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Audit of EPA's
Fiscal 2011 and 2010
Consolidated Financial
Statements
Report No. 12-1-0073
November 15, 2011

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Abbreviations
ALJ
Administrative Law Judges
BFY
Budget fiscal year
CFC
Cincinnati Finance Center
EAB
Environmental Appeals Board
EPA
U.S. Environmental Protection Agency
FFMIA
Federal Financial Management Improvement Act of 1996
FMFIA
Federal Managers' Financial Integrity Act of 1982
GAO
U.S. Government Accountability Office
HRFund
Oil Spill Reimbursable Fund
IFMS
Integrated Financial Management System
LEO
Legal Enforcement Office
OARM
Office of Administration and Resources Management
OCFO
Office of the Chief Financial Officer
OECA
Office of Enforcement and Compliance Assurance
OIG
Office of Inspector General
OMB
Office of Management and Budget
ORC
Office of Regional Counsel
RMDS
Resource Management Directive System
RPO
Regional program office
RSSI
Required Supplementary Stewardship Information
SFFAS
Statement of Federal Financial Accounting Standards
USCG
U.S. Coast Guard
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail: OIG Hotline@epa.gov	write: EPA Inspector General Hotline
phone: 1-888-546-8740	1200 Pennsylvania Avenue NW
fax:	202-566-2599	Mailcode 2431T
online:
http://www.epa.gov/oia/hotline.htm
Washington, DC 20460

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U.S. Environmental Protection Agency	12-1-0073
Office of Inspector General	November 15 2011

At a Glance
Why We Did This Audit
We performed this audit in
accordance with the Government
Management Reform Act, which
requires the U.S. Environmental
Protection Agency (EPA) to
prepare, and the Office of
Inspector General to audit, the
Agency's financial statements
each year. Our primary objectives
were to determine whether:
•	EPA's consolidated financial
statements were fairly stated
in all material respects.
•	EPA's internal controls over
financial reporting were in
place.
•	EPA management complied
with applicable laws and
regulations.
Background
The requirement for audited
financial statements was enacted
to help bring about improvements
in agencies' financial
management practices, systems,
and controls so that timely,
reliable information is available
for managing federal programs.
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
www.epa.gov/oia/reports/2012/
20111115-12-1-0073.pdf
Audit of EPA's Fiscal 2011 and 2010
Consolidated Financial Statements
EPA Receives an Unqualified Opinion
We rendered an unqualified opinion on EPA's Consolidated Financial
Statements for fiscal 2011 and 2010, meaning that they were fairly presented
and free of material misstatement.
Internal Control Significant Deficiencies Noted
We noted the following significant deficiencies:
•	Regions and headquarters did not timely provide accounts receivable
supporting documentation.
•	EPA did not timely bill other federal agencies for reimbursable costs.
•	EPA did not properly close general ledger accounts in its cancelling
Treasury symbols.
•	EPA double counted contractor-held property.
•	EPA headquarters could not account for 1,284 personal property items.
•	EPA needs to better secure marketable securities.
•	EPA recorded earned revenue without recognizing corresponding expenses.
•	EPA is withholding payments related to the BP Deepwater Horizon oil
spill.
Noncompliance With Laws and Regulations Noted
We noted a noncompliance issue involving EPA's Oil Spill Response Account
in relation to the BP Deepwater Horizon oil spill response. EPA violated the
Antideficiency Act in November 2010 because it made expenditures in excess
of funds available. Also, to avoid a second potential Antideficiency Act
violation, EPA delayed payments to vendors, resulting in the Agency being
required to make interest penalty payments to vendors as required by the
Prompt Payment Act.
Agency Comments and Office of Inspector General Evaluation
The Agency did not concur with our finding regarding cancelling Treasury
symbols causing inappropriate balances. The Agency believes that it is
following Treasury instructions and the balances are proper. While the amounts
are not material to the financial statements, by reversing the receivable, the
Agency has understated fiscal 2011 income and bad debt expense related to
cancelling the Treasury symbol. The Agency agreed with our other findings
and recommendations.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
November 15, 2011
MEMORANDUM
SUBJECT: Audit of EPA's Fiscal 2011 and 2010 Consolidated Financial Statements
Report No. 12-1-0073
Administrator
Barbara J. Bennett
Chief Financial Officer
Craig E. Hooks
Assistant Administrator for Administration and Resources Management
Cynthia Giles
Assistant Administrator for Enforcement and Compliance Assurance
Attached is our report on the U.S. Environmental Protection Agency's (EPA's) fiscal 2011 and
2010 consolidated financial statements. We are reporting eight significant deficiencies. We also
identified an instance of noncompliance with laws and regulations related to an Antideficiency
Act violation in the Oil Spill Response Account. Attachment 3 contains the status of
recommendations related to the material weaknesses, significant deficiencies, and
noncompliances with laws and regulations reported in prior years' reports. The significant
deficiencies and noncompliances included in attachment 3 also apply for fiscal 2011.
This audit report represents the opinion of the Office of Inspector General, 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
FROM: Arthur A. Elkins, Jr.
Inspector General
TO
Lisa P. Jackson

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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, you are required to provide a written response to this
report within 90 calendar days of the final report date. The response should address all issues and
recommendations contained in attachments 1 and 2. For corrective actions planned but not
completed by the response date, reference to specific milestone dates will assist us in deciding
whether to close this report in our audit tracking system. 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.
Should you or your staff have any questions about the report, please contact Melissa Heist,
Assistant Inspector General for Audit, at (202) 566-0899; or Paul Curtis, Director, Financial
Statement Audits, at (202) 566-2523.
Attachments
cc: See appendix III, Distribution

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Audit of EPA's Fiscal 2011 and 2010	12-1 -0073
Consolidated Financial Statements
	Table of Contents	
Inspector General's Report on EPA's Fiscal 2011 and
2010 Consolidated Financial Statements	1
Review of EPA's Required Supplementary Stewardship Information,
Required Supplementary Information, Supplemental Information, and
Management's Discussion and Analysis		2
Evaluation of Internal Controls		2
Tests of Compliance With Laws and Regulations		6
Prior Audit Coverage		7
Agency Comments and OIG Evaluation		8
Attachments		9
1.	Internal Control Significant Deficiencies		9
Accounts Receivable Detail Not Provided Timely		10
Federal Reimbursable Costs Not Billed Timely		13
EPA's Process for Cancelling Treasury Symbols Caused
Inappropriate Account Balances		16
EPA Double Counted Contractor-Held Property		18
EPA Headquarters Cannot Account for 1,284 Property Items		19
EPA Should Secure Marketable Securities		20
EPA Recognized Earned Revenue in Excess of Expenditures		21
EPA Is Withholding Payments Related to BP Deepwater Horizon
Oil Spill Cleanup		23
2.	Compliance with Laws and Regulations 		24
EPA Violated the Antideficiency Act in Its Oil Spill Response Account		25
3.	Status of Prior Audit Report Recommendations		27
4.	Status of Current Recommendations and Potential Monetary Benefits		29
Appendices		31
I.	EPA's Fiscal 2011 and 2010 Consolidated Financial Statements		31
II.	Agency Response to Draft Report		97
III.	Distribution		107

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Inspector General's Report on EPA's Fiscal 2011
and 2010 Consolidated Financial Statements
The Administrator
U.S. Environmental Protection Agency
We have audited the consolidated balance sheet of the U.S. Environmental Protection Agency
(EPA) as of September 30, 2011, and September 30, 2010, and the related consolidated
statements of net cost, net cost by goal, changes in net position, and custodial activity; and the
combined statement of budgetary resources for the years then ended. These financial statements
are the responsibility of EPA management. Our responsibility is to express an opinion on these
financial statements based upon our audit.
We conducted our audit in accordance with generally accepted government 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 07-04, Audit Requirements for Federal Financial Statements, as Amended
September 23, 2009. These standards require that we plan and perform the audit to obtain
reasonable assurance about 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.
The financial statements include expenses of grantees, contractors, and other federal agencies.
Our audit work pertaining to these expenses included testing only within EPA. The U.S.
Treasury collects and accounts for excise taxes that are deposited into the Leaking Underground
Storage Tank Trust Fund. The U.S. Treasury is also responsible for investing amounts not
needed for current disbursements and transferring funds to EPA as authorized in legislation.
Since the U.S. Treasury, and not EPA, is responsible for these activities, our audit work did not
cover these activities.
The Office of Inspector General (OIG) is not independent with respect to amounts pertaining to
OIG operations that are presented in the financial statements. The amounts included for the OIG
are not material to EPA's financial statements. The OIG is organizationally independent with
respect to all other aspects of the Agency's activities.
In our opinion, the consolidated financial statements, including the accompanying notes, present
fairly, in all material respects, the consolidated assets, liabilities, net position, net cost, net cost
by goal, changes in net position, custodial activity, and combined budgetary resources of EPA as
of and for the years ended September 30, 2011 and 2010, in conformity with accounting
principles generally accepted in the United States of America.
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Review of EPA's Required Supplementary Stewardship Information,
Required Supplementary Information, Supplemental Information, and
Management's Discussion and Analysis
We obtained information from EPA management about its methods for preparing Required
Supplementary Stewardship Information (RSSI), Required Supplementary Information,
Supplemental Information, and Management's Discussion and Analysis, and reviewed this
information for consistency with the financial statements. The Supplemental Information
includes the unaudited Superfund Trust Fund financial statements for fiscal 2011 and 2010,
which are being presented for additional analysis and are not a required part of the basic financial
statements. However, our audit was not designed to express an opinion and, accordingly, we do
not express an opinion on EPA's RSSI, Required Supplementary Information, Supplemental
Information, and Management's Discussion and Analysis.
We did not identify any material inconsistencies between the information presented in EPA's
consolidated financial statements and the information presented in EPA's RSSI, Required
Supplementary Information, Supplemental Information, and Management's Discussion and
Analysis.
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, 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 controls over 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 September 23, 2009. We did not test all internal
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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, 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, 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 manner. Because of inherent limitations in internal controls,
misstatements, losses, or noncompliance may nevertheless occur and not be detected. We noted
certain matters discussed below involving the internal control and its operation that we consider
to be significant deficiencies, none of which are considered to be material weaknesses. These
significant deficiencies are summarized below and detailed in attachment 1.
Accounts Receivable Source Documentation Not Provided Timely
EPA regional and headquarters offices did not timely submit supporting documentation
to the Cincinnati Finance Center (CFC) so that CFC could promptly record accounts
receivable in the financial system. EPA policies state that within 5 business days of
determining a debt is owed to the Agency, the responsible office must forward source
documents to CFC. Regional program office (RPO), Office of Regional Counsel (ORC),
the Environmental Appeals Board (EAB), Office of Administrative Law Judges (ALJ),
Office of Enforcement and Compliance Assurance (OECA) staff, and regional Legal
Enforcement Office (LEO) staff are responsible for providing this documentation. CFC
stated that offices may have been unaware of the 5-day policy, or may have simply
forgotten to send the documentation. When CFC is unable to create receivables timely,
the debtor may not be billed appropriately, interest may not accrue, and EPA may not
collect all that it is owed. Further, EPA's delayed recording of accounts receivable could
result in a material misstatement of the financial statements.
Federal Reimbursable Costs Not Billed Timely
EPA did not timely bill other federal agencies for $2,210,617 of reimbursable costs. We
found costs that had not been billed for up to 9 years. In addition, $3,150,692 and
$521,589 of reimbursable expenses were recorded in funds cancelled in fiscal 2010 and
2011, respectively. Reimbursable costs were not timely billed to other federal agencies
because EPA had difficulty reconciling costs previously incurred to costs previously
billed under individual reimbursable agreements. Untimely billing of reimbursable costs
causes delays in replenishing funds spent on reimbursable agreements. Also, untimely
billing may result in EPA losing the ability to obligate and/or spend funds due to the
expiration and subsequent cancellation of funds before they are collected. For example,
we identified $3.7 million of reimbursable expenses due from other agencies in fiscal
2010 and 2011 in cancelled funds. Since the funds are now cancelled, if EPA does bill
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such amounts, the collections must be returned to Treasury and will not be available to
EPA.
EPA's Process for Cancelling Treasury Symbols Caused Inappropriate
Account Balances
EPA did not properly close general ledger accounts in its cancelling Treasury symbols.
We identified two instances in which EPA inappropriately recorded general ledger entries
to close accounts when it cancelled Treasury symbols. Treasury Financial Manual
Bulletin No. 2011-07, Section 21, states that agencies must cancel any remaining
balances (whether obligated or unobligated) in a closed appropriation account being
cancelled and report valid receivable and payable balances associated with a cancelled
Treasury Appropriation Fund Symbol. Because EPA did not review the net impact to
current Treasury funds, EPA's improper cancellation procedures resulted in various
misstated general ledger accounts. Consequently, the financial statements were misstated,
although the misstatements were not material to the financial statements as a whole.
EPA Double Counted Contractor-Held Property
EPA double counted 97 items of capitalized property in its financial system because it did
not remove property from its financial system that had been transferred to contractors. As
a result, these items were recorded as both EPA-held property and contractor-held
property. The double-counted property had an acquisition cost of $12.3 million and a net
book value of $5 million. EPA property guidance states that when contractors are
furnished with government property, the property is deleted from the financial system.
The contractor-held property items were not removed because EPA does not have a
policy that states who is responsible for removing contractor-held property from EPA's
financial system. Without clear policies, neither the Office of the Chief Financial Officer
(OCFO) nor the Office of Administration and Resources Management (OARM) has
taken responsibility to ensure that EPA property transferred to contractors is deleted from
EPA's financial system. The double counting resulted in capitalized property being
overstated by $5 million in fiscal 2011.
EPA Headquarters Cannot Account for 1,284 Property Items
EPA headquarters could not account for 1,284 personal property items in fiscal 2011 as
required by EPA's Personal Property and Procedures Manual. Headquarters mid-level
management was not knowledgeable about Agency property management procedures,
and EPA did not provide planned property training for Agency employees during fiscal
2011. Because EPA could not account for these property items, it was not exercising
proper control over $2.1 million of accountable personal property. Inaccurate personal
property records compromise EPA's property control system and can lead to the loss or
misappropriation of Agency assets.
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EPA Should Secure Marketable Securities
EPA does not perform inspections of the safe in which marketable securities received
should be stored to ensure that the securities are adequately safeguarded and that the
contents of the safe agree with accounting or control records. The U.S. Government
Accountability Office's (GAO's) Standards for Internal Control in the Federal
Government, GAO/AIMD-OO-21.3.1, states, "An agency must establish physical control
to secure and safeguard vulnerable assets. Examples include security for and limited
access to assets such as cash, securities, inventories, and equipment which might be
vulnerable to risk of loss or unauthorized use. Such assets should be periodically counted
and compared to control records." By not securing marketable securities, EPA increases
the risk of loss or theft of its assets.
EPA Recognized Earned Revenue in Excess of Expenditures
EPA recorded earned revenue without recognizing corresponding expenses. At the end of
fiscal 2011, EPA had recorded $7 million more in earned revenue in the Oil Spill
Reimbursable (HR) Fund than it recognized in HR reimbursable expenses. The fund had
a balance of $74.5 million in Earned Revenue Federal Billed versus $67.5 million for
Operating Expense Public Exchange. These balances were the totals after EPA recorded
(1) a $5.7 million entry to accrue unbilled reimbursements and earned revenue, and (2) a
$1.1 million entry to reduce advances from other agencies and to increase earned
revenue. Statement of Federal Financial Accounting Standards (SFFAS) No. 7,
Accounting for Revenue and Other Financing Sources, requires agencies to match
revenue and expenses. The Agency did not properly match revenues and expenses in the
HR Fund at the end of fiscal 2011 because it made earned revenue accrual entries without
recognizing an equal amount in accrued expenses. The $7 million imbalance in the HR
Fund code violates the matching principle required by the standard.
EPA Is Withholding Payments Related to BP Deepwater Horizon Oil Spill
Cleanup
As of September 30, 2011, EPA had not paid contractors working on the Deepwater
Horizon oil spill $6.6 million, of which $2.8 million is late under the Prompt Payment
Act. EPA violated the Antideficiency Act in November 2010 because it made
expenditures in excess of funds available. To avoid a second potential Anti deficiency Act
violation, EPA delayed payments to vendors, resulting in the Agency being required to
make interest penalty payments to vendors as required by the Prompt Payment Act.
Section 1315.4(g) of the Prompt Payment Act states that payment is due (1) on the date
specified in the contract, (2) in accordance with discount terms when discounts are
offered and taken, (3) in accordance with Accelerated Payment Methods, or (4) 30 days
after the start of a payment period, when a proper invoice is received. The Agency
withheld payments to vendors because it did not have sufficient cash in its Deepwater
Horizon Oil Spill funds to pay its bills. By not paying contractors on time, EPA is
incurring interest payments and is losing the opportunity to take discounts.
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Attachment 3 contains the status of issues reported in prior years' reports. The issues included in
attachment 3 should be considered among EPA's significant deficiencies for fiscal 2011. We
reported to the Agency on less significant internal control matters in writing during the course of
the audit. We will not issue a separate management letter.
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
September 23, 2009, 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 reported that no material weaknesses had been found in the design or operation of
internal controls over financial reporting as of June 30, 2011. We did not identify any material
weaknesses during the course of our audit. Details concerning our findings on significant
deficiencies can be found in attachment 1.
Tests of Compliance With Laws and Regulations
EPA management is responsible for complying with laws and regulations applicable to the
Agency. As part of obtaining reasonable assurance about whether the Agency's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws and regulations, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts, and certain other laws and
regulations specified in OMB Bulletin No. 07-04, Audit Requirements for Federal Financial
Statements, as Amended September 23, 2009. The OMB guidance requires that we evaluate
compliance with federal financial management system requirements, including the requirements
referred to in the Federal Financial Management Improvement Act of 1996 (FFMIA). We limited
our tests of compliance to these provisions and did not test compliance with all laws and
regulations applicable to EPA.
Providing an opinion on compliance with certain provisions of laws and regulations was not an
objective of our audit and, accordingly, we do not express such an opinion. A number of ongoing
investigations involving EPA's grantees and contractors could disclose violations of laws and
regulations, but a determination about these cases has not been made. The results of our tests of
compliance with laws and regulations are summarized below and detailed in attachment 2.
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EPA Violated the Antideficiency Act in Its Oil Spill Response Trust Account
In January 2011, EPA notified OMB that it violated the Antideficiency Act when EPA
made expenditures in excess of funds available in the Oil Spill Response Account in the
amount of $502,215. The violation occurred because the U.S. Coast Guard (USCG) did
not timely reimburse EPA for BP Deepwater Horizon oil spill response expenses.
According to EPA, the reason for the reimbursement delay was that USCG wanted EPA
to provide a greater level of cost documentation than had been acceptable in the past. By
spending more funds than were available, EPA violated the Antideficiency Act.
Federal Financial Management Improvement Act Compliance
Under FFMIA, we are required to report whether the Agency's financial management
systems substantially comply with the federal financial management systems
requirements, applicable federal accounting standards, and the United States Government
Standard General Ledger at the transaction level. To meet the FFMIA requirement, we
performed tests of compliance with FFMIA Section 803(a) requirements and used the
OMB guidance, Memorandum M-09-06, Implementation Guidance for the Federal
Financial Management Improvement Act dated January 9, 2009, for determining
substantial noncompliance with FFMIA. The results of our tests did not disclose any
instances in which the Agency's financial management systems did not substantially
comply with FFMIA requirements.
No other significant matters involving compliance with laws and regulations came to our
attention during the course of the audit. We will not issue a separate management letter.
Our audit work was also performed to meet the requirements in 42 U.S.C. §961 l(k) with respect
to the Hazardous Substance Superfund Trust Fund, to conduct an annual audit of payments,
obligations, reimbursements, or other uses of the fund. The significant deficiencies reported
above also relate to Superfund.
Prior Audit Coverage
During previous financial or financial-related audits, we reported weaknesses that impacted our
audit objectives in the following areas:
•	Collectibility of federal receivables and recording of any needed allowances for doubtful
accounts
•	Headquarters property items not inventoried
•	Improper closing of accounts when cancelling Treasury symbols
•	Uncollectible debt misstated
•	Financial system user account management
•	Security planning for Customer Technology Solutions equipment
•	Assessing automated application processing controls for the Integrated Financial
Management System (IFMS)
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Attachment 3 summarizes the current status of corrective actions taken on prior audit report
recommendations related to these issues.
Agency Comments and OIG Evaluation
In a memorandum dated November 10, 2011, the Agency responded to our draft report.
The rationale for our conclusions and a summary of the Agency comments are included in
the appropriate sections of this report, and the Agency's complete response is included as
appendix II to this report.
This report is intended solely for the information and use of the management of EPA, OMB, and
Congress, and is not intended to be and should not be used by anyone other than these specified
parties.
Paul C. Curtis
Director, Financial Statement Audits
Office of Inspector General
U.S. Environmental Protection Agency
November 15, 2011
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Attachment 1
Internal Control Significant Deficiencies
Table of Contents
1—Accounts	Receivable Detail Not Provided Timely		10
2—Federal	Reimbursable Costs Not Billed Timely		13
3—EPA's	Process for Cancelling Treasury Symbols Caused
Inappropriate Account Balances		16
4—EPA	Double Counted Contractor-Held Property		18
5—EPA	Headquarters Cannot Account for 1,284 Property Items		19
6—EPA	Should Secure Marketable Securities		20
7—EPA	Recognized Earned Revenue in Excess of Expenditures		21
8—EPA	Is Withholding Payments Related to BP Deepwater Horizon
Oil Spill Cleanup		23
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1—Accounts Receivable Detail Not Provided Timely
EPA regional and headquarters offices did not timely submit supporting documentation to CFC
so that CFC could promptly record accounts receivable in the financial system. EPA policies
state that within 5 business days of determining a debt is owed to the Agency, the responsible
office must forward source documents to CFC. RPO, ORC, EAB, ALJ, OECA, and regional
LEO staff are responsible for providing this documentation. CFC stated that the offices may have
been unaware of the 5-day policy, or may have simply forgotten to send the documentation.
When CFC is unable to create receivables timely, the debtor may not be billed appropriately,
interest may not accrue, and EPA may not collect all that it is owed. Further, EPA's delayed
recording of accounts receivable could result in a material misstatement of the financial
statements.
According to GAO's Standards for Internal Control in the Federal Government, transactions
should be promptly recorded to maintain their relevance and value to management in controlling
operations and making decisions. EPA's Resource Management Directive System (RMDS)
2550D-14-T1 requires Servicing Finance Offices to maintain ongoing communications with the
RPOs, ORCs, and LEOs regarding the status of settlement agreements and to ensure that
accounts receivable source documents are forwarded within 5 business days.
From our audit of accounts receivable, we found that the offices did not timely forward
supporting documentation (e.g., consent decrees, consent agreements and final orders,
administrative orders, etc.) to CFC for 39 receivables totaling $106 million. CFC received
associated source documents from 1 day to over 2 years late. Table 1 provides a summary of the
relevant exceptions found during our audit.
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Table 1: Summary of receivables support not received timely
Sample
Number of
samples
Number of
exceptions
Dollar amount
of exceptions
6th month:



Department of Justice Report
27
6
$58,314,473.66
Integrated Compliance Information System Report
11
7
4,584,500.00
Superfund Control3
29
10
27,610,137.88
All Other Control13
12
0
0.00
Subtotal
79
23
$90,509,111.54
9th month:



Department of Justice Report
18
8
$13,528,177.32
Integrated Compliance Information System Report
4
1
140,000.00
Superfund Control
2
1
1,704,020.70
All Other Control
2
0
0.00
Subtotal
26
10
$15,372,198.02
Year-end:



