#«'osx
f Q\
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Spending Taxpayer Dollars
EPA Needs to Institutionalize
Its "Lean" Program to
Reap Cost and Time Benefits
Report No. 17-P-0346 July 31, 2017
Lean in Action at the EPA
-------
Report Contributors: Michael D. Davis
Heather Layne
Debra Coffel
Cara Lindsey
Abbreviations
CPI
Continuous Process Improvement
EPA
U.S. Environmental Protection Agency
FY
Fiscal Year
LAB
Lean Action Board
NPDES
National Pollutant Discharge Elimination System
NPM
National Program Manager
OIG
Office of Inspector General
OP
Office of Policy
OSEM
Office of Strategic Environmental Management
Cover photo: EPA Region 10 staff during a Kaizen Lean event. According to the EPA's
"Lean Thinking and Methods—Kaizen" webpage, a Kaizen event involves
employees of all levels working together to address a problem or improve a
process. (EPA photo)
Are you aware of fraud, waste or abuse in an
EPA program?
EPA Inspector General Hotline
1200 Pennsylvania Avenue, NW (2431T)
Washington, DC 20460
(888) 546-8740
(202) 566-2599 (fax)
OIG Hotline@epa.gov
Learn more about our OIG Hotline.
EPA Office of Inspector General
1200 Pennsylvania Avenue, NW (2410T)
Washington, DC 20460
(202) 566-2391
www.epa.gov/oiq
Subscribe to our Email Updates
Follow us on Twitter @EPAoig
Send us your Project Suggestions
-------
x^fcD ST/ij.
U.S. Environmental Protection Agency 17-P-0346
i ftA \ Office of Inspector General July 31,2017
~ SB?*
3 \\|// ?
At a Glance
Why We Did This Review
We conducted this audit to
determine whether the U.S.
Environmental Protection
Agency's (EPA's) current use
of Lean methodologies
operates as intended by
eliminating waste and
achieving savings. Lean is a
set of principles and methods
used to help organizations
identify and eliminate waste in
their processes.
In a 2014 memorandum, the
EPA introduced its Lean
Government Initiative "as a way
to maximize the agency's ability
to effectively implement its
mission." The memorandum
referred to "expectations for
taking the EPA's Lean work to
the next level" and announced
the launch of an agencywide
GreenSpark event designed to
engage all employees in the
Lean effort. To meet these
objectives, the EPA dedicated
significant resources—including
contract and staff support—to
apply Lean methodologies and
educate the workforce about
Lean.
This report addresses the
following EPA goal or
cross-agency strategy:
• Embracing EPA as a high-
performing organization.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
Listing of OIG reports.
EPA Needs to Institutionalize Its "Lean" Program to
Reap Cost and Time Benefits
What We Found
We found that the EPA could not fully
demonstrate that its Lean Government Initiative
is operating as intended to eliminate waste and
achieve savings. We found the following
opportunities for the EPA to strengthen its Lean
Government Initiative:
Why "Lean" the EPA?
Tight and dwindling
resources necessitate more
efficient use of the EPA's
multibillion dollar budget.
• Selection of Lean projects to avoid overlap.
• Improvements in monitoring Lean efforts to gauge progress.
• Improvements in reporting Lean projects, including cost metrics.
• Identification and tracking of Lean projects.
• Development of a cohesive strategy for leading, implementing and
monitoring the Lean initiative.
• Implementation of consistent and standard Lean training.
The federal government has issued guidance on how federal agencies can
optimize performance, improve efficiencies, and identify ways to eliminate
wasteful practices and operate more efficiently. In addition, the EPA has issued
memorandums on how to use Lean specifically within the agency. However, the
EPA's internal controls for implementing Lean in accordance with this guidance
and these memorandums need improvement, such as identifying and tracking
Lean projects to gauge progress and costs, as well as leading and monitoring the
Lean initiative agencywide. Because these controls have not been fully
implemented, Lean has not been institutionalized at the EPA. These internal
controls must be improved before the agency can fully maximize the application
of Lean practices and ensure that it is not wasting resources by failing to create
efficiencies.
Recommendations
We recommend that the Associate Administrator for Policy implement a strategy
for institutionalizing the Lean Government Initiative within the agency. In addition,
the Office of Policy (OP) should develop policies that specify how to plan, design,
oversee and implement Lean practices. OP should also establish agencywide
controls for monitoring, tracking and measuring the progress of Lean projects, as
well as for vetting and collaborating on Lean projects to avoid overlap. Lastly, OP
should develop standard Lean training for EPA staff. The EPA concurred with all
of the recommendations and initiated corrective actions.
Noteworthy Achievements
OP has launched a new automated Lean tracking system—called LeanTrack—
which OP said "will simplify information submissions, summarize work, and
provide an understanding of project activity across EPA and in the states."
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
July 31, 2017
MEMORANDUM
SUBJECT: EPA Needs to Institutionalize Its "Lean" Program to Reap Cost and Time Benefits
Report No. 17-P-0346
This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). The project number for this audit was OA-FY16-0107.
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.
Action Required
The agency provided corrective actions for addressing the recommendations with milestone dates.
Therefore, a response to the final report is not required. Should you choose to provide a final response,
we will post your response 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: Arthur A. Elkins Jr.
TO:
Samantha Dravis, Associate Administrator
Office of Policy
We will post this report to our website at www.epa.gov/oig.
-------
EPA Needs to Institutionalize Its "Lean" Program
to Reap Cost and Time Benefits
17-P-0346
Table of C
Chapters
1 Introduction 1
Purpose 1
Background 1
Implementation of EPA's Lean Initiative 2
Responsible EPA Offices 4
Scope and Methodology 5
Prior Report 7
Noteworthy Achievements 8
2 Improvements Needed to EPA's Lean Government Initiative 9
Federal Initiatives to Cut Waste 9
Direction for EPA's Lean Initiative 10
Overlap in Agency Lean Projects 11
Lean Not Institutionalized at EPA 13
Insufficient Monitoring, Tracking and Reporting of Lean Projects 15
Limited Oversight and Restricted Authority to Implement Lean 18
Lean Training Not Standardized 20
Opportunities Exist to Strengthen EPA's Streamlining Efforts 20
Recent Agency Actions Prompted by OIG Work 21
Recommendations 22
Agency Response and OIG Evaluation 22
Status of Recommendations and Potential Monetary Benefits 24
Appendices
A Agency Response to Draft Report 25
B Distribution 29
-------
Chapter 1
Introduction
Purpose
The Office of Inspector General (OIG) conducted an audit of the
U.S. Environmental Protection Agency's (EPA's) Lean Government Initiative.
The objective of this audit was to determine whether the EPA's current use of
Lean methodologies operates as intended by eliminating waste and achieving
savings.
Background
The EPA began learning from and
supporting Lean efforts
implemented by state governments
and stakeholders as early as 2005.
The regions and offices exposed to
these efforts gained experience with
Lean, which helped to facilitate the
understanding and use of Lean
methodologies at the EPA.
However, there was initially no central effort to manage, capitalize on and apply
the lessons learned from these early Lean projects across the agency.
In a September 2014 memorandum issued by then Administrator Gina McCarthy,
the EPA formally introduced its Lean Government Initiative and launched a
GreenSpark event to identify processes where Lean could be applied. In
September 2015, the EPA issued a supplemental memorandum outlining ways the
agency could further advance Lean.
