U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Fiscal Years 2011 and 2010
Financial Statements for the
Pesticides Reregistration
and Expedited Processing
Fund
Report No. 12-1-0521
June 6, 2012

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Report Contributors:	Paul Curtis
Robert Smith
Bill Samuel
Sabrina Jones
Mairim Lopez
Sheila May
Demetrios Papakonstantinou
Cynthia Poteat
Myka Sparrow
Alexandra Zapata-Torres
Abbreviations
EPA	U.S. Environmental Protection Agency
EPM	Environmental Programs and Management
FIFRA	Federal Insecticide, Fungicide, and Rodenticide Act
FMFIA	Federal Managers' Financial Integrity Act
OIG	Office of Inspector General
OMB	Office of Management and Budget
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail:	OIG Hotiirie@epa.aov	write: EPA Inspector General Hotline
phone:	1-888-546-8740	1200 Pennsylvania Avenue NW
fax:	202-566-2599	Mailcode 2431T
online:	http://www.epa.aov/oia/hotline.htm	Washington, DC 20460

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U.S. Environmental Protection Agency	12-1-0521
#	Office of Inspector General	June 6,2012
isSJ
- ° At a Glance
Why We Did This Review
The Food Quality Protection
Act requires that we perform
an annual audit of the
Pesticides Reregistration and
Expedited Processing Fund
(known as the FIFRA Fund)
financial statements.
Background
The U.S. Environmental
Protection Agency (EPA) is
responsible for reassessing the
safety of older pesticide
registrations against modern
health and environmental
testing standards. To expedite
this reregistration process,
Congress authorized EPA to
collect fees from pesticide
manufacturers. The fees are
deposited into the FIFRA Fund.
Each year, the Agency prepares
financial statements that
present financial information
about the fund, along with
information about EPA's
progress in reregistering
pesticides.
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
www.epa.gov/oiq/reports/2012/
20120606-12-1 -0521. pdf
Fiscal Years 2011 and 2010 Financial
Statements for the Pesticides Reregistration
and Expedited Processing Fund
Opinion
We rendered an unqualified, or clean, opinion on EPA's Pesticides Reregistration
and Expedited Processing Fund financial statements for fiscal years 2011 and
2010, meaning they are fairly presented and free of material misstatement.
Internal Control Material Weakness Noted
We noted one material weakness in internal controls. EPA materially understated
the FIFRA payroll and benefits payable, and related payroll expenses included in
gross costs, in fiscal year 2011. The Agency's practice of transferring employees
and expenses and liabilities from FIFRA to the Environmental Programs and
Management Fund for cash flow reasons led to the understatement. The transfer
removed the base upon which the leave accrual and benefits payable amounts are
calculated. As a result, payroll and benefits payable were materially understated.
The fiscal year 2010 accruals for FIFRA were $2,269,000 while the fiscal year
2011 accruals were $17,000. Understatements could impact the opinion on the
financial statements and reliance on reported FIFRA financial information.
Compliance With Applicable Laws and Regulations
The Agency was in compliance with applicable laws and regulations.
Planned Agency Corrective Actions
The Agency agreed with our findings and recommendations. The Agency
corrected the FIFRA financial statements to reflect the proper payroll and benefit
payable amounts and indicated it will monitor the FIFRA benefit accrual at year-
end. The Agency's complete response is in appendix B to this report. We agree
with the Agency's corrective actions taken and proposed and believe the actions
adequately address the issues raised.

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*	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
V\l/^/ *	WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
June 6, 2012
MEMORANDUM
SUBJECT: Fiscal Years 2011 and 2010 Financial Statements for the
Pesticides Reregistration and Expedited Processing Fund
Report No. 12-1-0521
FROM: Arthur A. Elkins, Jr.	^	\	/
TO:	Jim Jones
Acting Assistant Administrator for Chemical Safety and Pollution Prevention
Barbara Bennett
Chief Financial Officer
Attached is our report on the U.S. Environmental Protection Agency's (EPA's) fiscal years 2011
and 2010 financial statements for the Pesticides Reregistration and Expedited Processing Fund,
conducted by the Office of Inspector General (OIG) of the U.S. Environmental Protection
Agency (EPA). This audit report represents the opinion of the OIG, and the findings in this
report do not necessarily represent the final EPA position. EPA managers, in accordance with
established EPA audit resolution procedures, will make final determinations on the findings in
this audit report. Accordingly, the findings described in this audit report are not binding upon
EPA in any enforcement proceeding brought by EPA or the Department of Justice. We have no
objections to the further release of this report to the public. This report will be available at
http ://www.epa. gov/oig.
In accordance with EPA Manual 2750, we are closing this report on issuance in our tracking
system. You should track progress of your corrective actions in the Management Audit Tracking
System.
If you or your staff have any questions regarding this report, please contact Melissa Heist
at (202) 566-0899 or Heist.Melissa@epa.gov. or Paul Curtis at (202) 566-2523 or
Curtis. Paul@,epa. gov.

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Fiscal Years 2011 and 2010 Financial Statements for the
Pesticides Reregistration and Expedited Processing Fund
12-1-0521
	Table of Contents	
Inspector General's Report on the Fiscal Years 2011 and 2010
Financial Statements for the Pesticides Reregistration and
Expedited Processing Fund
Opinion on the FIFRA Fund Financial Statements		1
Evaluation of Internal Controls		1
Tests of Compliance With Laws and Regulations		3
Management's Discussion and Analysis Section of the Financial Statements		3
Prior Audit Coverage		4
Agency Comments and OIG Evaluation		4
Attachments
1	Material Weakness		5
FIFRA Payroll and Benefits Payable Are Understated		6
2	Status of Recommendations and Potential Monetary Benefits		8
Appendices
A Fiscal Years 2011 and 2010 FIFRA Financial Statements
B Agency's Response to Draft Report
C Distribution