Integrated Compliance Information System Report
16
6
$508,000.00
Subtotal
16
6
$508,000.00
Total
121
39
$106,389,309.56
Source: OIG analysis.
a One Department of Justice exception was also noted in Superfund Control Testing but excluded from
Number of Exceptions and Dollar Amount of Exceptions in our analysis to avoid double counting.
b One Integrated Compliance Information System and one Department of Justice exception were also
noted in All Other Control Testing but excluded from Number of Exceptions and Dollar Amount of
Exceptions in our analysis to avoid double counting.
EPA's RMDS, as updated in April 2011, establishes procedures for timely providing supporting
documentation for receivables. RMDS 2550D-14-T1 addresses Superfund receivables and
requires the originating office to forward to the Servicing Finance Office copies of all Superfund
consent decrees and judgments within 5 business days of receipt from the court. RMDS 2540-9-
P3 specifically addresses administrative penalties and referrals of civil enforcement cases to the
Department of Justice. The directive requires that the originating office ensure that
documentation of administrative orders and bankruptcy proceedings with civil penalties are
provided to CFC within 5 business days. For regionally initiated administrative enforcement
actions, ORC Regional Hearing Clerks are to ensure that penalties are entered in the EPA Case
Tracking System, which automatically sends a request to CFC to establish a billing document. It
also states that OECA will develop internal processes to ensure that, in the case of OECA-
initiated administrative enforcement actions, all documentation for administrative penalty
debt/accounts receivable is sent to CFC along with the request for CFC to establish a billing
document. OECA also coordinates with CFC to determine the appropriate action when a penalty
debt/accounts receivable is 120 days past due.
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For regionally initiated cases, the ORC/LEO/RPO is required to provide effective ongoing
communication with the finance center regarding the status of settlement agreements to prevent
untimely recording of accounts receivable. For headquarters-initiated cases, the Headquarters
Hearing Clerk, the EAB, and OECA's Air Enforcement Division are responsible for notifying
CFC after an order becomes final. Untimely receipt of accounts receivable source documentation
results in inaccurate balances in the Agency's financial management system. Therefore, we
believe that regional and headquarters offices and CFC should work together to resolve this
control issue.
Recommendation
We recommend that the Assistant Administrator for Enforcement and Compliance Assurance:
1. Require that regional and headquarters enforcement officials assist CFC by
implementing EPA's newly updated RMDS policy, which includes the requirement to
forward legal documentation within 5 business days and to designate regional
contacts so that receivables are recorded timely.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendation. OECA responded that in October
2011 it issued processes for headquarters-initiated administrative enforcement actions.
Headquarters-initiated cases include those resolved by ALJ, EAB, or OECA's Air Enforcement
Division. OECA requires these offices to make orders available to CFC within 5 business days of
the order's effective date.
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2—Federal Reimbursable Costs Not Billed Timely
EPA did not timely bill other federal agencies for $2,210,617 of reimbursable costs. We found
costs that had not been billed for up to 9 years. In addition, $3,150,692 and $521,589 of
reimbursable expenses were recorded in funds cancelled in fiscal 2010 and 2011, respectively.
Reimbursable costs were not timely billed to other federal agencies because EPA had difficulty
reconciling costs incurred to costs billed under individual reimbursable agreements. Untimely
billing of reimbursable costs causes delays in replenishing funds spent on reimbursable
agreements. Also, untimely billing results in EPA losing the ability to obligate and/or spend
funds due to the expiration and subsequent cancellation of funds before they are collected. For
example, we identified $3.7 million of reimbursable expenses due from other agencies in fiscal
2010 and 2011 in cancelled funds. Since the funds are now cancelled, if EPA does bill such
amounts, the collections must be returned to Treasury and will not be available to EPA.
EPA provides goods or services to other federal agencies and is reimbursed for its expenses
under reimbursable agreements. Under reimbursable agreements, EPA uses reimbursable
authority provided by OMB to perform agreement activities. Reimbursable authority is a type of
borrowing authority that exists for definite periods of time as long as the authority from the year
of funding exists and is not expired or cancelled.
OMB Circular A-l 1, S20, states that during the expired phase, no new obligation can be incurred
against the appropriations. At the end of the expired phase, all obligated and unobligated
balances must be cancelled and the account closed. Cancelled balances may not be used to incur
or pay obligations. Collections authorized or required to be credited to a cancelled appropriation
that are received after the account is closed must be deposited in the Treasury as miscellaneous
receipts. Therefore, once the appropriation in which the expenditures were incurred expires or
cancels, EPA no longer has the ability to obligate and/or spend those funds if collected.
To execute reimbursable agreements, EPA assigns a unique reimbursable account number
(budget organization code) to each reimbursable agreement. The budget organization code for
each interagency agreement identifies obligations pertaining to that agreement, and costs of
performance must be charged to reimbursable account numbers. As EPA performs work
specified in the agreement, EPA should bill the other agency for costs incurred in providing the
services or goods, and be reimbursed by the other agency for those costs.
During our analysis of the fiscal 2011 fourth quarter federal unbilled accrual, we identified more
than $2 million of reimbursable expenses incurred from budget fiscal years (BFYs) 2000 through
2008 that were not billed to other federal agencies, as shown in table 2.
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Table 2: Federal reimbursable costs not timely billed
BFY
Expended amount
Billed amount
Unbilled amount
2000
$909,056.80
855,371.83
$53,684.97
2001
804,873.23
702,805.84
102,067.39
2002
700,161.16
681,766.76
18,394.40
2003
6,748,900.32
6,746,253.27
2,647.05
2004
1,881,762.95
1,804,949.75
76,813.20
2005
394,948,066.24
394,383,011.57
565,054.67
2006
35,943,703.28
35,610,641.09
333,062.19
2007
23,233,385.48
23,072,839.72
160,545.76
2008
59,463,193.87
58,564,846.32
898,347.55
Total
$524,633,103.33
$522,422,486.15
$2,210,617.18
Source: OIG analysis.
Not timely billing reimbursable costs may result in EPA losing the ability to obligate and spend
those funds, because collections must be returned to Treasury if the budgetary authority has been
cancelled. For example, we identified unbilled reimbursable expenses of about $3.2 million and
$522,000 remaining in cancelled funds from BFYs 2002 through 2004, as shown in table 3.
These unbilled reimbursable expenses were moved to the miscellaneous receipt Treasury
account. As a result, EPA no longer had the ability to obligate and or spend funds collected due
to the cancellation of funds.
Table 3: Unbilled costs in cancelled funds
BFY
Expended amount
Billed amount
Unbilled amount
Year cancelled
2002-2003
$16,008,647.30
$12,857,955.39
$3,150,691.91
2010
2003-2004
3,933,402.14
3,411,813.33
521,588.81
2011
Source: OIG analysis.
In response to our inquiry as to why the reimbursable expenses incurred in prior years have not
been billed, the Agency stated that there may be problems with the agreements, expenses may
not be identified to an agreement, or the expenses may have just recently been paid.
Not timely billing other federal agencies for reimbursable costs (1) causes unnecessary delays in
replenishing funds spent on reimbursable agreements, (2) limits EPA's ability to recover all costs
before funding authority cancels, and (3) could result in EPA using appropriated funds to cover
reimbursable costs incurred. If EPA does not bill and collect the funds before the funds expire, it
is not able to obligate and expend additional funds from those accounts.
Recommendations
We recommend that the Chief Financial Officer:
2. Review unbilled federal reimbursable expenses, determine their collectibility, and bill
appropriate funds before the funding period is cancelled.
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3.	Create and implement a process to reconcile expenses incurred and costs billed under
individual reimbursable agreements.
4.	Develop a process or implement a reporting system to track, for each reimbursable
agreement, the expenses that have been billed for each budget fiscal year.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendations.
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3—EPA's Process for Cancelling Treasury Symbols
Caused Inappropriate Account Balances
EPA did not properly close general ledger accounts in its cancelling Treasury symbols. We
identified two instances in which EPA inappropriately recorded general ledger entries to close
accounts when it cancelled Treasury symbols. Treasury Financial Manual Bulletin No. 2011-07,
Section 21, states that agencies must cancel any remaining balances (whether obligated or
unobligated) in a closed appropriation account being cancelled, and report valid receivable and
payable balances associated with a cancelled Treasury Appropriation Fund Symbol. Because
EPA did not review the net impact to current Treasury funds, EPA's improper cancellation
procedures resulted in various misstated general ledger accounts. Consequently, the financial
statements were misstated, although the misstatements were not material to the financial
statements as a whole.
EPA's closing procedures for accounts receivable in cancelled expenditure accounts resulted in a
$6.5 million credit balance in the general ledger account, Expense Uncollectible Debt, Other
Finances (Uncollectible Debt Expense). This account should normally have a debit balance. A
credit balance in this account indicates that either the Agency has revenue from uncollectible
debts or the general ledger account is otherwise misstated. EPA uses Standard Vouchers with
predetermined debit(s) and credit(s) to record accounting events that occur on a recurring basis in
accordance with its Comptroller Policy 93-02, Policies for Documenting Agency Financial
Transactions. EPA moved the balances from the cancelling appropriation without properly
reviewing the net impact on current Treasury funds.
This is the third year we have reported this issue. In fiscal 2009 and 2010, we recommended that
EPA review and update its required standard voucher entries. In response to our
recommendations, EPA noted that it would review the impact of accounting entries, including
standard vouchers for billing documents, and provide accounting models and technical advice as
appropriate. EPA has not made changes to accounting entries in the year-end instructions.
The procedure also resulted in an understatement in the general ledger account, Allowance for
Loss on Accounts Receivable (Allowance for Loss). EPA did not properly record the Allowance
for Loss from cancelling appropriations in fund 3200 (Treasury Symbol for the Collection of
Receivable from Cancelled Account) along with the related account receivables. We found that
in fund 3200 nonfederal receivables increased by $6.4 million from last fiscal year, but the
related allowance account activity changed by $3,000. The Agency did not move the related
allowances from the cancelling appropriations to fund 3200, resulting in the overstatement of the
receivables net book value. Table 4 shows the fund 3200 balance as of year-end.
Table 4: Fund 3200 account balances
GL
GL account name
2011 balance
2010 balance
Diff $
Diff %
13P3
Billed Misc Receipts Public
$27,667,949.59
$21,293,448.77
$6,374,500.82
29.94%
13P9
Allow For Loss On A/R, Non Fed
(17,317,474.61)
(17,320,502.51)
3,027.90
-0.02%
Source: IFMS and OIG analysis.
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EPA recorded this entry in accordance with its Year-End Closing Instructions, which requires
finance centers to remove accounts receivable and the related allowance for doubtful accounts
from cancelling appropriations, and establish the receivables in fund 3200. The instructions do
not allow for establishing the related allowance in fund 3200. SFFAS No. 1 states that an
allowance for estimated uncollectible amounts should be recognized to reduce the gross amount
of receivables to its net realizable value. EPA required movement of balances without properly
reviewing the closing entries' net impact on current Treasury funds. In doing so, the entry caused
an understatement in the Allowance for Loss account in fund 3200. By not recording the related
allowance for the receivables, EPA is overstating the net book value of the receivables in fund
3200.
OMB Circular A-127, Financial Management Systems, requires financial management systems
to provide complete, reliable, consistent, timely, and useful financial management information
on federal government operations. If EPA had properly reviewed the two general ledger accounts
for the effect of the closing entries prior to the fiscal period close, EPA could have noticed the
net impact on current Treasury funds. By not reviewing the entries and the account balances,
EPA understated Uncollectible Debt Expense and Allowance for Loss in the financial
statements.
Recommendations
We recommend that the Chief Financial Officer:
5.	Revise the cancellation procedures to ensure accounts are properly stated.
6.	Post the proper Allowance for Loss.
7.	Revise the Year-End Closing Instructions, to prescribe proper procedures for closing
accounts.
8.	Prior to year-end closing, review and test the net impact of closing entries to ensure
proper statement of expenses, revenue, and assets in the financial management system
and financial statements.
Agency Comments and OIG Evaluation
The Agency did not concur with our finding and recommendations. The Agency stated it posted
the appropriate adjustments, it is following Treasury guidance, and balances are properly stated.
Our analysis of the Agency's adjustments to cancel a receivable and the related allowance
revealed they understated fiscal 2011 revenue and bad debt expense. The understatement
occurred because the Agency reversed the receivable and related allowance accounts creating
postings that decreased revenue and bad debt expense. While the understatements are not
material to the financial statements taken as a whole, we believe the Agency should have
reviewed the impact of the closing entries and posted the proper adjustments so that revenue and
expense were properly stated.
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4—EPA Double Counted Contractor-Held Property
EPA double counted 97 items of capitalized property in its financial system because it did not
remove from its financial system property that had been transferred to contractors. As a result,
these items were recorded as both EPA-held property and contractor-held property. The double-
counted property had an acquisition cost of $12.3 million and a net book value of $5 million.
EPA property guidance states that when contractors are furnished with government property, the
property is deleted from the financial system. The contractor-held property items were not
removed because EPA does not have a policy that states who is responsible for removing
contractor-held property from EPA's financial system. Without clear policies, neither OCFO nor
OARM has taken responsibility to ensure that EPA property transferred to contractors is deleted
from EPA's financial system. The double counting resulted in capitalized property being
overstated by $5 million in fiscal 2011.
EPA's Personal Property Policy and Procedures Manual states that as an integral part of all
EPA contracts, effective control and accountability must be maintained for all personal property
furnished by EPA or acquired with EPA funds, in accordance with the Federal Acquisition
Regulations and EPA's Contracts Management Manual. Section 5.2.1 of the property manual
states, "When contractors are furnished with government property, it is deleted from the IFMS
and the contractor becomes responsible for the property until such time as it is returned to the
Government. In such cases, the Government retains title to the property."
Recommendations
We recommend that the Assistant Administrator for Administration and Resources Management:
9.	Develop and implement policies and procedures to address responsibility for the
removal of EPA property from the Agency financial system when EPA property is
transferred to contractors.
10.	Ensure that all EPA property that has been transferred to contractors is removed from
EPA's financial system.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendations.
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5—EPA Headquarters Cannot Account for 1,284 Property Items
EPA headquarters could not account for 1,284 personal property items in fiscal 2011 as required
by EPA's Personal Property and Procedures Manual. Headquarters mid-level management was
not knowledgeable of Agency property management procedures, and EPA did not provide
planned property training for Agency employees during fiscal 2011. Because EPA could not
account for these property items, it was not exercising proper control over $2.1 million of
accountable personal property. Inaccurate personal property records compromise EPA's property
control system and can lead to the loss or misappropriation of Agency assets.
The OARM Facilities Management and Services Division is responsible for administering the
EPA Personal Property Management Program. EPA defines accountable personal property as
"non-expendable personal property with an acquisition cost of $5,000 or greater, EPA-leased
personal property, or property identified as a sensitive item." EPA's Personal Property and
Procedures Manual, Section 3.1.1, states that each accountable area must maintain personal
property records in the IFMS, thus providing all needed data for effective personal property
management (e.g., location, procurement, utilization, and disposal). The missing items indicate
that accurate personal property records are not being maintained. The Personal Property Policy
and Procedures Manual, Section 1.3.2, requires that, when property is lost, damaged, or
destroyed, a Board of Survey conduct a thorough investigation and provide recommendations to
remove the property from EPA's financial system. Headquarters has 77 requests for board action
on the 976 items from fiscal 2010.
As of October 15, 2011, EPA headquarters could not account for 1,284 accountable personal
property items with a value of $2,130,427. EPA headquarters could not account for 769 of the
items (valued at $1,288,817) missing from the fiscal 2010 inventory when it conducted its 2011
inventory. This is the third consecutive year we have reported this problem. In fiscal 2010 and
2009, EPA headquarters could not account for 1,134 and 1,804 items, respectively. In response
to our fiscal 2010 audit, EPA planned to develop a mandatory online property training program.
However, the target date for implementing the training program slipped from March 30, 2011, to
November 15, 2011.
Recommendations
We recommend that the Assistant Administrator for Administration and Resources Management
require the Director, Facilities Management and Services Division, to:
11.	Conduct planned property training and require completion of the course by all EPA
managers.
12.	Address the missing personal property items in accordance with Agency procedures.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendations.
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6—EPA Should Secure Marketable Securities
EPA does not perform inspections of the safe in which marketable securities should be stored to
ensure that securities are adequately safeguarded and that the contents of the safe agree with
accounting or control records. GAO's Standards for Internal Control in the Federal
Government, GAO/AIMD-OO-21.3.1, states, "An agency must establish physical control to
secure and safeguard vulnerable assets. Examples include security for and limited access to
assets such as cash, securities, inventories, and equipment which might be vulnerable to risk of
loss or unauthorized use. Such assets should be periodically counted and compared to control
records." By not securing marketable securities, EPA increases the risk of loss or theft of its
assets.
During our fiscal 2011 financial statement audit, we found that EPA received two Common
Stock Certificates from Exide Technologies totaling $1.2 million that were not placed in a safe
for safeguarding. During our review, we found that EPA does not have regularly scheduled
reviews of the safe. After our inquiry, EPA stated that it does not schedule inspections of the safe
because the safe is rarely used. In addition, we noted that the safe was located in an open area
instead of in a more secure location, such as a locked room.
Securities physically received by EPA should be secured in a safe until they are transferred to
Treasury for disposition. To properly safeguard securities, access to securities should be limited
to authorized personnel only. During our review, we found that EPA does not have regular
scheduled reviews of the safe. By not having controls in place for safe inspections, EPA has
minimal assurance that marketable securities received are properly accounted for and handled.
Recommendations
We recommend that the Chief Financial Officer:
13.	Develop and implement procedures to perform inspections of the safe on a regular
basis to verify the contents against accounting records.
14.	Move the safe to a secure area, such as a locked room, instead of keeping the safe in
an open area.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendation to develop and implement
procedures to perform inspections of the safe on a regular basis. The Agency did not concur with
moving the safe to a secure area, stating the safe is behind a desk, weighs 1,000 pounds, and
there is other office security; we concluded that no further action is required.
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7—EPA Recognized Earned Revenue in Excess of Expenditures
EPA recorded earned revenue without recognizing corresponding expenses. At the end of fiscal
2011, EPA had recorded $7 million more in earned revenue in the HR Fund than it recognized in
HR reimbursable expenses. The fund had a balance of $74.5 million in Earned Revenue Federal
Billed versus $67.5 million for Operating Expense Public Exchange. These balances were the
totals after EPA recorded (1) a $5.7 million entry to accrue unbilled reimbursements and earned
revenue, and (2) a $1.1 million entry to reduce advances from other agencies and to increase
earned revenue. SFFAS No. 7, Accounting for Revenue and Other Financing Sources, requires
agencies to match revenue and expenses. The Agency did not properly match revenues and
expenses in the HR Fund at the end of fiscal 2011 because it made earned revenue accrual entries
without recognizing an equal amount in accrued expenses. The $7 million imbalance in the HR
Fund code violates the matching principle required by the standard.
We extracted and reviewed the fiscal 2011 ending balances in general ledger accounts in the HR
Fund. The year-end balances showed that EPA reported $74.5 million in earned revenue in
general ledger account 522G—Earned Revenue Federal Billed. EPA also reported $67.5 million
in operating expenses in account 61PE—Operating Expense Public Exchange. These two
balances represent a surplus of $7.0 million in the HR account at year end, which violates the
principle of matching revenues and expenses. EPA created the imbalance when it recorded
entries to recognize unbilled reimbursements for the HR Fund code at year end. The amounts
EPA recorded and the resulting balances are shown in table 5:
Table 5: HR Fund code amounts in fiscal 2011
Event
G/L Account 522G
earned revenue
G/L Account 61PE
operating expense
Revenue-
expense

