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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Protecting America's Waters
EPA's Voluntary
WaterSense Program
Demonstrated Success
Report No. 17-P-0352	August 1, 2017

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Report Contributors:
Kathlene Butler
Kathryn Hess
Tiffine Johnson-Davis
Gerry Snyder
Abbreviations
EPA	U.S. Environmental Protection Agency
GAO	U.S. Government Accountability Office
OIG	Office of Inspector General
PMIAA Program Management Improvement Accountability Act
Cover figure: Gallons of water that consumers saved over time through use of WaterSense-
labeled products. (EPA OIG-created figure)
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At a Glance
Why We Did This Review
The Office of Inspector General
of the U.S. Environmental
Protection Agency (EPA)
examined whether the
accomplishments reported by
the EPA's WaterSense
program reflected actual
results. We evaluated EPA
controls to assess the accuracy
of WaterSense product label
claims of water and energy
savings, verify industry data
used to estimate program
accomplishments, and test the
veracity of the program's
annual accomplishment
estimates.
WaterSense partners
manufacture, distribute
and sell WaterSense-labeled
products and promote water
efficiency. These products
include faucets, showerheads,
toilets, urinals, pre-rinse spray
valves, and irrigation
controllers.
This report addresses the
following EPA goals or
cross-agency strategies:
•	Protecting America's
waters.
•	Working toward a
sustainable future.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
Listing of OIG reports.
EPA's Voluntary WaterSense Program
Demonstrated Success
What We Found
The EPA's WaterSense program demonstrated
adequate controls for ensuring that its estimated
water and energy savings were reasonable. The
program established goals, measured
performance, and established controls for
reducing program risk.
The EPA estimated that
consumers saved over
1.5 trillion gallons of water
through use of WaterSense-
labeled products. Consumers
saved an estimated $1,100
for every federal dollar spent
on the program.
However, the program lacked effective control
over one performance measure: the number of
partners working to improve water efficiency. The EPA can improve its tracking of
this measure. The EPA also can improve program accountability by adopting its
tracked water savings as an agency outcome measure.
The EPA launched WaterSense in 2006, in part, to ensure the performance of
water-efficient products. The EPA estimated that through 2015, the use of
WaterSense-labeled products saved 1.5 trillion gallons of water and reduced the
amount of energy needed to heat, pump and treat water by 212 billion kilowatt
hours. As a result, consumers saved an estimated $32.6 billion. The EPA
reported that more than 1,738 partners had joined the WaterSense program
through 2015.
The EPA's voluntary WaterSense program adhered to good practices in
program management, achieved significant returns on investment, documented
its controls on water savings and product performance, and obtained broad
partner and consumer support. The EPA could identify and disseminate the
good management practices of the WaterSense program to support the 2016
Performance Management Improvement Accountability Act's requirement to
enhance program management across the agency. In our opinion, the
WaterSense program is a sound model for voluntary programs. With
adjustments, the program will strengthen its potential for producing
beneficial results.
Recommendations and Planned Agency Actions
We recommend that the Assistant Administrator for Water share WaterSense
program management practices, evaluate the appropriateness of adopting water
savings as a program measure, implement controls for partners to periodically
reconfirm their commitment to the program, and revise annual partner reporting.
The agency agreed with all recommendations and provided acceptable corrective
actions and completion dates. All recommendations are resolved.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
August 1, 2017
MEMORANDUM
SUBJECT: EPA's Voluntary WaterSense Program Demonstrated Success
Report No. 17-P-0352
FROM: Arthur A. Elkins Jr.
TO:
Michael H. Shapiro, Acting Assistant Administrator
Office of Water
This is our report on the subject evaluation conducted by the Office of Inspector General (OIG)
of the U.S. Environmental Protection Agency (EPA). The project number for this evaluation was
OPE-FY17-0001. 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.
In your response to our draft report, you agreed to all recommendations and provided acceptable
corrective actions and completion dates. No response to this report is required. If you choose to respond,
your 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.
We will post this report to our website at www.epa.gov/oig.

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EPA's Voluntary WaterSense	17-P-0352
Program Demonstrated Success
		Table of 	
Purpose		1
Background 		1
EPA's WaterSense Program		1
Components of Internal Control 		5
Federal Program Management		5
Responsible Office		5
Scope and Methodology		5
Results of Review		6
Program Accomplishments		6
Controls on Water and Energy Savings Are in Place		7
Control Over the Number of Program Partners Is Needed		10
WaterSense Program Is Well Designed and Managed		11
Conclusion		12
Recommendations		13
Agency Response and OIG Evaluation		13
Status of Recommendations and Potential Monetary Benefits		15
Appendices
A Agency Response to Draft Report and OIG Evaluation 	 16
B Distribution 	 21

