer of opinion on
the PRIA Fund financial statements for
fiscal years (FYs) 2015 and 2014,
meaning that we were unable to obtain
sufficient evidence to determine if they
were fairly presented and free of material
misstatement.
Due to the material weakness in
internal controls noted, the agency
cannot provide reasonable
assurance that financial data
provided for the PRIA Fund
accurately reflect the agency's
financial activities and balances.
Internal Control Material Weakness Noted
We noted a material weakness in that the EPA cannot adequately support its
FY 2015 PRIA Fund costs. The EPA's Office of Pesticide Programs receives its
funding from both fees paid by pesticide manufacturers and amounts
appropriated by Congress. In FY 2015, the EPA allocated its pesticide funding to
use appropriated amounts, which would expire, and retained funding received
from fees. Therefore, significant payroll amounts paid from appropriations were
not charged directly to the PRIA Fund or other pesticide programs. This resulted
in the loss of the audit trail for reporting separate costs and liabilities for the PRIA
Fund and other pesticide programs. The EPA has taken corrective actions based
on what we found during our prior PRIA Fund financial statements audit report;
accordingly, we are making no additional recommendations on this issue. In
October 2016, the agency implemented a new enhancement for transactions that
will commence in FY 2017. However, this does not impact or correct the material
weakness for the FY 2015 statements, nor the disclaimer of opinion.
Compliance With Applicable Laws and Regulations
The EPA did not meet the minimum requirement for funding worker protection
activities in FY 2015. The EPA used approximately $480,000 for worker
protection activities in FY 2015. However, the Pesticide Registration
Improvement Extension Act of 2012 (PRIA 3) requires the EPA to use
approximately 1/17 of the amount in the PRIA Fund, but not less than $1 million,
to enhance scientific and regulatory activities relating to worker protection per
year. As a result, the EPA did not meet the statutory target set out by PRIA 3 of
at least $1 million.
We recommend that the Assistant Administrator for Chemical Safety and
Pollution Prevention develop an adequate plan for funding worker protection
activities that would require that the minimum target of $1 million set out by
PRIA 3 is met. The EPA agreed with our finding and recommendation. The
recommendation has been resolved with corrective actions pending.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
July 10,2017
MEMORANDUM
SUBJECT: Fiscal Years 2015 and 2014 Financial Statements for the Pesticide Registration Fund
Report No. 17-F-0315
This is our report on the audit of the U.S. Environmental Protection Agency's (EPA's) fiscal years 2015
and 2014 financial statements for the Pesticide Registration Fund, conducted by the EPA Office of
Inspector General (OIG). The project number for this audit was OA-FY16-0079. 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.
The offices with primary jurisdiction over the issues discussed in this report are the Office of Pesticide
Programs within the Office of Chemical Safety and Pollution Prevention, and the Office of the
Controller within the Office of the Chief Financial Officer.
Action Required
In accordance with EPA Manual 2750, your office provided planned corrective actions in response to
the OIG recommendation, and that recommendation is considered resolved. Therefore, you are not
required to provide a written response to this final report. Please update the EPA's Management Audit
Tracking System as you complete planned corrective actions. Should you choose to provide an
additional response, that response will be posted on the OIG's public website, along with our
memorandum commenting on your response. Your response 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.
FROM: Paul C. Curtis, Director
Financial Statement Audits
TO:
Wendy Cleland-Hamnett, Acting Assistant Administrator
Office of Chemical Safety and Pollution Prevention
David Bloom, Acting Chief Financial Officer
We will post this report to our website at www.epa.gov/oig.
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Fiscal Years 2015 and 2014 Financial Statements
for the Pesticide Registration Fund
17-F-0315
Table of C
Inspector General's Report on the Fiscal Years 2015 and 2014
Financial Statements for the Pesticide Registration Fund
Report on the Financial Statements 1
Report on Internal Control Over Financial Reporting 2
Tests of Compliance With Laws, Regulations, Contracts and Grant Agreements 4
Management's Discussion and Analysis Section of the Financial Statements 4
Prior Audit Coverage 4
Agency Comments and OIG Evaluation 5
Attachments
1 Material Weakness 6
EPA Cannot Adequately Support PRIA Fund Costs 7
2 Compliance With Laws and Regulations 9
EPA Did Not Comply With PRIA for Worker Protection Activities 10
3 Status of Recommendations and Potential Monetary Benefits 11
Appendices
A Fiscal Years 2015 and 2014 Pesticide Registration Fund
Financial Statements
B Agency Response to Draft Report
C Distribution
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Inspector General's Report on the
Fiscal Years 2015 and 2014 Financial Statements
for the Pesticide Registration Fund
The Administrator
U.S. Environmental Protection Agency
Report on the Financial Statements
We have audited the accompanying financial statements of the Pesticide
Registration Fund (known as the PRIA Fund), which comprise the balance sheet
as of September 30, 2015, and September 30, 2014, and the related statements of
net cost, changes in net position, and statement of budgetary resources for the
years then ended; and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with accounting principles generally accepted
in the United States of America. This includes the design, implementation and
maintenance of internal controls relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on
conducting the audit in accordance with generally accepted government auditing
standards; the standards applicable to financial statements contained in
Government Auditing Standards, issued by the Comptroller General of the United
States; and Office of Management and Budget (OMB) Bulletin 15-02, Audit
Requirements for Federal Financial Statements. Because of the matter described
in the Basis for Disclaimer of Opinion section, however, we were not able to
obtain sufficient, appropriate audit evidence to provide a basis for an audit
opinion.
Basis for Disclaimer of Opinion
The U.S. Environmental Protection Agency (EPA) cannot adequately support
payroll liabilities on the PRIA Fund's Balance Sheet as of September 30, 2015 and
2014; and Income/Expense from other appropriations on the statements of the
PRIA Fund's Net Costs and Changes in Net Position for the years ended
September 30, 2015 and 2014.
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In fiscal years (FY) 2015 and 2014, the EPA allocated its pesticides appropriated
funding to pay for payroll costs. By paying significant payroll amounts from
appropriations versus from fees collected by the PRIA Fund, the EPA lost the
audit trail to properly support how much of the PRIA payroll expenses were paid
for by appropriations. We were unable to satisfy ourselves by other audit
procedures concerning the adequacy of the amounts allocated, consistency of
application, or reasonableness of the payroll expenses between the PRIA Fund
and the EPA's other pesticide programs, including payroll accruals, as of and for
the years ended September 30, 2015 and 2014. As a result, we were unable to
determine whether any adjustments were necessary relating to payroll and related
accounts, income/expense from other appropriations, and payroll liabilities.