in millions
Balances in HR at 09/30/2011
($61.4)
$61.2
($0.2)
Entries recorded in the 13th and 14th
months to record unbilled
reimbursements and recognize oil spill
reimbursable revenue
(13.1)
0.0
(13.1)
Entries made in 13th month to accrue
exchange expenses
0.0
6.3
6.3
Balances in HR at 09/30/2011
(after accruals and adjusting entries)
(74.5)
67.5
(7.0)
Source: Data from IFMS and OIG analysis.
SFFAS No. 7 establishes the criteria for the recognition and measurement of revenue and
expenses. The guidance notes that revenue comes from two sources: exchange and nonexchange
transactions. The guidance requires agencies to match revenue and expenses. Exchange
(reimbursable funds) revenue is to be recognized at the time goods or services are provided
(i.e., when expenses are incurred).
EPA created the $7 million difference in HR revenues over expenses when it prepared entries for
the 13th- and 14th-month periods. EPA adjusted general ledger account 2315—Other Advances
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Federal, recognizing $1.1 million in earned revenue without recognizing expenses. EPA also
recorded an entry for $5.7 million to adjust the unbilled reimbursement accrual, which increased
earned revenue that was already recognized. The $5.7 million was based on accounts payable
recorded in late September 2011. When those payables were recorded, earned revenue was
properly recognized. However, EPA's entry to adjust the unbilled accrual recognized the
$5.7 million in earned revenue for a second time. By not taking into account the total impact of
its entries, EPA overstated earned revenue by $5.7 million and understated operating expense by
$1.1 million in the HR Fund. The net effect was earned revenue exceeding operating expenses in
the HR Fund, and exchange revenues not properly matching expenses at fiscal year-end 2011.
Recommendations
We recommend that the Chief Financial Officer:
15.	Review the entries and accounting models used to record expenditures and recognize
earned revenue to assess their impact on the financial statements and to ensure that
they result in the proper recognition of revenue.
16.	Ensure that exchange revenue is only recognized at the time goods or services are
provided.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendations.
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8—EPA Is Withholding Payments Related to
BP Deepwater Horizon Oil Spill Cleanup
As of September 30, 2011, EPA had not paid contractors working on the Deepwater Horizon oil
spill $6.6 million, of which $2.8 million is late under the Prompt Payment Act. EPA violated the
Antideficiency Act in November 2010 because it made expenditures in excess of funds available.
To avoid a second potential Antideficiency Act violation, EPA delayed payments to vendors,
resulting in the Agency being required to make interest penalty payments to vendors as required
by the Prompt Payment Act. Section 1315.4(g) of the Prompt Payment Act states that payment is
due (1) on the date specified in the contract, (2) in accordance with discount terms when
discounts are offered and taken, (3) in accordance with Accelerated Payment Methods, or
(4) 30 days after the start of a payment period, when a proper invoice is received. The Agency
withheld the payments because it did not have sufficient cash in its Deepwater Horizon oil spill
funds to pay its bills. By not paying contractors on time, EPA is incurring interest payments and
is losing the opportunity to take discounts.
The Agency was aware that it would have to pay interest as required by the Prompt Payment Act
if it did not pay the bills timely. The Agency was forced into this situation because of disputes
between EPA and USCG on invoices submitted for reimbursement. EPA has not received
sufficient emergency funding from USCG to reimburse the Oil Spill Response Trust Fund for
costs incurred by EPA's response to the April 2010 Deepwater Horizon incident. This lack of
funding prompted EPA to make a conscious decision to cease payments to its oil spill contractors
on September 12, 2011. It is not clear when EPA will obtain the funds necessary to resume
payment of the oil spill invoices. As of November 7, 2011, EPA has not resumed payments.
Consequently, EPA owes contractors the $6.6 million due as of September 30, 2011, as well as
any interest and late penalties, and debts incurred since September 30, 2011.
Recommendations
We recommend that the Chief Financial Officer:
17.	Resume payments to the oil spill contractors as soon as adequate funds are available
in the Oil Spill Response Trust Fund.
18.	Include in payments to contractors the interest penalties prescribed by the Prompt
Payment Act for invoices that are paid past their due dates.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendations.
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Attachment 2
Compliance With Laws and Regulations
Table of Contents
9—EPA Violated the Antideficiency Act in Its Oil Spill Response Account	25
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9—EPA Violated the Antideficiency Act in Its
Oil Spill Response Account
In January 2011, EPA notified OMB that it violated the Antideficiency Act when it made
expenditures in excess of funds available in the Oil Spill Response Account in the amount of
$502,215. The violation occurred because USCG did not timely reimburse EPA for BP
Deepwater Horizon oil spill response expenses. According to EPA, the reason for the
reimbursement delay was that USCG wanted EPA to provide a greater level of cost
documentation than had been acceptable in the past. By spending more funds than were
available, EPA violated the Antideficiency Act.
The Deepwater Horizon incident occurred in April 2010. According to EPA, starting on June 1,
2010, EPA's CFC regularly monitored the cash balance of the Oil Spill Response Account.
According to EPA, in July 2010, EPA requested a cash advance from USCG due to large
amounts being invoiced by contractors working on the response action. In August 2010, USCG
provided EPA with a $32 million advance. EPA used the advance to pay contractor invoices, as
well as Agency payroll and travel expenses, related to the Deepwater Horizon response work. On
October 27, 2010, EPA advised USCG that additional advances would be required to pay oil
spill response bills, but USCG was unwilling to provide additional advances because of cost
documentation concerns. In EPA OIG Report No. 1 l-P-0527, EPA 's Gulf Coast Oil Spill
Response Shows Needfor Improved Documentation and Funding Practices, August 25, 2011,
we identified that EPA needed to improve its cost documentation packages prior to submittal to
USCG. The report recommended that EPA implement controls to ensure that bills and supporting
cost documentation packages submitted to USCG are clear and complete, and comply with cost
documentation requirements.
To assist in cash management, EPA developed a cash monitoring report intended to include all
transaction costs, but the report did not include disbursements related to indirect costs. EPA
discovered this issue on November 23, 2010. In a revised cash monitoring report that included
indirect costs, EPA discovered a negative cash balance in the Oil Spill Response Account on
November 18 and 19, 2010. By spending more cash than available, EPA violated the
Antideficiency Act. Title 31 U.S.C. §1341 (a) states, "An officer or employee of the United
States Government may not make or authorize an expenditure or obligation exceeding an amount
available in an appropriation or fund for the expenditure or obligation."
Since the date of the violation, EPA has established several reporting and analysis measures and
safeguards. The measures include (1) establishing a new comprehensive funds-availability report
that includes indirect costs distributed from the account, (2) balancing the new report with the
fund balance with the Department of Treasury at the end of each month, and (3) analyzing the
historical monthly expenses to estimate future expenses. In addition, EPA indicated that it will
revise its administrative funds control policies to change the minimum required available cash
balance from $500,000 to $2 million or more if the balance cannot support payment of
anticipated fixed costs, and bill USCG weekly or when a disbursement of $1 million or more is
made.
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Recommendations
We recommend that the EPA Administrator:
19.	Finalize the reporting of the Antideficiency Act violation to the President, through the
OMB Director, Congress, and the Comptroller General, as required.
We recommend that the Chief Financial Officer:
20.	Work with USCG to come to a mutual agreement on what constitutes acceptable cost
documentation so that reimbursements do not continue to be delayed.
Agency Comments and OIG Evaluation
The Agency concurred with our finding and recommendations.
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Attachment 3
Status of Prior Audit Report Recommendations
EPA is continuing to strengthen its audit management to address audit follow-up issues and
complete corrective actions expeditiously and effectively to improve environmental results. The
Chief Financial Officer is the Agency follow-up official and is responsible for ensuring that
corrective actions are implemented. During fiscal 2011, OCFO instituted a new quarterly report
that highlights the status of management decisions and corrective actions. This report is shared
with program office and regional managers throughout the Agency to keep them informed of the
status of progress on their audits. OCFO also initiated an update of EPA Order 2750, EPA's
Audit Management Process. Additionally, OCFO continued to conduct the on-site reviews of
national and program offices, which it initiated in fiscal 2009. The reviews focus on offices'
audit follow-up procedures and their use of the Management Audit Tracking System, or MATS.
The reviews are designed to promote sound audit management; increase Agency awareness of,
accountability for, and completion of unimplemented corrective actions; and ensure that audit
follow-up data are accurate and complete. OCFO completed seven of these on-site reviews in
fiscal 2011, including four of regional offices and three of national program offices. These
reviews will be performed on an ongoing, rotating basis.
The Agency has continued to make progress in completing corrective actions from prior years.
The status of issues from prior financial statement audits and other audits with findings and
recommendations that could have an effect on the financial statements, and have corrective
actions that are not completed or have not been demonstrated to be fully effective, are listed in
the following table.
Table 6: Significant deficiencies—issues not fully resolved
•	Automated Application Processing Controls for IFMS
EPA has taken action to correct this open issue by implementing a new financial system to replace
IFMS. The new system was implemented in October 2011. We continue to report this issue because
the fiscal 2011 financial statements were produced using IFMS and the same inability to test
application controls due to insufficient system documentation still exists within IFMS.
•	EPA Misstated Uncollectible Debt and Other Related Accounts
In fiscal 2011, we recommended that prior to year-end closing, EPA should review and test the net
impact of closing entries to ensure proper statement of expenses, revenue, and assets in the
financial management system and financial statements. This is the third year we have reported this
issue. In responses to prior recommendations, EPA noted that it would review the impact of
accounting entries, including standard vouchers for billing documents, and provide accounting
models and technical advice as appropriate. EPA has not made changes to accounting entries in the
year-end instructions. See attachment 1, "Internal Control Significant Deficiencies," for more
information.
•	Improvements Needed in Controls for Headquarters Property
The Agency has not taken sufficient action to address the weakness we noted in the headquarters
annual personal property inventory. As described in attachment 1, "Internal Control Significant
Deficiencies," EPA headquarters could not account for 1,284 personal property items in fiscal 2011.
The activation date for the managers' on-line property training has slipped from March 30, 2011, to
November 15, 2011.
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•	Integrated Financial Management System User Account Management Needs Improvement
EPA has made significant strides to complete corrective actions associated with the segregation of
duties issue noted during the fiscal 2009 financial statement audit. To date, the Agency has
implemented a segregation of duties policy and detective systems controls do exist. However, it has
not provided sufficient documentation to show that the new Agency financial management system
includes automated controls to enforce separation of duties (recommendation 27 in the fiscal 2009
financial statement audit report). Additionally, the OIG recommended that the new financial
management system include automated controls to link to human resources data
(recommendation 32 in the fiscal 2009 financial statement audit report). To date, EPA has not
implemented any corrective actions in response to this recommendation. EPA has indicated that no
further actions have been taken due to reevaluation of the business case for a new human resources
system.
•	Improved Security Planning Needed for the Customer Technology Solutions Project.
Though EPA has taken steps to complete corrective actions, it has not provided all signed
memoranda of understanding for each General Support System owner as agreed upon. A corrective
action was rescheduled to be completed by August 29, 2011, but corrective actions are still
incomplete. EPA has not provided an updated milestone date for when it plans to complete the
corrective actions associated with this report's recommendations.
•	EPA Should Assess Collectibility of Federal Receivables and Record Any Needed Allowances
for Doubtful Accounts
EPA fully implemented recommendations 5 and 7 from our fiscal 2010 financial statement audit, but
did not take full corrective actions for recommendation 6. In our fiscal 2011 financial statement audit,
we found that EPA did not review the collectibility of 10 federal receivables that had been outstanding
for 4 to 11 years, totaling $793,000. EPA's CFC did not document efforts to collect the federal debt or
determine the debt's status after the 3-year delinquent period. During our review of the federal
allowance for doubtful accounts, we identified 6 of 10 receivable files with the CFC Director's
signature noting a review on September 30, 2011, but nothing was in the remaining 4 files. Debt files
are required to document efforts to collect the debt.
•	EPA Improperly Closing Accounts When Cancelling Treasury Symbols
During fiscal 2010, we reported that EPA processed an adjusting entry to close out the Treasury
symbol 682/30108, and improperly expensed the advance as well as removed other liabilities when
the funds became cancelled on September 30, 2010. We found that the Working Capital Fund had
not refunded the remaining advanced funds to EPA's Environmental Programs and Management
appropriation. EPA responded that the advanced funds were expended before the Treasury symbol
was cancelled, and the funds were spent in Treasury symbol 683/40108. Subsequently, EPA
performed a reconciliation to compare advanced funds recorded in BFY 2002/2003 with drawdowns
of those advanced funds in later BFYs. This comparison reflected activity by service agreement and
did not identify the specific transactions to record the expenditures. EPA did not adequately track
where the advanced funds from BFY 2002/2003 were spent. Further, although EPA's updated
cancellation procedures seemed reasonable, the implementation of the cancellation procedures
resulted in inappropriate activity and balances due to the cancellation of funds and improper
procedures prescribed in the fiscal 2011 year-end closing instructions. Additional support provided by
the Agency was not provided in time to be considered in this report.
Source: OIG analysis.
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No.
12
14
15
15
17
17
17
17
18
18
19
Attachment 4
Status of Current Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Subject
Status1
Action Official
Planned
Completion
Date
Claimed
Amount
Agreed To
Amount
Require that regional and headquarters
enforcement officials assist CFC by implementing
EPA's newly updated RMDS policy, which
includes the requirement to forward legal
documentation within 5 business days and to
designate regional contacts so that receivables
are recorded timely.
Review unbilled federal reimbursable expenses,
determine their collectibility, and bill appropriate
funds before the funding period is cancelled.
Create and implement a process to reconcile
expenses incurred and costs billed under
individual reimbursable agreements.
Develop a process or implement a reporting
system to track, for each reimbursable agreement,
the expenses that have been billed for each
budget fiscal year.
Revise the cancellation procedures to ensure
accounts are properly stated.
Post the proper Allowance for Loss.
Revise the Year-End Closing Instructions, to
prescribe proper procedures for closing accounts.
Prior to year-end closing, review and test the net
impact of closing entries to ensure proper
statement of expenses, revenue, and assets in
the financial management system and financial
statements.
Develop and implement policies and procedures
to address responsibility for the removal of EPA
property from the Agency financial system when
EPA property is transferred to contractors.
Ensure that all EPA property that has been
transferred to contractors is removed from EPA's
financial system.
Require the Director, Facilities Management and
Services Division, to conduct planned property
training and require completion of the course by
all EPA managers.
Assistant Administrator for
Enforcement and Compliance
Assurance
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Assistant Administrator for
Administration and Resources
Management
Assistant Administrator for
Administration and Resources
Management
Assistant Administrator for
Administration and Resources
Management
29

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RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Claimed Agreed To
Amount Amount
12	19 Require the Director, Facilities Management and
Services Division, to address the missing personal
property items in accordance with Agency
procedures.
13	20 Develop and implement procedures to perform
inspections of the safe on a regular basis to verify
the contents against accounting records.
14	20 Move the safe to a secure area, such a locked
room, instead of keeping the safe in an open
area.
15	22 Review the entries and accounting models used
to record expenditures and recognize earned
revenue to assess their impact on the financial
statements and to ensure that they result in the
proper recognition of revenue.
16	22 Ensure that exchange revenue is only recognized
at the time goods or services are provided.
17	23 Resume payments to the oil spill contractors as
soon as adequate funds are available in the Oil
Spill Response Trust Fund.
18	23 Include in payments to contractors the interest
penalties prescribed by the Prompt Payment Act
for invoices that are paid past their due dates.
19	26 Finalize the reporting of the Antideficiency Act
violation to the President, through the OMB
Director, Congress, and the Comptroller General,
as required.
20	26 Work with USCG to come to a mutual agreement
on what constitutes acceptable cost
documentation so that reimbursements do not
continue to be delayed.
Assistant Administrator for
Administration and Resources
Management
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
Chief Financial Officer
EPA Administrator
Chief Financial Officer
11/10/2011
1 O = 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 I
EPA's Fiscal 2011 and 2010
Consolidated Financial Statements
SECTION II
FINANCIAL SECTION
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Principal Financial Statements
Financial Statements
1.	Consolidated Balance Sheet
2.	Consolidated Statement of Net Cost
3.	Consolidated Statement of Net Cost by Goal
4.	Consolidating Statement of Changes in Net Position
5.	Combined Statement of Budgetary Resources
6.	Statement of Custodial Activity
Notes to Financial Statements
Note 1.
Summary of Significant Accounting Policies
Note 2.
Fund Balance with Treasury (FBWT)
Note 3.
Cash and Other Monetary Assets
Note 4.
Investments
Note 5.
Accounts Receivable, Net
Note 6.
Other Assets
Note 7.
Loans Receivable, Net
Note 8.
Accounts Payable and Accrued Liabilities
Note 9.
General Property, Plant and Equipment, Net
Note 10.
Debt Due to Treasury
Note 11.
Stewardship Land
Note 12.
Custodial Liability
Note 13.
Other Liabilities
Note 14.
Leases
Note 15.
FECA Actuarial Liabilities
Note 16.
Cashout Advances, Superfund
Note 17.
Unexpended Appropriations - Other Funds
Note 18.
Commitments and Contingencies
Note 19.
Earmarked Funds
Note 20.
Intragovernmental Costs and Exchange Revenue
Note 21.
Cost of Stewardship Land
Note 22
Environmental Cleanup Costs
Note 23.
State Credits
Note 24.
Preauthorized Mixed Funding Agreements
Note 25.
Custodial Revenues and Accounts Receivable
Note 26.
Reconciliation of President's Budget to Statement of Budgetary Resources
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Notes to Financial Statements (continued)
Note 27. Recoveries and Resources Not Available, Statement of Budgetary Resources
Note 28. Unobligated Balances Available
Note 29. Undelivered Orders at the End of the Period
Note 30. Offsetting Receipts
Note 31. Transfers-In and Out, Statement of Changes in Net Position
Note 32. Imputed Financing
Note 33. Payroll and Benefits Payable
Note 34. Other Adjustments, Statement of Changes in Net Position
Note 35. Non-exchange Revenue, Statement of Changes in Net Position
Note 36. Reconciliation of Net Cost of Operations to Budget
Note 37. Amounts Held By Treasury (Unaudited)
Note 38. Antideficiency Act Violations
Required Supplementary Information (Unaudited)
1.	Deferred Maintenance
2.	Stewardship Land
3.	Supplemental Combined Statement of Budgetary Resources
Required Supplementary Stewardship Information (Unaudited)
Supplemental Information and Other Reporting Requirements (Unaudited)
Superfund Financial Statements and Related Notes
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Environmental Protection Agency
Consolidated Balance Sheet
As of September 30, 2011 and 2010
(Dollars in Thousands)
ASSETS
Int rago vernment al:
F und Balance With T reasury (Note 2)
Investments (Note 4)
Accounts Receivable, Net (Note 5)
Other (Note 6)
Total Intragovernmental
FY 2011
FY 2010
12,662,541
7,112,197
35,518
251,803
20,062,059 S
14,603,024
7,243,613
45,698
223,296
22,115,631
Cash and Other Monetary Assets (Note 3)
Accounts Receivable, Net (Note 5)
Loans Receivable, Net - Non-Federal (Note 7)
Property, Plant & Equipment, Net (Note 9)
Other (Note 6)
Total Assets
10	10
514,190	417,535
2,107	5,254
966,799	915,121
	2,566 	2,834
S 21,547,731	S 23,456,385
Stewardship PP& E (Note 11)
LIABILITIES
Intragovernmental:
Accounts Payable and Accrued Liabilities (Note 8)
Debt Due to Treasury (Note 10)
Custodial Liability (Note 12)
Other (Note 13)
Total Intragovernmental
52,448	51,325
2,593	4,844
56,703	52,751
	132,910 	132,286
S 244,654	S 241,206
Accounts Payable & Accrued Liabilities (Note 8)
$ 916,766 S
1,031,448
Pensions & Other Actuarial Liabilities (Note 15)
44,833
44,938
Environmental Cleanup Costs (Note 22)
20,838
20,154
Cashout Advances, Superfund (Note 16)
790,069
636,673
Commitments & Contingencies (Note 18)
10,180
4,373
Payroll & Benefits Payable (Note 33)
272,335
264,975
Other (Note 13)
103,989
99,996
Total Liabilities
S 2,403,664 S
2,343,763
NET POSITION
Unexpended Appropriations - Other Funds (Note 17)
Cumulative Results of Operations - Earmarked Funds (Note 19)
Cumulative Results of Operations - Other Funds
11,462,598
7,027,163
654,306
13,342,784
7,152,382
617,456
Total Net Position
19,144,067
21,112,622
Total Liabilities and Net Position
21,547,731
23,456,385
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Consolidated Statement of Net Cost
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
FY2011	FY 2010
COSTS
Gross Costs (Note 20)	$ 11,577,224	$ 12,406,265
Less:
Earned Revenue (Note 20)		698,331 	693,484
NET COST OF OPERATIONS (Note 20) $	10,878,893 $	11,712,781
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Consolidated Statement of Net Cost by Goal
For the Period Ending September 30, 2011
(Dollars in Thousands)
Clean Air
Costs:
Intragovernmental
With the Public
Total Costs (Note 20)
159,456
1,035,680
1,195,136
Clean & Safe
Water
252,748
5,125,894
5,378,642
Land Pres ervation
& Restoration
390,431
2,180,996
2,571,427
Healthy
Communities &
Ecosystems
$	335,757
	1,289,505
1,625,262
Compliance &
Environmental
Stewardship
$	192,243
	614,514
806,757
Less:
Earned Revenue, Federal
Earned Revenue, non Federal
Total Earned Revenue (Note 20)
13,586
1,034
14,620
7,333
1,458
8,791
124,874
494,249
619,123
12,010
38,725
50,735
3,607
1,455
5,062
NET COST OF OPERATIONS (Note 20)
$ 1,180,516
5,369,851
1,952,304
1,574,527
801,695
Costs:
Intragovernmental
With the Public
Total Costs (Note 20)
Consolidated
Totals	
S 1,330,635
S 10,246,589
11,577,224
Less:
Earned Revenue, Federal
Earned Revenue, non Federal
Total Earned Revenue (Note 20)
161,410
536,921
698,331
NET COST OF OPERATIONS (Note 20) $ 10,878,893
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Consolidated Statement of Net Cost by Goal
For the Period Ending September 30, 2010
(Dollars in Thousands)
Clean Air
Costs:
Intragovernmental
With the Public
Total Costs (Note 20)
Clean & Safe
Water
Land
Preservation &
Restoration
Healthy
Communities &
Ecosystems
Compliance &
Environmental
Stewardship
$ 170,677
$ 193,456
$ 342,734
$ 293,850 $
182,299
1,048,124
6,197,330
2,096,211
1,265,653
615,931
1,218,801
6,390,786
2,438,945
1,559,503
798,230
Less:
Earned Revenue, Federal	18,923 2,803	103,687	64,034	3,400
Earned Revenue, non Federal		5,906		2,524 	446,569 	44,144 	1,494
Total Earned Revenue (Note 20)		24,829		5,327 	550,256 	108,178 	4,894
NET COST OF OPERATIONS (Note 20)	$ 1,193,972 $ 6,385,459 $ 1,888,689 $ 1,451,325 $ 793,336
Costs:
Intragovernmental
With the Public
Total Costs (Note 20)
Less:
Earned Revenue, Federal
Earned Revenue, non Federal
Total Earned Revenue (Note 20)
Consolidated
Totals
$ 1,183,016
$ 11,223,249
12,406,265
$ 192,847
$ 500,637
693,484
NET COST OF OPERATIONS (Note 20)	$ 11,712,781
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Consolidating Statement of Changes in Net Position
For the Period Ending September 30, 2011
(Dollars in
Thousands)



FY 2011
Earmarked
Funds
FY 2011
All Other
Funds
FY 2011
Consolidated
Total
Cumulative Results of Operations:



Net Position - Beginning of Period
7,152,382
617,456
7,769,838
Beginning Balances, as Adjusted
$ 7,152,382 $
; 617,456 5
! 7,769,838
Budgetary Financing Sources:
Appropriations Used
Nonexehange Revenue - Securities Investment (Note 35)
Nonexchange Revenue - Other (Note 35)
Transfers In/Out (Note 31)
Trust Fund Appropriations
120,429
184,984
(17,068)
1,156,073
10,287,988
0
35,410
(1,156,073)
10,287,988
120,429
184,984
18,342
Total Budgetary Financing Sources
$ 1,444,418 $
; 9,167,325 5
! 10,611,743
Other Financing Sources (Non-Exchange)
Donations and Forfeitures of Property
Transfers In/Out (Note 31)
Imputed Financing Sources (Note 32)
1
29,661
50
76
148,993
50
77
178,654
Total Other Financing Sources
$ 29,662 $
; 149,119 5
! 178,781
Net Cost of Operations
(1,599,299)
(9,279,594)
(10,878,893)
Net Change
(125,219)
36,850
(88,369)
Cumulative Results of Operations
$ 7,027,163 $
1 654,306 5
! 7,681,469

FY 2011
Earmarked
Funds
FY 2011
All Other
Funds
FY 2011
Consolidated
Total
Unexpended Appropriations:



Net Position - Beginning of Period
-
13,342,784
13,342,784
Beginning Balances, as Adjusted
-
13,342,784
13,342,784
Budgetary Financing Sources:
Appropriations Received
Appropriations Transferred In/Out (Note 31)
Other Adjustments (Note 34)
Appropriations Used
-
8,583,238
1,750
(177,186)
(10,287,988)
8,583,238
1,750
(177,186)
(10,287,988)
Total Budgetary Financing Sources
-
(1,880,186)
(1,880,186)
Total Unexpended Appropriations
-
11,462,598
11,462,598
TOTAL NET POSITION
S 7,027,163 S
12,116,904 S
19,144,067
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Consolidating Statement of Changes in Net Position
For the Periods Ending September 30, 2010
(Dollars in Thousands)

FY 2010
Earmarked
Funds
FY 2010 All
Other Funds
FY 2010
Consolidated
Total
Cumulative Results of Operations:



Net Position - Beginning of Period
7,086,476
582,668
7,669,144
Beginning Balances, as Adjusted $
7,086,476 $
582,668 $
7,669,144
Budgetary Financing Sources:
Appropriations Used
Nonexehange Revenue - Securities Investment (Note 35)
Nonexchange Revenue - Other (Note 35)
Transfers In/Out (Note 31)
Trust Fund Appropriations
130,504
213,984
(20,789)
1,280,570
11,294,823
33,859
(1,280,570)
11,294,823
130,504
213,984
13,070
Total Budgetary Financing Sources $
1,604,269 $
10,048,112 $
11,652,381
Other Financing Sources (Non-Exchange)
Transfers In/Out (Note 31)
Imputed Financing Sources (Note 32)
27,022
(546)
134,618
(546)
161,640
Total Other Financing Sources $
27,022 $
134,072 $
161,094
Net Cost of Operations
(1,565,385)
(10,147,396)
(11,712,781)
Net Change
65,906
34,788
100,694
Cumulative Results of Operations S
7,152,382 $
617,456 $
7,769,838

FY 2010
Earmarked
Funds
FY 2010 All
Other Funds
FY 2010
Consolidated
Total
Unexpended Appropriations:



Net Position - Beginning of Period
_
14,536,347
14,536,347
Beginning Balances, as Adjusted $
- $
14,536,347 $
14,536,347
Budgetary Financing Sources:
Appropriations Received
Appropriations Transferred In/Out (Note 31)
Other Adjustments (Note 34)
Appropriations Used

