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o I U.S. ENVIRONMENTAL PROTECTION AGENCY
Operating efficiently and effectively
EPA's Fiscal Years 2017
and 2016 Hazardous Waste
Electronic Manifest System
Fund Financial Statements
Report No. 19-F-0086 March 18, 2019
e-Manifest Act User Fees Rule
OCTOBER JANUARY
2012 2018
FEBRUARY
2014 2018
One-Year Rule System launch
and begin fee
collection
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Report Contributors: Paul Curtis
Wanda Arlington
Mairim Lopez
Sheree James
Abbreviations
e-Manifest Hazardous Waste Electronic Manifest System
EPA U.S. Environmental Protection Agency
FMFIA Federal Managers' Financial Integrity Act of 1982
OIG Office of Inspector General
OMB Office of Management and Budget
Cover Image: Timeline for the e-Manifest project. (EPA OIG image)
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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
19-F-0086
March 18, 2019
Why We Did This Project
We performed this audit pursuant
to the Hazardous Waste
Electronic Manifest
Establishment Act. The act
requires the U.S. Environmental
Protection Agency (EPA) to
prepare, and the Office of
Inspector General (OIG) to audit,
the Hazardous Waste Electronic
Manifest System Fund financial
statements each year. Our
primary objectives were to
determine whether:
• The financial statements were
fairly stated in all material
respects.
• The EPA's internal controls
over financial reporting were
in place.
• EPA management complied
with applicable laws and
regulations.
The e-Manifest system has been
designed to create a means to
track off-site shipments of
hazardous waste from a
generator's site to the site of the
receipt, and disposition of the
hazardous waste. On June 30,
2018, the e-Manifest System was
launched.
This report addresses the
following:
• Operating efficiently and
effectively.
EPA's Fiscal Years 2017 and 2016
Hazardous Waste Electronic Manifest
System Fund Financial Statements
EPA Receives an Unmodified Opinion
We rendered an unmodified opinion on the EPA's
fiscal years 2017 and 2016 Hazardous Waste
Electronic Manifest System Fund financial
statements, meaning that the statements were fairly
presented and free of material misstatements.
Significant Deficiencies Noted
We noted the following significant deficiencies:
• The EPA overstated the e-Manifest fund's accrued liabilities.
• The EPA did not provide adequate support for an e-Manifest contract
payment.
Compliance with Applicable Laws and Regulations
We did not identify any instances of noncompliance that would result in a
material misstatement to the audited financial statements.
Recommendations and Agency Corrective Actions
We recommend that the agency evaluate and revise its accrued liabilities
methodology and adjust the financial statements to reverse the impact to the
e-Manifest fund of amounts that cannot be directly matched to the fund. We
also recommend that the agency maintain sufficient documentation to support
that e-Manifest funds are used as intended. The agency agreed with our
recommendations and completed all corrective actions.
We found the fund's
financial statements to
be fairly presented and
free of material
misstatements.
Send all inquiries to our public
affairs office at (202) 566-2391
or visit www.epa.gov/oia.
Listing of OIG reports.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
March 18, 2019
MEMORANDUM
SUBJECT: EPA's Fiscal Years 2017 and 2016 Hazardous Waste Electronic Manifest System Fund
Financial Statements
Report No. 19-F-0086
This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). The project number for this audit was OA-FY18-0088.
This report contains findings that describe the problems the OIG identified and corrective actions the
OIG recommends. This report represents the opinion of the OIG and does not necessarily represent the
final EPA position. Final determinations on matters in this report will be made by EPA managers in
accordance with established audit resolution procedures.
The offices involved with the audit issues include the Office of the Chief Financial Officer and the
Office of Land and Emergency Management.
In accordance with EPA Manual 2750, your office completed acceptable corrective actions in response
to the OIG recommendations. All recommendations are resolved and no final response to this report is
required. However, if you submit a response, it will be posted on the OIG's website, along with our
memorandum commenting on your response. Your response should be provided as an Adobe PDF file
that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as
amended. The final response should not contain data that you do not want to be released to the public;
if your response contains such data, you should identify the data for redaction or removal along with
corresponding justification.