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Inspector General's Report on the
Fiscal Years 2011 and 2010 Financial Statements for the
Pesticides Reregistration and Expedited Processing Fund
The Administrator
U.S. Environmental Protection Agency
We have audited the Pesticides Reregistration and Expedited Processing Fund
(known as the FIFRA Fund) balance sheet as of September 30, 2011 and 2010,
and the related statements of net cost, changes in net position, and budgetary
resources for the years then ended. These financial statements are the
responsibility of U.S. Environmental Protection Agency (EPA) management. Our
responsibility is to express an opinion on these financial statements based upon
our audit.
We conducted our audit in accordance with the generally accepted auditing
standards; the standards applicable to financial statements contained in
Government Auditing Standards, issued by the Comptroller General of the United
States; and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit
Requirements for Federal Financial Statements, as Amended. These standards
require that we plan and perform the audit to obtain reasonable assurance as to
whether the financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, including the accompanying notes,
present fairly, in all material respects, the assets, liabilities, net position, changes
in net position and budgetary resources of the FIFRA Fund, as of and for the years
ending September 30, 2011 and 2010, in conformity with accounting principles
generally accepted in the United States of America.
Evaluation of Internal Controls
As defined by OMB, internal control, as it relates to the financial statements, is a
process, affected by the Agency's management and other personnel, that is
designed to provide reasonable assurance that the following objectives are met:
Reliability of financial reporting - Transactions are properly recorded,
processed, and summarized to permit the preparation of the financial
statements in accordance with generally accepted accounting principles,
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and assets are safeguarded against loss from unauthorized acquisition, use,
or disposition.
Compliance with applicable laws, regulations, and government-wide
policies - Transactions are executed in accordance with laws governing
the use of budget authority, government-wide policies, laws identified by
OMB, and other laws and regulations that could have a direct and material
effect on the financial statements.
In planning and performing our audit, we considered EPA's internal control over
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) financial
reporting by obtaining an understanding of the Agency's internal controls,
determining whether internal controls had been placed in operation, assessing
control risk, and performing tests of controls. We did this as a basis for designing
our auditing procedures for the purpose of expressing an opinion on the financial
statements and to comply with OMB audit guidance, not to express an opinion on
internal control. Accordingly, we do not express an opinion on internal control
over financial reporting nor on management's assertion on internal controls
included in Management's Discussion and Analysis. We limited our internal
control testing to those controls necessary to achieve the objectives described in
OMB Bulletin No. 07-04, Audit Requirements for Federal Financial Statements,
as Amended. We did not test all internal controls relevant to operating objectives
as broadly defined by the Federal Managers' Financial Integrity Act of 1982
(FMFIA), such as those controls relevant to ensuring efficient operations.
Our consideration of the internal controls over financial reporting would not
necessarily disclose all matters in the internal control over financial reporting that
might be significant deficiencies. Under standards issued by the American
Institute of Certified Public Accountants, a significant deficiency is a deficiency,
or combination of deficiencies, in internal controls that is less severe than a
material weakness, yet important enough to merit attention by those charged with
governance. A material weakness is a deficiency, or combination of deficiencies,
in internal controls, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected
and corrected, in a timely basis. Because of inherent limitations in internal
controls, misstatements, losses, or noncompliance may nevertheless occur and not
be detected. We noted a matter involving the internal controls and their operations
that we considered to be a material weakness.
Material Weakness: FIFRA Payroll and Benefits Payable Are
Understated
EPA materially understated the FIFRA payroll and benefits payable, and related
payroll expense included in gross costs, in fiscal year 2011. The Agency's
practice of transferring employees and related expenses and liabilities from
FIFRA to the Environmental Programs and Management (EPM) Fund for cash
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flow reasons led to the understatement. Just prior to year-end, the Office of
Pesticide Programs, in the Office of Chemical Safety and Pollution Prevention,
transferred all but one employee from FIFRAto EPM. On average, 141
employees were assigned to FIFRA throughout fiscal year 2011. The transfer
removed the base upon which the leave accrual and the benefits payable amounts
are calculated. As a result, payroll and benefits payable were materially
understated. The fiscal year 2010 accruals for FIFRA were $2,269,000 while the
fiscal year 2011 accruals were $17,000.
Comparison of EPA's FMFIA Report with Our Evaluation of Internal
Controls
OMB Bulletin No. 07-04, Audit Requirements for Federal Financial Statements,
as Amended, requires us to compare material weaknesses disclosed during the
audit with those material weaknesses reported in the Agency's FMFIA report that
relate to the financial statements and identify material weaknesses disclosed by
the audit that were not reported in the Agency's FMFIA report.
For financial statement audit and financial reporting purposes, OMB defines
material weaknesses in internal control as a deficiency or combination of
deficiencies in internal control, such that there is a reasonable possibility that a
material misstatement of the financial statements will not be prevented or detected
and corrected on a timely basis. The Agency did not report any material weakness
for fiscal year 2011 impacting the FIFRA Fund; however, we identified a material
weakness with the Agency's reporting of payroll and benefits payable. Details
concerning this material weakness are in attachment 1.
Tests of Compliance With Laws and Regulations
As part of obtaining a reasonable assurance about whether the Agency's financial
statements are free of material misstatement, we tested compliance with those
laws and regulations that could either materially affect the FIFRA financial
statements or that we considered significant to the audit. The objective of our
audit, including our tests of compliance with applicable laws and regulations, was
not to provide an opinion on overall compliance with such provisions.
Accordingly, we do not express such an opinion. We did not identify any
noncompliances that would result in a material misstatement to the audited
financial statements.
Management's Discussion and Analysis Section of the Financial Statements
We reviewed samples of reregistration, amendment, and cancellation actions
completed in fiscal year 2011 claimed in FIFRA Performance Measure 2 in the
Management's Discussion and Analysis, and found all actions sampled were
supported. We also reviewed documentation for the cumulative status of
reregistration actions in Performance Measure 2, and found that the reported
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cumulative status appears reasonable. There were no claimed fiscal year 2011
accomplishments for the other performance measures shown in the Management's
Discussion and Analysis.
During previous financial statement audits, we reported the following significant
deficiencies:
•	EPA misapplied federal retirement benefit cost factors in calculating
fiscal year 2010 imputed costs related to the Civil Service Retirement
System and the Federal Employees Retirement System. Imputed costs are
costs that are not fully reimbursed.
•	We could not assess the adequacy of the Integrated Financial
Management System automated controls.
The Agency has taken action to correct both of these deficiencies by correcting
the fiscal year 2010 imputed costs in the FIFRA Fund Financial Statements and
by implementing a new accounting system to replace the Integrated Financial
Management System in October 2011.
In a memorandum dated May 1, 2012, the Agency responded to our draft report.
The Office of the Chief Financial Officer concurred with our recommendations
and provided corrective actions for each specific recommendation. We agree with
the Agency's proposed corrective actions and believe that they adequately address
the issues raised. The Agency's complete response is included as appendix B to
this report.
Paul C. Curtis
Director, Financial Statement Audits
Office of Inspector General
U.S. Environmental Protection Agency
June 6, 2012
Prior Audit Coverage
Agency Comments and OIG Evaluation
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Attachment 1
Material Weakness
Table of Contents
1 - FIFRA Payroll and Benefits Payable Are Understated	6
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1 - FIFRA Payroll and Benefits Payable Are Understated
EPA materially understated the FIFRA Fund's payroll and benefits payable, and related payroll
expense included in gross costs, in the draft financial statements for fiscal year 2011. OMB
Circular A-136, Financial Reporting Requirements, states, "Liabilities shall be recognized when
they are incurred regardless of whether they are covered by available budgetary resources." The
Agency's practice of transferring employees and related expenses and liabilities from FIFRA to
the EPM Fund for cash flow reasons led to the understatement. The fiscal year 2010 accruals for
FIFRA were $2,269,000 while the fiscal year 2011 accruals were $17,000. Understatements
could impact the opinion on the financial statements and reliance on reported FIFRA financial
information.
The annual leave accrual amount is calculated at year-end using the total number of FIFRA
employees multiplied by their hourly rates and accrued leave balances. Just prior to year-end, the
Office of Pesticide Programs transferred all but one employee from FIFRA to EPM. On average,
141 employees were assigned to FIFRA throughout fiscal year 2011. The transfer removed the
base upon which the leave accrual and the benefits payable amounts are calculated. As a result,
payroll and benefits payable were materially understated.
EPA uses the EPM appropriation for a broad range of abatement, prevention, and compliance
activities, and personnel compensation, benefits, travel, and expenses for all programs of the
Agency. Statement of Federal Financial Accounting Standards No. 5 states that liabilities should
be recognized for exchange transactions, such as when a federal employee performs services in
exchange for compensation, when the services have been provided. OMB Circular No. 136,
Financial Reporting Requirements, further classifies liabilities of federal agencies as liabilities
covered or not covered by budgetary resources (e.g., unfunded).
EPA began the practice of moving payroll expenses from FIFRA to EPM in fiscal year 1996.
When FIFRA resources are low, the Agency transfers employees from FIFRA to EPM to keep
FIFRA obligations and disbursements within budgetary and cash limits. As FIFRA fees are
collected, employees are moved back to the FIFRA appropriation. EPA has regularly disclosed
this ongoing practice in prior FIFRA financial statement reports, and this practice is expected to
continue throughout fiscal year 2012. Temporarily moving employees for cash flow reasons
should not impact accruals as long as those employees are continuing the same work. If the
transfers become permanent, FIFRA should recognize a benefit as another appropriation would
be covering the accrued payroll debt.
The process of moving employees and the related payroll expenses and liabilities between
FIFRA and EPM near year-end contributed to the understatement of the FIFRA payroll and
benefits payable, and related payroll expense included in gross costs, in the draft financial
statements for fiscal year 2011. The Office of the Chief Financial Officer should have realized
that the transfer of employees from FIFRA to EMP was only temporary, and computed the
annual leave accrual and payroll benefits payable amounts accordingly.
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Recommendations
We recommend that the Office of the Chief Financial Officer:
1.	Correct the FIFRA financial statements to reflect the proper payroll and benefits payable
amounts.
2.	Closely monitor the payroll and benefit accruals for FIFRA at year-end.
Agency Response and OIG Evaluation
The Agency agreed with our findings and recommendations, and has completed corrective
actions on recommendation 1. The Office of the Chief Financial Officer corrected the FIFRA
financial statements to reflect the proper payroll and benefits payable amounts.
Agency actions on recommendation 2 are pending. The Office of the Chief Financial Officer
indicated it will closely monitor the payroll and benefit accruals for FIFRA at year-end. The
estimated completion date for this corrective action is September 30, 2012.
The Agency's complete response is included in appendix B to this report. We agree with the
Agency's proposed corrective actions and believe they adequately address the issues raised.
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Attachment 2
Status of Recommendations and
Potential Monetary Benefits
POTENTIAL MONETARY
RECOMMENDATIONS	BENEFITS (in $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Claimed
Amount
Agreed-To
Amount
1
7
Correct the FIFRA financial statements to reflect
the proper payroll and benefits payable amounts.
C
Office of the
Chief Financial Officer
03/05/12