10,182,421
(17,000)
(65,989)
(11,292,995)
10,182,421
(17,000)
(65,989)
(11,292,995)
Total Budgetary Financing Sources
-
(1,193,563)
(1,193,563)
Total Unexpended Appropriations
-
13,342,784
13,342,784
TO TAL NET PO SITIO N S
7,152,382 S
13,960,240 S
21,112,622
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Combined Statement of Budgetary Resources
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
FY2011
FY2010
BUDGETARY RES OURCES
Unobligated Balance, Brought Forward, October 1:
Adjusted Subtotal
Recoveries of Prior Year Unpaid Obligations (Note 27)
Budgetary Authority:
Appropriation
Borrowing Authority
Spending Authority from Offsetting Collections
Earned:
Collected
Change in Receivables from Federal Sources
Change in Unfilled Customer Orders:
Advance Received
Without Advance from Federal Sources
Expenditure Transfers from Trust Funds
Total Spending Authority from Offsetting Collections
Nonexpenditure Transfers, Net, Anticipated and Actual (Note 31)
Temporarily Not Available Pursuant to Public Law (Note 27)
Permanently Not Available (Note 27)
Total Budgetary Resources (Note 26)
4,626,341 $
3,703,022
4,626,341
270,664
8,648,816
640,179
11,181
79,324
(15,817)
35,410
750,277
1,372,575
(553)
(179,693)
3,703,022
277,771
10,256,166
52
918,786
(1,746)
234,559
(132,489)
36,809
1,055,919
1,369,345
(11,800)
(73,453)
15,488,427 $
16,577,022
S TATUS OF BUDGETARY RES OURCES
Obligations Incurred:
Direct
Reimbursable
Total Obligations Incurred (Note 26)
Unobligated Balances:
Apportioned (Note 28)
Total Unobligated Balances
Unobligated Balances Not Available (Note 28)
Total Status of Budgetary Resources
$ 11,232,330	$ 11,260,452
	758,247 	690,229
11,990,577	11,950,681
	3,326,812	4,430,813
3,326,812	4,430,813
	171,038 	195,528
$	15,488,427	$ 16,577,022
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Combined Statement of Budgetary Resources
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
FY2011
FY2010
CHANGE IN OBLIGATED BALANCE
Obligated Balance, Net:
Unpaid Obligations, Brought Forward, October 1
Adjusted Total
Less: Uncollected Customer Payments from Federal Sources,
Brought Forward, October 1
Total Unpaid Obligated Balance, Net
Obligations Incurred, Net (Note 26)
Less: Gross Outlays (Note 26)
Less: Recoveries ofPrior Year Unpaid Obligations, Actual (Note 27)
Change in Uncollected Customer Payments fromFederal Sources
Total, Change in Obligated Balance
13,872,909
13,872,909
(439,956)
13,432,953
11,990,577
(12,817,928)
(270,664)
1,528
15,788,389
15,788,389
(573,824)
15,214,565
11,950,681
(13,588,391)
(277,771)
133,869
12,336,466
13,432,953
Obligated Balance, Net, End of Period:
Unpaid Obligations
Less: Uncollected Customer Payments fromFederal Sources
Total, Unpaid Obligated Balance, Net, End of Period
12,774,894
(438,428)
12,336,466
13,872,909
(439,956)
13,432,953
NET OUTLAYS
Net Outlays:
Gross Outlays (Note 26)
Less: Offsetting Collections (Note 26)
Less: Distributed Offsetting Receipts (Notes 26 and 30)
Total, Net Outlays
12,817,928
(751,805)
(1,291,761)
10,774,362
13,588,391
(1,189,788)
(1,402,960)
10,995,643
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Statement of Custodial Activity
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
FY 2011
FY2010
Revenue Activity:
Sources of Cash Collections:
Fines and Penalties
Other
Total Cash Collections
Accrual Adjustment
Total Custodial Revenue (Note 25)
126,212
(4,024)
122,188
4,163
126,351
88,318
18,072
106,390
(16,763)
89,627
Disposition of Collections:
Transferred to Others (General Fund)
Increases/Decreases in Amounts to be Transferred
Total Disposition of Collections
122,910
3,441
126,351
105,684
(16,057)
89,627
Net Custodial Revenue Activity (Note 25)
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Notes to the Financial Statements
Fiscal Year Ended September 30, 2011 and 2010
(Dollars in Thousands)
Note 1. Summary of Significant Accounting Policies
A.	Reporting Entities
The EPA was created in 1970 by executive reorganization from various components of other
federal agencies to better marshal and coordinate federal pollution control efforts. The
Agency is generally organized around the media and substances it regulates - air, water,
hazardous waste, pesticides, and toxic substances.
The FY 2011 financial statements are presented on a consolidated basis for the Balance
Sheet, Statements of Net Cost, Changes in Net Position and Custodial Activity and a
combined basis for the Statement of Budgetary Resources. These financial statements
include the accounts of all funds described in this note by their respective Treasury fund
group.
B.	Basis of Presentation
These accompanying financial statements have been prepared to report the financial position
and results of operations of the U. S. Environmental Protection Agency (EPA or Agency) as
required by the Chief Financial Officers Act of 1990 and the Government Management
Reform Act of 1994. The reports have been prepared from the financial system and records
of the Agency in accordance with Office of Management and Budget (OMB) Circular No. A-
136, Financial Reporting Requirements, and the EPA accounting policies, which are
summarized in this note. The Statement of Net Cost has been prepared with cost segregated
by the Agency's strategic goals.
C.	Budgets and Budgetary Accounting
1. General Funds
Congress adopts an annual appropriation for State and Tribal Assistance Grants
(STAG), Buildings and Facilities (B&F), and for Payments to the Hazardous
Substance Superfund to be available until expended, as well as annual appropriations
for Science and Technology (S&T), Environmental Programs and Management
(EPM) and for the Office of Inspector General (OIG) to be available for 2 fiscal
years. When the appropriations for the General Funds are enacted, Treasury issues a
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warrant to the respective appropriations. As the Agency disburses obligated amounts,
the balance of funds available to the appropriation is reduced at Treasury.
The Asbestos Loan Program is a commercial activity financed from a combination of
two sources, one for the long term costs of the loans and another for the remaining
non-subsidized portion of the loans. Congress adopted a 1 year appropriation,
available for obligation in the fiscal year for which it was appropriated, to cover the
estimated long term cost of the Asbestos loans. The long term costs are defined as the
net present value of the estimated cash flows associated with the loans. The portion of
each loan disbursement that did not represent long term cost is financed under
permanent indefinite borrowing authority established with the Treasury. A permanent
indefinite appropriation is available to finance the costs of subsidy re-estimates that
occur in subsequent years after the loans were disbursed.
Funds transferred from other federal agencies are processed as non-expenditure
transfers. As the Agency disburses the obligated amounts, the balance of funding
available to the appropriation is reduced at Treasury.
Clearing accounts and receipt accounts receive no appropriated funds. Amounts are
recorded to the clearing accounts pending further disposition. Amounts recorded to
the receipt accounts capture amounts collected for or payable to the Treasury General
Fund.
2.	Revolving Funds
Funding of the Reregi strati on and Expedited Processing Fund (FIFRA) and Pesticide
Registration Funds (PRIA) is provided by fees collected from industry to offset costs
incurred by the Agency in carrying out these programs. Each year the Agency
submits an apportionment request to OMB based on the anticipated collections of
industry fees.
Funding of the Working Capital Fund (WCF) is provided by fees collected from other
Agency appropriations and other federal agencies to offset costs incurred for
providing Agency administrative support for computer and telecommunication
services, financial system services, employee relocation services, and postage.
3.	Special Funds
The Environmental Services Receipt Account obtains fees associated with
environmental programs.
Exxon Valdez uses funding collected from reimbursement from the Exxon Valdez
settlement.
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4.	Deposit Funds
Deposit accounts receive no appropriated funds. Amounts are recorded to the deposit
accounts pending further disposition. These are not EPA's funds.
5.	Trust Funds
Congress adopts an annual appropriation amount for the Superfund, Leaking
Underground Storage Tank (LUST) and the Oil Spill Response Accounts to remain
available until expended. A transfer account for the Superfund and LUST Trust Fund
has been established for purposes of carrying out the program activities. As the
Agency disburses obligated amounts from the transfer account, the Agency draws
down monies from the Superfund and LUST Trust Fund at Treasury to cover the
amounts being disbursed. The Agency draws down all the appropriated monies from
the Principal Fund of the Oil Spill Liability Trust Fund when Congress adopts the
appropriation amount to EPA's Oil Spill Response Account.
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 on a budgetary basis (where
budgets are issued). 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.
E.	Revenues and Other Financing Sources
The following EPA policies and procedures to account for inflow of revenue and other
financing sources are in accordance with Statement of Federal Financial Accounting
Standards (SFFAS) No. 7, "Accounting for Revenues and Other Financing Sources."
The Superfund program receives most of its funding through appropriations that may be
used within specific statutory limits for operating and capital expenditures (primarily
equipment). Additional financing for the Superfund program is obtained through:
reimbursements from other federal agencies, state cost share payments under Superfund
State Contracts (SSCs), and settlement proceeds from Potentially Responsible Parties
(PRPs) under CERCLA Section 122(b)(3) placed in special accounts. Cost recovery
settlements that are not placed in special accounts continue to be deposited in the Trust
Fund.
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Most of the other funds receive funding needed to support programs through
appropriations which may be used within statutory limits for operating and capital
expenditures. However, under Credit Reform provisions, the Asbestos Loan Program
receives funding to support the subsidy cost of loans through appropriations which may
be used within statutory limits. The Asbestos Direct Loan Financing fund 4322, an off-
budget fund, receives additional funding to support the outstanding loans through
collections from the Program fund 0118 for the subsidized portion of the loan.
The FIFRA and Pesticide Registration funds receive funding through fees collected for
services provided and interest on invested funds. The WCF receives revenue through fees
collected for services provided to Agency program offices. Such revenue is eliminated
with related Agency program expenses upon consolidation of the Agency's financial
statements. The Exxon Valdez Settlement Fund receives funding through
reimbursements.
Appropriated funds are recognized as Other Financing Sources expended when goods
and services have been rendered without regard to payment of cash. Other revenues are
recognized when earned (i.e., when services have been rendered).
F.	Funds with the Treasury
The Agency does not maintain cash in commercial bank accounts. Cash receipts and
disbursements are handled by Treasury. The major funds maintained with Treasury are
Appropriated Funds, Revolving Funds, Trust Funds, Special Funds, Deposit Funds, and
Clearing Accounts. These funds have balances available to pay current liabilities and
finance authorized obligations, as applicable.
G.	Investments in U.S. Government Securities
Investments in U.S. Government securities are maintained by Treasury and are reported
at amortized cost net of unamortized discounts. Discounts are amortized over the term of
the investments and reported as interest income. No provision is made for unrealized
gains or losses on these securities because, in the majority of cases, they are held to
maturity (see Note 4).
H.	Notes Receivable
The Agency records notes receivable at their face value and any accrued interest as of the
date of receipt.
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I. Marketable Securities
The Agency records marketable securities at cost as of the date of receipt. Marketable
securities are held by Treasury and reported at their cost value in the financial statements
until sold (see Note 4).
J. Accounts Receivable and Interest Receivable
The majority of receivables for non-Superfund funds represent penalties and interest
receivable for general fund receipt accounts, unbilled intragovernmental reimbursements
receivable, allocations receivable from Superfund (eliminated in consolidated totals), and
refunds receivable for the STAG appropriation.
Superfund accounts receivable represent recovery of costs from PRPs as provided under
CERCLA as amended by SARA. Since there is no assurance that these funds will be
recovered, cost recovery expenditures are expensed when incurred (see Note 5).
The Agency records accounts receivable from PRPs for Superfund site response costs
when a consent decree, judgment, administrative order, or settlement is entered. These
agreements are generally negotiated after at least some, but not necessarily all, of the site
response costs have been incurred. It is the Agency's position that until a consent decree
or other form of settlement is obtained, the amount recoverable should not be recorded.
The Agency also records accounts receivable from states for a percentage of Superfund
site remedial action costs incurred by the Agency within those states. As agreed to under
SSCs, cost sharing arrangements may vary according to whether a site was privately or
publicly operated at the time of hazardous substance disposal and whether the Agency
response action was removal or remedial. SSC agreements are usually for 10 percent or
50 percent of site remedial action costs, depending on who has the lead for the site (i.e.,
publicly or privately owned). States may pay the full amount of their share in advance or
incrementally throughout the remedial action process.
K. Advances and Prepayments
Advances and prepayments represent funds advanced or prepaid to other entities both
internal and external to the Agency for which a budgetary expenditure has not yet
occurred.
L. Loans Receivable
Loans are accounted for as receivables after funds have been disbursed. Loans receivable
resulting from obligations on or before September 30, 1991, are reduced by the allowance
for uncollectible loans. Loans receivable resulting from loans obligated on or after
October 1, 1991, are reduced by an allowance equal to the present value of the subsidy
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costs associated with these loans. The subsidy cost is calculated based on the interest rate
differential between the loans and Treasury borrowing, the estimated delinquencies and
defaults net of recoveries offset by fees collected and other estimated cash flows
associated with these loans.
M. Appropriated Amounts Held by Treasury
For the Superfund and LUST Trust Funds and for amounts appropriated from the
Superfund Trust Fund to the OIG, cash available to the Agency that is not needed
immediately for current disbursements remains in the respective Trust Funds managed by
Treasury.
N. Property, Plant, and Equipment
EPA accounts for its personal and real property accounting records in accordance with
SFFAS No. 6, "Accounting for Property, Plant and Equipment." For EPA-held property,
the Fixed Assets Subsystem (FAS) automatically generates depreciation entries monthly
based on acquisition dates.
A purchase of EPA-held or contract personal property is capitalized if it is valued at $25
thousand or more and has an estimated useful life of at least 2 years. For contractor held
property, depreciation is taken on a modified straight-line basis over a period of 6 years
depreciating 10 percent the first and sixth year, and 20 percent in years 2 through 5.
Detailed records are maintained and accounted for in contractor systems, not in FAS for
contractor held property. Acquisitions of EPA-held personal property are depreciated
using the straight-line method over the specific asset's useful life, ranging from 2 to 15
years.
Personal property also consists of capital leases. To be defined as a capital lease, it must,
at its inception, have a lease term of two or more years and the lower of the fair value or
present value of the minimum lease payments must be $75 thousand or more. Capital
leases may also contain real property (therefore considered in the real property category
as well), but these need to meet an $85 thousand capitalization threshold. In addition, the
lease must meet one of the following criteria: transfers ownership to EPA, contains a
bargain purchase option, the lease term is equal to 75 percent or more of the estimated
service life, or the present value of the lease and other minimum lease payments equal or
exceed 90 percent of the fair value.
Superfund contract property used as part of the remedy for site-specific response actions
is capitalized in accordance with the Agency's capitalization threshold. This property is
part of the remedy at the site and eventually becomes part of the site itself. Once the
response action has been completed and the remedy implemented, EPA retains control of
the property (i.e., pump and treat facility) for 10 years or less, and transfers its interest in
the facility to the respective state for mandatory operation and maintenance - usually 20
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years or more. Consistent with EPA's 10 year retention period, depreciation for this
property is based on a 10 year life. However, if any property is transferred to a state in a
year or less, this property is charged to expense. If any property is sold prior to EPA
relinquishing interest, the proceeds from the sale of that property shall be applied against
contract payments or refunded as required by the Federal Acquisition Regulations.
An exception to the accounting of contract property includes equipment purchased by the
Working Capital Fund (WCF). This property is retained in FAS and depreciated utilizing
the straight-line method based upon the asset's acquisition date and useful life.
Real property consists of land, buildings, capital and leasehold improvements and capital
leases. Real property, other than land, is capitalized when the value is $85 thousand or
more. Land is capitalized regardless of cost. Buildings are valued at an estimated original
cost basis, and land is valued at fair market value if purchased prior to FY 1997. Real
property purchased after FY 1996 is valued at actual cost. Depreciation for real property
is calculated using the straight-line method over the specific asset's useful life, ranging
from 10 to 102 years. Leasehold improvements are amortized over the lesser of their
useful life or the unexpired lease term. Additions to property and improvements not
meeting the capitalization criteria, expenditures for minor alterations, and repairs and
maintenance are expensed when incurred.
Software for the WCF, a revenue generating activity, is capitalized if the purchase price
is $100 thousand or more with an estimated useful life of 2 years or more. All other funds
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 2 to 10 years.
O. Liabilities
Liabilities represent the amount of monies or other resources that are more 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. Liabilities of the Agency arising from
other than contracts can be abrogated by the Government acting in its sovereign capacity.
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P. Borrowing Payable to the Treasury
Borrowing payable to Treasury results from loans from Treasury to fund the Asbestos
direct loans Periodic principal payments are made to Treasury based on the collections of
loans receivable.
Q. Interest Payable to Treasury
The Asbestos Loan Program makes periodic interest payments to Treasury based on its
debt.
R. 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 Note 33 as a component of "Payroll and Benefits Payable."
S. 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 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.
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T. Prior Period Adjustments and Restatements
Prior period adjustments, if any, are made in accordance with SFFAS No. 21, "Reporting
Corrections of Errors and Changes in Accounting Principles." Specifically, prior period
adjustments will only be made for material prior period errors to: (1) the current period
financial statements, and (2) the prior period financial statements presented for
comparison. Adjustments related to changes in accounting principles will only be made
to the current period financial statements, but not to prior period financial statements
presented for comparison.
U. Recovery Act Funds
On February 17, 2009, President Obama signed the American Recovery and
Reinvestment Act of 2009 (Recovery Act). The Act was enacted to create jobs in the
United States, encourage technical advances, assist in modernizing the nation's
infrastructure, and enhance energy independence. The EPA was charged with the task of
distributing funds to invest in various projects aimed at creating advances in science,
health, and environmental protection that will provide long-term economic benefits.
EPA manages almost $7.22 billion in Recovery Act funded projects and programs that
will help achieve these goals, offer resources to help other "green" agencies, and
administer environmental laws that will govern Recovery activities. As of September 30,
2011, EPA has paid out $6.31 billion.
EPA, in collaboration with states, tribes, local governments, territories and other partners,
is administering the funds it received under the Recovery Act through four
appropriations. The funds include:
State and Tribal Assistance Grants (STAG) that in turn include: $4 billion for assistance
to help communities with water quality and wastewater infrastructure needs and $2
billion for drinking water infrastructure needs (Clean Water and Drinking Water State
Revolving Fund programs and Water Quality Planning program); $100 million for
competitive grants to evaluate and clean up former industrial and commercial sites
(Brownfields program); $300 million for grants and loans to help regional, state and local
governments, tribal agencies, and non-profit organizations with projects that reduce
diesel emissions (Clean Diesel programs); $600 million for the cleanup of hazardous
sites (Superfund program); $200 million for cleanup of petroleum leaks from
underground storage tanks (Leaking Underground Storage Tank program); and $20
million for audits and investigations conducted by the Inspector General (IG).
The EPA has committed to focusing on the following areas: Clean Diesel Emissions,
Superfund Hazardous Waste Cleanup, Cleaner Underground Storage Tank Sites,
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Revitalized Neighborhoods from Brownfields and Cleaner Water and Drinking Water
Infrastructures.
The vast majority of the contracts awarded under the Recovery Act will be entered into
using competitive contracts. EPA is committed fully to ensuring transparency and
accountability throughout the Agency in spending Recovery Act funds in accordance
with OMB guidance.
EPA has set up a Stimulus Steering Committee that meets to review and report on the
status of the distribution of the Recovery Act Funds to ensure transparency and accuracy.
EPA has also developed a Stewardship Plan which is an Agency-level risk mitigation
plan that sets out the Agency's Recovery Act risk assessment, internal controls and
monitoring activities. The Stewardship Plan is divided into seven functional areas: grants,
interagency agreements, contracts, human capital/payroll, budget execution, performance
reporting and financial reporting. The Stewardship Plan was developed around
Government Accountability Office (GAO) standards for internal control. Under each
functional area, risks are assessed and related control, communication and monitoring
activities are identified for each impacted program. The Plan is a dynamic document and
will be updated as revised OMB guidance is issued or additional risks are uncovered.
EPA has the three-year EPM treasury symbol 689/10108 that is under the Recovery Act.
EPA's other Recovery Act programs are the following: Office of Inspector General,
treasury symbol 689/20113; State and Tribal Assistance Grants, treasury symbol
689/00102; Payment to the Superfund, treasury symbol 689/00249; Superfund, treasury
symbol 689/08195; and Leaking Underground Storage Tank, treasury symbol 689/08196.
V. Deepwater Horizon Oil Spill
On April 20, 2010 the Deepwater Horizon drilling rig exploded, releasing large volumes
of oil into the Gulf of Mexico. As a responsible party, BP is required by the 1990 Oil
Pollution Act to fund the cost of the response and cleanup operations. In FY 201 1, the
EPA continued to work on the cleanup effort in conjunction with the U.S. Coast Guard
who was named the lead Federal On-Scene Coordinator and is assisting the Department
of Justice on the pending civil litigation.
W. 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.
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Note 2. Fund Balance with Treasury (FBWT)
Fund Balance with Treasury as of September 30, 2011 and 2010, consists of the following:
FY2011	FY2010


Entity
Assets
Non-Entity
Assets
Total
Entity
Assets
Non-Bhtity
Assets
Total
Trust Funds:







Superfund
$
114,540 $
- $
114,540 $
106,247 $
- $
106,247
LUST

60,558
-
60,558
55,132
-
55,132
Oil Spill & Misc.

4,085
-
4,085
9,644
-
9,644
Revolving Funds:







FIFRA/Tolerance

3,571
-
3,571
4,204
-
4,204
Working Capital

68,776
-
68,776
80,485
-
80,485
Cr. Reform Finan.