FROM:
Paul C. Curtis, Director
Financial Audits
TO:
Holly Greaves, Chief Financial Officer
Nigel Simon, Acting Principal Deputy Assistant Administrator
Office of Land and Emergency Management
We will post this report to our website at www.epa.gov/oig.
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EPA's Fiscal Years 2017 and 2016
Hazardous Waste Electronic Manifest
System Fund Financial Statements
19-F-0086
Table of C
Inspector General's Report on EPA's Fiscal Years 2017 and 2016
Hazardous Waste Electronic Manifest System Fund Financial
Statements
Report on the Financial Statements 1
Management's Discussion and Analysis 2
Report on Internal Control over Financial Reporting 3
Tests of Compliance with Laws, Regulations, Contracts and Grant
Agreements 4
Prior Audit Coverage 5
Agency Comments and OIG Evaluation 5
Attachments
1. Significant Deficiencies 6
EPA Overstated e-Manifest Fund's Accrued Liabilities 7
EPA Did Not Provide Adequate Support for an e-Manifest
Contract Payment 9
2. Status of Recommendations and Potential Monetary Benefits 11
Appendices
A For the Fiscal Years Ending September 30, 2017 and 2016
Hazardous Waste Electronic Manifest System (e-Manifest) Fund
Financial Statements
B Agency Response to Draft Report
C Distribution
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Inspector General's Report on EPA's Fiscal Years
2017 and 2016 Hazardous Waste Electronic
Manifest System Fund Financial Statements
The Administrator
U.S. Environmental Protection Agency
Report on the Financial Statements
We have audited the accompanying financial statements of the U.S. Environmental
Protection Agency's (EPA's) Hazardous Waste Electronic Manifest System Fund
(known as the e-Manifest fund), which comprise the balance sheets for the fiscal
years ended September 30, 2017, and September 30, 2016, and the related
statements of net cost and changes in net position; the statement of budgetary
resources for the years then ended; and the related notes to the financial statements.
Management's Responsibilities for the Financial Statements
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with accounting principles generally accepted
in the United States of America; this includes the design, implementation and
maintenance of internal controls relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
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 No.
19-01, Audit Requirements for Federal Financial Statements. 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 involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the audit considers internal control relevant to the
entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances. An audit also
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includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above, including the
accompanying notes, present fairly, in all material respects, the assets, liabilities,
net position, net cost, changes in net position and budgetary resources of the
Hazardous Waste Electronic Manifest System Fund as of and for the years ended
September 30, 2017 and 2016, in conformity with accounting principles generally
accepted in the United States of America.
Specific Audit Requirements of the Hazardous Waste Electronic
Manifest Establishment Act
The Hazardous Waste Electronic Manifest Establishment Act (e-Manifest Act)
requires the Office of Inspector General (OIG) to include an analysis of (1) the
fees collected and disbursed, (2) the reasonableness of the fee structure in place,
(3) the level of use of the system by users, and (4) the success to date of the
system in operating on a self-sustaining basis and improving the efficiency of
tracking waste shipments and transmitting waste shipment data. As the fund has
not yet established a fee structure and started use of the system, no such analyses
were performed.
Management's Discussion and Analysis
Our audit was conducted for the purpose of forming an opinion on the financial
statements as a whole. The Management's Discussion and Analysis are presented
for purposes of additional analysis and are not a required part of the basic
financial statements. Such information is the responsibility of management.
We obtained information from the fund's management about its methods for
preparing the Management's Discussion and Analysis, and reviewed this
information for consistency with the financial statements.
We did not identify any material inconsistencies between the information
presented in the fund's financial statements and the information presented in the
Management's Discussion and Analysis.
Our audit was not designed to express an opinion and, accordingly, we do not
express an opinion on the fund's Management's Discussion and Analysis.
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Report on Internal Control over Financial Reporting
Opinion on Internal Controls. In planning and performing our audit, we
considered the fund'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 audit 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. 19-01,
Audit Requirements for Federal Financial Statements. We did not test all internal
controls relevant to operating objectives as broadly defined by the Federal
Managers' Financial Integrity Act of 1982 (FMFIA).
Material Weaknesses and Significant Deficiencies. 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. A deficiency in internal controls exists when the design or operation
of a control does not allow management or employees, in the normal course of
performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, 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, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that
is less severe than a material weakness, yet important enough to merit attention by
those charged with governance.