2
7
Closely monitor the payroll and benefit accruals for
FIFRA at year-end.
0
Office of the
Chief Financial Officer
09/30/12


1 0 = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is unresolved with resolution efforts in progress
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Appendix A
FYs 2011 and 2010 PESTICIDES REREGISTRA TION
and EXPEDITED PROCESSING FUND (FIFRA)
FINANCIAL STATEMENTS
\ PRQrt.^
Produced by the US. Environmental Protection Agency
Office of the Chief Financial Off icer
Office of Financial Management
12-1-0521

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TABLE OF CONTENTS
Management's Discussion and Analysis
Principal Financial Statements
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EPA's FY 2011 Annual FIFRA Financial Statements

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Management's Discussion and Analysis
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MANAGEMENT'S DISCUSSION AND ANALYSIS
The Agency's Office of Pesticide Programs (OPP) was established to administer the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA) to protect public health and the
environment. The law requires the Agency to balance public health and environmental concerns
with the expected economic benefits derived from pesticides. The guiding principles of the
pesticide program are to reduce risks from pesticides in food, the workplace, and other exposure
pathways and to prevent pollution by encouraging the use of new and safer pesticides.
In accordance with FIFRA and the Federal Food, Drug, and Cosmetic Act (FFDCA), the
pesticide program administers the Revolving Fund for Certification and Other Services
(Tolerance Fund) and the Pesticides Reregistration and Expedited Processing Fund (FIFRA
Fund). As of 1996, fees for both tolerance and reregistration are deposited to the FIFRA
account, which is available to the EPA without further appropriation.
Tolerance Program Description
As part of its authority to regulate pesticides, EPA is responsible for setting "tolerances."
If the pesticide is being considered for use on a food or feed crop or as a food or feed additive,
the applicant must petition EPA for establishment of a tolerance (or exemption from a tolerance)
under authority of the FFDCA. A tolerance is the maximum legal limit of a pesticide residue on
food commodities and animal feed. Tolerances are set at levels that ensure that the public is
protected from health risks posed by eating foods that have been treated with pesticides in
accordance with label directions.
In 1954, Congress authorized the collection of fees for the establishment of tolerances for
raw agricultural commodities (Section 408 of FFDCA). Congress, however, did not authorize
the collection of fees for food additive tolerances (Section 409 of FFDCA). EPA, therefore, does
not collect fees for food additive tolerances. The Agency also does not collect fees for Agency-
initiated actions such as the revocation of tolerances for previously canceled pesticides. Fees
collected from tolerances for raw agricultural commodities were deposited to the U.S. Treasury
General Fund until 1963 when Congress established the Tolerance Fund.
In 1996, pesticide reform legislation included provisions for additional fees to support
reregistration activities. Passage of the Food Quality Protection Act (FQPA) of 1996 requires
tolerances to be reassessed as part of the reregistration program. Effective January 1997, all fees
related to tolerance activities were deposited in the FIFRA Fund. With passage of the Pesticide
Registration Improvement Act (PRI A) of 2003 and the Pesticide Registration Improvement
Renewal Act in 2007, no additional tolerance petition fees will be deposited to the FIFRA Fund
through FY 2012.
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Pesticide Reregistration Program Description
As part of its authority to regulate pesticides, EPA is responsible for re-registering
existing pesticides. The FIFRA legislation, requiring the registration of pesticide products, was
originally passed in 1947. Since then, health and environmental standards have become more
stringent and scientific analysis techniques much more precise and sophisticated. In the 1988
amendments to FIFRA (FIFRA '88), Congress mandated the accelerated reregistration of all
products registered prior to November 1, 1984. The amendments established a statutory goal of
completing reregistration eligibility decisions (REDs) by 1997. The legislation allows for
various time extensions which can extend the deadline by three years or more. The statutory
requirement for the completion of reregistration food-use (REDs) is 2006, in conjunction with
the new tolerance reassessment program. For the non-food-use active ingredient REDs, the
current legal deadline under PRIA for completion of reregistration is October 3, 2008.
Congress authorized the collection of two kinds of fees to supplement appropriated funds
to support reregistration program: an annual maintenance fee and a one-time reregistration fee.
Maintenance fees are assessed on registrants of pesticide products and were structured to collect
approximately $14 million per year. Reregistration fees are assessed on the manufacturers of the
active ingredients in pesticide products and are based on the manufacturer's share of the market
for the active ingredient. In fiscal years 1992 through 1999, approximately 14% of the
maintenance fees collected, up to $2 million each year, were used for the expedited processing of
old chemical and amended registration applications. Fees are deposited into the FIFRA
Revolving Fund. By statute, excess monies in the FIFRA Fund may be invested. Waivers
and/or refunds are granted for minor use pesticides, antimicrobial pesticides, and small
businesses.
In 1996, pesticide reform legislation included provisions for additional fees to support
reregistration activities. Passage of the FQPA of 1996 implemented the following changes in the
Pesticide Reregistration Program: reauthorized collection of maintenance fees through 2001 to
complete the review of older pesticides to ensure they meet current standards (increased annual
fees from $14 million to $16 million per year for 1998, 1999, and 2000 only) and required all
tolerances (over 9,700) to be reassessed by 2006. EPA's 2002 appropriations bill extended
authority to collect maintenance fees by one year for the amount of $17 million; and the FY 2003
appropriations extended the authority to collect fees again by one year in the amount of $21.5
million. Passage of PRIA in FY 2004 extended the authority to collect maintenance fees through
FY 2008 (with annual fee amounts at $26 million in FY 2004; $27 million in FY 2005-2006; $21
million in FY 2007; and $15 million in FY 2008). Passage of the Pesticide Registration
Improvement Renewal Act (commonly known as PRIA 2) on October 9, 2007 extended the
authority to collect maintenance fees through FY 2012 (with annual fee amounts at $22 million
each FY). PRIA 2 includes the provision for use of maintenance fees to offset the costs of
registration review beginning in FY 2008.
The reregistration process is being conducted through reviews of groupings of similar
active ingredients called cases. There are five major phases of reregistration:
~ Phase 1 - Listing of Active Ingredients. EPA publishes lists of active ingredients and
asks registrants whether they intend to seek reregistration. (Completed in FY 1989)
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~	Phase 2 - Declaration of Intent and Identification of Studies. Registrants notify EPA if
they intend to reregister and identify missing studies. (Completed in FY 1990)
~	Phase 3 - Summarization of Studies. Registrants submit required existing studies.
(Completed in FY 1991)
~	Phase 4 - EPA Review and Data Call-Ins (DCIs). EPA reviews the studies, identifies and
"calls-in" missing studies by issuing a DCI. A "DCI" is a request to a pesticide registrant