390
-
390
390
-
390
Appropriated

12,086,770
-
12,086,770
14,049,511
-
14,049,511
Other Fund Types

314,522
9,329
323,851
289,149
8,262
297,411
Total	$ 12,653,212 $	9,329 $ 12,662,541 $ 14,594,762 $	8,262 $ 14,603,024
Entity fund balances, except for special fund receipt accounts, are available to pay current
liabilities and to finance authorized purchase commitments (see Status of Fund Balances
below). Entity Assets for Other Fund Types consist of special purpose funds and special
fund receipt accounts, such as the Pesticide Registration funds and the Environmental
Services receipt account. The Non-Entity Assets for Other Fund Types consist of clearing
accounts and deposit funds, which are either awaiting documentation for the determination of
proper disposition or being held by EPA for other entities.
Status of Fund Balances:
FY2011
FY 2010
Unobligated Amounts in Fund Balance:


Available for Obligation
$ 3,326,812 $
4,430,813
Unavailable for Obligation
171,038
195,529
Net Receivables from Invested Balances
(3,485,275)
(3,736,818)
Balances in Treasury Trust Fund (Note 37)
1,310
(1,115)
Obligated Balance not yet Disbursed
12,336,466
13,432,954
Non-Budgetary FBWT
312,190
281,661
Totals
$ 12,662,541 $
14,603,024
The funds available for obligation may be apportioned by OMB for new obligations at the
beginning of the following fiscal year. Funds unavailable for obligation are mostly balances
in expired funds, which are available only for adjustments of existing obligations. For FY
2011 and FY 2010 no differences existed between Treasury's accounts and EPA's statements
for fund balances with Treasury.
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Note 3. Cash and Other Monetary Assets
As of September 30, 2011 and 2010, the balance in the imprest fund was $10 thousand.
Note 4. Investments
As of September 30, 2011 and 2010 investments related to Superfund and LUST consist of
the following:
Cost
Intragowrnmental Securities:
Non-Marketable FY2011 $ 6,959,480 $
Non-Marketable FY2010 $ 7,079,053 $
CERCLA, as amended by SARA, authorizes EPA to recover monies to clean up Superfund
sites from responsible parties (RPs). Some RPs file for bankruptcy under Title 11 of the U.S.
Code. In bankruptcy settlements, EPA is an unsecured creditor and is entitled to receive a
percentage of the assets remaining after secured creditors have been satisfied. Some RPs
satisfy their debts by issuing securities of the reorganized company. The Agency does not
intend to exercise ownership rights to these securities, and instead will convert them to cash
as soon as practicable (see Note 6). All investments in Treasury securities are earmarked
funds (see Note 19).
The Federal Government does not set aside assets to pay future benefits or other expenditures
associated with earmarked funds. The cash receipts collected from the public for an
earmarked fund are deposited in the U.S. Treasury, which uses the cash for general
Government purposes. Treasury securities are issued to EPA as evidence of its receipts.
Treasury securities are an asset to EPA and a liability to the U.S. Treasury. Because EPA
and the U.S. Treasury are both parts of the Government, these assets and liabilities offset
each other from the standpoint of the Government as a whole. For this reason, they do not
represent an asset or liability in the U.S. Government-wide financial statements.
Treasury securities provide EPA with authority to draw upon the U.S. Treasury to make
future benefit payments or other expenditures. When EPA requires redemption of these
securities to make expenditures, the Government finances those expenditures out of
accumulated cash balances, by raising taxes or other receipts, by borrowing from the public
or repaying less debt, or by curtailing other expenditures. This is the same way that the
Government finances all other expenditures.
Amortized	T . .	T ^	™ i .
interest	inwstments,	Market
(Premium)	Receivable	Net	Value
Discount
(137,103) $	15,614 $	7,112,197 $ 7,112,197
(139,302) $	25,258 $	7,243,613 $ 7,243,613
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Note 5. Accounts Receivable, Net
The Accounts Receivable as of September 30, 2011 and 2010 consist of the following:
FY2011	FY 2010
$	35,518 $	45,698
Intragovernmental:
Accounts & Interest Receivable
Total
35,518
Non-Federal:
Unbilled Accounts Receivable
Accounts & Interest Receivable
Less: Allowance for Unco llectibles
Total
159,170
2,176,215
(1,821,195)
514,190
45,698
143,444
1,958,981
(1,684,890)
417,535
The Allowance for Uncollectible Accounts is determined both on a specific identification
basis, as a result of a case-by-case review of receivables, and on a percentage basis for
receivables not specifically identified.
Note 6. Other Assets
Other Assets as of September 30, 2011 and 2010 consist of the following:
Intragovernmental:	FY2011 FY 2010
Advances to Federal Agencies	$ 251,649 $ 223,165
Advances for Postage		154 	131
Total	$ 251,803 $ 223,296
Non-Federal:
Travel Advances	$ 486	$ 432
Letter of Credit Advances	-	9
Other Advances	1,838	2,105
Operating Materials and Supplies	140	149
Inventory for Sale		102 	139
Total	$	2,566 $	2,834
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Note 7. Loans Receivable, Net
Loans Receivable consists of Asbestos Loan Program loans disbursed from obligations made
prior to FY 1992 and are presented net of allowances for estimated uncollectible loans, if an
allowance was considered necessary. Loans disbursed from obligations made after FY 1991
are governed by the Federal Credit Reform Act, which mandates that the present value of the
subsidy costs (i.e., interest rate differentials, interest subsidies, anticipated delinquencies, and
defaults) associated with direct loans be recognized as an expense in the year the loan is
made. The net loan present value is the gross loan receivable less the subsidy present value.
The amounts as of September 30, 2011 and 2010 are as follows:
Direct Loans
Obligated Prior to S
FY 1992
Direct Loans
Obligated After FY
1991
Loans
Receivable,
Gross
44 $
2,194
FY2011
Allowance*
(131)
Value of Assets
Related to
Direct Loans
44 $
2,063
Loans
Receivable,
Gross
545 $
4,931
FY2010
Allowance*
(222)
Value of Assets
Related to
Direct Loans
545
4,709
Total	$	2,238 $	(131) $	2,107 $	5,476 $	(222) $	5,254
* Allowance for Pre-Credit Reform loans (prior to FY 1992) is the Allowance for Estimated
Uncollectible Loans, and the Allowance for Post Credit Reform Loans (after FY 1991) is the
Allowance for Subsidy Cost (present value).
During FY 2008, the EPA made a payment within the U.S. Treasury for the Asbestos Loan
Program based on an upward re-estimate of $33 thousand for increased loan financing costs.
It was believed that the payment only consisted of "interest" costs and, as such, an automatic
apportionment, per OMB Circular A-l 1, Section 120.83, was deemed appropriate.
However, approximately one third ($12 thousand) of the $33 thousand re-estimate was for
increased "subsidy" costs which requires an approved apportionment by OMB before any
payment could be made. Therefore, the payment resulted in a minor technical Antideficiency
Act (ADA) violation. On October 13, 2009, EPA transmitted, as required by OMB Circular
A-l 1, Section 145, written notifications to the (1) President, (2) President of the Senate, (3)
Speaker of the House of Representatives, (4) Comptroller General, and (5) the Director of
OMB. On May 18, 2011, EPA sent a supplemental letter to the OMB Director to further
identify the names of the persons responsible for the violation, and that they were not
suspected of willfully or knowingly violating the ADA.
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Subsidy Expenses for Credit Reform Loans (reported on a cash basis):
Interest Rate Technical	Total
Re-estimate Re-estimate
Upward Subsidy Reestimate-FY2011 $	104 $	39 $	143
Downward Subsidy Reestimate - FY2011
FY2011 Totals $
104 $
39 $
143
Upward Subsidy Reestimate - FY2010 $
5 $
2 $
7
Downward Subsidy Reestimate - FY2010
(35)
(16)
(51)
FY2010 Totals $
(30) $
(14)$
(44)
Schedule for Reconciling Subsidy Cost Allowance Balances
(Post-1991 Direct Loans)
FY2011	FY2010
Beginning balance ofthe subsidy cost allowance	$	(222) $	(948)
Add: subsidy expense for direct loans disbursed during the
reporting years by component:
Interest rate differential costs
Default costs (net of recoveries)
Fees and other collections
Other subsidy costs		 	
Total ofthe above subsidy expense components	$	-	$
Adjustments:
Loan Modification
Fees received
Foreclosed property acquired
Loans written off


Subs idy allowance amortization
234
477
Other


End balance ofthe subsidy cost allowance before reestimates
234
477
Add or subtract subsidy reestimates by component:


(a) Interest rate reestimate
(104)
176
(b) Technical/default reestimate
(39)
73
Total of the above reestimate components
(143)
249
Ending Balance of the suhsidy cost allowance
$ (131) $
(222)
EPA has not disbursed Direct Loans since 1993.
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Note 8. Accounts Payable and Accrued Liabilities
The Accounts Payable and Accrued Liabilities are current liabilities and consist of the
following amounts as of September 30, 2011 and 2010:
FY2011	FY 2010
Intr governmental:
Accounts Payable	$	62 $	1,466
Accrued Liabilities	52,386	49,859
Total	»	52,448 $	51,325
Non-Federal:	FY2011	FY2010
Accounts Payable	$ 69,505	$ 118,033
Advances Payable	3	8
Interest Payable	7	7
Grant Liabilities	617,073	650,526
Other Accrued Liabilities		230,178 	262,874
Total	$ 916,766	$ 1,031,448
Other Accrued Liabilities primarily relate to contractor accruals.
Note 9. General Property, Plant, and Equipment, Net
General property, plant, and equipment (PP&E) consist of software, real property, EPA and
contractor-held personal property, and capital leases.
As of September 30, 2011 and 2010, General PP&E consist of the following:
FY2011	FY2010

Acquisition
Value
Accumulated
Depreciation
Net Book Value
Acquisition
Value
Accumulated
Depreciation
Net Book
Value
EPA-Held Equipment $
255,049 $
(147,219) $
107,830 $
252,920 $
(145,672) $
107,248
Software
527,603
(190,302)
337,301
443,847
(158,034)
285,813
Contractor Held Equip.
66,808
(22,104)
44,704
95,494
(39,225)
56,269
Land and Buildings
653,518
(188,382)
465,136
630,252
(177,654)
452,598
Capital Leases
35,440
(23,612)
11,828
35,440
(22,247)
13,193
Total $
1,538,418 $
(571,619) $
966,799 $
1,457,953 $
(542,832) $
915,121
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Note 10. Debt Due to Treasury
The debt due to Treasury consists of borrowings to finance the Asbestos Loan Program. The
debt to Treasury as of September 30, 2011 and 2010 is as follows:
All Other Funds FY2011	FY2010
Beginning Net	Biding Beginning	Net Ehding
Balance Borrowing	Balance Balance	Borrowing Balance
Intragovernmental:
Debt to Treasury $	4,844 $	(2,251)	£ 2,593 $	9,983 $	(5,139) £	4,844
Note 11. Stewardship Land
The Agency acquires title to certain property and property rights under the authorities
provided in Section 104(j) CERCLA related to remedial clean-up sites. The property rights
are in the form of fee interests (ownership) and easements to allow access to clean-up sites or
to restrict usage of remediated sites. The Agency takes title to the land during remediation
and transfers it to state or local governments upon the completion of clean-up. A site with
"land acquired" may have more than one acquisition property. Sites are not counted as a
withdrawal until all acquired properties have been transferred under the terms of 104(j).
As of September 30, 2011, the Agency possesses the following land and land rights:
FY2011	FY2010
Superfund Sites with
Easements
Beginning Balance	35	33
Additions	1	2
Withdrawls		0_		0
Ehding Balance		36		35
Superfund Sites with
Land Acquired
Beginning Balance 32	30
Additions 4	2
Withdrawls		2_		0
Ehding Balance		34		32
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Note 12. Custodial Liability
Custodial Liability represents the amount of net accounts receivable that, when collected,
will be deposited to the Treasury General Fund. Included in the custodial liability are
amounts for fines and penalties, interest assessments, repayments of loans, and miscellaneous
other accounts receivable. As of September 30, 2011 and 2010, custodial liability is
approximately $57 million and $53 million, respectively.
Note 13. Other Liabilities
Other Liabilities consist of the following as of September 30, 2011:
Covered by Not Cove red by
Other Liabilities - Intragovernmental	Budgetary	Budgetary	Total
	Resources	Resources
Current
Employer Contributions & Payroll Ta?es $	25,495
WCF Advances	1,337
Other Advances	38,981
Advances, HRSTF Cashout	34,979
Deferred HRSTF Cashout
Liability for Deposit Funds
Resources Payable to Treasury	3
Subsidy Payable to Treasury
Non-Current
Unfunded FECA Liability
Payable to Treasury Judgment Fund		-
Total Intragovernmental	$	100,795
Other Liabilities - Non-Federal
Current
Unearned Advances, Non-Federal	$	70,084
Liability for Deposit Funds, Non-Federal	9,194
Contract Holdbacks
Non-Current
Other Liabilities
Capital Lease Liability		-
Total Non-Federal	$	79,278
25,495
1,337
38,981
34,979
10,115
22,000
32,115
10,115
22,000
132,910
70,084
9,194
24,711
24,711
24,711
103,989
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Other Liabilities consist of the following as
of September 30, 2010:


Covered by
Not Covered by

Other Liabilities - Intragowrnmental
Budgetary
Budgetary
Total

Resources
Resources

Current



Employer Contributions & Payroll Taxes $
22,585 $
- $
22,585
WCF Advances
1,706
-
1,706
Other Advances
52,596
-
52,596
Advances, HRSTF Cashout
20,431
-
20,431
Deferred HRSTF Cashout
1,831
-
1,831
Liability for Deposit Funds
-
-
-
Resources Payable to Treasury
649
-
649
Subsidy Payable to Treasury
256
-
256
Non-Current



Unfunded FECA Liability
-
10,232
10,232
Payable to Treasury Judgment Fund
-
22,000
22,000
Total Intragovernmental $
100,054 $
; 32,232 $
132,286
Other Liabilities - Non-Federal
Current
Unearned Advances
Liability for Deposit Funds
Contract Holdbacks
Non-Current
Other Liabilities
Capital Lease Liability
Total Non-Federal
Note 14. Leases
Capital Leases:
The value of assets held under Capital Leases as of September 30, 2011 and 2010 are as
follows:
Summary of Assets Under Capital Lease:
FY 2011
FY2010
Real Property :
$ 35,285 $
35,285
Personal Property
155
155
Software License
-
-
Total !
$ 35,440 $
35,440
Accumulated Amortization !
$ 23,612 $
22,246
65,314 $ -	$ 65,314
8,128 -	8,128
155 -	155
200	200
		26,199 	26,199
73,597 $ 26-399	$ 99,996
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EPA had two capital leases for land and buildings housing scientific laboratories and
computer facilities. All of these leases include a base rental charge and escalation clauses
based upon either rising operating costs and/or real estate taxes. The base operating costs are
adjusted annually according to escalators in the Consumer Price Indices published by the
Bureau of Labor Statistics, U.S. Department of Labor. Two leases terminate in FY 2013 and
FY 2025.
The total future minimum capital lease payments are listed below.
Future Payments Due:
Fiscal Year	Capital Leases
2012	$	5,714
2013	5,714
2014	4,215
2015	4,215
After 5 y ears		39,340
Total Future Minimum Leas e Payments	59,198
Less: Imputed Interest	$ (34,487)
Net Capital Lease Liability		24,711
Liabilities not Cow red by Budgetary Resources $ 	24,711
(See Note 13)
Operating Leases:
The GSA provides leased real property (land and buildings) as office space for EPA
employees. GSA charges a Standard Level User Charge that approximates the commercial
rental rates for similar properties.
EPA had two direct operating leases for land and buildings housing scientific laboratories
and computer facilities. The leases include a base rental charge and escalation clauses based
upon either rising operating costs and/or real estate taxes. The base operating costs are
adjusted annually according to escalators in the Consumer Price Indices published by the
Bureau of Labor Statistics. Two leases expire in FY 2017 and FY 2020. These charges are
expended from the EPM appropriation.
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The total minimum future operating lease costs are listed below:
Operating Leases, Land and
	Buildings	
Fiscal Year
2012	$	89
2013	89
2014	89
2015	89
Beyond 2015 	285
Total Future Minimum Lease Payments $	641
Note 15. FECA Actuarial Liabilities
The Federal Employees' Compensation Act (FECA) provides income and medical cost
protection to covered Federal civilian employees injured on the job, employees who have
incurred a work-related occupational disease, and beneficiaries of employees whose death is
attributable to a job-related injury or occupational disease. Annually, EPA is allocated the
portion of the long term FECA actuarial liability attributable to the entity. The liability is
calculated to estimate the expected liability for death, disability, medical and miscellaneous
costs for approved compensation cases. The liability amounts and the calculation
methodologies are provided by the Department of Labor.
The FECA Actuarial Liability as of September 30, 2011 and 2010 was $44.8 million and
$44.9 million, respectively. The FY 2011 present value of these estimated outflows is
calculated using a discount rate of 3.535 percent in the first year, and 4.025 percent in the
years thereafter. The estimated future costs are recorded as an unfunded liability.
Note 16. Cashout Advances, Superfund
Cashout advances are funds received by EPA, a state, or another PRP under the terms of a
settlement agreement (e.g., consent decree) to finance response action costs at a specified
Superfund site. Under CERCLA Section 122(b)(3), cashout funds received by EPA are
placed in site-specific, interest bearing accounts known as special accounts and are used for
potential future work at such sites in accordance with the terms of the settlement agreement.
Funds placed in special accounts may be disbursed to PRPs, to states that take responsibility
for the site, or to other Federal agencies to conduct or finance response actions in lieu of EPA
without further appropriation by Congress. As of September 30, 2011 and 2010, cashouts are
approximately $790 million and $637 million respectively.
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Note 17. Unexpended Appropriations — Other Funds
As of September 30, 2011 and 2010, the Unexpended Appropriations consist of the
following:
Unexpended Appropriations:	FY2011	FY2010
Unobligated
Available	$ 1,151,603	$ 184,815
Unavailable	74,517	275,592
Undelivered Orders	10,236,478	12,882,377
Total	$ 11,462,598	$ 13,342,784
Note 18. Commitments and Contingencies
EPA may be a party in various administrative proceedings, actions and claims brought by or
against it. These include:
•	Various personnel actions, suits, or claims brought against the Agency by employees
and others.
•	Various contract and assistance program claims brought against the Agency by
vendors, grantees and others.
•	The legal recovery of Superfund costs incurred for pollution cleanup of specific sites,
to include the collection of fines and penalties from responsible parties.
•	Claims against recipients for improperly spent assistance funds which may be settled
by a reduction of future EPA funding to the grantee or the provision of additional
grantee matching funds.
As of September 30, 2011 and 2010 total accrued liabilities for commitments and potential
loss contingencies is $10.2 million and $4.37 million, respectively. Further discussion of the
cases and claims that give rise to this accrued liability are discussed immediately below.
Litigation Claims and Assessments
There is currently one legal claim which has been asserted against the EPA pursuant to the
Federal Tort Claims and Fair Labor Standards Acts. This loss has been deemed probable,
and the unfavorable outcome is estimated to be between $10 million and $15 million. EPA
has accrued the higher conservative amount as of September 30, 2011. The maximum
amount of exposure under the claim could range as much as $15 million in the aggregate.
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Superfund
Under CERCLA Section 106(a), EPA issues administrative orders that require parties to
clean up contaminated sites. CERCLA Section 106(b) allows a party that has complied with
such an order to petition EPA for reimbursement from the fund of its reasonable costs of
responding to the order, plus interest. To be eligible for reimbursement, the party must
demonstrate either that it was not a liable party under CERCLA Section 107(a) for the
response action ordered, or that the Agency's selection of the response action was arbitrary
and capricious or otherwise not in accordance with law.
Judgment Fund
In cases that are paid by the U.S. Treasury Judgment Fund, EPA must recognize the full cost
of a claim regardless of which entity is actually paying the claim. Until these claims are
settled or a court judgment is assessed and the Judgment Fund is determined to be the
appropriate source for the payment, claims that are probable and estimable must be
recognized as an expense and liability of the Agency. For these cases, at the time of
settlement or judgment, the liability will be reduced and an imputed financing source
recognized. See Interpretation of Federal Financial Accounting Standards No. 2,
"Accounting for Treasury Judgment Fund Transactions."
As of September 30, 2011, there are no material claims pending in the Treasury's Judgment
Fund. However, EPA has a $22 million liability to the Treasury Judgment Fund for a
payment made by the Fund to settle a contract dispute claim.
Other Commitments
EPA has a commitment to fund the United States Government's payment to the Commission
of the North American Agreement on Environmental Cooperation between the Governments
of Canada, the Government of the United Mexican States, and the Government of the United
States of America (commonly referred to as CEC). According to the terms of the agreement,
each government pays an equal share to cover the operating costs of the CEC. For the
periods ended September 30, 2011 and 2010, EPA paid $3 million for each of these periods
to the CEC. A payment of $3 million was made in FY 2011.
EPA has a legal commitment under a non-cancellable agreement, subject to the availability
of funds, with the United Nations Environment Program (UNEP). This agreement enables
EPA to provide funding to the Multilateral Fund for the Implementation of the Montreal
Protocol. EPA made payments totaling $8.35 million in FY 2011. Future payments totaling
$11 million have been deemed reasonably possible and are anticipated to be paid in fiscal
years 2012 through 2014.
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Note 19. Earmarked Funds
Balance sheet as of September 30,2011
Assets
Fund Balance with Treasury
Investments
Accounts Receivable, Net
Other Assets
Environmental
Services
$ 302,677 :
LUST
6 60,558 I
3,535,052
347
Superfund
5 114,540 9
3,577,145
445,303
118,355
Other Earmarked
Funds
> 19,500 $
16,866
4,415
Total Earmarked
Funds
1 497,275
7,112,197
462,169
123,117
Total Assets
302,677
3,595,957
4,255,343

40,781
8,194,758
Other Liabilities
$ - :
6 20,757 I
5 1,111,724 9

35,114 $
1 1,167,595
Total Liabilities
$ - :
6 20,757 I
5 1,111,724 9

35,114 $
1 1,167,595
Cumulative Results of Operations
$ 302,677 :
6 3,575,200 I
5 3,143,619 9

5,667 $
1 7,027,163
Total Liabilities and Net Position
$ 302,677 :
6 3,595,957 I
5 4,255,343 9

40,781 $
1 8,194,758
Statement of Changes in Net Cost for the
Period Bided September 30,2011
Gross Program Costs
Less: Earned Revenues
$ - :
fi 209,613 I
5 1,908,317 9
532,006

124,214 $
110,839
1 2,242,144
642,845
Net Cost of Operations
$ - :
fi 209,613 I
5 1,376,311 9

13,375 $
1 1,599,299
Statement of Changes in Net Position for the
Period ended September 30,2011
Net Position, Beginning of Period
Nonexehange Revenue- Securities Investments
Nonexchange Revenue
Other Budgetary Finance Sources
Other Financing Sources
Net Cost of Operations
$ 273,416 :
29,261
fi 3,539,217 I
93,156
152,127
314
(209,613)
5 3,340,498 9
27,266
3,596
1,120,663
27,907
(1,376,311)

(749) $
7
18,342
1,441
(13,375)
1 7,152,382
120,429
184,984
1,139,005
29,662
(1,599,299)
Change in Net Position
$ 29,261 :
6 35,984 I
5 (196,879) 9
, 111'1
6,415 $
1 (125,219)