Disclaimer of Opinion
Because of the significance of the matter described in the Basis for Disclaimer of
Opinion section above, we have not been able to obtain sufficient, appropriate
audit evidence to provide a basis for an audit opinion. Accordingly, we do not
express an opinion on the PRIA Fund's financial statements, and the related
accompanying notes as of and for the years ended September 30, 2015 and 2014.
Report on Internal Control Over Financial Reporting
Opinion on Internal Control. In planning and performing our audit, we
considered the EPA's internal control over financial reporting by obtaining an
understanding of the agency's internal control, determining whether internal
control had been placed in operation, assessing control risk, and performing tests
of controls. We did this as a basis for designing our auditing procedures for the
purpose of expressing an opinion on the financial statements and to comply with
OMB audit guidance, not to express an opinion on internal control. Accordingly,
we do not express an opinion on internal control over financial reporting nor on
management's assertion on internal control included in Management's Discussion
and Analysis. We limited our internal control testing to those controls necessary
to achieve the objectives described in OMB Bulletin No. 15-02,
Audit Requirements for Federal Financial Statements. We did not test all internal
control relevant to operating objectives as broadly defined by the Federal
Managers' Financial Integrity Act of 1982 (FMFIA).
Material Weakness and Significant Deficiencies. Our consideration of the
internal control over financial reporting would not necessarily disclose all matters
in the internal control over financial reporting that might be significant
deficiencies. A deficiency in internal control exists when the design or operation
of a control does not allow management or employees, in the normal course of
performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will
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not be prevented, or detected and corrected in a timely basis. A significant
deficiency is a deficiency, or combination of deficiencies, in internal control that
is less severe than a material weakness, yet important enough to merit attention by
those charged with governance.
Because of inherent limitations in internal control, misstatements, losses or
noncompliance may nevertheless occur and not be detected. We noted a certain
matter discussed below and detailed in Attachment 1 and Prior Audit Coverage,
involving the internal control and its operation that we consider to be material.
Material Weakness
The EPA cannot adequately support its FY 2015 PRIA Fund costs. OMB policy
states that basic financial statements include a Balance Sheet and Statement of
Net Costs, and that the statement of net costs should include the net costs of
operations. The EPA's Office of Pesticide Programs receives its funding from
both fees paid by pesticide manufacturers and from amounts appropriated by
Congress. In FY 2015, the EPA allocated its pesticide funding to use appropriated
amounts, which would expire, and retained funding received from fees. Therefore,
significant payroll amounts paid from appropriations were not charged directly to
the PRIA Fund or other pesticide programs. This resulted in the loss of the audit
trail for reporting separate costs and liabilities for the PRIA Fund and other
pesticide programs. The EPA developed an allocation methodology to distribute
costs funded by EPA appropriations back to the PRIA Fund, but the methodology
is based upon inconsistent charging of payroll costs between the PRIA Fund and
EPA appropriations.
Because the EPA cannot adequately support total FY 2015 PRIA Fund costs and
liabilities, and because we were unable to determine by other audit procedures the
adequacy of amounts allocated, consistency of application, or reasonableness of
net costs and liabilities, we disclaimed an opinion on the PRIA Fund's FY 2015
financial statements. We consider the EPA's inability to support the PRIA Fund
payroll costs a material weakness.
Comparison of EPA's FMFIA Report With Our Evaluation of
Internal Controls
OMB Bulletin No. 15-02, Audit Requirements for Federal Financial Statements,
requires the OIG to compare material weaknesses disclosed during the audit with
those material weaknesses reported in the agency's FMFIA report that relate to
the financial statements, and identify material weaknesses disclosed by the audit
that were not reported in the agency's FMFIA report. The agency's FMFIA report
is prepared and submitted at the consolidated level, of which the PRIA Fund is a
component.
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The agency did not report any material weaknesses at the consolidated level for
FY 2015 that would impact the PRIA Fund.
Tests of Compliance With Laws, Regulations, Contracts and
Grant Agreements
The EPA management is responsible for complying with laws, regulations,
contracts and grant agreements applicable to the agency. As part of obtaining a
reasonable assurance as to whether the agency's financial statements are free of
material misstatement, we performed tests of its compliance with certain
provisions of laws, including those governing the use of budgetary authority,
regulations, contracts and grant agreements that have a direct effect on the
determination of material amounts and disclosures in PRIA Fund financial
statements. The objective of our audit, including our tests of compliance with
provisions of applicable laws, regulations, contracts, and grant agreements,
was not to provide an opinion on compliance with such provisions. Accordingly,
we do not express such an opinion. We did not identify any instances of
noncompliance that would result in a material misstatement to the audited
financial statements. We did notice one noncompliance with the use of funds for
worker protection activities.
The EPA did not meet the minimum requirement for funding worker protection
activities in FY 2015. The EPA used approximately $480,000 for worker
protection activities in FY 2015. However, the Pesticide Registration
Improvement Extension Act of 2012 (PRIA 3) requires the EPA to use
approximately 1/17 of the amount in the PRIA Fund, but not less than $1 million,
to enhance scientific and regulatory activities relating to worker protection per
year. As a result, the EPA did not meet the statutory target set out by PRIA 3 of at
least $1 million.
Management's Discussion and Analysis Section of the
Financial Statements
Our audit work related to the information presented in the Management's
Discussion and Analysis of the pesticide program included comparing the
overview information with information in the EPA's principal financial
statements for consistency. We did not identify any material inconsistencies
between the information presented in the two documents.
Prior Audit Coverage
During our previous audit of the PRIA financial statements—Fiscal Years 2014
and 2013 Financial Statements for the Pesticide Registration Fund (Report No.
16-F-0323). issued September 22, 2016—we reported a material weakness
regarding inadequate support of costs. Specifically, the EPA could not adequately
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support $28 million of its FY 2014 PRIA Fund costs. The EPA's Office of
Pesticide Programs receives its funding both from fees paid by pesticide
manufacturers and from amounts appropriated by Congress. In FY 2014, the EPA
allocated its pesticide funding to use appropriated amounts, which would expire,
and retained funding received from fees. Therefore, significant payroll amounts
paid from appropriations were not charged directly to the PRIA Fund or other
pesticide programs. This resulted in the loss of the audit trail for reporting
separate costs and liabilities for the PRIA Fund and other pesticide programs.
The agency has taken action to correct this weakness. As noted in the prior report,
the agency agreed with our finding and believes that the timekeeping system's cost
allocation enhancement will allow for the creation of an audit trail to capture costs
incurred by the PRIA Fund and other appropriations that support PRIA-related
activities. The agency implemented a new enhancement in October 2016. The
enhancement is for transactions commencing in FY 2017, and does not impact or
correct the material weakness, and the reason for the disclaimer of opinion for the
FY 2015 statements.
