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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Special Report
Recommendation to Strengthen
Management Integrity Processes
Affecting Recovery Act Activities
Report No. 09-X-0145
April 27, 2009
RECOVERY.

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Report Contributor:
Rudolph M. Brevard
Abbreviations
EPA	U.S. Environmental Protection Agency
FY	Fiscal Year
OIG	Office of Inspector General

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i	\	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
|	I	WASHINGTON, D.C. 20460
"% ,&•	OFFICE OF
PR0	INSPECTOR GENERAL
April 27, 2009
MEMORANDUM
SUBJECT:
FROM:
Recommendation to Strengthen Management Integrity Processes
Affecting Recovery Act Activities
Report No. 09-X-0145
ClLHjLCUjCLJ
Patricia H. Hill v	/
Assistant Inspector General for Mission Systems
TO:
Craig Hooks
Acting Assistant Administrator for Administration and
Resources Management and
Senior Accountable Official for Recovery Act
Maryann Froehlich
Acting Chief Financial Officer
The Office of Inspector General (OIG) of the U.S. Environmental Protection Agency (EPA) has
completed a review of the Agency's Fiscal Year (FY) 2009 Management Integrity guidance for
reporting on internal control reviews and preparing the annual assurance letters sent to the
Administrator. This review was not an audit conducted in accordance with the Government
Auditing Standards. In accordance with the Office of Management and Budget's Recovery Act
Implementation Guidance, dated April 3, 2009, EPA should review reporting and performance
under the American Recovery and Reinvestment Act of 2009 (Recovery Act) across the Agency;
establish and oversee development and implementation of Agency guidance to identify and
mitigate risk; and ensure the correction of weaknesses relating to the Recovery Act.
This memorandum provides the OIG's recommendation for issuing additional FY 2009
Management Integrity guidance to EPA offices receiving additional funding under the Recovery
Act. Conducting oversight of spending to prevent fraud, waste, and abuse is an integral
component for EPA to achieve the governance, risk management, and program integrity
objectives outlined in the Recovery Act.
In December 2008, the Agency issued its FY 2009 Management Integrity guidance that outlined
requirements for conducting internal control reviews and preparing annual assurance statements
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forwarded to the EPA Administrator. EPA guidance specifically asks Senior Agency Officials to
address the Information Security, Hiring Practices, Interagency Agreements, and Audit
Follow-up areas of focus in their FY 2009 assurance letters.
With the recent issuance of the updated implementation guidance for the Recovery Act, we
believe it is imperative that EPA update its Management Integrity guidance to address Recovery
Act activities. Specifically, the guidance should ensure EPA offices:
•	Emphasize effective design and operation of key business processes that support
Recovery Act activities and generate data for reporting purposes;
•	Integrate Recovery Act internal control reviews into their multi-year strategies; and
•	Certify how well internal controls are working in FY 2009 assurance statements to the
EPA Administrator.
The Recovery Act emphasizes that agencies should leverage existing organizations and entities to
review, assess, and manage Recovery Act risk. We believe that updated guidance is essential for
ensuring that programmatic operations of offices that receive Recovery Act funds have internal
controls that are properly designed and operating as intended.
Action Required
We recommend that the Agency expedite action to update its Management Integrity guidance for
EPA offices receiving Recovery Act funds.
Please provide a response within 30 days describing the actions EPA is taking, or has taken, to
address our recommendation. If you or your staff has any questions regarding this review, please
contact me at (202) 566-0894 or hill.patricia@epa.gov; or Rudolph M. Brevard, Director for
Information Resources Management Assessments, at (202) 566-0893 or brevard.rudv@epa.gov.
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Appendix A
Distribution
Office of the Administrator
Acting Assistant Administrator for Administration and Resources Management
Acting Chief Financial Officer
Agency Follow-up Official (the CFO)
Agency Follow-up Coordinator
Acting General Counsel
Acting Associate Administrator for Congressional and Intergovernmental Relations
Acting Associate Administrator for Public Affairs
Audit Follow-up Coordinator, Office of Administration and Resources Management
Audit Follow-up Coordinator, Office of the Chief Financial Officer
Acting Inspector General
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