Why the Federal Government Uses Lean
The federal government has issued guidance on how federal agencies can
optimize performance, improve efficiencies, and identify ways to eliminate
wasteful practices and operate more efficiently. Per the EPA's "About Lean
Government" webpage, Lean methodologies are "highly adaptable" and can be
used in a variety of processes. A number of agencies, including the EPA, are
using continuous process improvement methods like Lean to improve the quality,
transparency and speed of their processes.
What Is Lean?
Lean is a set of principles and methods used to
identify and eliminate waste in any process.
Lean helps organizations improve the speed
and quality of their processes by getting rid of
unnecessary activity such as document errors,
extra process steps and waiting time.
—EPA's "About Lean Government" webpage
17-P-0346
1
-------
Why EPA Uses Lean
Value Stream Mapping
According to the EPA's
"About Lean Government"
webpage, the EPA
recognizes that inefficiencies
exist across the agency and
that "Lean methods are
applicable to a range of EPA
service and administrative
processes—from rulemaking
to the processing of grants
and contracts." As a result,
the EPA has dedicated
significant resources—
including contract and staff
support—to apply Lean
methodologies and educate the
£» e=,. -
Value stream mapping is often used in "leaning" (streamlining) a
process. The EPA's "Lean and Six Sigma Process Improvement
Methods" webpage describes value stream mapping as
"developing a visual picture of the flow of processes, from start
to finish, involved in delivering a desired outcome, service or
product, which could include multiple processes." (EPA photo)
workforce about Lean.1
As of October 2016, agency staff have begun 196 projects using Lean methods to
revamp processes, produce new capabilities and skill sets, and maximize the
EPA's ability to serve its stakeholders. According to the EPA's Lean webpage,
these Lean projects, which are also referred to as "Lean events," have eliminated
processing steps, thereby reducing process time and staff time. "The results,"
according to the EPA's "About Lean Government" webpage, are allowing staff to
now "focus on higher value activities that are more directly linked to
environmental protection."
Implementation of EPA's Lean Initiative
In a memorandum issued on September 3, 2014, the EPA introduced its Lean
Government Initiative2 "as a way to maximize the agency's ability to effectively
implement its mission." The memorandum announced the agency's "expectations
for taking the EPA's Lean work to the next level"
and announced the launch of "an agency wide
GreenSpark ideation event to engage all of our
employees in identifying processes ripe for Lean,"
Also in the memorandum, then Administrator Gina
McCarthy provided specific instructions to agency
management, as detailed in Table 1.
INTO CHA
The EPA's Lean Government Initiative logo.
(EPA Lean Government intranet site)
1 The agency's Lean Practices (a.liPA website provides more information regarding Lean and how the EPA is using
Lean to improve agency performance.
2 Although the agency has been using Lean methodologies and conducting Lean projects since 2009, the initiative
was not officially supported until 2014 through the agency's GreenSpark challenge.
17-P-0346
2
-------
Table 1: September 2014 Lean memorandum instructions to management
Management level
Instructions provided
Assistant and Regional
Administrators
• Encourage your staff to participate in the agencywide
GreenSpark ideation event.
• Sign up for your staff to share a Lean success and
associated results from your organization.
• Identify Lean successes that could be replicated at the
national or program level.
Assistant Administrators
• Send information on the three Lean projects you will deliver.
• Encourage your managers and staff to participate in the
Lean summit.
• Select at least a quarter of your managers to receive Lean
training at the Lean summit.
Regional Administrators
Consider developing your own Lean summit.
Source: Lean checklist from the September 3, 2014, memorandum.
In a subsequent memorandum issued on September 18, 2015, the EPA
emphasized the need to focus its "efforts to facilitate and ensure implementation
of the recommendations that emerged from the Lean events, encourage replication
and continue to identify and Lean the EPA processes that need it most." Three
broad courses of action were outlined in this memorandum, as shown in Table 2.
Table 2: September 2015 Lean memorandum focus areas
Focus area
Proposed tasks
Implementing ideas from
your Lean events
• Follow up on the organization's fiscal year (FY) 2015 Lean
events by meeting with the participants from each event
and the managers responsible for implementing the
suggested changes.
• Assess what progress has been made toward achieving the
project-specific outcomes identified during the event—
including what successes have already been achieved,
what challenges or obstacles are being encountered, and
what resources and support are needed to implement the
plan.
• Share with the Administrator what you learn from those
discussions.
Replicating Lean
successes
A Lean Action Board (LAB) will be established to accomplish
the following objectives:
• Identify the best replication and scale-up opportunities for
the EPA, based on successful Lean implementation by the
EPA and states.
• Direct the agency's Lean FYs 2016 and 2017 replication
and scale-up resources toward these opportunities.
• Gain and share insights into the strategies that best support
a culture of Lean replication and scale up at the EPA.
New Lean projects
Identify at least one new priority Lean event for FY 2016.
Source: OIG summary of the September 18, 2015, memorandum.
17-P-0346
3
-------
As indicated in Table 2, a LAB was launched in January 2016 to help build on the
successes from the Lean projects conducted by the agency since 2014. The EPA's
"Lean Action Board" website outlines how the LAB optimizes internal EPA
operations and programmatic areas shared with states. The LAB also evaluates
and selects a limited number of Lean projects that have produced results to be
"transferred" or scaled up for use across the agency to better accomplish the
EPA's mission of protecting human health and the environment. The LAB
examines both Lean projects done internally at the EPA and done in coordination
with external stakeholders. The process for selecting Lean successes for
transference is shown in Figure 1.
Figure 1: Process for selecting Lean successes for transference
Federal and State Lean Projects
EPA Staff Input
ECOS Input3
LEAN ACTION BOARD
Compile and Analyze
Opportunities
Top Internal Projects
Top External Projects
Engage
Process
Owners
Limited Set
of Projects for
Scale-up - Internal
and External
Source: EPA's Lean Government public website
aECOS: Environmental Council of States.
Responsible EPA Offices
The Office of Policy (OP), within the Office of the Admini strator, is responsible
for helping the EPA strategically reach its goals. According to the office's
Functional Statement, the following task is among OP's major functions:
Provides strategic management practices to enhance Agency
effectiveness through program analysis, program evaluation and
the development and deployment of other management strategies
that enhance productivity and improve the effectiveness of Agency
programs and priorities.
Within OP, the Office of Strategic Environmental Management (OSEM) is the
primary office responsible for executing Lean (Figure 2). The OP website
summarizes OSEM's responsibilities:
As the Agency's National Program Manager [NPM] for Lean
government, OSEM provides the Agency with Lean expert
facilitators; builds the infrastructure for Lean activities across EPA
(via training, coaching, guidance publications, traditional and
17-P-0346
4
-------
innovative intranet presence, and documenting results); develops
and supports projects for replication and/or scale up; and explores
approaches to engage EPA's management to support their goals for
continuous process improvement.
