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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2006-P-00027
July 31, 2006
Catalyst for Improving the Environment
Why We Did This Review
We performed this review to
examine a potential Superfund
cost recovery issue noted
during our audit of the U.S.
Environmental Protection
Agency's (EPA's) fiscal year
2003 financial statements. As
of August 2003, EPA had
recorded payments of
$97 milhon for Superfund
response costs to a general site
identifier "WQ" that should
have been redistributed to
specific sites or other general
site identifiers to improve
EPA's cost recovery.
Background
EPA has the authority through
the Superfund program to
respond directly to releases of
hazardous substances and seek
recovery of its costs from the
responsible parties. EPA
accounts for response costs at
a site-specific level to enable
cost recovery. EPA obligates
costs not readily identifiable to
a site to the general site
identifier "WQ," and upon
payment redistributes the costs
to specific sites.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2006/
20060731 -2006-P-00027.pdf
EPA Could Improve Its Redistribution of
Superfund Payments to Specific Sites
What We Found
EPA did not make timely redistributions of Superfund cooperative agreement,
interagency agreement, and small purchase payments from the general site
identifier "WQ" to the specific Superfund sites or other general site identifiers.
The finance offices that we reviewed recorded the payments to "WQ" instead of
redistributing them to the appropriate general or site-specific identifiers, as
required. As of January 2006, $39 million was recorded in " WQ" for those
funding vehicles. The payments remained undistributed for periods ranging from
2 months to 10 years. As a result, the $39 million may not be considered in
settlement negotiations and oversight billings. Consequently, these funds may not
be recovered from responsible parties and be available for future site cleanup
activities.
We found various reasons why EPA did not timely redistribute the " WQ" costs.
EPA did not establish "WQ" procedures, consistently monitor the "WQ" accounts,
and provide " WQ" training. EPA also did not require cooperative agreement
recipients to provide the site-specific cost detail needed.
Subsequent to our audit, EPA provided unaudited data reports that indicated the
undistributed "WQ" was reduced to $13 million as of May 12, 2006.
What We Recommend
We recommend that EPA (1) develop written "WQ" procedures, including
timeliness standards and monitoring procedures; (2) provide training; (3) change
cooperative agreement conditions to require recipients to provide cost details
within 24 hours of drawing down funds, and enforce those conditions; and
(4) redistribute the remaining historical "WQ" costs.
EPA began corrective action on several of our recommendations before we
completed the audit, and generally agreed with all recommendations.

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