for scientific data to assist the Agency in determining the pesticide's eligibility for
reregistration. (Completed in FY 1994)
~	Phase 5 - Reregistration Decisions. EPA reviews all studies and issues a Reregistration
Eligibility Decision (RED) for the active ingredient(s). A "RED" is a decision by the
Agency defining whether uses of a pesticide active ingredient are eligible or ineligible for
reregistration. The registrant complies with the RED by submitting product specific data
and new labels. EPA reregisters or cancels the product. Pesticide products are re-
registered, based on a RED, when it meets all label requirements. This normally takes 14
to 20 months after issuance of the RED.
Research Program Description
Chemical safety is a major priority of research and decision making at EPA. EPA's new
integrated Chemical Safety for Sustainability research program is charged with examining the
risks resulting from exposure to pesticides and toxic chemicals. In previous years, this research
was performed under EPA's pesticides and toxics research program which will be consolidated
in FY 2012 into the Chemical Safety for Sustainability research program. Chemical safety
research is improving the protection of human health and the environment by providing scientific
approaches and information on chemical exposure, hazard and risk. The research program's
major goals are: (1) to evaluate pesticide and toxic chemicals for potential risks to human health
and the environment; (2) to research ways to produce, use and dispose of new and existing
chemicals using more sustainable methods, (3) emphasizes research efforts targeting
nanomaterials and endocrine disrupting chemicals and (4) uses innovative chemical screening
technologies such as computational toxicology to generate chemical data on the biological
effects of large numbers of chemicals.
The Chemical Safety research program:
•	Examines chemical properties (inherency'): Chemical inherency is the physico-chemical
characteristics of a pesticide or toxic that influences exposure and toxicity potential.
Inherency research works to understand the relationships between chemical inherency,
toxicity potential and specific disease outcomes.
•	Develops systems models to assess the potential toxicity of chemicals: Systems models
are developed to research the entire process of how a pesticide or toxic interacts with the
biological processes of humans and wildlife. The investigation starts with research on
chemical exposures. It then follows the subsequent interactions between chemical
exposures and resulting adverse effects to improve the understanding of environmentally
caused diseases.
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•	Evaluates biomarkers: Biomarkers are biological responses that indicate exposure to a
pesticide or toxic, an effect from exposure or susceptibility to adverse effects from a
chemical. Biomarkers research uses linkages to develop biomarker-based predictive tools
to understand chemical exposure events and predict potential outcomes.
•	Assesses cumulative risk: Real world chemical exposures are rarely due to a single
pesticide or toxic. The research assesses the potential human health and environmental
outcomes that may occur due to multiple and continuous exposures to toxics and
mixtures, especially those found in consumer products.
•	Evaluates Chemical Life Cycle: Life cycle considerations research includes studying the
design, manufacture, and use of a pesticide or toxic. By examining the environmental
exposures and human and ecological health impacts of a chemical, Life Cycle research
provides data to inform the design of more sustainable chemicals.
•	Provides methods for extrapolating chemical data: This research uses available pesticide
and toxics data to develop approaches that extrapolate possible effects between test
organisms and human or ecological responses, test and real-world exposure durations,
and from laboratory to field conditions.
•	Provides decision makers access to developed databases, tools and models: Using EPA's
web-based interactive tools, decision-makers and others interested in pesticide and toxics
research data can access information from chemical exposure, hazard data, decision-rules
and predictive models. CSS is working to provide more integrative, holistic information
for use in pesticide and toxic risk assessment and risk management decisions.
Enforcement and Compliance Assurance Program Description
The Pesticide Enforcement and Compliance Assurance Program focuses on pesticide
product and user compliance. These include problems relating to pesticide worker safety,
certification and training of applicators, ineffective antimicrobial products, food safety, adverse
effects, risks of pesticides to endangered species, pesticide containers and containment facilities,
and e-commerce and misuse. The enforcement and compliance assurance program provides
compliance assistance to the regulated community through its National Agriculture Compliance
Assistance Center, seminars, guidance documents, brochures, and other forms of communication
to ensure knowledge of and compliance with environmental laws.
EPA's grant support to states' and tribes' pesticide programs emphasizes its commitment
to maintaining a strong compliance and enforcement presence. Agency Cooperative Agreement
priorities for FY 2011 - FY 2013 include reducing chemical risks and protecting the underserved
and vulnerable populations. Core program activities include inspections of producing
establishments, dealers/distributors/retailers, e-commerce; imports and exports, and pesticide
misuse. Additionally, through Cooperative Agreement resources we support inspector training
and training for state/tribal senior managers, scientists, and supervisors.
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Highlights and Accomplishments
Tolerance Performance Measures
As mandated by PRIA 2, no Tolerance fees were collected and deposited to the FIFRA
Fund in FY 2011.
Measure: Tolerance re-evaluations.
Results: The tolerance reassessment program was completed in FY 2007; therefore, no
further tolerance reassessment decisions were needed or completed in FY 2011. At the end of
FY 2007, EPA had completed 9,721 tolerance reassessment decisions, addressing 100% of the
9,721 tolerances that required reassessment.
Reresistration (FIFRA) Financial Perspective
During FY 2011, the Agency's obligations charged against the FIFRA Fund for the cost
of the reregistration programs and other authorized pesticide programs were $24 million and
136.0 workyears. Of these amounts, OPP obligated $18.8 million of this cost and funded the
136.0 workyears.
Appropriated funds are used in addition to FIFRA revolving funds. In FY 2011, the
Enacted Operating Plan included approximately $ 38.5 million in appropriated funds for
reregistration program activities. The unobligated balance in the Fund at the end of FY 2011
was $400 thousand.
The Fund has two types of receipts: fee collections and interest earned on investments.
Of the $22.7 million in FY 2011 receipts, more than 99.9% were fee collections.
Reresistration Prosram (FIFRA) Performance Measures
The following measures support the program's strategic goals of Healthy Communities
and Ecosystems as contained in the FY 2010 President's budget.
Measure 1: Number of Reregistration Eligibility Documents (REDs) completed.
Results: All Reregistration Eligibility Decisions (REDs) were completed by the end of FY 2008.
No REDs were completed in FY 2011. Of the 613 chemical cases (representing approximately
1,150pesticide active ingredients), that initially were subject to reregistration, 384 cases have
completed REDs. An additional 229 reregistration cases were voluntarily canceled before EPA
invested significant resources in developing REDs. 613 reregistration cases (100%) had
completed the reregistration eligibility decision making process by the end of FY 2008.
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EPA's FY 2011 Annual FIFRA Financial Statements
6