Because of inherent limitations in internal controls, misstatements, losses or
noncompliance may nevertheless occur and not be detected.
We did not note any matters that we consider to be material weaknesses.
However, we noted two significant deficiencies impacting the e-Manifest fund.
These issues are summarized below and detailed in Attachment 1.
Significant Deficiencies
EPA Overstated e-Manifest Fund's Accrued Liabilities
During fiscal year 2017, the EPA recorded a standard voucher totaling $385,534
that overstated the intragovernmental accrued liabilities for the e-Manifest fund.
Federal standards limit recognition of intragovernmental costs to material items
that can be identified or matched to the receiving entity with reasonable precision.
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The EPA's methodology to mitigate intragovernmental reporting differences
caused the agency to prorate accrued liabilities that cannot be directly attributed to
any specific fund. Consequently, the EPA recorded a material entry that cannot be
directly matched to the e-Manifest fund.
EPA Did Not Provide Adequate Support for an e-Manifest Contract
Payment
In fiscal year 2017, the EPA paid $44,929 to a contractor using e-Manifest funds
without adequate support that clearly identified that e-Manifest work was
performed. Federal and agency requirements state that all transactions should be
clearly documented. The agency did not maintain sufficient documentation to
support that e-Manifest funds were used as intended.
Comparison of EPA's FMFIA Report with Our Evaluation of
Internal Controls
OMB Bulletin No. 19-01, Audit Requirements for Federal Financial Statements,
requires the OIG 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. The agency's FMFIA report is
prepared and submitted at the consolidated level, of which the e-Manifest fund is a
component. The agency continued to report one material weakness in fiscal year
2017 regarding capitalized software, which may impact the fund. Capitalized
software continues to be reported as a material weakness in the design and operation
of internal controls. While capitalized software continues to be a material weakness
for the agency, the EPA is in the process of accumulating costs in the development
of software, and, as a result, it is too early to determine whether the fund will be
impacted.
Tests of Compliance with Laws, Regulations, Contracts and
Grant Agreements
EPA management is responsible for complying with laws, regulations, contracts
and grant agreements applicable to the agency and the fund. As part of obtaining
reasonable assurance about whether the fund's financial statements are free of
material misstatement, we performed tests of its compliance with certain
provisions of laws, including those governing the use of budgetary authority,
regulations, contracts and grant agreements that have a direct effect on the
determination of material amounts and disclosures in the fund's financial
statements, and certain other laws and regulations specified in OMB Bulletin No.
19-01, Audit Requirements for Federal Financial Statements. The OMB guidance
requires that we evaluate whether the EPA's financial management system
complies substantially with requirements of the Federal Financial Management
Improvement Act of 1996. We limited our tests of compliance to these provisions
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and did not test compliance with all laws and regulations applicable to the EPA's
e-Manifest fund.
Opinion on Compliance with Laws and Regulations
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.
We did not identify any instances of noncompliance that would result in a
material misstatement to the audited financial statements.
During our previous financial statement audit, we did not report any material
weaknesses, significant matters or recommendations impacting the fund.
The agency agreed with our recommendations and completed all corrective
actions.
The rationale for our conclusions and a summary of the agency's comments are
included in the appropriate sections of this report. The agency's complete
response is included as Appendix B of this report.
Paul C. Curtis
Certified Public Accountant
Director, Financial Audits
Office of Inspector General
U.S. Environmental Protection Agency
March 14, 2019
Prior Audit Coverage
Agency Comments and OIG Evaluation
19-F-0086
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Attachment 1
Significant Deficiencies
Table of Contents
1 EPA Overstated e-Manifest Fund's Accrued Liabilities 7
2 EPA Did Not Provide Adequate Support for an e-Manifest Contract Payment 9
19-F-0086
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1 - EPA Overstated e-Manifest Fund's Accrued Liabilities
During fiscal year 2017, the EPA recorded a standard voucher totaling $385,534 that overstated
the intragovernmental accrued liabilities for the e-Manifest fund. Federal standards limit
recognition of intragovernmental costs to material items that can be identified or matched to the
receiving entity with reasonable precision. The EPA's methodology to mitigate
intragovernmental reporting differences caused the agency to prorate accrued liabilities that
cannot be directly attributed to any specific fund. Consequently, the EPA recorded a material
entry that cannot be directly matched to the e-Manifest fund.