Agency Comments and OIG Evaluation
The agency agreed with our finding and recommendation. We concur with the
planned corrective action. The agency's full written response is in Appendix B.
Paul C. Curtis
Certified Public Accountant
Director, Financial Statement Audits
Office of Inspector General
U.S. Environmental Protection Agency
July 6,2017
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Attachment 1
Material Weakness
Table of Contents
1 - EPA Cannot Adequately Support PRIA Fund Costs 7
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1 - EPA Cannot Adequately Support PRIA Fund Costs
The EPA cannot adequately support its FY 2015 PRIA Fund costs. OMB policy states that basic
financial statements include a Balance Sheet and Statement of Net Costs, and that the statement of net
costs should include the net costs of operations. The EPA's Office of Pesticide Programs receives its
funding from both fees paid by pesticide manufacturers and from amounts appropriated by Congress.
In FY 2015, the EPA allocated its pesticide funding to use appropriated amounts, which would
expire, and retained funding received from fees. Therefore, significant payroll amounts paid from
appropriations were not charged directly to the PRIA Fund or other pesticide programs. This resulted
in the loss of the audit trail for reporting separate costs and liabilities for the PRIA Fund and other
pesticide programs. The EPA developed an allocation methodology to distribute costs funded by EPA
appropriations back to PRIA, but the methodology is based upon inconsistent charging of payroll
costs between the PRIA Fund and EPA appropriations. Because the EPA cannot adequately support
total FY 2015 PRIA Fund costs and liabilities, and because we were unable to determine by other
audit procedures the adequacy of amounts allocated, consistency of application, or reasonableness of
net costs and liabilities, we disclaimed an opinion on PRIA's FY 2015 financial statements. We
consider the EPA's inability to support the PRIA Fund payroll costs a material weakness.
PRIA requires that a set of financial statements be prepared to provide an annual accounting of
expenditures and collections for the PRIA program. OMB Circular A-136 requires that these
statements include a Statement of Net Costs, under which net costs of operations are reported.
The PRIA Fund's costs of operations are supported by several sources: maintenance fees,
registration and reregi strati on fees, and EPA appropriations.
In FY 2015, the EPA allocated its pesticide funding to use appropriated amounts that would
expire, and to retain funding received from fees. Significant payroll amounts were paid from
appropriations and not charged directly to PRIA. This resulted in the loss of the audit trail for
reporting separate PRIA Fund costs. The EPA adopted an allocation methodology to determine
the amount of appropriated dollars used to support the PRIA Fund and the EPA's other pesticide
programs. However, this methodology is based upon inconsistent and arbitrary charging of the
Office of Pesticide Programs' payroll costs between the PRIA Fund and the EPA's other
pesticide programs. The inconsistent and arbitrary charging makes the allocation base unreliable,
and the methodology cannot support the PRIA Fund operations costs. We consider the inability
of the EPA to support FY 2015 PRIA Fund costs to be a material weakness.
We did not determine overall payroll costs for the EPA's pesticide programs to be inaccurate.
Our findings are limited to the specific allocation of appropriated amounts to cover payroll costs
of the EPA's pesticide programs and accounting for those costs at the program level. At the
program level (specifically, for the PRIA Funds), the agency could not provide adequate support,
and we could not audit the payroll costs for those funds paid for by appropriated amounts to
opine on the adequacy of such amounts.
We previously reported on this issue in the FY 2014 PRIA Fund Financial Statements audit report,
and the agency agreed with this finding. In FY 2015, the EPA indicated it made modifications to its
accounting system, which purportedly will address this material weakness. The agency believed that
the timekeeping system's cost allocation enhancement, which went live in October 2016, will allow
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for the creation of an audit trail to capture costs incurred by the PRIA Fund and by other
appropriations that support PRIA-related activities.
We make no recommendations regarding this finding.
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Attachment 2
Compliance With Laws and Regulations
Table of Contents
2 - EPA Did Not Comply With PRIA for Worker Protection Activities 10
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2 - EPA Did Not Comply With PRIA for Worker Protection Activities
The EPA did not meet the minimum requirement for funding worker protection activities in
FY 2015. The EPA used approximately $480,000 for worker protection activities in FY 2015.
However, the Pesticide Registration Improvement Extension Act of 2012 (PRIA 3) requires the
EPA to use approximately 1/17 of the amount in the PRIA Fund, but not less than $1 million, to
enhance scientific and regulatory activities relating to worker protection per year. As a result, the
EPA did not meet the statutory target set out by PRIA 3 of at least $1 million.
PRIA 3 states: "For each of fiscal years 2013 through 2017, the Administrator shall use
approximately 1/17 of the amount in the Fund (but not less than $1 million) to enhance scientific
and regulatory activities relating to worker protection."1 The approximately $480,000 the EPA
used for this purpose in FY 2015 was $520,000 less than the established minimum target of
$1 million. The agency indicated this occurred because a grantee withdrew from an EPA-
awarded grant related to the PRIA Fund.
Recommendation
We recommend the Assistant Administrator for Chemical Safety and Pollution Prevention:
1. Develop an adequate plan for funding worker protection activities that would require that
the minimum target of $1 million set out by the Pesticide Registration Improvement
Extension Act of 2012 is met.
Agency Comments and OIG Evaluation
The agency agreed with our finding and recommendation, and we agree with the planned
corrective action.
Codified at 7 U.S.C. § 136w-8(c)(3)(B)(i).
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Attachment 3
Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
Potential
Planned Monetary
Rec. Page Completion Benefits
No. No. Subject Status1 Action Official Date (In $000s)
1 10 Develop an adequate plan for funding worker protection R Assistant Administrator for 9/30/17
activities that would require that the minimum target of Chemical Safety and
$1 million set out by the Pesticide Registration Improvement Pollution Prevention
Extension Act of 2012 is met.
1 C = Corrective action completed.
R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.
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Appendix A
Fiscal Years 2015 and 2014 Pesticide Registration Fund
Financial Statements
vast
u.
%
Produced by the U.S. Environmental Protection Agency
Office of the Chief Financial Officer
Office of Controller
17-F-0315
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TABLE OF CONTENTS
Management's Discussion and Analysis
Principal Financial Statements
17-F-0315
EPA's FY 2015 Annual PRIA Financial Statements
1
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Management's Discussion and Analysis
EPA's FY 2015 Annual PRIA Financial Statements
2
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Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food,
Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act (FQPA) of
1996, the EPA's Pesticide Program registers new pesticides and re-evaluates existing pesticides
to ensure that they can be used safely and that levels of residue in food and animal feed are safe
(there is a reasonable certainty of no harm). The agency must also conclude that, when used in
accordance with labeling and common practices, the product will not generally cause
unreasonable adverse effects on the environment.