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Measure 2: Number of products reregistered, canceled, or amended. Over 20,000
products are or eventually will be subject to product reregistration. Many products,
however, contain more than one active ingredient. Since products are reassessed
separately for each active ingredient, EPA will conduct approximately 38,000 product
reviews.
Results: In FY 2011, 373 products were reregistered; 460products were amended; 379
products were cancelled; and 6 products were suspended. Currently, a universe of 24,576
products is undergoing or has completed product reregistration. The status of those products at
the end of FY 2011 was as follows: EPA had completed decisions for 16,952 products
(specifically, 4,742 products had been reregistered; 1,639 product registrations had been
amended; 10,545 products were cancelled; and 26products were suspended); and 7,624
products had actions/decisions pending. The Agency's goal inFY 2012 is to complete 1,200
product reregistration actions.
Measure 3: Progress in Reducing the Number of Unreviewed, Required
Reregistration Studies.
Results: EPA completed the lastREDs in 2008, so all necessary studies to make
reregistration eligibility decisions for all active ingredients subject to reregistration have been
reviewed. At this time, the Agency does not plan to spend additional resources examining these
records.
Measure 4: Number and Type of DCIs Issued to Support Product Reregistration by
Active Ingredient.
Results: Regarding Data Call-In notices (DCIs) under FIFRA section 3(c)(2)(B) to
support product reregistration for pesticide active ingredients included in REDs, EPA completed
the last remaining REDs and reported DCI information for those REDs in FY 2008. There is no
further activity to report for FY 2011.
Measure 5: Future Schedule for Reregistrations.
The last REDs were completed in FY 2008, therefore there are no remaining candidates
for future decisions.
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EPA's FY 2011 Annual FIFRA Financial Statements
7

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PRINCIPAL
FINANCIAL STATEMENTS
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EPA's FY 2011 Annual FIFRA Financial Statements
8

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TABLE OF CONTENTS
Financial Statements
Balance Sheet	10
Statement of Net Cost	11
Statement of Changes in Net Position	12
Statement of Budgetary Resources	13
Notes to Financial Statements
Note 1. Summary of Significant Accounting Policies	14
Note 2. Fund Balance with Treasury	17
Note 3. Other Assets - Advances to Working Capital Fund	17
Note 4. General Property, Plant and Equipment	17
Note 5. Other Liabilities	18
Note 6. Payroll and Benefits Payable, non-Federal	18
Note 7. Income and Expenses from Other Appropriations	19
Note 8. Exchange Revenues, Statement of Net Cost	21
Note 9. Intragovernmental Costs and Revenue	21
Note 10. Reconciliation of Net Cost of Operations to Budget (formerly the
Statement of Financing)	22
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EPA's FY 2011 Annual FIFRA Financial Statements

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Environmental Protection Agency
FIFRA
Balance Sheet
As of September 30, 2011 and 2010
(Dollars in
Thousands)


FY2011
FY2010
ASSETS


Intragovernmental:


Fund Balance With Treasury (Note 2)
$ 3,541 $
4,174
Other (Note 3)
0
92
Total Intragovernmental
$ 3,541 $
4,266
Property, Plant & Equipment, Net (Note 4)
657
909
Total Assets
$ 4,198 $
5,175
LIABILITIES


Intragovernmental:


Accounts Payable and Accrued Liabilities
202
163
Other (Note 5)
326
200
Total Intragovernmental
$ 528 $
363
Accounts Payable & Accrued Liabilities
$ 270 $
265
Payroll & Benefits Payable (Note 6)
3,213
2,269
Other (Note 5)
7,052
7,039
T otal Liabilities
$ 11,063 $
9,936
NET POSITION


Cumulative Results of Operations
(6,865)
(4,761)
Total Net Position
(6,865)
(4,761)
Total Liabilities andNet Position
$ 4,198 $
5,175
The accompanying notes are an integral part of these statements.
12-1 -0521	EPA's FY 2011 Annual FIFRA Financial Statements

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Environmental Protection Agency
FIFRA
Statement of Net Cost
For the Years Ended September 30, 2011 and 2010
(Dollars in Thousands)
FY2011	FY2010
COSTS
Gross Costs (Note 9) $ 25,141 $ 25,877
Expenses from Other Appropriations (Note 7) 	35,439 	36,268
Total Costs
60,580
62,145
Less:


Earned Revenue (Notes 8, 9)
22,688
23,231
NET COST OF OPERATIONS (Note 10) $
37,892 S
38,914
The accompanying notes are an integral part of these statements.
12-1 -0521	EPA's FY 2011 Annual FIFRA Financial Statements

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Environmental Protection Agency
FIFRA
Statement of Changes in Net Position
For the Years Ended September 30, 2011 and 2010
(Dollars in Thousands)

FY 2011
FY 2010
Net Position - Beginning of Period
Beginning Balances, as Adjusted
(4,761)
$ (4,761) $
(3,711)
(3,711)
Budgetary Financing Sources:
Nonexchange Revenue - Securities Investment
Income from Other Appropriations (Note 7)
T otal Budgetary Financing Sources
2
35,439
$ 35,441 $
7
36,268
36,275
Other Financing Sources (Non-Exchange)
Imputed Financing Sources
T otal Other Financing Sources
347
$ 347 $
1,589
1,589
Net Cost of Operations
(37,892)
(38,914)
Net Change
(2,104)
(1,050)
Cumulative Results of Operations	$	(6,865) $	(4,761)
The accompanying notes are an integral part of these statements.
12-1 -0521	EPA's FY 2011 Annual FIFRA Financial Statements