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Purpose
The Office of Inspector General (OIG) of the U.S. Environmental Protection
Agency (EPA) examined whether the accomplishments reported by the EPA's
WaterSense program reflected actual results. We evaluated EPA controls to assess
the accuracy of WaterSense product label claims of water and energy savings,
verify industry data used to estimate program accomplishments, and test the
veracity of the program's annual accomplishment estimates.
Background
EPA's WaterSense Program
The EPA launched its WaterSense program in 2006 to raise awareness about
water efficiency, ensure the performance of water-efficient products, and provide
good consumer information. WaterSense is a partnership program designed to
protect the nation's future water supply by, among other actions, promoting and
enhancing the market for water-efficient products. WaterSense aims to help
consumers and businesses use water resources more efficiently, and, in doing so,
preserve water resources for future generations and reduce water and wastewater
infrastructure costs by decreasing unnecessary water consumption.
Over the next decade, 80 percent of states are expected to suffer some type of
water shortage under average water conditions, according to the information state
water managers reported to the U.S. Government Accountability Office (GAO)
in 2013.
Program Structure
Over the WaterSense program's first
10 years, the Office of Wastewater
Management within the EPA's Office
of Water operated the program. The
program averaged seven full-time EPA
employees, who worked to provide
program direction and oversight,
consumer outreach, partner support,
maintenance of the WaterSense website,
and development of specifications for
WaterSense-labeled products. In
addition, each EPA region had a part-
time WaterSense coordinator, who
provided public outreach and education,
recruited partners, and worked with
partners to promote the WaterSense
program and water efficiency.
17-P-0352
WaterSense Strategic Goals
•	Raise awareness about the
importance of water efficiency.
•	Develop product specifications for
water-using products that improve
their water efficiency and ensure
product performance.
•	Promote practices and services to
reduce outdoor and commercial
water use.
•	Help consumers to differentiate
among products and services that
use less water.
•	Support state and local water
efficiency efforts.
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look for
Examples of Wa terSense program promotional material. (EPA photos)
The WaterSense program provided financial information that showed the EPA
spent about $33 million on the program since its launch in 2006.1 As part of
that total, the Office of Water provided approximately $2 million a year for
(1) a contract to provide program support, and (2) an interagency agreement
with the U.S. Department of Energy's Lawrence Berkeley National
Laboratory to develop and maintain the water-savings model the EPA
uses to estimate its accomplishments.
WaterSense-labeled products include faucets, showerheads, toilets, urinals,
pre-rinse spray valves, and irrigation controllers. The program relies on
partners to manufacture, distribute and sell products, and to promote
WaterSense and water efficiency. Partner categories include manufacturers,
retailers and builders, as well as promotional partners. Promotional partners
include water utilities, governments and advocacy groups. Partners promote
WaterSense products and water efficiency by coordinating activities like
toilet-rebate programs, the "Shower Better" campaign, and educating
consumers on fixing water leaks.
Third-Party Certification of WaterSerise-Labeled Products
The WaterSense program labels products that generally use 20 percent less
water and perform as well as, or better than, conventional product models.
Third-party certification demonstrates that products with the label meet the
WaterSense criteria. A manufacturer cannot put the WaterSense label on a
product without a third-party certification. During the certification process, a
manufacturer and the third-party certifying body test the product in
accordance with specifications established by the EPA. The third party then
certifies that the product and manufacturing processes meet the specifications
and authorizes the manufacturer to use the WaterSense label on the certified
product.
1 The President's fiscal year 2018 budget, released in May 2017, proposed to eliminate the WaterSense program. As
of July 31, 2017, Congress had not passed appropriations for fiscal year 2018, and the continuity of the program
remained uncertain.
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Annual Reporting
The WaterSense program describes its results through three annual reporting
mechanisms:
(1)	Partners report to the WaterSense program on product and promotional
efforts for the year. Manufacturer partners report the quantities of
WaterSense-labeled products and total products shipped, retailer and
distributor partners report quantities sold, and all partners report on
their water efficiency activities. The EPA depends on partner
information to assess annually the impact of the WaterSense program.
(2)	The WaterSense program's annual report describes the program's
accomplishments to the public. The program voluntarily issues this
report that, among other accomplishments, estimates water and energy
savings attributed to the WaterSense program.
(3)	The EPA annually reports to Congress and the public on its
performance achievements. Since fiscal year 2016, the EPA has
included the number of WaterSense partners as a performance
measure.
Water-Savings Models
The EPA developed a set of models to estimate water savings attributable to
the use of WaterSense-labeled products. These models examine water use for
various sectors, including residential, commercial, institutional and outdoor
uses. To determine the amount of water saved, the models compare two
scenarios: (1) water used in the absence of the WaterSense program; and (2)
water used with the program in place.
Each model includes various factors in calculating the total water used for
each product type. For example, the residential model incorporates the
marginal price of water, household size, household income, and product
efficiency in the calculations of water consumption for household fixtures
such as toilets. The EPA uses product shipping data reported by manufacturer
partners as annual input into the model.
Energy and Monetary Savings
The EPA also estimates energy and monetary savings resulting from use of
WaterSense products. Water and energy uses are interrelated (Figure 1).
Pumping, treating and heating water for use, as well as treating wastewater for
disposal, consume energy. As such, saving water results in saving energy.
Saving water also saves money for consumers through reduced water, sewer,
and energy bills. While WaterSense reports the energy savings associated with
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Figure 1: Examples of interrelationships between water
and energy uses
Water Flows
Source: U.S. Department of Energy.
all phases of water delivery, use and disposal, only the cost savings associated
with the heating of water are included in the program's monetary savings.
Authority for Program
The WaterSense program addresses the EPA's strategic goal to protect
America's waters and the EPA's cross-agency strategy to work toward a
sustainable future. The EPA operates the program voluntarily using broad
authorities provided by the Clean Water Act, and the Safe Drinking Water
Act.2 The Clean Water Act allows the EPA to conduct water-efficiency
activities related to reducing pollution and decreasing the flow of sewage. The
Safe Drinking Water Act allows the EPA to conduct water-efficiency
activities related to providing a dependably safe supply of drinking water.
As recently as 2016, congressional proposals to provide the EPA with direct
authority for the WaterSense program have been unsuccessful. In May 2017,
a bipartisan group of U.S. Senators introduced legislation to authorize the
program. As of July 31, 2017, this legislation remains pending and the agency