The Pesticide Registration Improvement Act (PRIA) of 2003 established the Pesticide
Registration Fund. PRIA authorizes the collection of Registration service fees, which are
deposited into the Registration Fund and made available for obligation to the extent provided in
appropriation acts, and are available without fiscal year limitation.
Pesticide Registration
Under FIFRA and FFDCA pesticides must be registered by the EPA. The passage of PRIA
introduced deadlines for the agency to complete certain registration actions. EPA expedites the
registration of reduced-risk pesticide uses, which generally pose lower risks to people and the
environment. Accelerated pesticide reviews provide an incentive for industry to develop and
register lower risk pesticides, and the availability of these reduced-risk pesticides provides
alternatives to older, potentially more harmful products currently on the market.
PRIA prescribed the amount of the registration service fee and the corresponding decision
review time for various categories of registration action. The goal is to create a more predictable
evaluation process for affected pesticide registrants and couple the collection of individual fees
with specific decision-making periods. The legislation also promotes shorter decision review
periods for reduced-risk pesticide applications. PRIA 1, effective on March 23, 2004, authorized
collection of registration fees through FY 2008. The Pesticide Registration Improvement
Renewal Act (PRIA 2), effective on October 1, 2007, authorized collection of registration fees
through FY 2012. The Pesticide Registration Improvement Extension Act (PRIA 3) was
effective on October 1, 2012, authorized collection of registration fees through FY 2017.
For a pending or a new application covered by PRIA to be deemed complete and subject to the
decision review periods, a registrant is required to pay the applicable fee or receive a waiver
from the fee. For most applications, the decision review period starts 21 days after submission of
the application, provided that the fee has been paid, fee waiver granted or in the case of a 75% or
50% fee waiver under PRIA 3, the waiver has been granted and the remaining fee has been paid.
The legislation provides fee waivers for certain categories of small businesses and minor uses1.
1 Minor use pesticides are those that produce relatively little revenue for their manufacturers, for a variety of
reasons. They may be registered for a seldom seen pest, or for a crop that is not grown by a large number of
producers. However, minor crops include some high revenue fruit, vegetable, and ornamental crops.
17-F-0315
EPA's FY 2015 Annual PRIA Financial Statements
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Exemption from the requirement to pay a registration service fee is continued under PRIA 3 for
applications solely associated with IR-4 petitions2. Applications from federal and state agencies
are also exempt from registration service fees. If the registrant requests a waiver or reduction of
the fee, the decision review period will begin when the agency grants such request or in the case
of small business fee waivers, no more than 60 days after receipt of the waiver application. If the
agency determines that a fee is required and the waiver is not granted, the decision review period
starts after the fee is collected.
Applications received prior to October 1, 2007, were covered by PRIA 1. Applications received
up to September 30, 2012, were covered by PRIA 23 and applications received on or after
October 1, 2012, are covered by PRIA 3. PRIA 3 contains the same audit provision as PRIA 2.
PRIA 3 includes new authority to reject an application if it fails a preliminary technical screen.
PRIA 3 also increases the fee categories or types of applications covered by PRIA from 140 to
189 and maintains set-asides to support worker protection and applicator training activities as
well as IPM grants at levels comparable to PRIA 2.
Enforcement and Compliance Assurance Program Description
The Pesticide Enforcement and Compliance Assurance Program focuses on pesticide product
and user compliance. These include problems relating to pesticide worker safety, certification
and training of applicators, ineffective antimicrobial products, food safety, adverse effects, risks
of pesticides to endangered species, pesticide containers and containment facilities, and e-
commerce and misuse. The enforcement and compliance assurance program provides
compliance assistance to the regulated community through its National Agriculture Compliance
Assistance Center, seminars, guidance documents, brochures, and other forms of communication
to ensure knowledge of and compliance with environmental laws.
EPA's grant support to state and tribal pesticide programs emphasizes its commitment to
maintaining a strong compliance and enforcement presence. Agency FIFRA Cooperative
Agreement priorities for FY 2015 - FY 2017 include the enforcement of worker protection
standards and pesticide applicator certification; compliance monitoring and enforcement
activities related to the pesticide container and containment rules, the revised soil fumigant
labels, compliance of supplemental distributor products, contact manufacturing and program
performance reporting. Core program activities include inspections of producing establishments;
dealers/distributors/retailers; e-commerce; imports and exports, and pesticide misuse.
2 The IR-4 (Interregional Research Project No.4) program is involved in making sure that pesticides are registered
for use on minor crops. IR-4 helps by conducting research on minor use pesticides, pesticides that would not
otherwise be profitable to manufacture.
3Out of approximately 7,889 actions completed under PRIA 2, more than 99.0% were completed on or before the
PRIA 2 due date.
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EPA's FY 2015 Annual PRIA Financial Statements
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Additionally, through the Cooperative Agreements we support inspector training and training for
state/tribal senior managers, scientists, and supervisors.
Highlights and Accomplishments
Registration Financial Perspective
During FY 2015, the Agency's obligations charged against the PRIA Fund for the cost of
registration were $15,655 million and 69.2 work-years. Of this amount, OPP obligated $9.8
million in PC&B.
Appropriated funds are used in addition to Registration funds. In FY 2015, the Enacted
Operating Plan included approximately $34.2 million in appropriated funds for registration
activities.
The Fund has two types of receipts: fee collections and interest earned on investments. Of the
$17.1 million in FY 2015 net receipts, more than 99.9% were fee collections.
Registration Program Performance Measures
The following measures support the program's strategic goals ensuring the safety of chemicals
and Pollution Prevention.
Measure 1: Number of new active ingredients registered.
Results: In FY 2015, EPA registered 17 new active ingredients, including 9 biopesticides, 1
antimicrobial, and 7 conventional pesticides. In addition, EPA approved an import tolerance for
1 new active ingredient. This measure includes both reduced-risk and non-reduced-risk
pesticides.
Measure 2: Progress in Registering Reduced-risk Pesticides.
Results: In FY 2015, EPA registered 11 reduced-risk new active ingredients, including 2
conventional pesticides and 9 biopesticides. Biological pesticides are derivedfrom such natural
materials as animals, plants, bacteria, and certain minerals. They are usually less toxic and are
typically considered safer pesticides than the traditional conventional chemicals; therefore, the 9
biopesticide new active ingredients are counted as reduced-risk pesticides. Conventional
"reduced risk" pesticides have one or more of the following advantages over currently
registered pesticides: low impact on human health, low toxicity to non-target organisms, low
potential for groundwater contamination, lower use rates, low pest resistance potential, and
compatibility with integrated pest management strategies.
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Measure 3: Number of New Food Uses Registered.
Results: EPA registered 113 new food uses for previously registered active ingredients. Of
these new uses, 108 food uses were for conventional pesticides, 1 was for an antimicrobial
pesticide, and 4 were for biopesticides.