Net Position
$ 302,677 :
fi 3,575,201 I
5 3,143,619 9

5,666 $
1 7,027,163
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Balance sheet as ofSeptember30,2010
Assets
Fund Balance with Treasury
Investments
Accounts Receivable,Net
Other Assets
Total Assets
Other Liabilities
Total Liabilities
Cumulative Results of Operations
Total Liabilities and Net Position
Statement of Net Cost for the
Period Bided September 30,2010
Gross Program Costs
Less: Earned Revenues
Environmental
Services
273,420
LUST
273,420
4
273,416
273,420
55,132
3,502,913
266
3,558,311
19,094
19,094
181,870
Superfund
3,539,217
3,558,311
106,247
3,740,700
391,388
115,729
4,354,064
1,013,566
1,013,566
3,340,498
4,354,064
1,844,712
484,165
Other Earmarked
Funds
29,578
7,697
6,199
43,474
44,223
44,223
121,214
98,246
Total Earmarked
Funds
464,377
7,243,613
399,085
	122,194
	8,229,269
1,076,887
(749)
43,474
1,076,887
7,152,382
8,229,269
2,147,796
582,411
Net Cost of Operations
181,870
1,360,547
22,968
1,565,385
Statement of Changes in Net Position for the
Period ended September 30,2010
Net Position, Beginning of Period $
231,820 $
3,436,303 $
3,416,536 $
1,817
Nonexchange Revenue- Securities Investments
-
115,523
14,968
13
Nonerahange Revenue
41,596
168,990
3,396
2
Other Budgetary Finance Sources
-
-
1,241,402
18,379
Other Financing Sources
-
271
24,743
2,008
Net Cost of Operations
-
(181,870)
(1,360,547)
(22,968)
7,086,476
130,504
213,984
1,259,781
27,022
(1,565,385)
Change in Net Position	$	41,596 $ 	102,914 $	(76,038) $ 	(2,566) $ 	65,906
Net Position	$	273,416 $	3,539,217 $	3,340,498 $ 	Q49) $ 	7,152,382
Earmarked funds are as follows:
Environmental Services Receipt Account: The Environmental Services Receipt Account
authorized by a 1990 act, "To amend the Clean Air Act (P.L. 101-549),", was established for
the deposit of fee receipts associated with environmental programs, including radon
measurement proficiency ratings and training, motor vehicle engine certifications, and water
pollution permits. Receipts in this special fund can only be appropriated to the S&T and EPM
appropriations to meet the expenses of the programs that generate the receipts if authorized
by Congress in the Agency's appropriations bill.
Leaking Underground Storage Tank (LUST) Trust Fund: The LUST Trust Fund, was
authorized by the Superfund Amendments and Reauthorization Act of 1986 (SARA) as
amended by the Omnibus Budget Reconciliation Act of 1990. The LUST appropriation
provides funding to respond to releases from leaking underground petroleum tanks. The
Agency oversees cleanup and enforcement programs which are implemented by the states.
Funds are allocated to the states through cooperative agreements to clean up those sites
posing the greatest threat to human health and the environment. Funds are used for grants to
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non-state entities including Indian tribes under Section 8001 of the Resource Conservation
and Recovery Act. The program is financed by a one cent per gallon tax on motor fuels
which will expire on September 31, 2011.
Superfund Trust Fund: In 1980, the Superfund Trust Fund, was established by CERCLA to
provide resources to respond to and clean up hazardous substance emergencies and
abandoned, uncontrolled hazardous waste sites. The Superfund Trust Fund financing is
shared by federal and state governments as well as industry. The EPA allocates funds from
its appropriation to other Federal agencies to carry out CERCLA. Risks to public health and
the environment at uncontrolled hazardous waste sites qualifying for the Agency's National
Priorities List (NPL) are reduced and addressed through a process involving site assessment
and analysis and the design and implementation of cleanup remedies. NPL cleanups and
removals are conducted and financed by the EPA, private parties, or other Federal agencies.
The Superfund Trust Fund includes Treasury's collections, special account receipts from
settlement agreements, and investment activity.
Other Earmarked Funds:
Oil Spill Liability Trust Fund: The Oil Spill Liability Trust Fund, was authorized by the Oil
Pollution Act of 1990 (OPA). Monies are appropriated from the Oil Spill Liability Trust
Fund to EPA's Oil Spill Response Account each year. The Agency is responsible for
directing, monitoring and providing technical assistance for major inland oil spill response
activities. This involves setting oil prevention and response standards, initiating enforcement
actions for compliance with OPA and Spill Prevention Control and Countermeasure
requirements, and directing response actions when appropriate. The Agency carries out
research to improve response actions to oil spills including research on the use of remediation
techniques such as dispersants and bioremediation. Funding for specific oil spill cleanup
actions is provided through the U.S. Coast Guard from the Oil Spill Liability Trust Fund
through reimbursable Pollution Removal Funding Agreements (PRFAs) and other inter-
agency agreements.
Miscellaneous Contributed Funds Trust Fund: The Miscellaneous Contributed Funds Trust
Fund authorized in the Federal Water Pollution Control Act (Clean Water Act) as amended
P.L. 92-500 (The Federal Water Pollution Control Act Amendments of 1972), includes gifts
for pollution control programs that are usually designated for a specific use by donors and/or
deposits from pesticide registrants to cover the costs of petition hearings when such hearings
result in unfavorable decisions to the petitioner.
Pesticide Registration Fund: The Pesticide Registration Fund authorized by a 2004 Act,
"Consolidated Appropriations Act (P.L. 108-199),", and reauthorized in 2007 for five more
years, for the expedited processing of certain registration petitions and associated
establishment of tolerances for pesticides to be used in or on food and animal feed. Fees
covering these activities, as authorized under the FIFRA Amendments of 1988, are to be paid
by industry and deposited into this fund group.
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Reregistration and Expedited Processing Fund: The Revolving Fund, was authorized by the
FIFRA of 1972, as amended by the FIFRA Amendments of 1988 and as amended by the
Food Quality Protection Act of 1996. Pesticide maintenance fees are paid by industry to
offset the costs of pesticide re-registration and reassessment of tolerances for pesticides used
in or on food and animal feed, as required by law.
Tolerance Revolving Fund: The Tolerance Revolving Fund, was authorized in 1963 for the
deposit of tolerance fees. Fees are paid by industry for Federal services to set pesticide
chemical residue limits in or on food and animal feed. The fees collected prior to January 2,
1997 were accounted for under this fund. Presently collection of these fees is prohibited by
statute, enacted in the Consolidated Appropriations Act, 2004 (P.L. 108-199).
Exxon Valdez Settlement Fund: The Exxon Valdez Settlement Fund authorized by P.L. 102-
389, "Making appropriations for the Department of Veterans Affairs and Housing and Urban
Development, and for sundry independent agencies, boards, commissions, corporations, and
offices for the fiscal year ending September 30, 1993,", has funds available to carry out
authorized environmental restoration activities. Funding is derived from the collection of
reimbursements under the Exxon Valdez settlement as a result of an oil spill.
Note 20. Intragovernmental Costs and Exchange Revenue
Exchange, or earned revenues on the Statement of Net Cost include income from services
provided to Federal agencies and the public, interest revenue (with the exception of interest
earned on trust fund investments), and miscellaneous earned revenue.
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FY2011
FY 2010
Clean Air
Pro gram Costs
Earned Revenue
Intragovern
mental
$ 159,456 !
13,586
With the
Public
6 1,035,680 !
1,034
Total
5 1,195,136
14,620
Intragovern
mental
$ 170,677 !
18,923
With the
Public
5 1,048,124 $
5,906
Total
J 1,218,801
24,829
NET COST
$ 145,870 !
6 1,034,646 !
5 1,180,516
$ 151,754 !
5 1,042,218 $
J 1,193,972
Clean and Safe Water
Pro gram Costs
Earned Revenue
$ 252,748 !
7,333
6 5,125,894 !
1,458
5 5,378,642
8,791
$ 193,456 !
2,803
5 6,197,330 $
2,524
J 6,390,786
5,327
NET COSTS
$ 245,415 !
6 5,124,436 !
5 5,369,851
$ 190,653 !
5 6,194,806 $
J 6,385,459
Land Preservation &
Restoration
Pro gram Costs
Earned Revenue
$ 390,431 !
124,874
6 2,180,996 !
494,249
5 2,571,427
619,123
$ 342,734 !
103,687
5 2,096,211 $
446,569
J 2,438,945
550,256
NET COSTS
$ 265,557 !
6 1,686,747 !
5 1,952,304
$ 239,047 !
S 1,649,642 S
J 1,888,689
Healthy Communities &
Ecosystems
Pro gram Costs
Earned Revenue
$ 335,757 !
12,010
6 1,289,505 !
38,725
5 1,625,262
50,735
$ 293,850 !
64,034
S 1,265,653 S
44,144
J 1,559,503
108,178
NET COSTS
$ 323,747 !
6 1,250,780 !
5 1,574,527
$ 229,816 !
S 1,221,509 S
J 1,451,325
Compliance &
1'ji\i i"i in menial
Stewardship
Program Costs
Earned Revenue
$ 192,243 !
3,607
6 614,514 3
1,455
5 806,757
5,062
$ 182,299 3
3,400
5 615,931 S
1,494
J 798,230
4,894
NET COSTS
$ 188,636 !
6 613,059 3
5 801,695
$ 178,899 !
S 614,437 S
J 793,336
Total
Pro gram Costs
Earned Revenue
$ 1,330,635 !
161,410
6 10,246,589 !
536,921
5 11,577,224
698,331
$ 1,183,016 3
192,847
5 11,223,249 S
500,637
J 12,406,265
693,484
NET COSTS
$ 1,169,225 !
6 9,709,668 !
5 10,878,893
$ 990,169 !
S 10,722,612 S
J 11,712,781
Intragovernmental costs relate to the source of goods or services not the classification of the
related revenue.
Note 21. Cost of Stewardship Land
There were costs of approximately $438 thousand related to the acquisition of stewardship
land for September 30, 2011 and no costs for September 30, 2010. These costs are included
in the Statement of Net Cost.
Note 22. Environmental Cleanup Costs
As of September 30, 2011, EPA has 2 sites that requires clean up stemming from its
activities. Two claimants' chances of success are characterized as probable with costs
amounting to $180 thousand, may be paid out of the Treasury Judgment Fund. For sites that
had previously been listed, it was determined by EPA's Office of General Counsel to
discontinue reporting the potential environmental liabilities for the following reasons: (1)
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although EPA has been put on notice that it is subject to a contribution claim under
CERCLA, no direct demand for compensation has been made to EPA; (2) any demand
against EPA will be resolved only after the Superfund cleanup work is completed, which
may be years in the future; and (3) there was no legal activity on these matters in FY2010 or
in FY2011.
Accrued Cleanup Cost:
EPA has 15 sites that will require permanent closure, and EPA is responsible to fund the
environmental cleanup of those sites. As of September 30, 2011 and 2010, the estimated
costs for site cleanup were $20.84 million and $20.15 million, respectively. Since the
cleanup costs associated with permanent closure were not primarily recovered through user
fees, EPA has elected to recognize the estimated total cleanup cost as a liability and record
changes to the estimate in subsequent years.
Note 23. State Credits
Authorizing statutory language for Superfund and related Federal regulations requires states
to enter into Superfund State Contracts (SSC) when EPA assumes the lead for a remedial
action in their state. The SSC defines the state's role in the remedial action and obtains the
state's assurance that it will share in the cost of the remedial action. Under Superfund's
authorizing statutory language, states will provide EPA with a 10 percent cost share for
remedial action costs incurred at privately owned or operated sites, and at least 50 percent of
all response activities (i.e., removal, remedial planning, remedial action, and enforcement) at
publicly operated sites. In some cases, states may use EPA-approved credits to reduce all or
part of their cost share requirement that would otherwise be borne by the states. The credit is
limited to state site-specific expenses EPA has determined to be reasonable, documented,
direct out-of-pocket expenditures of non-Federal funds for remedial action.
Once EPA has reviewed and approved a state's claim for credit, the state must first apply the
credit at the site where it was earned. The state may apply any excess/remaining credit to
another site when approved by EPA. As of September 30, 2011 and 2010, the total remaining
state credits have been estimated at $22.2 million and $21.0 million, respectively.
Note 24. Preauthorized Mixed Funding Agreements
Under Superfund preauthorized mixed funding agreements, PRPs agree to perform response
actions at their sites with the understanding that EPA will reimburse them a certain
percentage of their total response action costs. EPA's authority to enter into mixed funding
agreements is provided under CERCLA Section 111(a)(2). Under CERCLA Section
122(b)(1), as amended by SARA, PRPs may assert a claim against the Superfund Trust Fund
for a portion of the costs they incurred while conducting a preauthorized response action
agreed to under a mixed funding agreement. As of September 30, 2011, EPA had 4
outstanding preauthorized mixed funding agreements with obligations totaling $11.5 million.
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As of September 30, 2010, EPA had 6 for $15.6 million. A liability is not recognized for
these amounts until all work has been performed by the PRP and has been approved by EPA
for payment. Further, EPA will not disburse any funds under these agreements until the
PRP's application, claim, and claims adjustment processes have been reviewed and approved
by EPA.
Note 25. Custodial Revenues and Accounts Receivable
FY2011	FY 2010
Fines, Penalties and Other Miscellaneous Receipts	$	126,351 $	89,627
Accounts Receivable for Fines, Penalties and Other
Miscellaneous Receipts:
Accounts Receivable $ 236,313 $ 229,658
Less: Allowance for Uncollectible Accounts		(184,366) 	(181,153)
Total	$	51,947 $	48,505
EPA uses the accrual basis of accounting for the collection of fines, penalties and
miscellaneous receipts. Collectability by EPA of the fines and penalties is based on the
PRPs' willingness and ability to pay.
Note 26. Reconciliation of President's Budget to the Statement of Budgetary Resources
Budgetary resources, obligations incurred and outlays, as presented in the audited
FY 2011 Statement of Budgetary Resources will be reconciled to the amounts included in the
FY 2012 Budget of the United States Government when they become available. The Budget
of the United States Government with actual numbers for FY 2011 has not yet been
published. We expect it will be published by early 2012, and it will be available on the OMB
website at http://www.whitehouse.gov/.
The actual amounts published for the year ended September 30, 2010 are listed immediately
below:
FY2010
Statement of Budgetary Resources
Expired and Immaterial Funds *
68X6275 adjustment
Rounding Differences**
Reported in Budget of the U. S. Government
Budgetary Offsetting
	Resources	Obligations	Receipts	Net Outlays
$ 16,577,022 $ 11,950,681 $ 1,402,960 $	12,398,603
(189,104)	(281)
(6,290)
2,082 1,319 330	678
$ 16,390,000 $	11,952,000 $ 1,397,000 $ 	12,399,000
* Expired funds are not included in Budgetary Resources Available for Obligation in the
Budget Appendix (lines 23.90 and 10.00). Also, minor funds are not included in the Budget
Appendix.
** Balances are rounded to millions in the Budget Appendix.
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Note 27. Recoveries and Resources Not Available, Statement of Budgetary Resources
Recoveries of Prior Year Obligations, Temporarily Not Available, and Permanently Not
Available on the Statement of Budgetary Resources consist of the following amounts for
September 30, 2011 and 2010:

FY2011
FY2010
Recoveries of Prior Year Obligations - Downward


adjustments of prior years' obligations $
270,664 $
277,771
Temporarily Not Available - Rescinded Authority
(553)
(11,800)
Permanently Not Available:


Payments to Treasury
(2,508)
(5,191)
Rescinded authority
(157,166)
(52,897)
Canceled authority
(20,019)
(15,365)
Total Permanently Not Available $
(179,693) $
(73,453)
Note 28. Unobligated Balances Available
Unobligated balances are a combination of two lines on the Statement of Budgetary
Resources: Apportioned, Unobligated Balances and Unobligated Balances Not Available.
Unexpired unobligated balances are available to be apportioned by the OMB for new
obligations at the beginning of the following fiscal year. The expired unobligated balances
are only available for upward adjustments of existing obligations.
The unobligated balances available consist of the following as of September 30, 2011 and
2010:
FY2011	FY 2010
Unexpired Unobligated Balance	$	3,325,991 $	4,441,115
Expired Unobligated Balance		171,859 	185,226
Total	$ 3,497,850 $ 4,626,341
Note 29. Undelivered Orders at the End of the Period
Budgetary resources obligated for undelivered orders at September 30, 2011 and 2010 were
$11.91 billion and $12.88 billion, respectively.
Please note that in FY 2010, Undelivered Orders at the End of the Period inadvertently
excluded the paid portion of undelivered orders and were highlighted as $12.63 billion.
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Note 30. Offsetting Receipts
Distributed offsetting receipts credited to the general fund, special fund, or trust fund receipt
accounts offset gross outlays. For FY 2011 and 2010, the following receipts were generated
from these activities:
FY 2011	FY2010
Trust Fund Recoveries	$ 97,623	$ 53,247
Special Fund Environmental Service	29,257	41,599
Downward Re-estimates of Subsidies	-	51
Trust Fund Appropriation	1,156,073	1,280,570
Special Fund Receipt Account and Treasury
Miscellaneous Receipt and Clearing Accounts	8,808	27,493
Total	$ 1,291,761	$ 1,402,960
Note 31. Transfers-In and Out, Statement of Changes in Net Position
Appropriation Transfers, In/Out:
For FY 2011 and 2010, the Appropriation Transfers under Budgetary Financing Sources on
the Statement of Changes in Net Position are comprised of non-expenditure transfers that
affect Unexpended Appropriations for non-invested appropriations. These amounts are
included in the Budget Authority, Net Transfers and Prior Year Unobligated Balance, Net
Transfers lines on the Statement of Budgetary Resources. Details of the Appropriation
Transfers on the Statement of Changes in Net Position and reconciliation with the Statement
of Budgetary Resources follows for September 30, 2011 and 2010:
Transfers In/Out Without Reimbursement, Budgetary:
Fund/Type of Account	FY2011 FY2010
Amy Corps ofEngineers	$ 1,750 $ (9,000)
U.S. Navy	(8,000)
Small Business Administration		 	-
Total Appropriation Transfers (Other	1,750 (17,000)
Funds)		 	
Net Transfers from Invested Funds	1,370,349 1,386,345
Transfers to Another Agency	1,750 (17,000)
Allocations Rescinded	$ 476 $
Total of Net Transfers on Statement of
Budgetary Resources	$	1,372,575 $	1,369,345
For FY 2011 and 2010, Transfers In/Out under Budgetary Financing Sources on the
Statement of Changes in Net Position consist of transfers to or from other Federal agencies
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and between EPA funds. These transfers affect Cumulative Results of Operations. Details of
the transfers-in and transfers-out, expenditure and nonexpenditure, follows for September 30,
2011 and 2010:
Type of Trans fer/F\inds	FY2011	FY2010
Earmarked	Other Funds	Earmarked Other F\inds
Transfers-in (out) nonexpenditure,
Earmark to S&T and OIG funds	$	(35,410) $	35,410 $	(39,168) $	33,859
Transfer-in nonexpenditure recovery
from CDC
Transfers-in nonexpenditure, Oil Spill	18,342	18,379
Transfer-in (out) cancelled fixnds		 	 	-_ 	-_
Total Transfer in (out) without
Reimbursement, Budgetary	$	(17,068) $	35,410 $	(20,789) $	33,859
Transfers In/Out without Reimbursement, Other Financing Sources:
For FY 2011 and 2010, Transfers In/Out without Reimbursement under Other Financing
Sources on the Statement of Changes in Net Position are comprised of negative subsidy to a
special receipt fund for the credit reform funds.
The amounts reported on the Statement of Changes in Net Position are as follows for
September 30, 2011 and 2010:
Type of Transfer/F\inds	FY2011	FY2010
Earmark	Other Funds	Earmark	Other Funds
Transfers-in by allocation transfer
agency
Transfers-in property
Transfers (out) of prior year negative
subsidy to be paid following year
Total Transfer in (out) without
Reimbursement, Budgetary
$ $ $
(1)	180
- $
341
	205
- $	546
	£561
$	(1) $	(76) $
Note 32. Imputed Financing
In accordance with SFFAS No. 5, "Accounting for Liabilities of the Federal Government,"
Federal agencies must recognize the portion of employees' pensions and other retirement
benefits to be paid by the OPM trust funds. These amounts are recorded as imputed costs
and imputed financing for each agency. Each year the OPM provides Federal agencies with
cost factors to calculate these imputed costs and financing that apply to the current year.
These cost factors are multiplied by the current year's salaries or number of employees, as
applicable, to provide an estimate of the imputed financing that the OPM trust funds will
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provide for each agency. The estimates for FY 2011 were $164.4 million ($25.8 million
from Earmarked funds, and $138.6 million from Other Funds). For FY 2010, the estimates
were $146.8 million ($23.7 million from Earmarked funds, and $123.1 million from Other
Funds).
SFFAS No. 4, "Managerial Cost Accounting Standards and Concepts" and SFFAS No. 30,
"Inter-Entity Cost Implementation," requires Federal agencies to recognize the costs of goods
and services received from other Federal entities that are not fully reimbursed, if material.
EPA estimates imputed costs for inter-entity transactions that are not at full cost and records
imputed costs and financing for these unreimbursed costs subject to materiality. EPA applies
its Headquarters General and Administrative indirect cost rate to expenses incurred for inter-
entity transactions for which other Federal agencies did not include indirect costs to estimate
the amount of unreimbursed (i.e., imputed) costs. For FY 2011 total imputed costs were
$11.6 million ($3.9 million from Earmarked funds, and $7.7 million from Other Funds).
In addition to the pension and retirement benefits described above, EPA also records imputed
costs and financing for Treasury Judgment Fund payments made on behalf of the Agency.
Entries are made in accordance with the Interpretation of Federal Financial Accounting
Standards No. 2, "Accounting for Treasury Judgment Fund Transactions." For FY 2011
entries for Judgment Fund payments totaled $2.6 million (Other Funds). For FY 2010,
entries for Judgment Fund payments totaled $4.0 million (Other Funds).
The combined total of imputed financing sources for FY 2011 and FY 2010 is $178.6 million
and $161.6 million, respectively.
Note 33. Payroll and Benefits Payable
Payroll and benefits payable to EPA employees for the years ending September 30, 2011 and
2010 consist of the following:
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Covered by	Not Covered
FY2011 Payroll & Benefits Payable	Budgetary by Budgetary	Total
Resources	Resources
Accrued Funded Payroll & Benefits $
73,432 $
- $
73,432
Withholdings Payable
32,050
-
32,050
Employer Contributions Pay able-TSP
4,008
-
4,008
Accrued Unfunded Annual Leave
-
162,845
162,845
Total - Current	$	109,490 $	162,845 $	272,335
FY2010 Payroll & Benefits Payable
Accrued Funded Payroll and Benefits	$ 66,677 $	- $	66,677
Withholdings Payable 31,298	-	31,298
Employer Contributions Pay able-TSP 3,588	-	3,588
Accrued Unfunded Annual Leave			163,412 	163,412
Total - Current	$ 101,563"$	163,412"$	264,975
Note 34. Other Adjustments, Statement of Changes in Net Position
The Other Adjustments under Budgetary Financing Sources on the Statement of Changes in
Net Position consist of rescissions to appropriated funds and cancellation of funds that
expired 5 years earlier. These amounts affect Unexpended Appropriations.
Rescissions to General
Appropriations
Canceled General Authority
Total Other Adjustments
Other Funds
FY2011
157,208
	19,978
177,186
Other Funds
FY2010
50,623
	15,366
65,989
Note 35. Non-exchange Revenue, Statement of Changes in Net Position
Non-exchange Revenue, Budgetary Financing Sources, on the Statement of Changes in Net
Position as of September 30, 2011 and 2010 consists of the following items:
Interest on Trust Fund
TaxRevenue, Net of Refunds
Fines and Penalties Revenue
Special Receipt Fund Revenue
Total Nonexchange Revenue
Earmarked Funds
FY2011
305,413
Earmarked Funds
120,429 $
152,437
3,286
29,261
FY2010
130,504
172,127
261
41,596
344,488
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Note 36. Reconciliation of Net Cost of Operations to Budget
FY 2011	FY2010
RESOURCES USED TO FINANCE ACTIVITIES


Budgetary Resources Obligated


Obligations Incurred
$ 11,990,577 $
11,950,681
Less: Spending Authority from Offsetting Collections and Recoveries
(1,020,941)
(1,333,690)
Obligations, Net of Offsetting Collections
$ 10,969,636 $
10,616,991
Less: Offsetting Receipts
(1,282,958)
(1,375,422)
Net Obligations
$ 9,686,678 $
9,241,569
Other Resources


Donations of Property
$ 50 $

Transfers In/Out without Reimbursement, Property
(178)
(341)
Imputed Financing Sources
178,654
161,640
Net Other Resources Used to Finance Activities
$ 178,526 $
161,299
Total Resources Used to Finance Activities
$ 9,865,204 $
9,402,868
RESOURCES USED TO FIN WCKITIYLS


NOT PART OF THE NET COST OF OPERATIONS:


Change in Budgetary Resources Obligated
$ 1,031,615 $
2,166,944
Resources that Fund Prior Periods Expenses
-
-
Budgetary Offsetting Collections and Receipts that


Do Not Affect Net Cost of Operations:


Credit Program Collections Increasing Loan Liabilities for


Guarantees or Subsidy Allowances
2,759
5,681
Offsetting Reciepts Not Affecting Net Cost
126,885
94,852
Resources that Finance Asset Acquition
(190,101)
(213,953)
Total Resources Used to Finance Items Not Part ofthe Net Cost of Operations
$ 971,158 $
2,053,524
Total Resources Used to Finance the Net Cost of Operations
$ 10,836,362 $
11,456,392
COMPONENTS OF THE NET COST OF OPERATIONS THAT WIT J,
FY 2011
FY2010
NOT REQUIRE OR GENERATE RESOURCES IN THE CURRENT PERIOD:


Components Requiring or Generating Resources in Future Periods:


Increase in Annual Leave Liability
$ (823) $
4,232
Increase in Environmental and Disposal Liability
484
630
Increase in Unfunded Contingencies
5,807
(200)
Upward/ Downward Reestimates of Credit Subsidy Expense
394
(207)
Increase in Public Exchange Revenue Receivables
(231,519)
7,375
Increase in Workers Compensation Costs
(221)
979
Other
1,563
(3,077)
Total Components ofNet Cost of Operations that Require or


Generate Resources in Future Periods
$ (224,315) $
9,732
Components Not Requiring/ Generating Resources:


Depreciation and Amortization
73,640 $
85,741
Expenses Not Requiring Budgetary Resources
193,206
160,916
Total Components ofNet Cost that Will Not Require or Generate Resources
$ 266,846 $
246,657
Total Components ofNet Cost of Operations That Will Not Require or
$ 42,531 $
256,389
Generate Resources in the Current Period