continues to operate its WaterSense program voluntarily.
2 Sections 104(a), (b). and (o) of the Clean Water Act; Sections 1442(a)(1) and (2) of the Safe Drinking Water Act.
In particular. Section 104(o) of the Clean Water Act states that the EPA Administrator "shall conduct research and
investigations on ... methods of reducing the total flow of sewage, including, but not limited to, unnecessary water
consumption in order to reduce the requirements for, and the costs of, sewage and waste treatment services."
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Components of Internal Control
Internal controls help federal managers achieve
their program objectives by improving
program efficiency and effectiveness,
enhancing information and reporting, and
ensuring compliance with applicable laws and
regulations. An effective internal control
system helps a program adapt to shifting
environments, evolving demands, changing
risks, and new priorities. The GAO's Standards for Internal Controls in the
Federal Government specifies guidance for designing internal controls and
putting those controls in place. The GAO guidance identifies five components of
internal controls. These components apply to staff at all organizational levels and
to each of the program's objectives.
Federal Program Management
Congress recognized the need for improved program management in federal
agencies when it enacted the Program Management Improvement Accountability
Act (PMIAA) in December 2016. The PMIAA requires that by December 2017,
the federal Office of Management and Budget must establish standards and
policies for executive agencies, consistent with widely accepted standards for
program and project management planning and delivery.3
Under the PMIAA, each agency must designate a Program Management
Improvement Officer to implement agency program management policies, and
develop a strategy for enhancing the role of program managers within the agency.
The role of the Program Management Improvement Officer, among other things,
is to develop improved means for collecting and disseminating best practices and
lessons learned to enhance program management across the agency.
Responsible Office
The responsible office for this report is the EPA's Office of Water. The Office of
Wastewater Management within the Office of Water implements the WaterSense
program.
Scope and Methodology
We conducted our work from October 2016 to May 2017. We conducted this
performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain
3 The Project Management Institute's The Standard for Program Management (2013) is an example of widely used
standards.
GAO's Components of
Internal Control
•	Control Environment
•	Risk Assessment
•	Control Activities
•	Information and Communication
•	Monitoring
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sufficient, appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit
objectives.
We reviewed applicable laws, policies, procedures and guidance. We collected
and analyzed program documents. We interviewed the WaterSense program
director and program staff at EPA headquarters, as well as in EPA Regions 1, 3
and 8. We also interviewed staff in the EPA's ENERGY STAR program, 14
WaterSense program partners, and another program stakeholder. We surveyed
WaterSense coordinators in all 10 EPA regions.
We used GAO's standards of internal control in our assessment of the EPA's
reporting of WaterSense program results. However, the scope of our evaluation
did not include assessing the effectiveness of EPA controls.
Because the Office of Management and Budget has not yet issued the federal
standards that the PMIAA required by December 2017, we used the private
industry standards for program management found in the Project Management
Institute's The Standardfor Program Management in our assessment of the
EPA's management of the WaterSense program.
Results of Review
The EPA's voluntary WaterSense program demonstrated success. Over the past
10 years, the program estimated substantial water and energy savings, and returns
on investment. The program established adequate controls for ensuring that its
saving estimates were reasonable. However, the program lacked effective control
over one performance measure: the number of partners working to improve water
efficiency. Therefore, the program may not accurately report the number of
partners actively working to improve water use efficiency.
The program also displayed elements of a well-designed and managed program.
In our opinion, the EPA's adherence to good practices resulted in consumer and
industry confidence in WaterSense-labeled products, broad stakeholder support,
and returns on investment. The EPA's WaterSense program demonstrated a sound
model for voluntary programs. With adjustments, the program will strengthen its
potential for producing beneficial results.
Program Accomplishments
The program stated in its voluntary annual report that through 2015, use of
WaterSense-labeled products had saved 1.5 trillion gallons of water (Figure 2)
and reduced the amount of energy needed to heat, pump and treat water by 212
billion kilowatt hours. This resulted in consumers saving $32.6 billion.
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Independent third parties certified over 16,000 WaterSense-labeled products. The
program also reported that 1,738 organizational partners joined through 2015.4
The EPA's WaterSense program estimated significant returns on investment over
its first 10 years (2006-2015). For example, the program calculated the following:
•	An estimated $1,100 saved by consumers on their energy and water bills
for every $1 spent by the federal government on the WaterSense program.
•	An estimated 51,000 gallons of water saved for every $1 spent by the
federal government on the WaterSense program.
Figure 2: Billions of gallons of water saved per year
400
343
.¦ill
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: OIG analysis of EPA data.
These returns on investment are based on the savings and costs reported by the
program, and capture some of the water and energy savings resulting from
WaterSense-labeled products. The program also contributed value to the
plumbing industry by providing a unified labeling system that consumers could
understand, and by providing product specifications that focused not only on
water efficiency but performance. The calculated benefits also do not capture
savings from additional WaterSense efforts, such as labeling homes, certifying
irrigation professionals and providing educational materials.
Controls on Water and Energy Savings Are in Place
The EPA's WaterSense program had controls in place to ensure that the water and
energy savings it calculated were reasonable. The program's controls conformed
to GAO's five components of internal control. The EPA's implementation of
these controls provided assurance that its reported water and energy saving
4 The EPA publicly released the WaterSense program's 2016 Accomplishments Report on June 27, 2017. The
agency included some of these most-recent accomplishments in its response to our draft report (Appendix A).
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estimates were generally accurate and reflected actual results. In addition, the
program used a transparent and sufficiently documented control process, which
provides assurance that the program will continue its good practices.
The EPA had controls in place to assess WaterSense product claims, manufacturer
shipping data, and the methodology used to calculate water and energy saving
estimates (Figure 3). For example, the annual shipping data reported by
manufacturer partners serve as the foundation for the savings calculations.
Program staff told us that they identified the significant manufacturer partners,
and estimated they receive information on 90 percent of product shipments each
year. Program staff also told us that they did not estimate energy and water
savings for the missing 10 percent. As a result, the program underreported energy
and water savings to the public.
Figure 3: WaterSense product shipments provide information for estimating water
and energy savings	