Measure 4: Progress in Registering Reduced-risk New Uses.
Results: Included in the new food uses registered is a reduced-risk use associated with 1
conventional pesticide (a mosquito adulticide for use across all crops), as well as the 4
biopesticide new uses.
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PRINCIPAL
FINANCIAL STATEMENTS
EPA's FY 2015 Annual PRIA Financial Statements
7
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Principal Financial Statements
Financial Statements
Balance Sheet 9
Statement of Net Cost 10
Statement of Changes in Net Position 11
Statement of Budgetary Resources 12
Notes to Financial Statements
Note 1. Summary of Significant Accounting Policies 13
Note 2. Fund Balance with Treasury 17
Note 3. Other Assets 17
Note 4. General Property, Plant and Equipment 17
Note 5. Other Liabilities 17
Note 6. Payroll and Benefits Payable, Non-Federal 18
Note 7. Income and Expenses from Other Appropriations 18
Note 8. Exchange Revenues, Statement of Net Cost 20
Note 9. Intragovernmental Costs and Exchange Revenue 20
Note 10. Reconciliation of Net Cost of Operations to Budget (formerly the
Statement of Financing) 21
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United States Environmental Protection Agency
PRIA
Balance Sheet
As of September 30, 2015 and 2014
(Dollars in Thousands)
FY 2015 FY 2014
ASSETS
Intragovernmental:
Fund Balance With Treasury (Note 2) $
Other (Note 3)
20,658
6
18,667
Total Intragovernmental
20,664
18,667
Accounts Receivable, Net
Property, Plant & Equipment, Net (Note 4)
15
1,900
2,205
Total Assets
22,579
20,872
LIABILITIES
Intragovernmental:
Accounts Payable and Accrued Liabilities
Other (Note 5)
25
204
54
135
Total Intragovernmental
229
189
Accounts Payable and Accrued Liabilities
Payroll and Benefits Payable (Note 6)
Other (Note 5)
555
1,673
19,104
645
850
17,307
T otal Liabilities
21,561
18,991
NET POSITION
Cumulative Results of Operations - Funds from Dedicated Collections
1,018
1,881
Total Net Position
1,018
1,881
Total Liabilities and Net Position $
22,579
20,872
The accompanying footnotes are an integral part of these financial statements
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United States Environmental Protection Agency
PRIA
Statement of Net Cost
For the Fiscal Years Ending September 30, 2015 and 2014
(Dollars in Thousands)
FY 2015
FY 2014
COSTS
Gross Costs (Note 9) $
16,136
16,540
Expenses from Other Appropriations (Note 7)
38,346
27,729
Total Costs
54,482
44,269
Less:
Earned Revenue (Note 8 and 9)
18,985
18,754
NET COST OF OPERATIONS $
35,497
25,515
The accompanying footnotes are an integral part of these financial statements
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United States Environmental Protection Agency
PRIA
Statement of Changes in Net Position
For the Fiscal Years Ending September 30, 2015 and 2014
(Dollars in Thousands)
Cumulative Results of Operations:
Net Position - Beginning of Period
Beginning Balances, as Adjusted
Budgetary Financing Sources:
Nonexchange Revenue - Securities Investment
Nonexchange Revenue - Other
Transfers In/Out
Income from Other Appropriations (Note 7)
Total Budgetary Financing Sources
Other Financing Sources (Non-Exchange)
Imputed Financing Sources
Total Other Financing Sources
Net Cost of Operations
Net Change
Cumulative Results of Operations
FY 2015
FY 2014
1,881
1,402
1,881
1,402
1
1
(4,067)
(1,926)
(164)
162
38,346
27,729
34,116
25,967
518
28
518
28
(35,497)
(25,515)
(863)
479
1,018
1,881
The accompanying footnotes are an integral part of these financial statements
EPA's FY 2015 Annual PRIA Financial Statements
11
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United States Environmental Protection Agency
PRIA
Statement of Budgetary Resources
For the Fiscal Years Ending September 30, 2015 and 2014
(Dollars in Thousands)
FY 2015
BUDGETARY RESOURCES
Unobligated balance, brought forward, October 1:
Unobligated Balance Brought Forward, October 1, as adjusted
Recoveries of prior year unpaid obligations
Unobligated balance from prior year budget authority, net
Appropriations (discretionary and mandatory)
Spending Authority from offsetting collection (discretionary and mandatory)
Total Budgetary Resources
12,510
12,510
227
12,737
16,081
OH
28,804
FY 2014
11,719
11,719
15
11,734
16,817
28,551
STATUS OF BUDGETARY RESOURCES
Obligations Incurred 15,264 16,041
Unobligated Balance, end of year:
Apportioned 13,540 273
Unapportioned 12,237
Total Unobligated balance, end of period 13,540 12,510
Total Status of Budgetary Resources 28,804 28,551
CHANGE IN OBLIGATED BALANCE
Unpaid Obligations:
Unpaid obligations, brought forward, October 1 (gross)
5,338
5,723
Obligated balance, start of year (net), before adjustments
5,338
5,723
Obligated balance, start of year (net), as adjusted
5,338
5,723
Obligations incurred, net
15,264
16,041
Outlays (gross)
(14,090)
(16,411)
Recoveries of prior year unpaid obligations
(227)
(15)
Obligated balance, end of period
Unpaid obligations, end of year (gross)
6,285
5,338
Obligated balance, end of period (net)
6,285
5,338
BUDGET AUTHORITY AND OUTLAYS, NET:
Budget authority, gross (discretionary and mandatory)
16,067
16,817
Actual offsetting collections (discretionary and mandatory)
14
-
Budget Authority, net (discretionary and mandatory)
16,081
16,817
Outlays, gross (discretionary and mandatory)
14,090
16,411
Actual offsetting collections (discretionary and mandatory)
14
-
Outlays, net (discretionary and mandatory)
14,104
16,411
Distributed offsetting receipts
(16,081)
(16,674)
Agency outlays, net (discretionary and mandatory)
$ (1,977)
(263)
The accompanying footnotes are an integral part of these financial statements
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Environmental Protection Agency
PRIA
Notes to Financial Statements
For the Fiscal Years Ending September 30, 2015 and 2014
(Dollars in Thousands)
Note 1. Summary of Significant Accounting Policies
A. Reporting Entity
The U.S. Environmental Protection Agency (EPA or Agency) was created in 1970 by executive
reorganization from various components of other Federal agencies in order to better marshal and
coordinate federal pollution control efforts. The Agency is generally organized around the media
and substances it regulates — air, water, land, hazardous waste, pesticides and toxic substances.