Figure 2: Roles and responsibilities for executing Lean at EPA
LEAN EXECUTION: ROLES
& RESPONSIBILITIES
OP/OSEM
National Program Manager for EPA
NPM/Regional
Lean Advocates
• Educate and empower with trainina and
expertise to drive action and behavior toward
a Lean culture of continuous improvement
• Advance Lean bv promotina EPA's Lean
products, successes, and opportunities
¦ Realize results throuah projects and trackina
metrics
• Engage with leadership, Lean Leaders and
Practitioners in coordinating and communicating
organization's Lean efforts
• Assure that plans are underway to conduct Lean
projects and periodically monitor progress
• Maintain awareness of all Lean projects and
ensure project information and metrics are
reported to OP
• Provide input/support for senior management
meetings
¦ Liaison between home organization and OP
Lean b part of th* EPA CroW'Agancy Strategy "Embracing EPA o* a High*Performing Orgonizattoo"
Source: OP Associate Administrator's "Lean Government at EPA" presentation.
Scope and Methodology
We conducted this audit from February 24, 2016, to May 25, 2017, in accordance
with generally accepted government auditing standards. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit
objective. We believe the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objective.
To answer our objective, we reviewed the following relevant laws, procedures
and policy orders:
• Government Accountability Office, Standards for Internal Control in the
Federal Government, September 2014.
• Lean Government Metrics Guide, July 2009.
• Government Performance and Results Act Modernization Act of 2010.
• Executive Order 13576, Delivering an Efficient, Effective, and
Accountable Government\ June 3, 2011.
• Office of Management and Budget M-11 -31, Delivering an Efficient,
Effective, and Accountable Government\ August 17, 2011.
17-P-0346
5
-------
• EPA Memorandum, Advancing Lean Work at the U.S. Environmental
Protection Agency, September 3, 2014.
• Lean Continuous Process Improvement Training Strategy and Capacity
Building Efforts at EPA, July 1, 2015.
• EPA Memorandum, Leaning into Change, September 18, 2015.
• EPA Policy Statement, Applying Lean Practices to Modernize the
Business of Environmental Protection at the EPA, June 21, 2016.
• Office of Management and Budget Circular No. A-123, Management's
Responsibility for Enterprise Risk Management and Internal Control,
July 15,2016.
We reviewed the agency's current use of Lean methods to determine whether the
program is improving the quality, transparency and speed of Lean projects by
performing the following actions:
• Interviewing staff in OP to obtain an understanding of the EPA's Lean
Government Initiative and the internal controls in place.
• Identifying and gathering general information on the universe of Lean
projects as of March 2016 to obtain an understanding of the following
characteristics:
o Types of projects,
o Categories of projects,
o Participating offices/regions,
o C ompl eted proj ects.
o Reported savings/efficiencies.
• Sorting the projects by category and determining which category had the
highest number of projects with similarities (Table 3). We identified
16 projects related to human resources processes. We conducted a detailed
review of 12 of these human resources projects to determine if there were
any similarities or overlapping objectives and processes.
• Determining project effectiveness by judgmentally selecting for further
review six additional Lean projects in various stages of implementation.
• Interviewing project teams involved to determine the status of
implementation.
17-P-0346
6
-------
Table 3: Project count by category
Count of OFFICE / REGION by CATEGORY
Water
Solid Waste and Emergency...
—
Resource Management
Procurement and Financial
CATEGORY -
Other
Communications
Chemical Safety and Pollution...
5 10 15
Source: OIG analysis of OP data.
Prior Report
In EPA OIG Report No. ll-P-0315. Agency-Wide Application of Region 7
NPDES Program Process Improvements Could Increase EPA Efficiency, issued
July 6, 2011, the OIG published the following findings:
(1) Although Region 7 National Pollutant Discharge Elimination System
(NPDES) program Kaizen3 event participants continued to follow up
on the commitments and action items identified, no single authority
was responsible for tracking the process improvement outcomes.
(2) The EPA did not have a process to develop and track quantifiable
results and outcomes from the Kaizen event.
(3) The EPA encountered barriers involving scope, performance
measures, implementation and accountability when planning the
Kaizen event.
The report included three recommendations to identify process improvements
from the Region 7 NPDES Kaizen event that can be transferred agencywide and
three recommendations to improve the nationwide management of the EPA's
Lean Government Initiative. Corrective actions have been completed on all
recomm endati ons.
3 Per the EPA's "Lean and Six Sigma Process Improvement Methods" webpage, "Kaizen activity often involves
rapid improvement events (sometimes called a kaizen blitz), which bring together a cross-functional team for two to
five days to study a process and begin the implementation of process changes."
17-P-0346
7
-------
Noteworthy Achievements
The EPA has produced tangible improvements in how it operationalizes and
tracks Lean methodologies and projects since the publication of OIG Report No.
1 l-P-0315. Agency-Wide Application of Region 7 NPDES Program Process
Improvements Could Increase EPA Efficiency. To facilitate a culture of Lean
thinking throughout the EPA, OP has continued to build and organize a team of
Lean stakeholders that draws from across the agency's professional ranks:
• Lean Advocate's group, which is a nationwide team of EPA staff who
assist their organizations with the deployment of Lean and who serve as
the points of contact for the NPM of the EPA's Lean Government
Initiative.
• Lean Community of Practice, which is a staff-level network that includes
Lean leaders and other practitioners of Lean at the EPA.
• LAB, which comprises senior executive service members who oversee and
guide project selection and transference opportunities.
• Project support teams, which facilitate and coach Lean events, when
necessary.
OP staff have also sought to expand institutional knowledge and buy-in of Lean
by increasing staff access to Lean metrics. OP now posts project data on the
agency's Lean intranet site and has launched an automated project data reporting
system, called LeanTrack. This new system, which went live in March 2017, aids
in project data reporting by standardizing the data collection process. LeanTrack
also allows Lean project teams to view the data for any project in the database,
which may help them to understand the possible cost and time benefits of each
project. According to OP, this system:
... will simplify information submissions, summarize work, and
provide an understanding of project activity across EPA and in the
states, thereby greatly enhancing transference opportunities.
Former EPA Administrator Giria McCarthy is photographed with the EPA's Lean Advocates during
a Lean Advocate's Symposium held in August 2016. (EPA photo)
17-P-0346
8
-------
Chapter 2
Improvements Needed to EPA's
Lean Government Initiative
While the EPA has made positive strides with its Lean program, we found that the
agency could not fully demonstrate that its Lean Government Initiative is
operating as intended to eliminate waste and achieve savings. We found the
following opportunities for the EPA to strengthen its Lean Government Initiative:
• Selection of Lean projects to avoid overlap.
• Improvements in monitoring Lean efforts to gauge progress.
• Improvements in reporting Lean projects, including cost metrics.
• Identification and tracking of Lean proj ects.
• Development of a cohesive strategy for leading, implementing and
monitoring the Lean initiative.
• Implementation of consistent and standard Lean training.
To comply with federal guidance to eliminate wasteful practices and operate more
efficiently, former EPA Administrator Gina McCarthy advocated instituting Lean
within the EPA. However, we found that internal controls for implementing Lean
need improvement, such as identifying and tracking Lean projects to gauge
progress and costs, as well as leading and monitoring the Lean initiative
agencywide.
Because these controls are not fully implemented, Lean is not institutionalized at
the EPA, which means the agency is not maximizing the application of Lean
practices and may be wasting resources by failing to create efficiencies. The
importance of the EPA's mission to protect human health and the environment—
particularly when faced with tight resources and dwindling budgets—necessitates
more efficient use of resources. The Lean Government Initiative remains a critical
step for the EPA to operate more efficiently.