Consumers
Purchaseand
Use Product
Product Goes
to Market
Manufacturer
Manufacturer
Reports to EPA
on Products
Shipped
Develops
WaterSense
Product
Label
3rd Party £epa
3rd Party
Certifies that
Product
Meets
Specifications
Market
EPA Checks
Against Other
Information
Surveillance
Re-Testing
EPA
Establishes
Product
Specifications
I
Consumers


Achieve


Water and


Energy


Savings




EPA Reports^—
EPA

Estimated I
Calculates

Water and ll
Water and

Energy ||
Energy

Savings |
Savings




Peer Review
of Model
Source: OIG figure created from EPA information.
Overall, the partners agreed that the program effectively saved water and energy.
The promotional partners we interviewed provided several examples illustrating
how the WaterSense program effectively reached the consumer, supported the
partners, and saved water and energy. In one example, a partner stated that the
WaterSense program informed consumer choices, brought the water efficiency
community together, and improved the reputation of the program.
Table 1 presents other examples that illustrate how the EPA's WaterSense
program conformed to GAO's components of internal control.
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Table 1. Examples of the WaterSense program's conformance to the five components of internal
controls identified in GAO's Standards for Internal Controls in the Federal Government
Component of
internal control
Examples of internal controls
Control Environment
Program documents outlined the program's objectives and vision, and identified
program requirements.
The EPA entered into partnership agreements with program participants, and the
partners agreed to meet program requirements.
Product certification guidelines described activities that must be performed to
ensure that products meet specifications.
The EPA established the WaterSense trademark to be used only on products
certified to meet WaterSense performance and water-savings specifications.
Risk Assessment
Certifying bodies followed specific guidelines in certifying that products meet
WaterSense specifications.
Certifying bodies audited manufacturers' product testing and manufacturing
processes.
Certifying bodies required re-tests for product testing and changes in
manufacturing processes to meet product specifications.
Control Activities
EPA contractor conducted quality assurance review of product data supplied by
certifying body.
Certifying bodies audited laboratory procedures, witnessed product testing and
production, and oversaw product re-testing.
Accreditation bodies performed annual assessments of certifying bodies.
Information and
Communication
Partnership agreements required manufacturing partners to report shipping data
used to estimate water and energy savings.
The EPA used a peer-reviewed model and reported shipping data to calculate
estimated water and energy savings.
The EPA validated manufacturer data using other sources.
The EPA took steps to ensure that the largest manufacturers supplied their annual
shipping data for inclusion in the EPA's estimate of water savings.
Monitoring
Accreditation bodies conducted annual surveillance of certifying bodies for
compliance with certification standards.
Certifying bodies performed ongoing market and product labeling surveillance.
Certifying bodies may suspend or withdraw a label due to a manufacturer's
nonconformance with guidelines.
Source: OIG analysis of EPA information.
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Control Over the Number of Program Partners Is Needed
The EPA lacked control over the number of WaterSense program partners
identified in its annual accomplishment report and included in the EPA's annual
performance report as a performance measure. The program used partners' annual
reports to gather information on water-efficiency activities. Because the partner
reporting rate was low, the program could not determine whether all partners were
working actively to improve water use efficiency and should be included in the
performance measure.
The EPA's data shows that the number of partners participating in the program
has grown steadily (Figure 4). The EPA reported more than 1,738 partners at the
end of 2015. The EPA elevated the importance of this accomplishment when it
added "the number of WaterSense partners working to improve water use
efficiency" as a national performance measure for fiscal year 2016.
Figure 4: Cumulative number of WaterSense partners overtime
2000
1500
1000
: . 11
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
¦	Builder	¦ Licensed Certification Provider
¦	Manufacturer	¦ Professional Certifying Organization
¦	Retailer or Distributor	¦ Promotional
Source: OIG analysis of EPA data.
Potential WaterSense partners sign agreements that commit most partners to
report annually on their water-efficiency activities and accomplishments. An
exception is the promotional partnership agreement that limits the annual
reporting requirement to utilities and governments. The agreement does not
include this requirement for other promotional partners, such as trade associations
and nongovernmental organizations. As such, about 12 percent of partners were
not required to report.
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In addition, not all partners that were required to submit reports complied. The
program used its annual partner reporting process to gather information on the
water-efficiency activities of its partners (Figure 5). Because the partner reporting
rate was low—only about 20 percent in 2015—the program could not determine
whether all partners were working actively to improve water use efficiency and
should be included in the EPA's performance measure. The EPA included all
partners with signed agreements, regardless of whether they reported.
Figure 5. Overview of the EPA's WaterSense program partners	
EPA Recruits
Program
Partners
4
Partners Sign
Agreement
EPA
WaterSense
PARTNER
Partners Conduct
Activities to Encourage
Water Savings