The Pesticide Registration Fund (PRIA) is authorized under the Pesticide Registration
Improvement Act of 2003 (which amended the Federal Insecticide, Fungicide, and Rodenticide
Act (FIFRA)), and became effective on March 23, 2004. This Act authorizes the EPA to assess
and collect pesticide registration service fees on applications submitted to register pesticides
covered by this Act, as well as assess and collect fees to register new active ingredients not listed
in the Registration Division 2003 Work Plan of the Office of Pesticide Programs. The Pesticide
Registration Improvement Renewal Act (commonly referred to as PRIA II) extended the
authority to collect pesticide registration service fees through FY 2012. PRIA II became
effective October 1, 2007. PRIA II was reauthorized with the passage of the Pesticide
Registration Improvement Extension Act (referred to as PRIA III) on September 28, 2012 and
became effective 2 days later on October 1, 2012. The PRIA Fund is accounted for under
Treasury symbol number 68X5374.
The PRIA fund may charge some administrative costs directly to the fund and charge the
remainder of the administrative costs to Agency-wide appropriations. Costs funded by Agency-
wide appropriations for FYs 2015 and 2014 were $38,346 thousand and $27,729 thousand,
respectively. This amount was included as Income from Other Appropriations on the Statement
of Changes in Net Position and as Expenses from Other Appropriations on the Statement of Net
Cost for FYs 2015 and 2014. Costs for FY 2015 reflect a change in accounting principles to full
cost, as explained in Paragraph N below.
B. Basis of Presentation
These financial statements have been prepared to report the financial position and results of
operations of the EPA for the Pesticide Registration Fund (PRIA) as required by the Chief
Financial Officers Act of 1990 and the Pesticide Registration Improvement Act (PRIA) of 2003.
In the prior years, pesticide registration was included in the FIFRA financial statements. The
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13
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reports have been prepared from the books and records of the EPA in accordance with Office of
Management and Budget (OMB) Circular A-136 Financial Reporting Requirements, and the
EPA's accounting policies which are summarized in this note. These statements are therefore
different from the financial reports also prepared by the EPA pursuant to OMB directives that are
used to monitor and control the EPA's use of budgetary resources. The balances in these reports
have been updated from the EPA consolidated financial statements to reflect the use of FY 2015
cost factors for calculating imputed costs for Federal civilian benefits programs. These updates
impact the Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position.
C. Budgets and Budgetary Accounting
Funding for PRIA is provided by fees collected from industry to offset costs incurred by EPA in
carrying out these programs. Each year the EPA submits an apportionment request to OMB
based on the anticipated collections of industry fees.
D. Basis of Accounting
Generally Accepted Accounting Principles (GAAP) for Federal entities is the standard
prescribed by the Federal Accounting Standards Advisory Board (FASAB), which is the official
standard setting body for the federal government. The financial statements are prepared in
accordance with GAAP for federal entities.
Transactions are recorded on an accrual accounting basis and a budgetary basis. Under the
accrual method, revenues are recognized when earned and expenses are recognized when a
liability is incurred, without regard to receipt or payment of cash. Budgetary accounting
facilitates compliance with legal constraints and controls over the use of Federal funds. All
interfund balances and transactions have been eliminated.
E. Revenues and Other Financing Sources
For FYs 2015 and 2014, PRIA received funding from fees collected from registrants requesting
pesticide registrations. For FYs 2015 and 2014, revenues were recognized from fee collections
to the extent that expenses are incurred during the fiscal year.
F. Funds with the Treasury
The PRIA fund deposits receipts and processes disbursements through its operating account
maintained at the U.S. Department of the Treasury.
G. Investments in U. S. Government Securities
Investments in U. S. government securities are maintained by Treasury and are reported at
amortized cost net of unamortized discounts. Discounts are amortized over the term of the
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investments and reported as interest income. PRIA holds the investments to maturity, unless
needed to finance operations of the fund. No provision is made for unrealized gains or losses on
these securities because, in the majority of cases, they are held to maturity.
H. General Property, Plant and Equipment
Purchases of the EPA-held personal equipment are capitalized if the equipment is valued at $25
thousand or more and has an estimated useful life of at least two years. Depreciation is taken on
a basic straight-line method over the specific asset's useful life, ranging from two tol5 years.
The EPA shows property, plant and equipment at net of depreciation on its audited financial
statements.
All funds (except for the Working Capital Fund) capitalize software if those investments are
considered Capital Planning and Investment Control (CPIC) or CPIC Lite systems with the
provisions of SFFAS No. 10, "Accounting for Internal Use Software." Once software enters the
production life cycle phase, it is depreciated using the straight-line method over the specific
asset's useful life ranging from two to 5 years.
I. Liabilities
Liabilities represent the amount of monies or other resources that are likely to be paid by the
Agency as the result of an Agency transaction or event that has already occurred and can be
reasonably estimated. However, no liability can be paid by the Agency without an appropriation
or other collections. Liabilities for which an appropriation has not been enacted are classified as
unfunded liabilities and there is no certainty that the appropriations will be enacted. For PRIA,
liabilities are liquidated from fee receipts, since PRIA receives no appropriation. Liabilities of
the Agency arising from anything other than contracts can be abrogated by the Government
acting in its sovereign capacity.
J. Accrued Unfunded Annual Leave
Annual, sick and other leave is expensed as taken during the fiscal year. Sick leave earned but
not taken is not accrued as a liability. Annual leave earned but not taken as of the end of the
fiscal year is accrued as an unfunded liability. Accrued unfunded annual leave is included in the
Balance Sheet as a component of "Payroll and Benefits Payable."
K. Retirement Plan
There are two primary retirement systems for Federal employees. Employees hired prior to
January 1, 1987, may participate in the Civil Service Retirement System (CSRS). On January 1,
1984, the Federal Employees Retirement System (FERS) went into effect pursuant to Public Law
99-335. Most employees hired after December 31, 1983, are automatically covered by FERS
and Social Security. Employees hired prior to January 1, 1984, elected to either join FERS and
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EPA's FY 2015 Annual PRIA Financial Statements
15
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Social Security or remain in CSRS. A primary feature of FERS is that it offers a savings plan to
which the Agency automatically contributes one percent of pay and matches any employee
contributions up to an additional four percent of pay. The Agency also contributes the
employer's matching share for Social Security.
With the issuance of SFFAS No. 5, "Accounting for Liabilities of the Federal Government,"
accounting and reporting standards were established for liabilities relating to the federal
employee benefit programs (Retirement, Health Benefits, and Life Insurance). SFFAS No. 5
requires that the employing agencies recognize the cost of pensions and other retirement benefits
during their employees' active years of service. SFFAS No. 5 requires that the Office of
Personnel Management (OPM), as administrator of the CSRS and FERS, the Federal Employees
Health Benefits Program, and the Federal Employees Group Life Insurance Program, provide
federal agencies with the actuarial cost factors to compute the liability for each program.