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Environmental Protection Agency
FIFRA
Statement of Budgetary Resources
For the Years Ended September 30, 2011 and 2010
(Dollars in Thousands)
FY 2011
FY2010
BUDGETARY RES OURGES
Unobligated Balance, Brought Forward, October 1:
Budgetary Authority:
Spending Authority from Offsetting Collections
Earned:
Collected
Change in Unfilled Customer Orders:
Advance Received
Total Spending Authority from Offsetting Collections
Total Budgetary Resources
1,746 S
22.690
14
22.704
24,450 S
4.133
23.237
(1,151)
22,086
26.219
STATUS OF BUDGETARY RESOURCES
Obligations Incurred:
Reimbursable
Total Obligations Incurred
Unobligated Balances:
Apportioned
Total Unobligated Balances
Total Status of Budgetary Resources
24.046
24.046
404
404
24,450
24.473
24,473
1,746
1,746
26,219
CHANGE IN OBLIGATED BALANCE
Obligated Balance, Net:
Unpaid Obligations, Brought Forward, October 1
Adjusted Total
Total Unpaid Obligated Balance, Net
Obligations Incurred, Net
Less: Gross Outlays
Total, Change in Obligated Balance
2,427
2,427
2,427
24,046
(23,337)
3,136
2;
2,990
24,473
(25,036)
2,427
Obligated Balance, Net, End of Period:
Unpaid Obligations
Total, Unpaid Obligated Balance, Net, End of Period
3,136
3,136
2,427
2,427
NET OUTLAYS
Net Outlays:
Gross Outlays
Less: Offsetting Collections
Total, Net Outlays
23,337
(22,704)
633
The accompanying notes are an integral part of these statements.
25,036
(22,086)
2,950
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EPA's FY 2011 Annual FIFRA Financial Statements
13

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Environmental Protection Agency
FIFRA
Notes to Financial Statements
(Dollars in Thousands)
Note 1. Summary of Significant Accounting Policies
A.	Reporting Entity
The U.S. Environmental Protection Agency (EPA or Agency) was created in 1970 by executive
reorganization from various components of other Federal agencies in order to better marshal and
coordinate Federal pollution control efforts. The Agency is generally organized around the
media and substances it regulates -- air, water, land, hazardous waste, pesticides and toxic
substances.
The FIFRA Revolving Fund was authorized in 1988 by amendments to the Federal Insecticide,
Fungicide and Rodenticide Act (FIFRA). The 1988 amendments mandated the accelerated re-
registration of all products registered prior to November 1, 1984. Congress authorized the
collection of maintenance fees to supplement appropriations to fund re-registration and to fund
expedited processing of pesticides. Maintenance fees are assessed on registrants of pesticide
products. FIFRA also includes provisions for the registration of new pesticides (funded in part
from the PRIA or Pesticide Registration Fund), monitoring the distribution and use of pesticides,
issuing civil or criminal penalties for violations, establishing cooperative agreements with the
states, and certifying training programs for users of restricted chemicals. Appropriated funds,
with the exception of partial funding of registration from Pesticide Registration Service Fees in
the Pesticide Registration Fund, pay for these activities. The FIFRA Revolving Fund is
accounted for under Treasury symbol number 68X4310.
The FIFRA fund may charge some administrative costs directly to the fund and charge the
remainder of the administrative costs to Agency-wide appropriations. Costs funded by Agency-
wide appropriations for FYs 2011 and 2010 were $35,439 thousand and $36,268 thousand,
respectively. These amounts are included as Income from Other Appropriations on the
Statement of Changes in Net Position and as Expenses from Other Appropriations on the
Statement of Net Cost.
B.	Basis of Presentation
These financial statements have been prepared to report the financial position and results of
operations of the EPA for the Reregistration and Expedited Processing (FIFRA) Revolving Fund
as required by the Chief Financial Officers Act of 1990. The reports have been prepared from
the books and records of the EPA in accordance with Office of Management and Budget (OMB)
Circular A-136 Financial Reporting Requirements, and the EP A's accounting policies which are
summarized in this note. These statements are therefore different from the financial reports also
prepared by the EPA pursuant to OMB directives that are used to monitor and control the EP A's
use of budgetary resources. The balances in these reports have been updated from the EPA
consolidated financial statements to reflect the use of FY 2011 cost factors for calculating
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EPA's FY 2011 Annual FIFRA Financial Statements
14

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imputed costs for Federal civilian benefits programs. These updates impact the Balance Sheet,
Statement of Net Cost, and Statement of Changes in Net Position.
C.	Budgets and Budgetary Accounting
Funding of the FIFRA Revolving Fund is provided by fees collected from industry to offset costs
incurred by the EPA in carrying out these programs. Each year the EPA submits an
apportionment request to OMB based on the anticipated collections of industry fees.
D.	Basis of Accounting
Generally Accepted Accounting Principles (GAAP) for Federal entities is the standard
prescribed by the Federal Accounting Standards Advisory Board (FASAB), which is the official
standard setting body for the federal government. The financial statements are prepared in
accordance with GAAP for federal entities.
Transactions are recorded on an accrual accounting basis and a budgetary basis. Under the
accrual method, revenues are recognized when earned and expenses are recognized when a
liability is incurred, without regard to receipt or payment of cash. Budgetary accounting
facilitates compliance with legal constraints and controls over the use of Federal funds. All
interfund balances and transactions have been eliminated.
E.	Revenues and Other Financing Sources
The EPA's 2002 appropriations bill extended authority to collect maintenance fees by one year
in the amount of $17 million and the FY 2003 appropriations extended the authority to collect
fees again by one year in the amount of $21.5 million. Passage of the Pesticide Registration
Improvement Act (PRIA) in 2004 extended the authority to collect maintenance fees through FY
2008 (with annual fee amounts at $26 million in FY 2004; $27 million in FY 2005-2006; $21
million in FY 2007; and $15 million in FY 2008). Passage of the Pesticide Registration
Improvement Renewal Act (commonly referred to as PRIA II) in 2007 extended the authority to
collect maintenance fees through FY 2012 (with annual fee amounts set at $22 million each year
from 2008-2012). For FYs 2011 and 2010, the FIFRA Revolving Fund received funding from
maintenance fees collected on existing registered pesticide products and from interest collected
on investments in U.S. Government securities. For FYs 2011 and 2010 revenues were
recognized from fee collections to the extent that expenses are incurred during the fiscal year.
F.	Funds with the Treasury
The FIFRA fund deposits receipts and processes disbursements through its operating account
maintained at the U.S. Department of Treasury. Cash funds in excess of immediate needs are
invested in U.S. Government securities.
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EPA's FY 2011 Annual FIFRA Financial Statements
15

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G.	Investments in U. S. Government Securities
Investments in U. S. Government securities are maintained by Treasury (Bureau of Public Debt)
and are reported at amortized cost net of unamortized discounts. Discounts are amortized over
the term of the investments and reported as interest income. FIFRA holds the investments to
maturity, unless needed to finance operations of the fund. No provision is made for unrealized
gains or losses on these securities because, in the majority of cases, they are held to maturity.
H.	General Property, Plant and Equipment
General property, plant and equipment for FIFRA consists of software in development. All
funds (except for the Working Capital Fund) capitalize software if those investments are
considered Capital Planning and Investment Control (CPIC) or CPIC Lite systems with the
provisions of SFFAS No. 10, "Accounting for Internal Use Software." Once software enters the
production life cycle phase, it is depreciated using the straight-line method over the specific
asset's useful life ranging from two to 10 years.
I.	Accounts Receivable and Interest Receivable
FIFRA receivables are mainly for interest receivable on investments.
J. Liabilities
Liabilities represent the amount of monies or other resources that are likely than not to be paid
by the Agency as the result of an Agency transaction or event that has already occurred and can
be reasonably estimated. However, no liability can be paid by the Agency without an
appropriation or other collections. Liabilities for which an appropriation has not been enacted
are classified as unfunded liabilities, and there is no certainty that the appropriations will be
enacted. For FIFRA, liabilities are liquidated from fee receipts and interest earnings, since
FIFRA receives no appropriation. Liabilities of the Agency, arising from other than contracts
can be abrogated by the Government acting in its sovereign capacity.
K. Accrued Unfunded Annual Leave
Annual, sick and other leave is expensed as taken during the fiscal year. Sick leave earned but
not taken is not accrued as a liability. Annual leave earned but not taken as of the end of the
fiscal year is accrued as an unfunded liability. Accrued unfunded annual leave is included in the
Balance Sheet as a component of "Payroll and Benefits Payable."
L. Retirement Plan
There are two primary retirement systems for Federal employees. Employees hired prior to
January 1, 1987, may participate in the Civil Service Retirement System (CSRS). On January 1,
1984, the Federal Employees Retirement System (FERS) went into effect, pursuant to Public
Law 99-335. Most employees hired after December 31, 1983, are automatically covered by
FERS and Social Security. Employees hired prior to January 1, 1984, elected to either join FERS
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EPA's FY 2011 Annual FIFRA Financial Statements
16