Federal Initiatives to Cut Waste
With the issuance of Executive Order 13576, Delivering an Efficient, Effective,
and Accountable Government, President Obama initiated a campaign to
"cut waste, streamline Government operations, and reinforce the performance and
management reform gains ... achieved." As a part of this campaign, the President
charged the government's Chief Financial Officers with achieving cost savings.
The Government Performance and Results Act Modernization Act of 2010
focuses on performance and improving efficiencies in federal agencies, while the
Office of Management and Budget's M-l 1-31, Delivering an Efficient, Effective,
17-P-0346
9
-------
and Accountable Government, provides additional guidance on the act and assists
agencies in refining performance management guidance.
Direction for EPA's Lean Initiative
EPA Lean Memorandums
I
The September 2014 memorandum, Advancing Lean Work at the
U.S. Environmental Protection Agency, announced that the agency would use
Lean methodologies to effectively implement its mission and asked OP, which
seives as the NPM for Lean, "to ensure ready access
to the suite of training, coaching, facili tati on and
other needed expertise."
Administrator's Video
Gtna McCarthy
U S. EfhwcKritftal to:
m
Watch a video featuring former Administrator
Gina McCarthy,. Regions 3. 7. and 10, and
Industry partners who have implemented lean
process irrprowment e\'ents
(EPA Lean Government intranet site video)
The September 2015 memorandum, Leaning into
Change, proposed a course of action and instructions
for advancing Lean in the future. The memorandum
instructed staff to take "efforts to facilitate and
ensure implementation of the recommendations that
emerged from the Lean events, encourage
replication, and continue to identify and lean the
EPA processes that need it most." This memorandum
also directed OP to assess the successes and
challenges of 38 priority Lean projects and to
develop an action plan that further supports
"implementing the great ideas and work plans from
FY 2015 events." The memorandum was addressed to the General Counsel,
Assistant Administrators, the Inspector General, the Chief Financial Officer, the
Chief of Staff, Associate Administrators and Regional Administrators, with
instructions for implementing project recommendations, replicating project
successes, and identifying projects for FY 2016.
EPA Lean Policy Statement and Guidance
On June 21, 2016, the EPA issued a policy statement titled Applying Lean
Practices to Modernize the Business of Environmental Protection at the EPA,
which was designed to "maximize the application of Lean practices and [business
process improvement] approaches, supporting the EPA's streamlining, reform,
and integration efforts across the agency." In this policy statement, the LAB is
charged with providing "oversight and guidance, utilizing evidence from Lean
practices to monitor the success of this policy at the EPA."
Published in July 2009, the EPA's Lean Government Metrics Guide is a resource
to help staff "understand and select metrics to support their implementation of
Lean." Table 2 of the guide specifically outlines cost as a process metric,
including the following dollar savings from Lean projects:
17-P-0346
10
-------
• Dollar value of full-time equivalent savings, such as from staff attrition
and eliminated need-to-hire positions.
• Reductions in contractor costs (after subtracting Lean facilitator costs).
• Other office cost savings, such as energy/utility costs and the
consolidation of office space.
Overlap in Agency Lean Projects
There is some overlap in the selection of the EPA's Lean projects nationwide. In
our review of 12 human resources projects, we noted the following overlapping
objectives and processes:
• Three involved provisioning (streamlining the new employee equipment
and information technology process).
• Three involved in-processing (streamlining the new employee and/or
participant process).
• Two involved exit processing (streamlining the employee exit process).
Table 4 illustrates the eight projects with overlapping objectives and processes.
Furthermore, we noted coordination or sharing of information between offices in
only three of those eight projects, as indicated in the "Coordination with other
offices?" column in Table 4.
As shown in Table 4, we noted the following specific similarities in these eight
projects:
• Rows 1-3: Region 10, the Office of Environmental Information, and the
Office of International and Tribal Affairs each completed a provisioning
project. These projects entailed involvement by the human resources and
information technology departments, where (1) users were given access or
granted authorization to systems, applications and databases and (2) users
were provided the hardware resources necessary for completing their
duties, such as computers, phones and equipment.
• Rows 4-6: The Office of the Administrator, Office of Research and
Development, and Office of Administration and Resources Management
each conducted onboarding projects that streamlined the various workflow
processes for in-processing a new employee and/or program participant.
• Rows 7-8: The Office of Administration and Resources Management and
Region 5 both completed out-processing projects that streamlined and
simplified the employee exit process.
17-P-0346
11
-------
Table 4: Lean project overlap
Office/
region
Project focus
Project goal
Overlap
Coordination
with other
offices?
Provisioning projects:
1
Region 10
New personnel
Reduce the time required to
complete the User Management
Request process for new employees
and other new system users.
• Provisioning
• Workstation setup
(equipment)
No
2
OEI
Agency employee
onboarding/off-
boarding process
Improve various facets of the
employee onboarding process.
• Provisioning
(information, equipment,
training, networking)
Yes
(with OARM)
3
OITA
Office employee
onboarding
Streamline various facets of the
employee onboarding process.
• Provisioning
(information, equipment,
training, networking)
Yes
in-processing projects:
4
OA
Update personnel
processes
Streamline the establishment of a
new employee by improving various
facets of the employee onboarding
process.
• In-processing
• Streamline
establishment
of new employee
process
No
5
ORD
ORISE recruitment
process a
Streamline ORD's ORISE
recruitment process by improving
various facets of the onboarding
program.
• In-processing
• Streamline
establishment
of new participant
process
No
6
OARM
Agency
onboarding/off-
boarding process
Streamline the establishment of a
new employee by improving various
facets of the onboarding process.
• In-processing
• Streamline
establishment
of new employee
process
Yes
(with OEI)
Exit processing projects:
7
Region 5
Employee exit
process
Streamline, simplify and automate
various facets of the employee exit
process.
• Out-processing
• Streamline employee
exit process
No
8
OARM
EPA RTP
separation
checkout process
Streamline the EPA RTP employee
checkout process.
• Out-processing
• Streamline employee
exit process
No
Source: OIG analysis of OP data.
a OP's acting Associate Administrator stated, "ORISE onboarding process is demonstrably different from other
human resource processes at EPA. For example, ORISE uses a third party, not USAJobs, to advertise for
recruits, and ORISE program participants are not formal EPA employees. As such, streamlining the ORISE
onboarding process required specific solutions."
OA: Office of the Administrator
OARM: Office of Administration and Resources Management
OEI: Office of Environmental Information
OITA: Office of International and Tribal Affairs
ORD: Office of Research and Development
ORISE: Oak Ridge Institute for Science and Education
RTP: Research Triangle Park
Lean projects are determined and implemented primarily at the local level. Each
office or region identifies and implements Lean projects based on what the office
or region determines to be relevant. OP does not screen or vet projects to limit
17-P-0346
12
-------
overlap, nor does it coordinate efforts between offices with similar projects to
maximize the application of Lean practices and business process improvement
approaches. OSEM's Associate Director states that this decentralized approach is
a way to encourage participation in the Lean Government Initiative:
[Establishing a 'governing entity' to vet Lean projects could be a
disincentive to programs and offices considering a Lean project.