L. Offsetting Receipts
Beginning in FY 2007 OMB Circular A-13 6, Financial Reporting Requirements, requires that
the amount of distributed offsetting receipts reported in the Statement of Budgetary Resources
(SBR) should equal the amount recorded as offsetting receipts by the Department of the Treasury
(Treasury). Pesticide Registration Fees collected under PRIA are considered to be offsetting
receipts by Treasury.
M. Use of Estimates
The preparation of financial statements requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ from those
estimates.
N. Prior Period Adjustments and Restatements
Prior period adjustments, if any, are made in accordance with SFFAS No. 21, "Reporting
Corrections of Errors and Changes in Accounting Principles." Specifically, prior period
adjustments will only be made for material prior period errors to: (1) the current period financial
statements, and (2) the prior period financial statements presented for comparison. Adjustments
related to changes in accounting principles will only be made to the current period financial
statements, but not to prior period financial statements presented for comparison.
In fiscal year 2014, EPA elected to change an accounting principle and use the full cost of
expenses from other appropriations in accordance with SFFAS No. 4, "Managerial Costs
Accounting Standards and Concepts". See Note 7 for additional information.
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Note 2. Fund Balance with Treasury
FY 2015 FY 2014
Revolving Funds: Entity Assets $ 20,658 18,667
Note 3. Other Assets-Advances to Working Capital Fund
PRIA advances funds to the EPA's Working Capital Fund to pay for computer, postage, and
other administrative support services. As of September 30, 2015 and 2014, funds advanced that
will be applied to future costs as incurred were $6 thousand and $0 respectively.
Note 4. General Property, Plant and Equipment
General property, plant and equipment consists of the EPA-Held personal property, software,
and software in development.
As of September 30, 2015 and 2014, General Property, Plant and Equipment consist of the
following:
FY 2015 FY 2014
Acquisition
Accumulated
Net Book
Acquisition
Accumulated
Net Book
Value
Depreciation
Value
Value
Depreciation
Value
EPA-Held Equipment
$ 173
(167)
6
411
(372)
39
Software
6,019
(4,125)
1,894
6,019
(3,853)
2,166
Total
$ 6,192
(4,292)
1,900
6,430
(4,225)
2,205
Note 5. Other Liabilities
For FYs 2015 and 2014, Payroll and Benefits Payable, non-federal, are presented on a separate
line of the Balance Sheet and in a separate footnote (see Note 6).
FY 2015 FY 2014
Other Intragovernmental Liabilities -
Covered by Budgetary Resources
Employer Contributions - Payroll 5
i 204
135
Total
204
135
Other Non-Federal Liabilities - Covered
by Budgetary Resources
Advances from Non-Federal Entities
19,104
17,307
Total $ 19,104
17,307
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EPA's FY 2015 Annual PRIA Financial Statements
17
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Note 6. Payroll and Benefits Payable, Non-Federal:
Covered by Budgetary Resources
Accrued Payroll Payable to Employees
Withholdings Payable
Thrift Savings Plan Benefits Payable
Total
Not Covered by Budgetary Resources
Unfunded Annual Leave
Total
FY 2015
FY 2014
$ 820
663
191
61
41
30
1,052
754
621
96
$ 621 96
At various periods throughout FY 2015 and FY 2014 employees with their associated payroll
costs were transferred from PRIA to the Environmental Programs and Management (EPM)
appropriation. (See graph in Note 7 below showing trend of hours charged per month to the
PRIA fund for FYs 2015 and 2014.) These employees were transferred in order to keep PRIA's
obligations and disbursements within budgetary limits.
This process has led to variations between the year-end liabilities of FYs 2015 and 2014. The
liabilities covered by budgetary resources (both intragovernmental and non-Federal) represent
unpaid payroll and benefits at year-end. For FY 2015 Pay Period 26, eighty six were charging a
portion of their salary and benefits to PRIA. As of September 30, 2015, the liabilities were $204
thousand and $1,052 thousand for employer contributions and accrued funded payroll and
benefits as compared to FY 2014's balances of $135 thousand and $754 thousand, respectively.
In contrast, the unfunded annual leave liability is a longer term liability than the funded
liabilities. At various periods throughout FY 2015 and FY 2014, approximately 109 and 207
employees, respectively, in total have been under PRIA's accountability. As of September 30,
2015 and 2014 liability balances for unfunded annual leave were accrued to cover these
employees for a total of $621 thousand and $96 thousand, respectively.
Note 7. Income and Expenses from Other Appropriations:
The Statement of Net Cost reports program costs that include the full costs of the program
outputs and consist of the direct costs and all other costs that can be directly traced, assigned on a
cause and effect basis, or reasonably allocated to program outputs.
During FYs 2015 and 2014, the EPA had two appropriations which funded a variety of
programmatic and non-programmatic activities across the Agency, subject to statutory
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EPA's FY 2015 Annual PRIA Financial Statements
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requirements. The EPM appropriation was created to fund personnel compensation and benefits,
travel, procurement, and contract activities. Transfers of employees from PRIA to EPM at
various times during FYs 2015 and 2014 (see Note 6) resulted in an increase in payroll expenses
in EPM, and these costs financed by EPM are reflected as an increase in the Expenses from
Other Appropriations on the Statement of Net Cost. The increased financing from EPM is
reported on the Statement of Changes in Net Position as Income from Other Appropriations.
In terms of hours charged to PRIA each month, the transfers of employees and their associated
costs during FYs 2015 and 2014 are shown below. Note that a decrease in hours charged to
PRIA normally signifies an increase in EPM's payroll costs, and vice versa.
C£L
=>
o
>-
o
PRIA - Employee Hours
01 03 05 07
11 13 15 17
PAY PERIODS
19
21 23 25 27
-Hours - 2015
¦ Hours - 2014
The EPM costs related to PRIA are allocated based on specific EPM program codes which have
been designated for Pesticide registration activities. As illustrated below, there is no impact on
PRIA's Statement of Changes in Net Position.
Income from Other Expenses from Other Net
Appropriations Appropriations Effect
FY 2015 $ 38,346 38,346
FY 2014 $ 27,729 27,729
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Note 8. Exchange Revenues, Statement of Net Cost
For FYs 2015 and 2014, the exchange revenues reported on the Statement of Net Cost consists of
non-Federal amounts.
Note 9. Intragovernmental Costs and Exchange Revenue
COSTS: FY 2015 FY 2014
Intragovernmental $ 2,985 3,256
With the Public 13,151 13,284
Expenses from Other Appropriations 38,346 27,729
Total Costs 54,482 44,269
REVENUE
With the Public 18,985 18,754
Total Revenue 18,985 18,754
NET COST OF OPERATIONS $ 35,497 25,515
Intragovernmental costs relate to the source of the goods or services not the classification of the
related revenue.