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and Social Security or remain in CSRS. A primary feature of FERS is that it offers a savings plan
to which the Agency automatically contributes one percent of pay and matches any employee
contributions up to an additional four percent of pay. The Agency also contributes the
employer's matching share for Social Security.
With the issuance of SFFAS No. 5, "Accounting for Liabilities of the Federal Government,"
accounting and reporting standards were established for liabilities relating to the federal
employee benefit programs (Retirement, Health Benefits, and Life Insurance). SFFAS No. 5
requires that the employing agencies recognize the cost of pensions and other retirement benefits
during their employees' active years of service. SFFAS No. 5 requires that the Office of
Personnel Management (OPM), as administrator of the CSRS and FERS, the Federal Employees
Health Benefits Program, and the Federal Employees Group Life Insurance Program, provide
federal agencies with the actuarial cost factors to compute the liability for each program.
M. Use of Estimates
The preparation of financial statements requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ from those
estimates.
Note 2. Fund Balance with Treasury
FY 2011	FY 2010
Revolving Funds: Entity Assets	$	3,541 $	4,174
Note 3. Other Assets - Advances to Working Capital Fund
FIFRA advances funds to the EPA's Working Capital Fund to pay for computer, postage, and
other administrative support services. As of September 30, 2011 and 2010, funds advanced that
will be applied to future costs as incurred were $0 and $92 thousand respectively.
Note 4. General Property, Plant and Equipment
General property, plant and equipment consists of software and software in development.
As of September 30, 2011 and 2010, General Property, Plant and Equipment consist of the
following:
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EPA's FY 2011 Annual FIFRA Financial Statements
17

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FY 2011


FY 2010
Acquisition
Value
Accumulated
Depreciation
Net Book
Value
Acquisition
Value
Accumulated
Depreciation
905
(248)
657
909
-
905 :
$ (248) S
> 657
$ 909 Ğ
S 0
Net Book
	 .	 	 	 		 Value
Software
Total	S	905 $	(248) $ 657 $	909 S	OS 909
Note 5. Other Liabilities
For FYs 2011 and 2010, the Payroll and Benefits Payable, non-Federal, are presented on a
separate line of the Balance Sheet and in a separate footnote (see Note 6).
FY 2011	FY 2010
Other Intragovemmeirtal Liabilities - Covered by
Budgetaiy Resources
Employer Contributions - Payroll	$ 326 $	200
Total	$ 326" $ 200
Other Non-Federal Liabilities — Covered by
Budgetaiy Resources
Advances fromNon-Federal Entities
Total
7,052
7,052
7,039
7,039
Note 6. Payroll and Benefits Payable, non-Federal
FY 2011	FY2010
Covered by Budgetaiy Resources
Accrued Payroll Payable to Employees	$ 1,153	$ 589
Withholdings Payable	180	277
Thrift Savings Plan Benefits Payable	54	32
Total	$ 1,387	$ 898
Not Covered by Budgetaiy Resources
Unfunded Annual Leave Liability	$ 1,826	$ 1,371
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EPA's FY 2011 Annual FIFRA Financial Statements
18

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At various periods throughout FYs 2011 and 2010, employees with their associated payroll costs
were transferred from the FIFRA fund to the Environmental Programs and Management (EPM)
appropriation. (See graph in Note 7 below showing trend of hours charged per month to the
FIFRA fund for FYs 2011 and 2010.) These employees were transferred in order to keep
FIFRA's obligations and disbursements within budgetary and cash limits. When resources
became available, the employees charging to FIFRA increased in order to utilize resources as
much as possible. The Agency expects that the practice of transferring employees when
FIFRA's resources are low, and restoring employees when funds become available, will continue
throughout FY 2012 and probably beyond that period.
This process has led to variations between the year-end liabilities for FYs 2011 and 2010. The
liabilities covered by budgetary resources (both intragovernmental and non-Federal) represent
unpaid payroll and benefits at year-end. At the end of FY 2011, no employees were charging
their salary and benefits to FIFRA compared to 149 employees for the end of FY 2010. As of
September 30, 2011 these liabilities were $326 thousand and $1,387 thousand for employer
contributions and accrued funded payroll and benefits, as compared to FY 2010's balances of
$200 thousand and $898 thousand, respectively.
In contrast, the unfunded annual leave liability is a longer term liability than the funded
liabilities. At various periods throughout FYs 2011 and 2010, approximately 258 and 243
employees, respectively, in total have been under FIFRA's accountability. During the last pay
period of FY 2011, all FIFRA employees had been transferred to EPM so the liability was
computed based on no employees charging to FIFRA in the last pay periods covering the
timeframe from August 28, 2011 through September 30, 2011. Both the September 30, 2011 and
2010 liability balances for unfunded annual leave were accrued to cover the employees charged
to FIFRA close to the end of the fiscal year for a total of $1,826 thousand and $1,371 thousand,
respectively.
Note 7. Income and Expenses from Other Appropriations
The Statement of Net Cost reports program costs that include the full costs of the program
outputs and consist of the direct costs and all other costs that can be directly traced, assigned on a
cause and effect basis, or reasonably allocated to program outputs.
During FYs 2011 and 2010, the EPA had two appropriations which funded a variety of
programmatic and non-programmatic activities across the Agency, subject to statutory
requirements. The EPM appropriation was created to fund personnel compensation and benefits,
travel, procurement, and contract activities. Transfers of employees from FIFRA to EPM at
various times during these years (see Note 6 above) resulted in an increase in payroll expenses in
EPM, and these costs financed by EPM are reflected as an increase in the Expenses from Other
Appropriations on the Statement of Net Cost. The increased financing from EPM is reported on
the Statement of Changes in Net Position as Income from Other Appropriations.
In terms of hours charged to FIFRA each month, the transfers of employees and their associated
costs during FYs 2011 and 2010 are shown below. Note that a decrease in hours charged to
FIFRA normally signifies an increase in EPM's payroll costs, and vice versa. In addition,
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EPA's FY 2011 Annual FIFRA Financial Statements
19