Such an entity would be almost certain to establish additional
bureaucracy and process related to the review and selection of
Lean projects, which would have a chilling effect on proposals.
Duplication of some aspects of a few Lean projects is a small price
to pay for allowing programs and offices to select and implement
their own projects, which is a highly effective way of gaining
support for Lean.
As noted in the EPA's September 2014 Lean memorandum, however, each Lean
project is a significant investment. In the September 2015 Lean memorandum,
then EPA Administrator Gina McCarthy emphasized replicating Lean successes
and established a LAB to perform the following functions:
• Identify the best replication and scale up opportunities for
the EPA, based on successful Lean implementation by the
EPA and states.
• Direct the agency's Lean FY 2016 and FY 2017 replication
and scale up resources.
• Gain and share insights into the strategies that best support
a culture of Lean replication and scale up at the EPA.
Furthermore, in its June 2016 policy statement on applying Lean practices, the
EPA charged the LAB with providing oversight, issuing guidance, and utilizing
evidence from Lean practices to monitor the success of the EPA's Lean policy.
Lean Not Institutionalized at EPA
When the EPA's Lean Government Initiative was introduced in 2014, there was
no policy or overarching plan for instituting or implementing the initiative. There
were no mandates or integrated efforts to identify Lean efficiencies in the
agency's strategic planning, programming, budget or execution processes. As a
result, Lean was not institutionalized at the EPA.
OSEM's Associate Director informed the OIG that the only Lean policies initially
available were the 2014 and 2015 memorandums. In June 2016, after the start of
our audit, the agency issued a policy statement on applying Lean practices
agency wide. This policy was in response to OIG Report No. 1 l-P-0315.
Agency-Wide Application of Region 7 NPDES Program Process Improvements
Could Increase EPA Efficiency, issued July 6, 2011, in which we recommended
17-P-0346
13
-------
that "OP develop a national policy on how to plan, design, and implement
business process improvement events." However, we found that the June 2016
policy statement does not address how to plan, design and implement Lean
practices, nor does the policy provide sufficient direction for implementing and
managing a large-scale organizational transformation like the Lean Government
Initiative. Thus, the policy did not aid in institutionalizing Lean at the EPA.
The OP Lean team reported continued difficulties in establishing a Lean culture
and instilling Lean thinking as a "way of doing business." A Lean Rapid
Assessment, which was conducted in October 2015 by OP at the request of former
Administrator Gina McCarthy, supports the team's perceptions. As shown in
Figure 3, OP determined that the agency was rated at a Level 2 out of five
possible levels in the Lean Maturity Model.
Figure 3: EPA's rating on the Lean Maturity Model
Continuously
improving
process
Optimizing Level
Predictable
process
Managed Level
Standard,
consistent
process
Defined Level
Disciplined
process
RepeaUMe Lml
Initial Level
Source: OP Lean Rapid Assessment,
Implementing a large-scale organizational transformation and establishing a
culture that embraces Lean as a way of doing business requires the use of change
management practices. These practices should actively involve and engage
leaders, identify a dedicated implementation team (like OP) to manage the
transformation, and develop a strategy for measuring progress and assessing and
mitigating risk. This practice will help to more strategically implement the Lean
initiative, as well as sustain it long term.
In its Lean Rapid Assessment, OP made the following statement:
These preliminary findings will continue to be refined, and once
further informed by the [Assistant Administrator/Regional
Administrator] dialogues and reports, will contribute to an action
17-P-0346
14
-------
plan designed to achieve full implementation of these plans ...
only through full implementation will EPA advance on the Lean
maturity model in order to sustain Lean as a cultural practice.
However, according to OP staff, the agency had not taken steps to institutionalize
the Lean effort, which would help to translate the EPA's policies and strategic
plans into actionable guidelines that are applicable to the daily activities of its
employees. For example, in FY 2015, the agency identified 39 Lean events as
being priority projects. The responsible offices completed 30 of these 39 events,
but OP's Lean Rapid Assessment revealed that only half of the offices had either
started or completed implementing the recommended improvements resulting
from these Lean events (Figure 4). In addition, a formalized Lean implementation
action plan was not published, as required by the EPA's September 2015 Lean
memorandum. However, although the agency has not issued a formalized Lean
Implementation Action Plan, the OIG noted that OP has realized and delivered
some improvements in certain areas, which would constitute the basis of an action
plan for implementing Lean.
Figure 4: FY 2015 implementation status of Lean project results
Event Implementation Status
Implementation status of recommendations from
30 priority Lean events in FY 2015
25
15
7
5
I Implementation Completed (100%)
¦ Have NOT reported Starting Implementation
¦ < 50% of Implementation Completed
¦ >50% but< 100% Implementation Completed
Source: OP Lean Rapid Assessment, with data current as of October 27, 2015.
Insufficient Monitoring, Tracking and Reporting of Lean Projects
Insufficient Project Monitoring and Tracking
OP, which serves as the NPM for Lean, does not consistently monitor the
progress of the agency's Lean efforts, including timeframes for completion or
status of implementation, nor does it accurately track and report project results.
20
15
10
5
0
17-P-0346
15
-------
Regions and offices report the status of their projects to OP, which then reports
agencywide on the status of the EPA's Lean initiative.
The OIG performed a detailed review of six Lean projects in various stages of
implementation, noting when the Lean event was held, when the implementation
plan was finalized and completed, and when expected project results were
submitted. We also conducted interviews with project team members. As shown
in Table 5, we were unable to reconcile the data provided to us by OP with the
project team's data.
Table 5: Comparison of OP and project team data
Project name
Primary
process
owner
Event held
Implementation plan
Expected project
results
submitted
Finalized
Activities
completed
OP
data
Project
team
data
OP
data
Project
team
data
OP
data
Project
team
data
OP
data
Project
team
data
Agency Reorganization
Process
OARM
Sep
2013
No event
held
Sep
2014
Not
reported
C)
Sep 2014
Jan
2015
Not
reported
OAR Hardship
Application Process
OAR
Jan
2015
Feb 2015
Jun
2015
C)
C)
Jun 2015
Aug
2015
Aug 2015
OAR Congressional
Correspondence
Response Process
Improvement
OAR
Jan
2014
C)
Jul
2014
C)
C)
Third
quarter of
FY 2016
Jul
2014
C)
OCFO Reimbursable
IA Payment Process
OCFO
C)
Mar 2014
Apr
2014
C)
C)
FY 2015
Aug
2014
End of
FY 2015
Region 6 Inspection
Report Normalization
Process
Region 6
Oct
2013
No event
held
Nov
2013
No event
held
No
Event
Held
No event
held
Jan
2016
Not
reported
Regions 3 and 7
RCRA Corrective
Action CMS Process
Regions 3
and 7
May
2014
C)
May
2014
C)
C)
Jun 2015
Oct
2014
C)
Source: OIG analysis of project data.
a Information could not be reconciled with source document(s).
CMS: Corrective Measures Study
IA: Interagency Agreement
OAR: Office of Air and Radiation
OARM: Office of Administration and Resources Management
OCFO: Office of the Chief Financial Officer
RCRA: Resource Conservation and Recovery Act
OP staff explained that the inconsistencies in monitoring projects were due to a
combination of factors, such as different people entering information at different
times, the technology used to enter data being limited and not user friendly,
and/or information not being updated as it changed. In addition, project teams
expressed frustration in submitting results to the national Lean metrics system.