Partners Report to
EPA on Activities




EPA Reports 11

Number of

Partners
m
The EPA included partners in its performance measure, "the number of WaterSense partners working to
improve water use efficiency," regardless of whether partners reported on their activities.
Source: OIG figure created from EPA information.
Over its 10-year existence, the WaterSense program had not asked partners to
renew their agreements. The EPA should have a control in place for ensuring the
accuracy of its performance measure. Without a control in place to periodically
assess that partners continue to work to improve water use efficiency, as they
pledged to do when signing their agreement, the number of partners the EPA
reports may be overestimated and the program's understanding of whether all
partners still work actively to improve water use efficiency will remain limited.
WaterSense Program Is Well Designed and Managed
The WaterSense program displayed elements of a well-designed and managed
program. In our opinion, the EPA's adherence to these good practices resulted in
consumer and industry confidence in WaterSense-labeled products, broad
stakeholder support, and demonstrated returns on investment. Examples of good
program management practices5 used by the EPA's WaterSense program include
the following:
• Program Strategy Alignment. The EPA identified the need for a
program on water efficiency similar to its ENERGY STAR program to
5 These examples of good practices are arranged by the five performance domains described in the Project
Management Institute's The Standard for Program Management (2013).
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address the growing need to conserve water. In 2006, the EPA launched
the WaterSense program to meet this need.
•	Program Benefits Management. The WaterSense program required its
manufacturing and retail partners to annually report product shipping and
sales data. This provided the information needed to estimate and report
water savings attributed to the program. The program clearly
communicated these accomplishments to stakeholders in its annual
reports.
•	Program Stakeholder Engagement. The WaterSense program developed
partnerships and relied on its partners to manufacture, distribute and sell
WaterSense labeled products, and to promote the program and water
efficiency. The program established expectations in agreements signed by
partners. The program engaged stakeholders in the development of
product specifications.
•	Program Governance. The WaterSense program presented its vision,
mission, strategic goals and portfolio plans in its business plan. The
program has a well-developed set of control documents that address
program risk at the appropriate level.
•	Program Life Cycle Management. The WaterSense program is in its
benefits delivery phase, as evidenced by its demonstrated returns on
investment. The director and staff have managed and expanded the
program over time to include not only certifying products, but also
promoting other water-efficiency practices and certifying homes. In
addition, the program director and some partners have discussed how the
program may look in the future and how water-efficiency gains could
continue if the EPA chooses to close the program.
Congress recognized the need for improved program management in federal
agencies when it passed the PMIAA in 2016. But the act did not require the
government to identify federal standards until December 2017. The good
practices of WaterSense could be identified and disseminated as part of meeting
the requirements of the PMIAA to develop improved means of collecting and
disseminating best practices and lessons learned to enhance program management
across the agency.
Conclusion
Well-designed and managed government programs can achieve significant
outcomes. The EPA's voluntary WaterSense program demonstrated success in its
estimates of returns on investment, controls on water savings and product
performance, and partner support. Over its first 10 years, WaterSense achieved
substantial estimated water savings of 1.5 trillion gallons. This water savings
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contributed to the EPA's strategic goal of protecting America's waters by
reducing the amounts of drinking water that consumers used in homes and
businesses, and of wastewater that would be treated. In addition, the program used
transparent and documented controls, providing assurance that the program will
continue its good practices.
The WaterSense program is a sound model for voluntary programs. With
adjustments, the program will strengthen its potential for producing beneficial
results. To improve performance accountability for WaterSense, the EPA should
adopt water savings as an outcome measure, develop a control for identifying the
number of partners, and take steps to improve partner reporting. The EPA also has
an opportunity to inform good practices for program management and
accountability in other EPA programs by sharing successful WaterSense practices
more broadly.
Recommendations
We recommend that the Assistant Administrator for Water:
1.	Share WaterSense program practices in program design, implementation
and reporting with the agency's Program Management Improvement
Officer.
2.	Evaluate the appropriateness of adopting water savings as a program
measure for WaterSense in the EPA's fiscal year 2019 National Program
Guidance for the Office of Water.
3.	Develop and implement controls for WaterSense partners to periodically
reconfirm their commitment to the program.
4.	Revise annual WaterSense program partner reporting to incorporate the
following:
a.	Require all promotional partners to report.
b.	If the program continues, improve the rate of reporting for all
partners.
Agency Response and OIG Evaluation
The acting Assistant Administrator for Water agreed with our recommendations
and provided acceptable, planned corrective actions, and projected or actual
completion dates. During a June 29, 2017, meeting, and in two follow-up emails,
the program director provided additional clarification on the agency's planned
corrective actions. Specifically, the director committed to sharing the WaterSense
program design, implementation and reporting with the agency's Program
Management Improvement Officer by the end of fiscal year 2018. In the event the
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agency has not designated an officer, the program will share this information with
an appropriate alternate official. The agency also agreed that if Congress
maintains funding for the WaterSense program, the Office of Water will consider
a new program indicator measure for water savings and will document its
evaluation of the appropriateness of adding the measure to the National Water
Program Guidance for the Office of Water.
All recommendations are resolved. Appendix A contains the Office of Water's
response to the draft report and our evaluation.
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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
13
Share WaterSense program practices in program design,
implementation and reporting with the agency's Program
Management Improvement Officer.
R
Assistant Administrator
for Water
9/30/18

2
13
Evaluate the appropriateness of adopting water savings as a
program measure for WaterSense in the EPA's fiscal year 2019
National Program Guidance for the Office of Water.
R
Assistant Administrator
for Water
9/30/17

3
13
Develop and implement controls for WaterSense partners to
periodically reconfirm their commitment to the program.
R
Assistant Administrator
for Water
9/30/17

4
13
Revise annual WaterSense program partner reporting to
incorporate the following:

Assistant Administrator
for Water


a.	Require all promotional partners to report.	C	6/27/17
b.	If the program continues, improve the rate of	R	3/31/18
reporting for all partners.
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
Agency Response to Draft Report and OIG Evaluation
^ PftOTt0
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
June 27, 2017
OFFICE OF WATER
MEMORANDUM
SUBJECT: Response to Office of Inspector General Draft Report No. OPE-FY17-0001 —
EPA's Voluntary WaterSense Program Demonstrated Success, dated May 30,
Thank you for the opportunity to respond to the issues and recommendations in the subject audit
report. Following is a summary of the agency's overall position, along with its position on each
of the report recommendations. For the report recommendations, we have provided high-level
intended corrective actions and estimated completion dates. For your consideration, we have
included a Technical Comments Attachment to supplement this response.
AGENCY'S OVERALL POSITION
The EPA appreciates being provided with the opportunity to respond to the OIG evaluation of
the WaterSense program. The conclusion of the report confirms our position that the program
represents an effective public-private partnership that demonstrates results and provides benefits
to business, consumers, and water utilities. WaterSense management and staff have worked
diligently to develop appropriate controls to ensure the credibility of the program and it is
satisfying to see the OIG recognize their work.
WaterSense recently updated its program savings through 2016, which was the 10th year of the
program. We provide the values here as an update to the figures included in your report. Since
2006, the program has helped save 2.1 trillion gallons of water and $46.3 billion in consumer
water and energy bills. This reflects the efforts of more than 1,850 organizations that have
entered into partnership agreements with the program.
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2017
FROM: Michael H. Shapiro /s/
Acting Assistant Administrator
TO:
Carolyn Copper
Assistant Inspector General
Office of Program Evaluation

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As described below, we accept the recommendations made by the OIG and agree that their
implementation can help to strengthen the program. We have also provided technical comments
as an attachment to this memorandum. We appreciate the productive and positive interactions we
had with OIG evaluators during the investigation, as well as the cooperation of the EPA staff and
WaterSense partners who responded to OIG inquiries.
We request that you include the entirety of this response as an appendix to the OIG final report.
AGENCY'S RESPONSE TO REPORT RECOMMENDATIONS
Recommendation 1: Share WaterSense program practices in program design, implementation
and reporting with the agency's Program Management Improvement Officer.
Response: The EPA concurs with the goal of the recommendation. Over the past several years,
program staff have met with staff in other parts of the agency to share how a third party
certification program works. WaterSense has worked hard to develop both a program strategy
and procedures that will ensure the credibility of the program. Staff will continue to share best
practices with other interested parts of the agency and the new Program Management
Improvement Officer when that person is appointed to the position.
Recommendation 2: Adopt water savings as a program measure for WaterSense in the EPA's
National Program Guidance for the Office of Water.
Response: Since 2007, WaterSense has prepared an annual accomplishments report which
includes the cumulative water, energy, and consumer bill savings associated with reported
shipments of WaterSense labeled products. The report also highlights the number of WaterSense
partners and our progress in carrying out program activities. This report is posted on the
WaterSense website and its content is shared through WaterSense social media outlets as well as
through agency outlets. We believe this approach has allowed us to communicate the program's
success with a wide audience within and external to the agency beyond that reached by national
program guidances.
The Office of Water did not have a formal program measure for WaterSense until 2016, when it
added a measure that reported on the "number of WaterSense partners working to improve water
use efficiency". This measure had previously been associated with the Office of Water climate
strategy and associated workplans as a means to encourage regional staff to help the national
program extend WaterSense program opportunities to a greater number of partners. We agree
that the partner measure is an output measure and that it may be more appropriate to include an
outcome-focused measure of gallons of water saved through the use of shipped products as an
indicator of program success. As it considers changes to the national program guidance to
respond to agency budget deliberations and the next agency Strategic Plan, the Office of Water
will take the recommendation of the OIG into consideration. The next available opportunity to
have this added as a measure would be during the FY 2019 addendum period of the FY 2018-
2019 National Program Guidance process. Given the direction in the agency to reduce the
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number of measures, the Office may choose to replace the current measure with a new measure