The EPA's Resource Management Directive System No. 2540-13-P2, Cost Accounting Methods:
Recognizing Full Costs for Funds-In Interagency Agreements, states that the "EPA must both
provide to and receive from its interagency agreement (IA) partners full cost information, and
recognize those costs on its financial statements." However, Statement of Federal Financial
Accounting Standards No. 30, Inter-Entity Cost Implementation, limits recognition of these costs
to material items that:
a. Are significant to the receiving entity;
b. Form an integral or necessary part of the receiving entity's output; and
c. Can be identified or matched to the receiving entity with reasonable precision.
At the end of the fiscal year, the EPA's Office of the Chief Financial Officer records standard
vouchers to reconcile balances with its respective trading partners. The EPA calculates the
difference between its intragovernmental balances and the corresponding balances reported by
the other agency and records a standard voucher for the difference. The other agency's balances
are not reported at the EPA fund level; rather, the EPA records its standard voucher by applying
amounts to individual lines of accounting based on available lines of funding.
As a result, the EPA prorated the overall trading partner difference among accounting lines that
had available obligations as of the end of fiscal year 2017. The available obligations for the
e-Manifest fund accounted for $385,534 of the overall trading partner difference based on the
percentages used. The EPA's methodology is designed to mitigate intragovernmental reporting
differences at the trading partner level and not at the fund level within the EPA. However,
without specific details from its trading partner, the EPA cannot verify such allocations with
reasonable precision. As a result, the EPA recorded a material entry for $385,534 that cannot be
directly matched to the e-Manifest fund, and that thus represents an overstatement. The agency
agreed to make an adjustment and reverse the entry.
Recommendations
We recommend that the Chief Financial Officer:
1. Evaluate and revise the EPA's intragovernmental accrual reconciliation methodology to
prevent adjustments to the Hazardous Waste Electronic Manifest System Fund that
cannot be directly matched to the fund with reasonable precision.
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2. Adjust the fiscal year 2017 e-Manifest financial statements to reverse the impact to the
Hazardous Waste Electronic Manifest System Fund of intragovernmental accrued
liabilities that cannot be directly matched to the fund.
Agency Comments and OIG Evaluation
The Office of the Chief Financial Officer agreed with our findings and recommendations and has
completed corrective actions.
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2 - EPA Did Not Provide Adequate Support for an e-Manifest
Contract Payment
In fiscal year 2017, the EPA paid $44,929 to a contractor using e-Manifest funds without
adequate support that clearly identified that e-Manifest work was performed. Federal and agency
requirements state that all transactions should be clearly documented. The agency did not
maintain sufficient documentation to support that e-Manifest funds were used as intended.
According to the e-Manifest Act, Section 2(a), the EPA "shall carry out all necessary measures
to ensure that amounts in the Fund are used only to carry out the goals of establishing, operating,
maintaining, upgrading, managing, supporting, and overseeing the [e-Manifest] system."
The U.S. Government Accountability Office's Standards for Internal Control in the Federal
Government require that all transactions be clearly documented and the documentation be readily
available for examination. The EPA's Resource Management Directive System No. 2540-01,
Overview of Chapter 2540: Financial and Accounting Management, states that the "EPA will
maintain records at the transaction level that. . . [pjrovide clear audit trails of financial
transactions that include all materials created in support of a financial transaction or event."
The EPA's Office of Mission Support (which includes the former Office of Environmental
Information), which is responsible for the contract, was unable to provide sufficient support to
the OIG to determine whether $44,929 paid to a contractor using e-Manifest funds was
appropriate. The Office of Mission Support referred us to the Office of Land and Emergency
Management for supporting documentation. However, the Office of Land and Emergency
Management was also unable to provide us with supporting documentation and referred us back
to Office of Mission Support. The invoice for the payment did not contain details specifying that
the work performed was related to the e-Manifest project, nor could EPA staff provide any other
documentation showing which costs if any involved e-Manifest activities. EPA staff said they
were unable to determine how much of the invoiced amount was related to the e-Manifest project
and indicated they just used the e-Manifest funds because those funds were available.