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Note 10. Reconciliation of Net Cost of Operations to Budget (formerly the Statement of
Financing)
FY 2015 FY 2014
RESOURCES USED TO FINANCE ACTIVITIES:
Budgetary Resources Obligated
Obligations Incurred $
15,264
16,041
Less: Spending Authority from Offsetting Collections and Recoveries
(213)
(15)
Obligations, Net of Offsetting Collections
15,051
16,026
Less: Offsetting Receipts
(16,081)
(9,257)
Net Obligations
(1,030)
6,769
Other Resources
Imputed Financing Sources
518
28
Income from Other Appropriations
38,346
27,729
Net Other Resources Used to Finance Activities
38,864
27,757
Total Resources Used To Finance Activities
37,834
34,526
RESOURCES USED TO FINANCE ITEMS
NOT PART OF THE NET COST OF OPERATIONS:
Change in Budgetary Resources Obligated
(248)
1,488
Resources that Fund Prior Periods Expenses
-
(522)
Offsetting Receipts Not Affecting Net Cost
16,081
9,257
Resources that Finance Asset Acquistion
-
(1,318)
Total Resources Used to Finance Items Not Part of the Net Cost of Operations
15,833
8,905
Total Resources Used to Finance the Net Cost of Operations
53,667
43,431
COMPONENTS OF THE NET COST OF OPERATIONS THAT WILL
NOT REQUIRE OR GENERATE RESOURCES IN THE CURRENT PERIOD:
Components Requiring or Generating Resources in Future Periods:
Increase in Annual Leave Liability
525
(522)
Increase in Public Exchange Revenue Receivables
(18,985)
(18,754)
Total Components of Net Cost of Operations that Require or
Generate Resources in Future Periods
(18,460)
(19,276)
Components Not Requiring/Generating Resources:
Depreciation and Amortization
305
1,360
Expenses Not Requiring Budgetary Resources
(15)
-
Total Components of Net Cost that Will Not Require or Generate Resources
290
1,360
Total Components of Net Cost of Operations That Will Not Require or
Generate Resources in the Current Period
(18,170)
(17,916)
Net Cost of Operations $ 35,497 25,515
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21
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Appendix B
Agency Response to Draft Report
¦J* UNITED STATEb ENVIRONMENTAL PROTECTION AGENCY
S2;
¦' \\iZZ " n oi t would like to explain why the agene) did not meet the PRIA minimum requirement for funding
wot Ler protection activities in fiscal year 2015. f he f PA. uses j nux of appropriations for these
activ itie.i — one oi the worker protection grants in 2015 was funded mosik with appropriated dollars and
a smaller portion with PRIA funds. That same vear, a grant to he funded bv PRIA did not get processed
vviihiu the fiscal year and instead was awarded in F\ 2016, I his delav in the processing of the syant to
be funded bv PR 1 A. icsulted in a proportional reduction hi funding lor worker protection activ ities in FY
2015 causing the agertc) to miss the minimum requirement for funding these activities. 1 lowever, it ts
important to note that in FY 2016. the agency spent approximate!) SI 5 million in PRIA funding on
worker protection grants, exceeding the worker protection set aside requirement of $1 million
1 he LP A also would like to provide an update on the material weakness that the ()i(j found in its 2014
financial audit, when the OKi pointed out thai the UP A could not adequate!} support PR1 \ fund costs
Staning on < tetober 1, 20! 6, the Office of Pesticide Programs, in partnership with the Office of the
Chief Financial Officer, developed an approach to account for employee time on PRIA work within the
I PA time and attendance svslern. Che agency implemented time accounting codes aligned with
accounting standards tor PR FA work, trained all OPP employees on the use of these codes, and
established requirements for employees and supervisors to ensure proper coding as part of the official
timekeeping cveie. 1 his enhancement to time accounting gives the jgutcv the ability to capture better
the ditect and indirect costs ot the PRIA jnoijt am I he OPP and the (>CFO continue to track and
ft»eycl«ffi*cycl.b!» • Primed with Veo'. .v'l'U l'..-'* •>'Chlorine F« Recycled Paper
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monitor the use of these time accounting codes to ensure consistent coding as well as identity concerns
and verify that the OPP complies with the enhanced time accounting.
Thank you once again for \our rex iew oi the 20i ;> and 2014 rmancial Statements. I appreciate the hard
work and dedication of the OIG stall" in achieving excellent management and funds control, ultimate!)
supporting our mission to protect human health and the environment through our registration and review
of pesticides.
ce: Janet Werner
Debtes Barber
HamaaJ Sved
Derek. Scot!
Martha Shimkin
Jeanne Conkhn
Meshell Junes-Peeler
Sherrt" 1 . Anthony
Bob Trent
Benin) Deant*
John I >"Connor
j.idi league
Qucntin Jones
Robert Hill
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Appendix C
Distribution
The Administrator
Chief of Staff
Chief Financial Officer
Assistant Administrator for Chemical Safety and Pollution Prevention
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intragovernmental Relations
Associate Administrator for Public Affairs
Deputy Assistant Administrator for Chemical Safety and Pollution Prevention
Director, Office of Pesticide Programs, Office of Chemical Safety and Pollution Prevention
Deputy Director, Office of Pesticide Programs, Office of Chemical Safety and Pollution
Prevention
Senior Advisor, FIFRA & PRIA Implementation, Office of Pesticide Programs, Office of
Chemical Safety and Pollution Prevention
Director, Biopesticides and Pollution Prevention Division, Office of Pesticide Programs,
Office of Chemical Safety and Pollution Prevention
Director, Pesticide Re-Evaluation Division, Office of Pesticide Programs, Office of Chemical
Safety and Pollution Prevention
Director, Registration Division, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
Director, Antimicrobials Division, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
Director, Information Technology and Resources Management Division, Office of Pesticide
Programs, Office of Chemical Safety and Pollution Prevention
Controller, Office of the Controller, Office of the Chief Financial Officer
Deputy Controller, Office of the Controller, Office of the Chief Financial Officer
Director, Accounting and Cost Analysis Division, Office of the Chief Financial Officer
Director, Policy, Training, and Accountability Division, Office of the Chief Financial Officer
Director, Washington Finance Center, Office of the Chief Financial Officer
Audit Follow-Up Coordinator, Office of the Administrator
Audit Follow-Up Coordinator, Office of the Chief Financial Officer
Audit Follow-Up Coordinator, Office of Chemical Safety and Pollution Prevention
FIFRA & PRIA Audit Coordinator, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
17-F-0315
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