rather than add an additional measure.
Recommendation 3: Develop and implement controls for WaterSense partners to periodically
reconfirm their commitment to the program.
Response: In order to become a WaterSense partner, eligible organizations must complete a
partnership agreement. WaterSense has frequent communications with program partners during
the year and annually requests information on what they have done to further their partnership.
In 2016, as the program approached its 10th anniversary, WaterSense implemented a practice of
sending partners an "anniversary" email - to commemorate milestones in their partnership. At
1-year, 5-year, and 10-year anniversaries, WaterSense sends an email to the partner to highlight
the milestone, thank them for their engagement, and encourage them to share their outreach
activities so WaterSense can help to promote and share them with other partners.
We agree with the OIG that it would be wise to periodically ask partners if they still wish to be
engaged with the program. Because we have already implemented the "anniversary" email, our
plan is to add a recommitment request as part of that communication. We have already started
work to determine the best approach for executing the recommendation and plan to complete it
during the 4th quarter of FY 2017.
Recommendation 4: Revise annual WaterSense program partner reporting to incorporate the
following:
a)	Require all promotional partners to report
b)	Improve the rate of reporting for all partners.
Response:
(a) As described above, WaterSense asks all partners to complete an agreement to become a
partner. A section of this agreement describes the partnership pledge. The promotional
partner category is broad and can include utilities (water, wastewater, energy), water districts,
trade associations, nonprofit organizations, and government agencies (federal, state, local).
As noted in the report, the agreement for promotional partners only includes a pledge for
organizations classified as a utility, government, or trade association to annually report to
WaterSense.
In practice, when carrying out the annual reporting process WaterSense has asked all
promotional partners, irrespective of their organizational type, to report using a consistent
form and we have received annual reports from every type of organization. That said, we
agree that the information in the agreement can be clarified to note that all types of
organizations are asked to report annually on activities they have undertaken to promote
labeled products and carry out WaterSense-related programming. We have modified our
partnership agreement terms to clarify that all partners are asked to annually report on their
promotional activities and incentive programs. The new document is available at
https://www.epa.gov/watersense/join-watersense.
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(b) Although partners have different reasons for non-reporting which may not be linked to their
level of engagement with the program, WaterSense concurs with the OIG that it would
beneficial to the program to improve the rate of annual reporting. As noted in the report, we
believe we have sufficient reporting from our product manufacturers to ensure the quality of
our savings estimates. Other reporting results provide us with insight into how partners view
the program, how they are engaging with campaigns, how they are using materials, and what
program changes they would like to see in the future. We have used the results of reporting
to help us determine the course of the program. As such, we would welcome additional
voices to inform our actions and will look to identify new strategies to improve reporting.
As we work to do so, however, we need to balance breadth with depth. For example, we may
be able to increase the rate of reporting by simplifying forms and reducing the number of
questions. However, this could have the unintended effect of reducing the value of the input
we receive. For some types of feedback, it may be better to have deeper, more thoughtful
input than could be availed by a shorter reporting form. It has been a standard WaterSense
practice to review and revise our process after each annual reporting season. We are in the
process of doing that now as we complete our 2016 accomplishments report and will
continue the process through this fall as we prepare for 2017 annual reporting which
commences in January 2018.
Summary of Agreements
No.
Recommendation
EPA
Office
High-Level Intended
Corrective Action(s)
Estimated
Completion by
Quarter and FY
1
Share WaterSense program
practices in program design,
implementation
and reporting with the
agency's Program
Management Improvement
Officer.
OW
Share program
practices upon request.
N/A, ongoing
commitment
2
Adopt water savings as a
program measure for
WaterSense in the EPA's
National Program Guidance
for the Office of Water.
ow
Consider addition of
new program measure
as part of new EPA
strategic plan and
associated national
program guidance.
4th quarter, FY
2017.
Measure would be
added during the
FY 2019 addendum
period of the FY
2018-2019 NPM
Guidance process
3
Develop and implement
controls for WaterSense
partners to periodically
OWM
Develop
communication
mechanism to seek
4th quarter, FY
2017
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reconfirm their commitment
to the program.