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Pesticide registration was separated from FIFRA starting with FY 2004 and Pesticide has its own
set of financial statements.
FIFRA - Total Employee Hours by Month
45,000
40,000
35,000
30,000
25,000
3
O
X
o
o
>
Ĥ2 20,000
Q. '
15,000
10,000
5,000
eft
•FY 2011 Total Hours
•FY 2010 Total Hours
X/X/V'V ^ ^ ^ *
*° 
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Note 8. Exchange Revenues, Statement of Net Cost
For FYs 2011 and 2010, the exchange revenues reported on the Statement of Net Cost include
both Federal and non-Federal amounts.
Note 9. Intragovernmental Costs and Exchange Revenue
FY 2011	FY 2010
COSTS:
Intragovernmental	$ 5,822	$ 8,221
Wilhthe Public	19,319	17,656
Expenses from Other Appropriations	35,439	36,268
Total Costs	$ 60,580 $ 62,145
REVENUE:
Wilhthe Public	22.688	23.231
Total Revenue	$ 22,688 $ 23,231
NET COST OF OPERATIONS	$ 37,892 $ 38,914
Intragovernmental costs relate to the source of the goods or services not the classification of the
related revenue.
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EPA's FY 2011 Annual FIFRA Financial Statements
21
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Note 10. Reconciliation of Net Cost of Operations to Budget (formerly the Statement of
Financing)
RESOURCES USED TO FINANCE ACTIVITIES:
Budgetary Resources Obligated
Obligations Incurred
Less: Spending Authority fromOffsetting
Collections and Recoveries
Obligations, Net of Offsetting Collections
Other Resources
Imputed Financing Sources
Income from Other Appropriations (Note 7)
Net Other Resources Used to Finance Activities
FY2011
24,046
(22,704)
1,342
347
35,439
35.786
FY2010
24.473
(22,086)
2,387
1,589
36,268
37.857
Total Resources Used To Finance Activities
37.128
40.244
RESOURCES USED TO FINANCE HEMS
NOT PART OF NET COST OF OPERATIONS
Change in Budgetary Resources Obligated for Goods
Resources thatFund Prior Period Expenses
Resources thatFinance Asset Acquisition
Total Resources Used to Finance Items Not Part of the Net Cost of Operations
54
(862)
(343)
(1,336)
Total Resources Used to Finance the Net
Cost of Operations
36.320
38.908
COMPONENTS OF NET COST OF OPERATIONS
THAT WILL NOT REQUIRE OR GENERATE
RESOURCES IN THE CURRENT PERIOD
Components Requiring or Generating Res ources in Future Periods:
Increase in AnnualLeave Liability
Other
Total components ofNet Cost of Operations that Require or Generate
Resources in Future Periods
455
2
457
Components Not Requiring/Generating Resources
Depreciation and Amortization	$	248	$
Expenses Not Requiring Budgetary Resources		867		-
Total Components ofNet Cost that Will Not Require or Generate Resources	$ 1,115	$
Total Components ofNet Cost of Operations That Will Not Require or
Generate Resources in the Current Period	$ 1,572	$	6
Net Cost of Operations	$ 37,892 $ 38,914
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EPA's FY 2011 Annual FIFRA Financial Statements
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Appendix B
Agency's Response to Draft Report
May 1, 2012
MEMORANDUM
SUBJECT: Response to Office of Inspector General Draft Report: "Fiscal Year 2011 and
2010 Financial Statements for the Pesticides Reregi strati on and Expedited
Processing Fund, " Assignment No. 12-P-XXXX, dated April 20, 2012
FROM: Barbara J. Bennett /s/ Original Signed By:
Chief Financial Officer
TO:	Arthur A. Elkins, Jr.
Inspector General
Thank you for the opportunity to respond to the issues and recommendations in the subject draft
audit report. Attention to the issues identified in the draft report should help further strengthen
the agency's fiscal integrity. Attached is our corrective action plan in response to the specific
recommendations made in the draft report.
If you have any questions regarding this response, please contact Sandy Dickens of the Office of
Financial Management on (202) 564-0606.
Attachment
cc: Maryann Froehlich
Joshua Baylson
Steven Bradbury
Marty Monell
Melvin Visnick
Kimberly Dubbs
Jeanne Conklin
Dale Miller
Chris Osborne
Sherri Anthony
Sandy Dickens
Janet Weiner
Janice Kern
Sheldonna Proctor
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Elizabeth Leovey
John Street
Michael Hardy
Melissa Heist
Meg Hiatt
Paul Curtis
Robert L. Smith
Art Budelier
Sheila May
Bill Samuel
12-1-0521
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Attachment
Response to Office of Inspector General Draft Report No. 12-P-XXXX
"Fiscal Year 2011 and 2010 Financial Statements for the Pesticides Reregistration and
Expedited Processing Fund,"
dated April 20, 2012
Rec.
No.
OIG Recommendation
Proposed Corrective Action
Action
Official
Estimated
Completion Date
1.
Correct the FIFRA and PRIA
financial statements to reflect
the proper payroll and benefits
payable amounts.
1.1 OCFO/OFM will correct
the FIFRA and PRIA
financial statements to reflect
the proper payroll and
benefits payable amounts.
Office of the
Chief Financial
Officer/Office
of Financial
Management
03/05/2012
(Completed)
2.
Closely monitor the payroll and
benefit accruals for the FIFRA
and PRIA at year-end.
2.1 OCFO/OFS will closely
monitor the payroll and
benefit accruals for the
FIFRA and PRIA at year-
end.
Office of the
Chief Financial
Officer/Office
of Financial
Services
09/30/2012
12-1-0521
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Appendix C
Distribution
Office of the Administrator
Chief Financial Officer
Acting Assistant Administrator for Chemical Safety and Pollution Prevention
Assistant Administrator for Administration and Resources Management
Deputy Chief Financial Officer
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intragovernmental Relations
Associate Administrator for External Affairs and Environmental Information
Director, Office of Pesticide Programs, Office of Chemical Safety and Pollution Prevention
Deputy Director, Office of Pesticide Programs, Office of Chemical Safety and Pollution
Prevention
Senior Advisor, PRIA Implementation, Office of Pesticide Programs, Office of Chemical Safety
and Pollution Prevention
Director, Biopesticides and Pollution Prevention Division, Office of Pesticide Programs, Office
of Chemical Safety and Pollution Prevention
Director, Pesticide Re-Evaluation Division, Office of Pesticide Programs, Office of Chemical
Safety and Pollution Prevention
Director, Registration Division, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
Director, Antimicrobials Division, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
Director, Information Technology and Resources Management Division, Office of Pesticide
Programs, Office of Chemical Safety and Pollution Prevention
Director, Office of Human Resources, Office of Administration and Resources Management
Director, Office of Financial Management, Office of the Chief Financial Officer
Director, Office of Financial Services, Office of the Chief Financial Officer
Director, Reporting and Analysis Staff, Office of the Chief Financial Officer
Acting Director, Financial Policy and Planning Staff, Office of the Chief Financial Officer
Director, Research Triangle Park Finance Center, Office of the Chief Financial Officer
Director, Cincinnati Finance Center, Office of the Chief Financial Officer
Director, Las Vegas Finance Center, Office of the Chief Financial Officer
Director, Payroll Management and Outreach Staff, Office of Financial Services, Office of the
Chief Financial Officer
Staff Director, Accountability and Control Staff, Office of Financial Services, Office of the Chief
Financial Officer
Audit Follow-Up Coordinator, Office of the Chief Financial Officer
Audit Follow-Up Coordinator, Office of Chemical Safety and Pollution Prevention
Audit Follow-Up Coordinator, Office of Administration and Resources Management
FIFRA Audit Coordinator, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
12-1-0521
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