Compounding these challenges were OP's limited oversight and restricted
authority for leading the Lean program. OP staff said that they cannot require
project teams to report results, nor can they require project teams to use the
available guidance for determining individual project metrics. As mentioned in
17-P-0346
16
-------
the "Noteworthy Achievements" section, OP developed a new automated Lean
tracking system—called LeanTrack—that should help eliminate inconsistencies
and improve oversight capabilities. This new system was designed to allow any
project team to view the information on any project in the database. LeanTrack
was officially launched on March 1, 2017.
Insufficient Project Reporting
Project results, which are self-reported by the project team members at the end of
a Lean event, are based on projected or estimated process improvements
(Figure 5). Furthermore, the EPA does not report on projected savings or cost
avoidances.4
Figure 5: Dashboard of EPA's Lean project results (October 2013-October 2016)
EPA Lean Project Work: Executive Dashboard
October 2013 through October 2016
(srifrrportcd)
In response to a LAB request,
regions and offices committed to 29
transference projects for FY 2017.
Time Regained
Total Process Time
#55%
How long a process
Ijltn from beginning to
end (includes waiting)
Total Work Time
0 4 49%
Total time spent actually
working on the task —
"touch time" (excludes
waiting)
Arrrtxpt rtducoen. Si itfCfttnf
AHe cesrt JoxS
Avtroj* rrdactofl. 33 ftpotmj
Aha e eced pretetunf mm
Participant Satisfaction with the Process
1.3
3.9
Average satisfaction
with the current process
2?rtpcrt**g. o scoi* of i to $
Average satisfaction
with the newty
designed process
R*flon 7
OARM
S
Rtffcon 6
Rtffon 1
OAR
OCfO
R«*k>n 0
Rffkx* 8
OCCA
OifM
OCT A
ocsft
Rtfton I
Rrftoo 10
ow
RtgiOft 4
OCI
ORO
AO
OIG
OGC
196 Projects Total
105
17
74
I
S 10 IS 70 7S
Numb#r of Pro)»cu
20% Included co-regulators
1752
17
Participants took part
Sa**r&n6vob may hert prc*tca
Projects transferred charges, practices, or tools
from previous projects
Source: EPA Lean Government intranet site.
4 In November 2016, OP staff stated that project leads have started reporting on actual savings. The OIG has not
been able to review and confirm these savings.
17-P-0346
17
-------
According to OP staff, not all regions or headquarters offices report their
information or calculate metrics the same way. In addition, OP does not collect
information on project efforts, project progress, or the methodologies used for
estimating or calculating project outcomes. OP also does not analyze and compare
projected results to actual outcomes. OP has identified a number of improvements
and efficiencies resulting from select Lean projects, such as reduced timeframes
or eliminated steps, but does not translate those project results into related costs.
Furthermore, because OP does not consider cost to be a primary efficiency
measure, it does not include financial benefits in its data reporting, even if
financial benefits are reported by individual project teams. As a result, OP has not
translated, identified or reported project outcomes in terms of related cost savings,
cost avoidances, or funds put to better use for any of the EPA's more than 150
Lean projects (Figure 5).
OP's acting Associate Administrator provided the following statement:
While OP does not report on these results in aggregate, some
projects do track these metrics and report them to OP. OP is aware
of numerous projects for which this information has been
calculated and reported. Moreover, as a resource document, the
Lean Government Metrics Guide does not dictate what metrics
must be used and when. The guide states that it is important to
remember that the Lean ... metrics discussed in this guide should
ultimately support progress toward achieving the agency's mission.
Yet, the Lean Government Metrics Guide clearly outlines cost as a process metric
and provides instruction on how to calculate cost metrics. OSEM's Associate
Director acknowledged that the EPA could more effectively report and share
actual results, noting that the agency has made recent progress on reporting such
results.
Limited Oversight and Restricted Authority to Implement Lean
The EPA provides limited oversight for leading, implementing and monitoring the
Lean program agencywide, as well as for establishing expectations and
accountability. OP staff have been assessing and addressing circumstances ad hoc
and lack a cohesive Lean strategy.
Currently, the responsible office for the EPA's Lean Government Initiative is
OP's OSEM, Evaluation Support Division. According to the Associate Director of
OSEM, "As the NPM, OP provides infrastructure to the Lean Government
Initiative by funding, directing, training and convening to share ideas."
OP staff asserted that involvement in the EPA's Lean Government Initiative is
voluntary, with a decentralized process. However, the EPA's June 2016 policy
statement established a LAB composed of senior executive service members who
17-P-0346
18
-------
"provide oversight and guidance, utilizing evidence from Lean practices to
monitor the success of this policy at the EPA."
Per the LAB's charter, strategy document and website, the LAB is required to
perform the following actions:
• Evaluate and select a limited number of Lean proj ects whose
results can be transferred or scaled up to better accomplish
EPA's mission of protecting human health and the
environment.
• Direct the agency's Lean resources toward best opportunities.
• Gain and share insights into the strategies that best support a
culture of Lean thinking and continuous process improvement.
• Advance the practice of Lean to ensure continuous
improvement at the EPA and with state partners.
• Report quarterly to the Administrator and Deputy
Administrator.
The LAB comprises three to six Senior Executive Service-level officials, two
state representatives, and a facilitator, all of whom also have the day-to-day task
of managing their respective programs or regional offices. LAB members have
begun to examine both Lean projects done internally at the EPA and those done in
coordination with external stakeholders. Members meet occasionally via
teleconference to evaluate and select a limited number of Lean projects, with the
goal of identifying results that can be transferred or scaled up for use by other
offices. However, OP and the LAB have not coordinated to determine how they
will achieve the charges dictated within the June 2016 policy statement, Applying
Lean Practices to Modernize the Business of Environmental Protection at the
EPA. While the newly formed LAB is still working to realize its objectives, the
LAB alone cannot provide adequate oversight of this large-scale initiative. A
dedicated, fully authorized project management team (such as OP) is still needed
to augment the LAB's oversight functions.
Since Lean is not institutionalized at the agency, there is no strategic plan or
strategic implementation of the program. Further, with restricted authority for
leading the Lean initiative, OP staff cannot effectively monitor the progress of
projects, require project teams to report consistently, implement identified
solutions, establish consistent training, or hold accountable those project owners
who impede implementation or do not act in accordance with policy and guidance.
17-P-0346
19
-------
Lean Training Not Standardized
The EPA does not provide nor have a requirement for standardized Lean training.
Staff reported that OSEM provides support to regions/offices in obtaining training
as requested rather than developing and disseminating a common curriculum
throughout the agency. OSEM staff added that, as a result, regions and offices
initiate their own efforts to obtain the training they deem appropriate, which can
vary in quality, concepts, terms and activities.
OSEM's Associate Director provided documentation from representatives of
numerous EPA offices and programs citing, among other issues, that the agency
has a need for Lean training. More specifically, OP's Lean Rapid Assessment
noted the following training needs:
• Core team members need more technical coaching and mentoring for
completing their projects using Lean tools.
• Key team members have not had training on tools that facilitate the
implementation phase to reach sustained results; there is a need for expert
support to fill this gap.
• Not enough core staff are trained regarding what Lean tools can help with
implementation; there is a lack of awareness/understanding in this area.