Net Cost of Operations
$ 10,878,893 $
11,712,781
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Note 37. Amounts Held by Treasury (Unaudited)
Amounts held by Treasury for future appropriations consist of amounts held in trusteeship by
Treasury in the Superfund and LUST Trust Funds.
Superfund
Superfund is supported by general revenues, cost recoveries of funds spent to clean up
hazardous waste sites, interest income, and fines and penalties.
The following reflects the Superfund Trust Fund maintained by Treasury as of September 30,
2011 and 2010. The amounts contained in these notes have been provided by Treasury. As
indicated, a portion of the outlays represents amounts received by EPA's Superfund Trust
Fund; such funds are eliminated on consolidation with the Superfund Trust Fund maintained
by Treasury.
SUPERFUND FY2011		EPA	Treasury	Combined
Undistributed Balances



Uninvested Fund Balance
$ - $
15,000 $
15,000
Total Undisbursed Balance
-
15,000
15,000
Interest Receivable
-
4,361,927
4,361,927
Investments, Net
3,368,753,717
204,029,927
3,572,783,644
Total Assets
$ 3,368,753,717 $
208,406,854 $
3,577,160,571
Liabilities & Equity



Equity
$ 3,368,753,717 $
208,406,854 $
3,577,160,571
Total Liabilities and Equity
$ 3,368,753,717 $
208,406,854 $
3,577,160,571
Receipts



Corporate Environmental
-
310,125
310,125
Cost Recoveries
-
97,623,116
97,623,116
Fines & Penalties
-
1,755,095
1,755,095
Total Revenue
-
99,688,336
99,688,336
Appropriations Received
-
1,156,073,340
1,156,073,340
Interest Income
-
27,266,038
27,266,038
Total Receipts
$ - $
1,283,027,714 $
1,283,027,714
Outlays



Transfers to/from EPA, Net
$ 1,292,883,474 $
(1,292,883,474) $
-
Total Outlays
1,292,883,474
(1,292,883,474)
-
Net Income
$ 1,292,883,474 $
(9,855,760) $
1,283,027,714
In FY 2011, the EPA received an appropriation of $1.16 billion for Superfund. Treasury's
Bureau of Public Debt (BPD), the manager of the Superfund Trust Fund assets, records a
liability to EPA for the amount of the appropriation. BPD does this to indicate those trust
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fund assets that have been assigned for use and, therefore, are not available for appropriation.
As of September 30, 2011 and 2010, the Treasury Trust Fund has a liability to EPA for
previously appropriated funds of $3.37 billion and $3.53 billion, respectively.
SUPERFUND FY2010
EPA
Treasury
Combined
Undistributed Balances



Uninvested Fund Balance
$ - $
4,234,294 $
4,234,294
Total Undisbursed Balance
-
4,234,294
4,234,294
Interest Receivable
-
4,442,724
4,442,724
Investments, Net
3,526,671,825
209,585,595
3,736,257,420
Total Assets
$ 3,526,671,825 $
218,262,613 $
3,744,934,438
Liabilities & Equity



Receipts and Outlays
-

-
Equity
$ 3,526,671,825 $
218,262,613 $
3,744,934,438
Total Liabilities and Equity
$ 3,526,671,825 $
218,262,613 $
3,744,934,438
Receipts



Corporate Environmental
-
3,137,141
3,137,141
Cost Recoveries
-
53,246,618
53,246,618
Fines & Penalties
-
3,451,837
3,451,837
Total Revenue
-
59,835,596
59,835,596
Appropriations Received
-
1,280,570,288
1,280,570,288
Interest Income
-
14,967,685
14,967,685
Total Receipts
$ - $
1,355,373,569 $
1,355,373,569
Outlays



Transfers to/from EPA, Net
$ 1,308,704,084 $
(1,308,704,084) $
-
Total Outlays
1,308,704,084
(1,308,704,084)
-
Net Income
$ 1,308,704,084 $
46,669,485 $
1,355,373,569
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LUST
LUST is supported primarily by a sales tax on motor fuels to clean up LUST waste sites. In
FY 2011 and 2010, there were no fund receipts from cost recoveries. The following
represents the LUST Trust Fund as maintained by Treasury. The amounts contained in these
notes are provided by Treasury. Outlays represent appropriations received by EPA's LUST
Trust Fund; such funds are eliminated on consolidation with the LUST Trust Fund
maintained by Treasury.
LUSTFY2011		EPA	Treasury	Combined
Undistributed Balances
Uninvested Fund Balance
$ - $
1,295,063 $
1,295,063
Total Undisbursed Balance
Interest Receivable
Investments, Net
Total Assets
116,520,987
$ 116,520,987 $
1,295,063
11,252,175
3,407,278,686
3,419,825,924 $
1,295,063
11,252,175
3,523,799,673
3,536,346,911
Liabilities & Equity
Equity
$ 116,520,987 $
3,419,825,924 $
3,536,346,911
Receipts
Highway TF Tax
Airport TF Tax
Inland TF Tax
$ - $
141,300,963 $
10,750,770
75,023
141,300,963
10,750,770
75,023
Total Revenue
Interest Income
-
152,126,756
93,156,165
152,126,756
93,156,165
Total Receipts
$ - $
245,282,921 $
245,282,921
Outlays
Transfers to/fromEPA, Net
$ 112,874,798 $
(112,874,798) $
.
Total Outlays
112,874,798
(112,874,798)
-
Net Income
$ 112,874,798 $
132,408,123 $
245,282,921
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LUSTFY2010
EPA
Treasury
Combined
Undistributed Balances



Uninvested Fund Balance
$ - $
(5,349,000) $
(5,349,000)
Total Undisbursed Balance
-
(5,349,000)
(5,349,000)
Interest Receivable
-
20,815,275
20,815,275
Investments, Net
210,146,189
3,271,951,525
3,482,097,714
Total Assets
$ 210,146,189 $
3,287,417,800 $
3,497,563,989
Liabilities & Equity



Equity
$ 210,146,189 $
3,287,417,800 $
3,497,563,989
Receipts
Highway TF Tax
Airport TF Tax
Inland TF Tax
$ - $
158,254,000 $
10,685,000
51,000
158,254,000
10,685,000
51,000
Total Revenue
Interest Income
-
168,990,000
115,523,147
168,990,000
115,523,147
Total Receipts
$ - $
284,513,147 $
284,513,147
Outlays
Transfers to/from EPA, Net
$ 103,901,000 $
(103,901,000) $

Total Outlays
103,901,000
(103,901,000)
-
Net Income
$ 103,901,000 $
180,612,147 $
284,513,147
Note 38. Antideficiency Act Violations
During FY 2004, the EPA awarded a contract in the amount of $193,545 for the analysis of
drinking-water samples. The funding was available for FY 2004 and FY 2005. However, the
contract performance period crossed three fiscal years: FY 2004, FY 2005, and FY 2006. As
a result, the obligation of funds went beyond the appropriation resulting in an Antideficiency
Act violation. On July 14, 2010 EPA transmitted, as required by OMB Circular A-ll,
Section 145, written notifications to the (1) President, (2) President of the Senate, (3) Speaker
of the House of Representatives, (4) Comptroller General, and (5) the Director of OMB.
The EPA experienced an Antideficiency Act violation in November 2010 when EPA made
an expenditure in excess of the funds available in the Inland Oil Spill Program account due to
an inadvertent reporting error in monitoring the cash flow. The required notification letters
are awaiting OMB clearance.
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Environmental Protection Agency
As of September 30, 2011
(Dollars in Thousands)
1.	Deferred Maintenance
Deferred maintenance is maintenance that was not performed when it should have been, that
was scheduled and not performed, or that was delayed for a future period. Maintenance is the
act of keeping property, plant, and equipment (PP&E) in acceptable operating condition and
includes preventive maintenance, normal repairs, replacement of parts and structural
components, and other activities needed to preserve the asset so that it can deliver acceptable
performance and achieve its expected life. Maintenance excludes activities aimed at
expanding the capacity of an asset or otherwise upgrading it to serve needs different from or
significantly greater than those originally intended.
The EPA classifies tangible property, plant, and equipment as follows: (1) EPA-Held
Equipment, (2) Contractor-Held Equipment, (3) Land and Buildings, and, (4) Capital Leases.
The condition assessment survey method of measuring deferred maintenance is utilized. The
Agency adopts requirements or standards for acceptable operating condition in conformance
with industry practices. No deferred maintenance was reported for any of the four categories.
2.	Stewardship Land
Stewardship land is acquired as contaminated sites in need of remediation and clean-up; thus
the quality of the land is far-below the standard for usable and manageable land. Easements
on stewardship lands are in good and usable condition but acquired in order to gain access to
contaminated sites.
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Environmental Protection Agency
As of September 30, 2011
(Dollars in Thousands)
3. Supplemental Combined Statement of Budgetary Resources
For the Period Ending September 30, 2011
BUDGETARY RES OURGES

EPM
FIFRA
LUST
S&T
STAG
OTHER
TOTAL
Unobligated Balance Brought Forward, October 1
$
481,430 S
1,776 S
7,163 S
253,199 S
1,717,294 S
2,165,479 S
4,626,341
Recoveries of prior year unpaid obligations

18,183

6,633
6,047
67,859
171,942
270,664
Budgetary Authority:








Appropriation

2,761,994


815,110
3,766,446
1,305,266
8,648,816
Borrowing Authority







0
Spending Authority from Offsetting Collections:








Collected

41,297
20,983
51
7,113
7,285
563,450
640,179
Change in receivables from Federal sources

(2,668)


734

13,115
11,181
Advance received

20,988
1,721
(10)
(1,039)

57,664
79,324
Without advance fromFederal sources

(30,898)


2,423

12,658
(15,817)
Expenditure Transfers from trust funds




25,484

9,926
35,410
Nonexpenditure transers, net anticipated and actual

1,750

113,101


1,257,724
1,372,575
Temporarily not available pursuant to Public Law



(226)


(327)
(553)
Permanently not available

(16,061)


(10,687)
(147,532)
(5,413)
(179,693)
Total Budgetary Resources
S
3,276,015 S
24,480 S
126,712 $
1,098,384 S
5,411,352 $
5,551,484 $
15,488,427
STATUS OF BUDGETARY RESOURCES








Obligations Incurred:








Direct
$
2,916,254 S
$
118,878 S
905,157 S
4,552,822 $
2,739,219 S
11,232,330
Reimbursable

65,946
22,339

4,913

665,049
758,247
Total Obligations Incurred

2,982,200
22,339
118,878
910,070
4,552,822
3,404,268
11,990,577
Unobligated Balances:








Unobligated funds apportioned

174,028
2,141
4,345
150,025
855,714
2,140,559
3,326,812
Unobligated balance not available

119,787

3,489
38,289
2,816
6,657
171,038
Total Status of Budgetary Resources
s
3,276,015 S
24,480 $
126,712 S
1,098,384 S
5,411,352 $
5,551,484 $
15,488,427
CHANGE IN OBLIGATED BALANCE








Obligated Balance, Net








Unpaid obligations brought forward, October 1
$
1,218,961 S
2,427 S
263,464 S
411,565 S
10,081,435 S
1,895,057 S
13,872,909
Less: Uncollected customer payments fromFederal sources








brought forward, October 1

(156,949)


(35,065)

(247,942)
(439,956)
Total unpaid obligated balance, net

1,062,012
2,427
263,464
376,500
10,081,435
1,647,115
13,432,953
Obligations incurred net

2,982,200
22,339
118,878
910,070
4,552,822
3,404,268
11,990,577
Less: Gross outlays

(2,776,330)
(23,337)
(207,759)
(893,623)
(5,555,301)
(3,361,578)
(12,817,928)
Less: Recoveries ofprior year unpaid obligations, actual

(18,183)

(6,633)
(6,047)
(67,859)
(171,942)
(270,664)
Change in uncollected customer payments from Federal








sources

33,565


(3,717)

(28,320)
1,528
Total
$
1,283,264 S
1,429 S
167,950 S
383,183 S
9,011,097 S
1,489,543 S
12,336,466
Obligated Balance, net, end of period:








Unpaid obligations

1,406,648
1,430
167,950
421,966
9,011,098
1,765,802
12,774,894
Less: Uncollected customer payments fromFederal sources

(123,384)


(38,781)

(276,263)
(438,428)
Total, unpaid obligated balance, net, end of period
$
1,283,264 S
1,430 S
167,950 S
383,185 S
9,011,098 S
1,489,539 S
12,336,466
NET OUTLAYS








Gross outlays
$
2,776,330 S
23,337 S
207,759 S
893,623 S
5,555,301 S
3,361,578 S
12,817,928
Less: Offsetting collections

(62,285)
(22,704)
(41)
(30,998)
(7,285)
(628,492)
(751,805)
Less: Distributed Offsetting Receipts






(1,291,761)
(1,291,761)
Total, Net Outlays
$
2,714,045 $
633 $
207,718 $
862,625 $
5,548,016 $
1,441,325 $
10,774,362
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Environmental Protection Agency
Required Supplemental Stewardship Information
For the Year Ended September 30, 2011
(Dollars in Thousands)
INVESTMENT IN THE NATION'S RESEARCH AND DEVELOPMENT:
EPA's Office of Research and Development provides the crucial underpinnings for EPA
decision-making by conducting cutting-edge science and technical analysis to develop
sustainable solutions to our environmental problems and more innovative and effective
approaches to reducing environmental risks. EPA is unique among scientific institutions in
combining research, analysis, and the integration of scientific information across the full
spectrum of health and ecological issues and across the risk assessment and risk management
paradigm. Research enables us to identify the most important sources of risk to human
health and the environment and by so doing, informs our priority-setting, ensures credibility
for our policies, and guides our deployment of resources.
Among the Agency's highest priorities are research programs that address: the development
of alternative techniques for prioritizing chemicals for further testing through computational
toxicology; the environmental effects on children's health; the potential risks and effects of
manufactured nanomaterials on human health and the environment; the impacts of global
change and providing information to policy makers to help them adapt to a changing climate;
the potential risks of unregulated contaminants in drinking water; the development of
recreational water quality criteria; the health effects of air pollutants such as particulate
matter; the protection of the nation's ecosystems; and the provision of near-term, appropriate,
affordable, reliable, tested, and effective technologies and guidance for potential threats to
homeland security. EPA also supports regulatory decision-making with chemical risk
assessments.
For FY 2011, the full cost of the Agency's Research and Development activities totaled over
$678M. Below is a breakout of the expenses (dollars in thousands):
FY 2007 FY2008 FY2009 FY2010 FY2011
Programmatic Expenses $624,088 $597,080 $600,552 $590,790 $597,558
Allocated Expenses $100,553 $103,773 $119,630 $71,958 $80,730
Each of EPA's strategic goals has a Science and Research Objective.
INVESTMENT IN THE NATION'S INFRASTRUCTURE
The Agency makes significant investments in the nation's drinking water and clean water
infrastructure. The investments are the result of three programs: the Construction Grants
Program which is being phased out and two State Revolving Fund (SRF) programs.
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Construction Grants Program: During the 1970s and 1980s, the Construction Grants Program
was a source of Federal funds, providing more than $60 billion of direct grants for the
construction of public wastewater treatment projects. These projects, which constituted a
significant contribution to the nation's water infrastructure, included sewage treatment plants,
pumping stations, and collection and intercept sewers, rehabilitation of sewer systems, and
the control of combined sewer overflows. The construction grants led to the improvement of
water quality in thousands of municipalities nationwide.
Congress set 1990 as the last year that funds would be appropriated for Construction Grants.
Projects funded in 1990 and prior will continue until completion. After 1990, EPA shifted the
focus of municipal financial assistance from grants to loans that are provided by State
Revolving Funds.
State Revolving Funds: EPA provides capital, in the form of capitalization grants, to state
revolving funds which state governments use to make loans to individuals, businesses, and
governmental entities for the construction of wastewater and drinking water treatment
infrastructure. When the loans are repaid to the state revolving fund, the collections are used
to finance new loans for new construction projects. The capital is reused by the states and is
not returned to the Federal Government.
The Agency also is appropriated funds to finance the construction of infrastructure outside
the Revolving Funds. These are reported below as Other Infrastructure Grants.
The Agency's investments in the nation's Water Infrastructure are outlined below (dollars in
thousands):
FY 2007	FY 2008	FY 2009	FY 2010 FY 2011
Construction Grants $9,975	$11,517	$30,950	$18,186 $35,339
Clean Water SRF $1,399,616	$1,063,825	$836,502	$2,966,479 $2,299,721
Safe Drinking Water SRF $962,903	$816,038	$906,803	$1,938,296 $1,454,274
Other Infrastructure Grants $381,481	$388,555	$306,366	$264,227 $269,699
Allocated Expenses $443,716	$396,253	$414,460	$631,799 $548,375
HUMAN CAPITAL
Agencies are required to report expenses incurred to train the public with the intent of
increasing or maintaining the nation's economic productive capacity. Training, public
awareness, and research fellowships are components of many of the Agency's programs and
are effective in achieving the Agency's mission of protecting public health and the
environment, but the focus is on enhancing the nation's environmental, not economic,
capacity.
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The Agency's expenses related to investments in the Human Capital are outlined below
(dollars in thousands):
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Training and Awareness Grants $32,845 $30,768 $37,981 $25,714 $23,386
Fellowships	$12,185 $9,650 $6,818 $6,905 $9,538
Allocated Expenses	$7,255 $7,025 $8,924 $3,973 $4,448
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Environmental Protection Agency
Supplemental Information and Other Reporting Requirements
Balance Sheet for Superfund Trust Fund
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
(Unaudited)

FY 2011
FY 2010
ASSETS


Int rago vernment al:


Fund Balance With Treasury (Note SI)
$ 114,540 $
106,247
Investments
3,577,146
3,740,700
Accounts Receivable, Net
10,560
27,323
Other
8,076
12,941
Total Intragovernmental
$ 3,710,322 $
3,887,211
Accounts Receivable, Net
454,606
364,065
Property, Plant & Equipment, Net
109,272
101,714
Other
1,006
1,075
Total Assets
$ 4,275,206 $
4,354,065
LIABILITIES


Intragovernmental:


Accounts Payable and Accrued Liabilities
53,778
45,641
Other
61,080
62,260
Total Intragovernmental
$ 114,858 $
107,901
Accounts Payable & Accrued Liabilities
$ 141,464 S
178,045
Pensions & Other Actuarial Liabilities
7,778
6,420
Cashout Advances, Superfund (Note S2)
790,069
636,673
Payroll & Benefits Payable
47,174
45,792
Other
30,244
38,736
Total Liabilities
$ 1,131,587 $
1,013,567
NET POSITION


Cumulative Results of Operations
3,143,619
3,340,498
Total Net Position
3,143,619
3,340,498
Total Liabilities and Net Position
$ 4,275,206 $
4,354,065
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Supplemental Information and Other Reporting Requirements
Statement of Net Cost for Superfund Trust Fund
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
(Unaudited)
FY2011
FY 2010
COSTS
Gross Costs
Expenses from Other Appropriations
Total Costs
Less:
Earned Revenue
$
1,908,317 $
1,844,712
30,349
1,875,061
71,457
1,979,774
532,006
484,165
NET COST OF OPERATIONS
$
1,447,768 $
1,390,896
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Supplemental Information and Other Reporting Requirements
Statement of Changes in Net Position for Superfund Trust Fund
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
(Unaudited)

FY 2011
FY 2010

Earmarked
Earmarked

Funds
Funds
Cumulative Results of Operations:


Net Position - Beginning of Period
3,340,498
3,416,536
Beginning Balances, as Adjusted
S 3,340,498 $
i 3,416,536
Budgetary Financing Sources:


Nonexehange Revenue - Securities Investment
27,266
14,968
Nonexchange Revenue - Other
3,596
3,396
Transfers In/Out
(35,410)
(39,168)
Trust Fund Appropriations
1,156,073
1,280,570
Income from Other Appropriations
71,457
30,349
Total Budgetary Financing Sources
$ 1,222,982 S
i 1,290,115
Other Financing Sources (Non-Exchange)


Transfers In/Out
1
-
Imputed Financing Sources
27,906
24,743
Total Other Financing Sources
$ 27,907 S
i 24,743
Net Cost of Operations
(1,447,768)
(1,390,896)
Net Change
(196,879)
(76,038)
Cumulative Results of Operations
$ 3,143,619 S
i 3,340,498
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Supplemental Information and Other Reporting Requirements
Statement of Budgetary Resources for Superfund Trust Fund
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
(Unaudited)
FY2011	FY2010
BUDGETARY RES OURCES
Unobligated Balance, Brought Forward, October 1:	$	2,059,687 $ 	1,605,363
Adjusted Subtotal
2,059,687
1,605,363
Recoveries of Prior Year Unpaid Obligations
154,843
171,423
Budgetary Authority:


Appropriation
35,410
36,809
Spending Authority from Offsetting Collections


Earned:


Collected
313,039
518,936
Change in Receivables fromFederal Sources
2,864
47
Change in Unfilled Customer Orders:


Advance Received
63,378
244,146
Without Advance fromFederal Sources
(3,828)
4,423
Total Spending Authority from Offsetting Collections
375,453
767,552
Nonexpenditure Transfers, Net, Anticipated and Actual
1,257,724
1,273,244
Temporarily Not Available Pursuant to Public Law
(250)
(2,600)
Permanently Not Available
-
(4,102)
Total Budgetary Resources
$ 3,882,867 $
3,847,690
STATUS OF BUDGETARY RES OURCES
Obligations Incurred:
Direct
Reimbursable
Total Obligations Incurred
Unobligated Balances:
Apportioned
Total Unobligated Balances
Unobligated Balances Not Available
Total Status of Budgetary Resources (Note S6)
$ 1,450,802	$ 1,475,861
	396,582 	312,141
1,847,384	1,788,002
	2,033,533	2,058,813
2,033,533	2,058,813
	1,950 	874
$	3,882,867 $	3,847,690
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Supplemental Information and Other Reporting Requirements
Statement of Budgetary Resources for Superfund Trust Fund
For the Periods Ending September 30, 2011 and 2010

(Dollars in Thousands)


(Unaudited)



FY2011
FY2010
CHANGE IN OBLIGATED BALANCE


Obligated Balance, Net:


Unpaid Obligations, Brought Forward, October 1 $
1,692,915 $
1,861,908
Adjusted Total
1,692,915
1,861,908
Less: Uncollected Customer Payments from Federal Sources,


Brought Forward, October 1
(123,366)
(118,896)
Total Unpaid Obligated Balance, Net
1,569,549
1,743,012
Obligations Incurred, Net
1,847,384
1,788,002
Less: Gross Outlays
(1,814,706)
(1,785,572)
Less: Recoveries ofPrior Year Unpaid Obligations, Actual
(154,843)
(171,423)
Change in Uncollected Customer Payments fromFederal Sources
963
(4,471)
Total, Change in Obligated Balance
1,448,347
1,569,549
Obligated Balance, Net, End of Period:


Unpaid Obligations
1,570,749
1,692,915
Less: Uncollected Customer Payments fromFederal Sources
(122,402)
(123,366)
Total, Unpaid Obligated Balance, Net, End of Period $
1,448,347 $
1,569,549
NET OUTLAYS
Net Outlays:
Gross Outlays (Note S6)	$ 1,814,706	$ 1,785,572
Less: Offsetting Collections (Note S6)	(376,417)	(763,081)
Less: Distributed Offsetting Receipts* (Note S6)		(97,623) 	(53,247)
Total, Net Outlays	$ 1,340,666	$ 969,244
Offsetting receipts line includes the amount in 68X0250 (payment to trust fund) from Treasury
The payment cannot be made directly through the trust fund, but must go through a "pass-through" fund
The accompanying notes are an integral part of these financial statements.
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Environmental Protection Agency
Supplemental Information and Other Reporting Requirements
Related Notes to Superfund Trust Financial Statements
For the Periods Ending September 30, 2011 and 2010
(Dollars in Thousands)
(Unaudited)
Note SI. Fund Balance with Treasury for Superfund Trust
Fund Balance with Treasury for the Superfund as of September 30, 2011 and 2010 is $114.5
million and $106.2 million, respectively. Fund balances are available to pay current
liabilities and to finance authorized purchase commitments (see Status of Fund Balances
below).
Status of Fund Balances:
FY2011
FY2010
Unobligated Amounts in Fund Balance:


Available for Obligation
$ 2,033,533 $
2,058,813
Unavailable for Obligation
1,951
874
Net Receivables from Invested Balances
(3,368,754)
(3,526,672)
Balances in Treasury Trust Fund
15
(1,115)
Obligated Balance not yet Disbursed
1,447,795
1,574,347
Totals
$ 114,540 $
106,247
The funds available for obligation may be apportioned by the OMB for new obligations at
the beginning of the following fiscal year. Funds unavailable for obligation are mostly
balances in expired funds, which are available only for adjustments of existing obligations.
Note S2. Cashout Advances, Superfund
Cashout Advances are funds received by EPA, a state, or another PRP under the terms of a
settlement agreement (e.g., consent decree) to finance response action costs at a specified
Superfund site. Under CERCLA Section 122(b)(3), cashout funds received by EPA are
placed in site-specific, interest bearing accounts known as special accounts and are used for
potential future work at such sites in accordance with the terms of the settlement agreement.
Funds placed in special accounts may be disbursed to PRPs, to states that take responsibility
for the site, or to other Federal agencies to conduct or finance response actions in lieu of EPA
without further appropriation by Congress. As of September 30, 2011 and 2010, cashout
advances are $790 million and $637 million.
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Note S3. Superfund State Credits
Authorizing statutory language for Superfund and related Federal regulations require states to
enter into SSCs when EPA assumes the lead for a remedial action in their state. The SSC
defines the state's role in the remedial action and obtains the state's assurance that they will
share in the cost of the remedial action. Under Superfund's authorizing statutory language,
states will provide EPA with a 10 percent cost share for remedial action costs incurred at
privately owned or operated sites, and at least 50 percent of all response activities (i.e.,
removal, remedial planning, remedial action, and enforcement) at publicly operated sites. In
some cases, states may use EPA approved credits to reduce all or part of their cost share
requirement that would otherwise be borne by the states. Credit is limited to state site-
specific expenses EPA has determined to be reasonable, documented, direct out-of-pocket
expenditures of non-Federal funds for remedial action.
Once EPA has reviewed and approved a state's claim for credit, the state must first apply the
credit at the site where it was earned. The state may apply any excess/remaining credit to
another site when approved by EPA. As of September 30, 2011, the total remaining state
credits have been estimated at $22.2 million. The estimated ending credit balance on
September 30, 2010 was $20.9 million.
Note S4. Superfund Preauthorized Mixed Funding Agreements
Under Superfund preauthorized mixed funding agreements, PRPs agree to perform response
actions at their sites with the understanding that EPA will reimburse them a certain
percentage of their total response action costs. EPA's authority to enter into mixed funding
agreements is provided under CERCLA Section 111(a)(2). Under CERCLA Section
122(b)(1), as amended by SARA, PRPs may assert a claim against the Superfund Trust Fund
for a portion of the costs they incurred while conducting a preauthorized response action
agreed to under a mixed funding agreement. As of September 30, 2011, EPA had 4
outstanding preauthorized mixed funding agreements with obligations totaling $11.5 million.
As of September 30, 2010, EPA had 6 for $15.6 million. A liability is not recognized for
these amounts until all work has been performed by the PRP and has been approved by EPA
for payment. Further, EPA will not disburse any funds under these agreements until the
PRP's application, claim, and claims adjustment processes have been reviewed and approved
by EPA.
Note S5. Income and Expenses from other Appropriations; General Support Services
Charged to Superfund
The Statement of Net Cost reports costs that represent the full costs of the program outputs.
These costs 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.
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During FYs 2011 and 2010, the EPM appropriation funded a variety of programmatic and
non-programmatic activities across the Agency, subject to statutory requirements. This
appropriation was created to fund personnel compensation and benefits, travel, procurement,
and contract activities. This distribution is calculated using a combination of specific
identification of expenses to Reporting Entities, and a weighted average that distributes
expenses proportionately to total programmatic expenses. As illustrated below, this estimate
does not impact the consolidated totals of the Statement of Net Cost or the Statement of
Changes in Net Position.
FY 2011
FY 2010
Superfund
All Others
Total
Income from
Other
Appropriations
71,457
	(71,457)
Expenses from
Other
Appropriations
(71,457)
71,457
Net
Effect
Income from
Other
Appropriations
30,349
	(30,349)
Expenses from
Other
Appropriations
(30,349)
30,349
Net
Effect
In addition, the related general support services costs allocated to the Superfund Trust Fund
from the S&T and EPM funds are $48 thousand for FY 2011 and $194 thousand for FY
2010.
Note S6. Reconciliation of the Statement of Budgetary Resources to the President's Budget
Budgetary resources, obligations incurred, and outlays, as presented in the audited FY 2010
Statement of Budgetary Resources, will be reconciled to the amounts included in the Budget
of the United States Government when they become available. The Budget of the United
States Government with actual numbers for FY 2011 has not yet been published. We expect
it will be published by March 2012, and it will be available on the OMB website at
http://www.whitehouse.gov/omb. The actual amounts published for the year ended
September 30, 2010 are included in EPA's FY 2010 financial statement disclosures.
JY2010	Budgetary	Offsetting
	Resources	Obligations	Receipts	Net Outlays
Statement of Budgetary Resources $ 3,847,690 $ 1,788,002 $ 53,247 $ 1,022,491
Rounding Differences** (690) (2) 509
Reported in Budget of the U. S. Government	$	3,847,000 $	1,788,000 $ 	53,247 $ 	1,023,000
* Balances are rounded to millions in the Budget Appendix.
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Note S7. Superfund Eliminations
The Superfund Trust Fund has intra-agency activities with other EPA funds which are
eliminated on the consolidated Balance Sheet and the Statement of Net Cost. These are listed
below:
FY 2011	FY 2010
Advances $5,506	$9,265
Expenditure Transfers Payable $28,663	$25,555
Accrued Liabilities $950	$2,214
Expenses $25,337	$33,419
Transfers $35,410	$38,016
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Appendix II
Agency Response to Draft Report
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
November 10, 2011
OFFICE OF
CHIEF FINANICAL OFFICER
MEMORANDUM
SUBJECT: Audit of EPA's Fiscal Year 2011 and 2010 Consolidated Financial Statements
FROM: Barbara J. Bennett	/s/ Original Signed By:
Chief Financial Officer
Craig Hooks, Assistant Administrator /s/ Original Signed By:
Office of Administration and Resources Management
Cynthia Giles, Assistant Administrator /s/ Original Signed By:
Office of Enforcement and Compliance Assurance
TO:	Arthur A. Elkins, Jr.
Inspector General
Fiscal Year 2011 marks another successful financial statements audit cycle for the U.S.
Environmental Protection Agency. This year, we continued agency partnerships with a focus on
strengthening fiscal integrity, enhancing core business operations and contributing to
agencywide performance management systems. We are proud of the many accomplishments and
thank you for identifying additional areas for improvement in the draft Office of Inspector
General's Audit Report. The audit work performed will help shape future financial management
initiatives.
Our offices worked together to expand stakeholder involvement thereby engaging all parts of the
agency in fiscal stewardship yielding significant results. Attached are the agency's responses to
this audit report. Detailed corrective action plans will be provided to you and your staff within
90 days of the issuance of the final audit report.
Please let me know if you have any questions or your staff can contact Stefan Silzer, Director,
Office of Financial Management of (202) 564-5389 regarding the audit.

ri
LU
CD

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Attachment
cc: Craig Hooks, Assistant Administrator, Administration and Resources Management
Cynthia Giles, Assistant Administrator, Office of Enforcement and Compliance Assurance
Melissa Heist, Assistant Inspector General for Audit
Maryann Froehlich, Deputy Chief Financial Officer
Joshua Baylson, Associate Chief Financial Officer
Stefan Silzer, Director, Office of Financial Management
Raffael Stein, Director, Office of Financial Services
Renee Page, Director, Office of Administration
Jeanne Conklin, Deputy Director, Office of Financial Management
Paul Curtis, Director, Financial Statements Audit
Jim Wood, Director, Cincinnati Finance Center
Chris Osborne, Acting Staff Director, Reporting and Analysis Staff
Dale Miller, Acting Staff Director, Financial Policy and Planning Staff
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Attachment
Response to Draft OIG Audit of EPA's Fiscal 2011 and 2010 Consolidated Financial
Statements
1 - Accounts Receivable Detail Not Provided Timely by Regions
We recommend that the Assistant Administrator for Enforcement and Compliance Assurance:
1. Request that regional enforcement officials assist Cincinnati Finance Center by
implementing the EPA's newly updated Resource Management Directives System policy,
which includes the requirement of forwarding legal documentation within 5 business days and
designating regional contacts so that receivables are recorded timely.
Response: (Concur)
The Office of Enforcement and Compliance Assurance will continue to work with the regions
and CFC and outline additional actions to be taken in the implementation of the EPA's newly
updated RMDS policy including the requirement of forwarding legal documentation within 5
business days and designating regional contacts so that receivables are recorded timely. This
effort requires the coordination of headquarters enforcement offices, the Department of Justice,
the Environmental Appeals Board and the Office of Administrative Law Judges in addition to the
regional offices to work with CFC to create accounts receivable in a timely manner.
We request the following corrections be made in the draft audit report.
•	In the case of non-Superfund civil judicial cases, RMDS 2540-9-43 (Procedure 3), issued on
April 13, 2011, states that the DO J will notify and provide CFC with documentation when a
final order is issued requiring the payment of a civil penalty.
•	In October 2011, the OECA issued internal procedures governing penalties assessed under
headquarters initiated administrative enforcement actions.
•	For Superfund enforcement-related accounts receivable, RMDS 2550D-14-T1 covers five
types of statutory Superfund accounts receivable (i.e., cost recoveries, cash outs, Superfund
state contract cost share payments, future response costs, and civil and stipulated penalties).
•	Among the 39 exceptions noted in the draft audit report, some of these involved cases for
which DOJ or headquarters did not provide timely notification to CFC.
Over the course of the last year, OECA has taken the following steps to address this issue. First, the
Office of Civil Enforcement worked closely with other OECA offices and with the Office of the
Chief Financial Officer to revise the RMDS policy governing non-Superfund penalties. Second, by
memorandum dated October 4, 2011, signed by OECA's former Principal Deputy Assistant
Administrator Catherine McCabe and OCFO's Deputy Chief Financial Officer Maryann Froehlich,
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OECA and OCFO advised the Regional Administrators, Deputy Regional Administrators and Senior
Enforcement Managers of the new procedures issued by OCFO requiring the notification to CFC
when penalty accounts receivable are created. Third, as required under Procedure 3, OECA issued
internal procedures for EPA headquarters-originated administrative enforcement cases.
In addition on November 17, 2011, OCE and OCFO will be presenting a webinar for the regions,
headquarters and staff at the EAB and the OALJ to explain the revised RMDS policy, how to
coordinate with CFC on a timely and consistent basis and to explain the performance measure that
requires notification to CFC within 5 business days of the effective date of a final administrative
order assessing civil penalties and Superfund penalty actions.
With regard to Superfund-related enforcement accounts receivable, the Office of Site
Remediation Enforcement is developing a training course, to be delivered to all regions, on how
to effectively manage Superfund accounts receivable. The training will include a section that
emphasizes the need for regional offices to forward executed copies of settlement agreements,
and other legal documents, establishing amounts due to CFC within 5 business days as provided
in RMDS 2550D-14-T1.
Finally, we have been working with OCFO on a FY 2012 performance measure for notifying and
providing CFC with documentation regarding penalty and other enforcement-related accounts
receivable within 5 business days. OCFO has committed to provide quarterly reports to senior
management in OECA and the regions assessing the extent to which the regions and headquarters
are meeting this performance metric. Throughout FY 2012, we will be working with regional
enforcement managers, OCFO and the Department of Justice to ensure that enforcement-related
accounts receivable are created in a timely manner.
2 - Federal Reimbursable Costs Not Billed Timely
We recommend that the Chief Financial Officer:
2.	Review unbilled federal reimbursable expenses, determine their collectability and bill
appropriate funds before the funding period is cancelled.
Response: (Concur)
The CFC works diligently to research, resolve, and bill outstanding reimbursable costs and
will continue to research and resolve unbilled costs particularly before the funding period is
cancelled. CFC reviews and bills all active funds-in Interagency Agreements on a quarterly
basis. Expenditure reports for unique budget organization are reviewed by previously billed
amount prior to creating a bill for new costs. In addition, CFC will research methods to
allocate costs if it cannot be identified to an agreement and research their collectability once
identified to an IA.
3.	Create and implement a process to reconcile expenses incurred and costs billed under
individual reimbursable agreements.
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Response: (Concur)
CFC currently processes expense reports under individual reimbursable agreements. These
reports are maintained in the agreement file along with a log of bills, date the bills were issued
and remaining balance on the agreement. CFC will continue to maintain these records either
manually in the agreement files or within the Compass financial system.
4.	Develop a process or implement a reporting system to track, for each reimbursable
agreement, the expenses that have been billed for each budget fiscal year.
Response: (Concur)
CFC manually tracks these costs in each agreement file using the OCFO Reporting and
Business Intelligence Tool and Compass Data Warehouse reports. CFC is also exploring
using functionality within Compass to link the budget organizations and agreement for
reimbursable costs. This should eliminate charging to generic or "unlinked" budget
organizations.
3 - EPA's Processes for Cancelling Treasury Symbols Caused Inappropriate Balances
We recommend that the Chief Financial Officer:
5.	Revise the cancellation procedures to ensure accounts are properly stated.
Response: (Non-Concur)
The Treasury financial management guidance supports the agency's position in regards to how
it cancels a Treasury Account Symbol. The EPA cancellation procedures support this guidance
and are properly stated.
6.	Post the proper Allowance for Loss.
Response: (Non-Concur)
The EPA has posted the appropriate adjustments to close the TAS and establish the
correct balances in the 3200 miscellaneous receipt account.
7.	Revise the Year-End Closing Instructions, to prescribe proper procedures for closing
accounts.
Response: (Non-Concur)
The EPA Year End Closing Instructions already provide proper procedures for closing
accounts.
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8.	Prior to year-end closing, review and test the net impact of closing entries to ensure proper
statement of expenses, revenue, and assets in the financial management system and financial
statements.
Response: (Non-Concur)
The EPA properly handled cancellation of the TAS; no further work is deemed necessary.
4 - EPA Double Counted Contractor-Held Property
We recommend that the Assistant Administrator for Administration and Resources Management:
9.	Develop and implement policies and procedures to address responsibility for the removal
of EPA property from its financial system when it is transferred to contractors.
Response: (Concur)
The Office of Administration and Resources Management will review current policies and
procedures and revise as needed to ensure they address responsibilities for the removal from
its financial system when it is transferred to contractors. Current procedures are in place to
inform contracting officers, project managers, contractors and agency property personnel on
how to handle property transfers to contractors. While the appropriate agency guidance exists
in the Contract Management Manual and the Property Policy and Procedures Manual, agency
and contractor compliance remains a challenge. Additionally, frequent turnover of positions
necessitates an increase in both training and cross training of COs and Agency Property
Managers. Agency property management duties are collateral duties that, in some cases, are
rotated among program level staff.
OARM is committed to developing a training program for all parties associated with the
contract property process during FY 2012. As part of an on-going review and improvement
program, OARM will continue to provide periodic training information to COs on the
importance of ensuring that all contracts having contract property clauses are identified as
such in the U.S. Environmental Protection Agency Acquisition System. Additional guidance
and training is being developed to improve communications and eliminate this issue. In
addition, the agency's Contractor Property Coordinator sent an informational memo regarding
potential double counting issues to APMs on October 13, 2011.
The following points highlight significant action taken by OARM during FY 2011 to address
the issue:
•	The CPC provided training to contracting officers at the annual training conference
and attended three APM's monthly teleconferences to address the issues and answer
questions.
•	OARM implemented a quarterly assessment and management certification program
on property management and reporting. This program will aid in the improvement of
the agency's compliance with federal and EPA property policies, improve data
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accuracy through verification and validation and ensure the effectiveness of
management and oversight systems that support government property tracking and
reporting systems.
•	The Operating Division Directors and Regional Acquisition Managers are provided
with reports on a quarterly basis, from EAS and Federal Procurement Data System-
Next Generation on contracts under their purview that have government property
and/or government property clauses. Each ODD and RAM is required to: 1) review
the information for accuracy and completeness, 2) make any necessary corrections,
and 3) validate that all necessary information has been provided or when it will be
provided to the CPC. Using the data from both EAS and FPDS-NG, OARM has the
reporting capability to identify contracts containing CHP and/or the government
property clauses, as well as a management tool to verify that COs are forwarding
contracts containing CHP to the CPC in compliance with Contracts Management
Manual 42.5. These two reports provide an independent process methodology for
identifying and verifying the universe of the EPA's contracts containing CHP.
•	OARM has also created a new position for data quality as part of its Strategic
Acquisition Human Capital Plan and found new avenues to electronically collect
information on government property from contracts.
10.	Ensure that all EPA property that has been transferred to contractors is removed from
EPA's financial system.
Response: (Concur)
OARM has already taken steps to remedy the issues surrounding data collection and
maintenance for Government property. A more comprehensive and accurate list of contractors
having contracts and agency contract property clauses has been compiled and is being used to
validate the FY 2011 annual reporting. The list contains 396 contracts: 1) 69 had reportable
contract property greater than or equal to $25,000, 2) 191 had no property, and 2) 136 had
property but no property at the $25,000 level. A review is underway to identify any
duplicative recording and ensure corrective action where necessary.
5 - EPA Headquarters Cannot Account for 1,284 Property Items
We recommend that the Assistant Administrator for Administration and Resources Management
require the Director, Facilities Management and Services Division, to:
11.	Conduct planned property training and require completion of the course by all EPA
managers.
Response: (Concur)
The planned property training course has been developed and is posted on the agency's
website. Over the next week, the Assistant Administrator for OARM will send a notification
letter to the agency's senior managers outlining the training course instructions and training
commencement.
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12.	Address the missing personal property items in accordance with agency procedures.
Response: (Concur)
OARM is currently addressing the missing personal property items in accordance with agency
procedures. OARM is currently working with the Board of Survey to investigate the
remaining items from previous years. The Board plans to make a decision on missing items
shortly and it is anticipated the recommendation will be to mark the missing items as inactive
in the agency's financial system.
6	- EPA Should Secure Marketable Securities
We recommend that the Office of Chief Financial Officer:
13.	Develop and implement procedures to perform inspections of the safe on a regular basis
to verify the contents against accounting records.
Response: (Concur)
CFC will create and maintain a log of accountable items in the safe.
14.	Move the safe to a secure area, such a locked room, instead of keeping the safe in an open
area.
Response: (Non-Concur)
The safe is currently in a secure area and is located behind the CFC administrative assistant's
desk out of the general flow of the office. The safe is the size of a four drawer file cabinet
and weighs over 1,000 pounds. The building has a guard sitting in the lobby 24 hours/7 days a
week and non-duty hours access to the building is restricted and monitored through a sign-in
sheet.
7	- EPA Recognized Earned Revenue in Excess of Expenditures
We recommend that the Chief Financial Officer:
15.	Review the entries and accounting models used to record expenditures and recognize
earned revenue to assess their impact on the financial statements and to ensure that they result
in the proper recognition of revenue.
Response: (Concur)
The accounting model will be reviewed and verified.
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16.	Ensure that exchange revenue is only recognized at the time goods or services are
provided.
Response: (Concur)
The EPA concurs.
8	- EPA is Withholding Payments Related to BP Deepwater Horizon Oil Spill Cleanup
We recommend that the Chief Financial Officer:
17.	Resume payments to the oils spill contractors as soon as adequate Oil Spill Response
Trust funds are available.
Response: (Concur)
The EPA will process the payments to the contractors as soon as adequate funds are available.
18.	Include in the payments the interest penalties prescribed by the Prompt Payment Act for
invoices that are paid past their due dates.
Response: (Concur)
The EPA will include the interest on all payments over 30 days in accordance with the Prompt
Payment Act.
9	- EPA Violated the Antideficiency Act in Its Oil Spill Response Account
We recommend that the EPA Administrator:
19.	Finalize the reporting of the Antideficiency Act violation to the President, through the
Office of Management and Budget Director, Congress and the Comptroller General, as
required.
Response: (Concur)
The agency will continue to work with OMB to finalize the submission of the Antideficiency
Act letters. The EPA Administrator signed the letters on October 25, 2011 and they were
delivered to OMB. The required notification letters are awaiting OMB clearance.
We recommend that the Chief Financial Officer:
20. Work with USCG to come to a mutual agreement on what constitutes acceptable cost
documentation so that reimbursements do not continue to be delayed.
Response: (Concur)
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The OCFO and U.S. Coast Guard have been in discussions for the past several months to
identify a process to ensure the timely submission and reimbursement of agency costs while
adhering to the cost documentation requirements of the U.S. Coast Guard.
Responsible Managers:
/s/ Original Signed By:
Stefan Silzer, Director, Office of Financial Management
/s/ Original Signed By:
/s/ Original Signed By:
November 10, 2011
	Signature/Date
Raffael Stein, Director, Office of Financial Services
November 10, 2011
	Signature/Date
November 10, 2011
	Signature/Date
Craig Hooks, Assistant Administrator for Administration and Resources Management
/s/ Original Signed By:
November 10, 2011
	Signature/Date
Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance
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Appendix III
Distribution
Administrator
Chief Financial Officer
Assistant Administrator for Administration and Resources Management
Assistant Administrator for Enforcement and Compliance Assurance
Assistant Administrator for Environmental Information and Chief Information Officer
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Acting Director, Office of Policy and Resource Management, Office of Administration and
Resources Management
Director, Office of Administration, Office of Administration and Resources Management
Director, Office of Civil Enforcement, Office of Enforcement and Compliance Assurance
Director, Office of Site Remediation Enforcement, Office of Enforcement and Compliance
Assurance
Director, Office of Technology Operations and Planning, Office of Environmental Information
Director, Office of Budget, Office of the Chief Financial Officer
Director, Office of Financial Management, Office of the Chief Financial Officer
Director, Office of Financial Services, 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, Office of Planning, Analysis, and Accountability, Office of the Chief Financial Officer
Director, Reporting and Analysis Staff, Office of the Chief Financial Officer
Director, Office of Technology Solutions, Office of the Chief Financial Officer
Director, Financial Policy and Planning Staff, Office of the Chief Financial Officer
Director, Accountability and Control Staff, Office of the Chief Financial Officer
Director, Payroll Management and Outreach Staff, Office of the Chief Financial Officer
Agency Audit Follow-Up Coordinator
Audit Follow-Up Coordinator, Office of the Administrator
Audit Follow-Up Coordinator, Office of the Chief Financial Officer
Audit Follow-Up Coordinator, Office of Administration and Resources Management
Audit Follow-Up Coordinator, Office of Enforcement and Compliance Assurance
Audit Follow-Up Coordinator, Office of Environmental Information
Audit Follow-Up Coordinator, Office of Solid Waste and Emergency Response
Audit Follow-Up Coordinator, Office of Grants and Debarment, Office of Administration and
Resources Management
Audit Follow-Up Coordinator, Office of Financial Management, Office of the
Chief Financial Officer
Audit Follow-Up Coordinator, Office of Financial Services, Office of the Chief Financial Officer
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