Lack of adequate supporting documentation affects the validity and integrity of the agency's
financial information. Without adequate support and oversight of the applicable contract, the
EPA could have expended e-Manifest funds for non-e-Manifest purposes, which would violate
the requirements of the e-Manifest Act.
In its response to our finding, the Office of Mission Support stated the amount in question was
placed on the contract by the Office of Land and Emergency Management as part of its annual
payment to the EPA's Docket Center Partnership. Due to the nature of the Docket Center
contract, the Office of Mission Support does not track costs by specific activities. As such, the
Office of Mission Support did not have documentation showing which costs, if any, involved
e-Manifest activities.
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Recommendation
We recommend that the Principal Deputy Assistant Administrator for Land and Emergency
Management:
3. Maintain sufficient documentation to support that Hazardous Waste Electronic Manifest
System Funds are used as intended.
Agency Comments and OIG Evaluation
Subsequent to our issuing the draft report, the Office of Land and Emergency Management
provided us with sufficient supporting documentation for e-Manifest funds allocated to the
Docket Center Partnership and has completed corrective action.
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Attachment 2
Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Potential
Monetary
Benefits
(in $000s)
1
7
Evaluate and revise the EPA's intragovernmental accrual
reconciliation methodology to prevent adjustments to the
Hazardous Waste Electronic Manifest System Fund that cannot
be directly matched to the fund with reasonable precision.
C
Chief Financial Officer
7/27/18
2
8
Adjust the fiscal year 2017 e-Manifest financial statements to
reverse the impact to the Hazardous Waste Electronic Manifest
System Fund of intragovernmental accrued liabilities that cannot
be directly matched to the fund.
C
Chief Financial Officer
7/27/18
$385.5
3
10
Maintain sufficient documentation to support that Hazardous
Waste Electronic Manifest System Funds are used as intended.
c
Principal Deputy
Assistant Administrator
for Land and
Emergency Management
12/20/18
C = Corrective action completed.
R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.
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Appendix A
For the Fiscal Years Ending September 30, 2017 and
2016 Hazardous Waste Electronic Manifest System
(e-Manifest) Fund Financial Statements
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For the Fiscal Years Ending September 30,2017 and 2016
Hazardous Waste Electronic Manifest System (e-Manifest) Fund
Financial Statements
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Produced by the U.S. Environmental Protection Agency
Office of the Chief Financial Officer
Office of the Controller
19-F-0086
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Table of Contents
Management's Discussion and Analysis 1
Introduction 1
Current EPA RCRA Manifest Program 1
e-Manifest System Planning Activities 2
Acquisition Strategy Change 3
e-Manifest System Development 4
Principal Financial Statements: 7
Balance Sheet 7
Statement of Net Cost 8
Statement of Changes in Net Position 9
Statement of Budgetary Resources 10
Notes to Financial Statements 11
Note 1. Summary of Significant Accounting Policies 11
A. Reporting Entity 11
B. Basis of Presentation 11
C. Budgets and Budgetary Accounting 12
D. Basis of A ccounting 12
E. Revenues and Other Financing Sources 12
F. Funds with the Treasury 12
G. Investments in U. S. Government Securities 12
H. General Property, Plant and Equipment 12
I. Liabilities 13
J. Accrued Unfunded Annual Leave 13
K. Retirement Plan 13
L. Use of Estimates 14
Note 2. Fund Balance with Treasury 14
Note 3. Other Assets 14
Note 4. General Property, Plant and Equipment 14
Note 5. Other Liabilities 14
Note 6. Payroll and Benefits Payable, non-Federal 15
Note 7. Income and Expenses from Other Appropriations 15
Note 8. Reconciliation of Net Cost of Operations to Budget 16
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Management's Discussion and Analysis
Introduction
The Hazardous Waste Electronic Manifest System fund (e-Manifest) was established as a result
of the Hazardous Waste Manifest Establishment Act (Public Law 112-195, October 5, 2012).