The EPA notes the need for standardized training in its July 2015
guide, Lean Continuous Process Improvement Training Strategy
and Capacity Building Efforts at EPA, which communicates the
agency's Lean training strategy and offers guidance for attaining
the Continuous Process Improvement (CPI) core competencies. In
the guide, the agency's Lean Community of Practice noted that
"the variation in training has raised some ... issues related to a
standardized curriculum and the adoption of a CPI certification
program," such as a "belt" system for advanced practitioners.
However, although OP has made available a set of core
competencies and basic body of knowledge, there is still variation
in the training agencywide.
In February 2017, OP's acting Associate Administrator did state that "OP is now
developing a more specific training curriculum for event participants, managers,
project implementation teams, and project facilitators." The OIG was not able to
review and confirm this claim.
Opportunities Exist to Strengthen EPA's Streamlining Efforts
In its September 2014 Lean memorandum, the EPA emphasized that each Lean
project is a significant investment. If the agency does not closely oversee and
Lean training is currently
not standardized across the
agency. (EPA photo)
17-P-0346
20
-------
monitor its progress on waste reduction, performance and management
improvements, and if it does not maximize the application of Lean practices and
business process improvement approaches, it may be wasting resources by failing
to create efficiencies. Specifically, the agency will not be fulfilling the
expectations of the 2014 and 2015 Administrator's memorandums or of the 2016
policy statement. Additionally, without operating efficiently and effectively, the
EPA will not be serving as a proper steward of federal resources or operating as a
high-performing organization.
Tracking and reporting actual project results, along with calculating any estimated
benefits and savings using only quality data and methodologies, will enable the
EPA to better represent, substantiate and understand the accuracy and reliability
of any savings or efficiencies resulting from its Lean Government Initiative.
Seeing project outcomes in terms of financial benefits will help to build
momentum and promote the Lean Government Initiative, generate employee
engagement, increase management buy-in, and make a case for transformation
and change.
For the Lean Government Initiative to be fully successful and to enable the
tracking and reporting of efficiencies, the agency must incorporate change
management strategies that encourage the use of Lean practices. The EPA must
also standardize and coordinate Lean-specific training. OP staff should be given
the necessary authority and resources to set priorities, make decisions, and act to
implement Lean goals and expectations. The OIG agrees with OP's assessment
that, with a full implementation plan, the EPA can advance on the Lean Maturity
Model and sustain Lean as a cultural practice.
Recent Agency Actions Prompted by OIG Work
OP staff stated that they published an update to the Lean Government
Implementation Guide in February 2017 that contains a standard set of tools and
templates to help Lean practitioners and facilitators plan for, conduct and
implement the results of Lean projects. However, the OIG learned that, at the time
our report was finalized, OP's Lean Government Implementation Guide had not
been published but was still in draft form and under review by the agency.
In addition, OP staff stated that, in May 2017, they began conducting a new
comprehensive training program for Lean event participants, managers, project
implementation teams, project facilitators, general staff and managers. Specific
training courses include a Basic Lean Facilitation ("Greenbelt") certification
course and an Advanced Lean Facilitation course.
17-P-0346
21
-------
Recommendations
We recommend that the Associate Administrator for Policy:
1. Implement a strategy for institutionalizing the Lean Government Initiative
within the agency by integrating the application of Lean practices and
business process improvement approaches.
2. Develop policies that specify how to plan, design, oversee and implement
Lean practices within the agency.
3. Develop a process for monitoring, tracking and measuring quantifiable
results, including cost savings, for Lean projects.
4. Develop a process for a) vetting projects that have the potential for
standardized implementation across the agency and b) collaborating on
projects to maximize the application of Lean, as well as sharing
experiences and lessons learned agencywide.
5. Develop and implement a consistent and standardized Lean training effort
for the EPA's staff.
Agency Response and OIG Evaluation
The EPA concurred with all recommendations. The agency provided an estimated
completion date of June 2018 for corrective actions related to Recommendations 1,
2, 4 and 5. The agency provided an estimated completion date of January 2018 for
actions related to Recommendation 3.
For Recommendation 1, OP agreed to work with its administrative offices, national
program offices and regional offices to develop a draft Lean strategy by June 2018.
For Recommendation 2, OP agreed to develop policies that specify how to plan,
design, oversee and implement Lean practices within the agency by June 2018.
For Recommendation 3, OP launched a new tracking system in March 2017 that
automated the process for monitoring, tracking and measuring quantifiable results
for Lean projects. The agency also stated that it plans to complete a pilot process by
January 2018 for measuring cost savings realized from Lean projects.
Regarding Recommendation 4, the agency concurred with the recommendations
that it collaborate on Lean projects to avoid overlap and that it develop processes to
share experiences and lessons learned nationwide. However, the agency asked that
the OIG reconsider its recommendation for vetting projects. The OIG agreed and
revised the recommendation based on the agency's response to the draft report and
discussions with the agency. The agency concurred with the revised
17-P-0346
22
-------
recommendation. To meet the intent of the revised recommendation, OP agreed to
complete the following actions by June 2018:
1. Use LeanTrack to identify similar projects.
2. Facilitate coordination of teams with similar projects.
3. Use the LAB to identify and prioritize Lean projects with agencywide
implications for transference with the goal of standardization across the
agency.
For Recommendation 5, OP implemented a new comprehensive training program
in May 2017 for Lean event participants, managers, project implementation teams,
project facilitators, general staff and managers. In addition, OP stated that it plans
to establish a standard curriculum through which all agency employees can gain
Lean knowledge and skills by June 2018. OP also described its plans to establish
required annual training for all agency employees regarding Lean basics, as well as
more specific and required annual training for agency managers.
These recommendations will remain open pending completion of the proposed
corrective actions.
The complete agency response to the draft report is in Appendix A.
17-P-0346
23
-------
Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Potential
Monetary
Benefits
(in $000s)
1
22
Implement a strategy for institutionalizing the Lean Government
Initiative within the agency by integrating the application of Lean
practices and business process improvement approaches.
R
Associate Administrator
for Policy
6/30/18
2
22
Develop policies that specify how to plan, design, oversee and
implement Lean practices within the agency.
R
Associate Administrator
for Policy
6/30/18
3
22
Develop a process for monitoring, tracking and measuring
quantifiable results, including cost savings, for Lean projects.
R
Associate Administrator
for Policy
1/31/18
4
22
Develop a process for a) vetting projects that have the potential
for standardized implementation across the agency and
b) collaborating on projects to maximize the application of Lean,
as well as sharing experiences and lessons learned agencywide.
R
Associate Administrator
for Policy
6/30/18
5
22
Develop and implement a consistent and standardized Lean
training effort for the EPA's staff.
R
Associate Administrator
for Policy
6/30/18
C = Corrective action completed.
R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.