partnership
recommitment.

4
Revise annual WaterSense
program partner reporting to
incorporate the
following:
•	Require all promotional
partners to report.
•	Improve the rate of
reporting for all
partners.
OWM
(a)	Modify
partnership
agreement to
clarify reporting
requirement.
(b)	implement
strategies to
improve partner
reporting rate.
(a)	Completed
(b)	2nd quarter, FY
2018
CONTACT INFORMATION
If you have any questions regarding this response, please contact Steven Moore, Audit Follow-
up Coordinator of the Office of Water at 202-564-0992 or moore.steven@epa.gov.
Attachment
Technical Comments
CC: Benita Best-Wong, OW
Andrew Sawyers, OWM
Raffael Stein, OWM
Tim Fontaine, OW
Steven Moore, OW
Kathleen Butler, OIG
Kathryn Hess, OIG
OIG Evaluation: The acting Assistant Administrator for Water agreed with our
recommendations and provided acceptable, planned corrective actions, and projected or
actual completion dates. During a June 29, 2017, meeting, and in two follow-up emails,
the program director provided additional clarification on the agency's planned corrective
actions. Specifically, the director committed to sharing the WaterSense program design,
implementation and reporting with the agency's Program Management Improvement
Officer by the end of fiscal year 2018. In the event the agency has not designated an
officer, the program will share this information with an appropriate alternate official. The
agency agreed that if Congress maintains funding for the WaterSense program, the Office
of Water will consider a new program indicator measure for water savings and will
document its evaluation of the appropriateness of adding the measure to the National
Water Program Guidance for the Office of Water. All recommendations are resolved.
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Distribution
The Administrator
Chief of Staff
Assistant Administrator for Water
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
Principal Deputy Assistant Administrator, Office of Water
Audit Follow-Up Coordinator, Office of the Administrator
Audit Follow-Up Coordinator, Office of Water
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