17-P-0346
24
-------
Appendix A
Agency Response to Draft Report
£% " UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
?» WASHINGTON, DC 2G4S8
i" I
•s
OFFICE Of
KJliGf
MEMORANDUM
SUBJECT; Response to Office of inspector General's Final Audit Report No. OA-FY16-
0107, EPA's Lean Government Initiative; Opportunities Exist to Strengthen the
Agency's Streamlining Efforts, dated May 25,2017
f ROM; Samantha Dmvis,^<«wr€Mfflsel and Associate AdrnMstrator
Office of Policy ^ "I »-|*|
TO: Kevin Christensen, Assistant Inspector General
Office of injector General / Office of Audit
Thank you for the opportunity to respond to the proposed recommendations in the subject audit
report. EPA's overall response to each of the Office of Inspector General's (OIG) proposed
recommendations, including comments on the findings and, where appropriate, planned
corrective actions and estimated completion dates are provided below.
1) Proposed Recommendation: The Associate Administrator for Policy should implement a
strategy for institutionalizing the Lean Government Initiative within the agency by integrating
the application of Lean practices and business process improvement approaches.
EPA Response: EPA concurs with this recommendation. The Office of Policy (OP) plans to
work with its administrative offices, national program offices, and regional offices to develop a
draft strategy by June 2018.
2) Proposed Recommendation: The Associate Administrator for Policy should develop policies
that specify how to plan, design, oversee and implement Lean practices within the agency.
EPA Response: EPA concurs with this recommendation. While the agency does not yet have
policies that specifically address how to plan, design, oversee and implement Lean practices, the
Agency has developed several resources to facilitate, guide and promote the integration of Lean
practices across the agency. In February 2017, OP published an update to the Lean Government
Implementation Guide that contains a standard set of tools and templates to help Lean
17-P-0346
25
-------
practitioners and facilitators plan for, conduct and implement results of Lean projects. In
addition, EPA's Lean Intranet site includes several tools to help staff plan, design, oversee and
implement Lean projects within the agency.
EPA will develop policies that capitalize on these existing tools to expand the knowledge and
understanding of Lean across the agency. OP will develop these draft policies by June 2018.
3) Proposed Recommendation: The Associate Administrator for Policy should develop a
process for monitoring, tracking and measuring quantifiable results, including cost savings, for
Lean projects.
EPA Response: EPA concurs with this recommendation. OP has developed a process for
monitoring, tracking and measuring quantifiable results for Lean projects. This process is
available on the agency's Lean Intranet site and outlined in the EPA Way Kit for Lean Projects.
The Metrics Checklist guides Lean teams through a detailed process to select metrics to support
project implementation and track quantifiable results following project completion. In addition to
this information being available on the Intranet, this information is routinely discussed with Lean
Teams, during Community of Practice teleconferences, and periodically shared with members of
the Lean community through email updates.
EPA recently launched a new tracking system called LeanTrack to automate this process.
LeanTrack includes information on over 200 EPA improvement projects and over 700 state
projects. EPA staff can use LeanTrack to search for information on a wide range of Lean
projects, enter data on new and existing projects, and generate custom reports. Following the
launch of LeanTrack, OP held webinars and provided resources via the Intranet to help staff
understand how to use the new system. Over 100 people participated in three webinars held by
OP staff. EPA fully expects that the new system will significantly eliminate inconsistencies in
reporting and improve oversight capabilities.
While financial savings has not been a primary intention of the Lean Government Initiative, EPA
concurs with the recommendation that it develop a process to measure cost savings realized from
Lean projects. The agency plans to complete a pilot process for doing so by January 2018. This
process will be included in the policies developed under Recommendation 2.
4) Proposed Recommendation: The Associate Administrator for Policy should develop a
process for vetting and collaborating on Lean projects to avoid overlap, as well as a process to
share experiences and lessons learned nationwide.
EPA Response: EPA does not concur with the recommendation that it should vet Lean projects.
EPA concurs with the recommendations that it collaborate on Lean projects to avoid overlap and
that it develop processes to share experiences and lessons learned nationwide.
As stated in the agency's January 30, 2017 response to OIG's discussion document, EPA
believes that establishing a "governing entity" to vet lean projects could be a disincentive to
programs and offices considering a Lean project. Lean projects are selected and implemented at
the local level based on what individual offices determine to be relevant. This approach provides
17-P-0346
26
-------
individual offices with the flexibility to choose projects based on their specific needs. EPA
recognizes a difference between smaller, locally focused Lean and those that affect the entire
agency. OIG might consider focusing its recommendation on vetting of those projects to those
with the purpose of and potential for standardized implementation across the entire agency.
EPA continues to believe that OIG's perceived overlap and duplication of Lean projects is often
a result of improving different parts of an administrative process. At the same time, EPA concurs
with the finding that OP should do more to collaborate and coordinate efforts between offices
with similar projects to adhere to the policy of maximizing the application of Lean practices and
business process improvement approaches. As one example, for projects with agency-wide
implications, the Lean Action Board should identify and prioritize Lean projects for endorsement
by agency senior leadership.
OP has developed toolkits that support knowledge sharing across EPA offices, has organized a
highly attended series of webinars on the transference projects, and is providing Lean facilitation
expertise to ensure consistency across the projects. EPA believes that project transference is
fundamental to realizing the efficiencies of EPA's Lean Initiative. LeanTrack provides EPA with
a greater opportunity to identify similar projects and to facilitate the coordination of the teams
conducting such projects.
The EPA has created several mechanisms in place to facilitate and promote the sharing of
experiences and lessons learned through the Lean Community of Practice, the Lean Advocates
and the Lean Action Board. EPA will use these networks, including our website and Agency-
wide communications to enhance sharing of project examples and results.
5) Proposed Recommendation: The Associate Administrator for Policy should develop and
implement a consistent and standardized Lean training effort for the EPA's staff.
EPA Response: EPA concurs with this recommendation. Since at least 2013, EPA has offered
some standardized Lean training, such as Lean awareness webinars. Over 2500 managers and
staff have voluntarily participated in Lean awareness training.
In addition, the agency recently developed a comprehensive training program for Lean event
participants, managers, project implementation teams, project facilitators, general staff and
managers. Specific training courses include a Basic Lean Facilitation ("Greenbelt") certification
course and an Advanced Lean Facilitation course. Each course includes one-week of in-person
training and several supporting webinars.
Employees who complete these courses will gain valuable skills for applying Lean tools and
facilitation techniques to execute projects and guide others through the continuous improvement
process. OP launched the new training program in May 2017 and is scheduled to hold two
courses this summer and one in the fall. OP is planning to deliver additional sessions of the
Greenbelt course to EPA staff in multiple regional offices before the end of the calendar year.
EPA is also developing course for managers that it expects to begin offering by January 2018.
The agency plans to offer each of these training courses on a regular basis.
17-P-0346
27
-------
In addition to the training developed by OP, two other EPA offices (Region 9 and OARM) are
also conducting Lean training. By June 2018, OP will establish a standard curriculum through
which all agency employees can gain Lean knowledge and skills. EPA will pursue the
establishment of required training in Lean basics for all agency employees, as well as more
specific training for agency managers, as part of the annual training requirement.
We appreciate OIG's collaboration throughout the development of this audit and look forward to
working with you to improve EPA's Lean Government Initiative.
17-P-0346
28
-------
Distribution
The Administrator
Deputy Administrator
Chief of Staff
Chief of Staff for Operations
Deputy Chief of Staff for Operations
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Associate Administrator for Policy
Principal Deputy Associate Administrator, Office of Policy
Director, Office of Strategic Environmental Management, Office of Policy
Audit Follow-Up Coordinator, Office of the Administrator
17-P-0346
------- |