The e-Manifest Act requires the United States Environmental Protection Agency ('EPA' or 'the
Agency') to establish and own a hazardous waste electronic manifest program information
technology ('IT') system that will enable electronic manifesting as a means to augment or
replace the use of paper manifests for tracking hazardous waste shipments. The e-Manifest Act
requires that the e-Manifest system:
1. Meets the needs of the user community;
2. Attracts sufficient user participation and service revenues to ensure the viability of the
system (the e-Manifest Act authorizes EPA to collect reasonable user fees); and
3. Decreases the administrative burden on the user community.
Current EPA RCRA Manifest Program
The EPA Office of Land and Emergency Management (OLEM) provides policy, guidance and
direction for the Agency's emergency response and waste programs. The Office of Resource
Conservation and Recovery (ORCR) within OLEM works to protect human health and the
environment by ensuring responsible national management of hazardous and nonhazardous
waste. Working with delegated state waste programs, ORCR implements the 1976 Resource
Conservation and Recovery Act (RCRA), and ensures that the resource conservation, recovery
and waste management goals of RCRA are met. All states with the exception of Iowa and Alaska
have been delegated RCRA authority, meaning that states implement many if not all aspects of
RCRA policy.
The manifest program as implemented by EPA and the states ensures that hazardous waste
shipments are consistently tracked, and that hazardous wastes in fact arrive at permitted waste
management facilities. The manifest program is based on both RCRA and Department of
Transportation (DOT) hazardous materials law (The Hazardous Materials Transportation Act
(HMTA)). These laws together require uniformity in the content and use of the hazardous waste
manifest form.
EPA's FY 2017 e-Manifest Financial Statements
1
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e-Manifest System Planning Activities
Discussion of the e-Manifest system itself has taken place over many years; beginning back in
the 1990's when the concept of an electronic manifest system was first taking shape. Further
activities continued over the years to envision the e-Manifest system through various stakeholder
discussions and pilots. For more information EPA's efforts prior to the passage of the e-Manifest
Act in 2012, please visit https://www.epa.gov/osw/hazard/transportation/manifest/e-man-
pastmeetines.html
In early calendar year (CY) 2013, EPA conducted various stakeholder requirements meetings to
reengage with the user community. The purpose of these meetings was to build on past e-
Manifest work to determine high level system functional requirements. Following this, a system
alternatives analysis was conducted to look at various system implementation approaches, all
assuming (among other things) a full electronic mobile workflow. The alternatives analysis
recommended that EPA leverage cloud hosting for initial system development and system
launch, and for long term operations and maintenance (O&M), consider re-negotiating the cloud
contract model or potentially migrate to an on premise hosting model to keep costs down.
Also as a part of the planning work, a system Concept of Operations (CONOPS) was completed
that, at a high level, outlines both what the current manifest process entails for highway and rail
transporters as well as what the future system may look like. The CONOPS document provides a
process and conceptual model for how data will flow from stakeholder to stakeholder and
through the system during the manifest workflow.
The technical architecture for e-Manifest was completed in FY 2015. This architecture includes
the specific components and data flows as currently defined to illustrate a technical solution for
the e-Manifest system. In doing so, it defines the specific boundaries of the e-Manifest system
and how the different parts of the system work together to provide the required services based on
current requirements. For example, areas such as system Cross-Media Electronic Reporting
Regulation (CROMERR) integration, paper manifest processing and manifest data quality
assurance (QA) were analyzed as a part of this effort.
As a part of this technical architecture planning work, EPA conducted targeted meetings with
states and industry separately in order to further flesh out current processes as well as
expectations for the above areas. The meetings were more detailed than previous discussions,
and provided critical information to inform system requirements.
The technical architecture work completed in FY 2015 serves as baseline for the current manifest
program and provides very strong foundation for future system buildout. It meets user needs and
provides flexibility for future iterations of the system.
Building on FY 2015, in FY 2016 the e-Manifest program realized significant progress while
leveraging existing ORCR software applications. EPA initially conceived e-Manifest as a
standalone system and allowed the system architects to consider a broad range of approaches
EPA's FY 2017 e-Manifest Financial Statements
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without inherent constraints from an existing system design. However, as designs matured, it
was recognized that the e-Manifest technical solution aligned closely with RCRAInfo in terms of
end user functionality, data integration, and required technical infrastructure. These factors led to
the decision to implement e-Manifest as a unique module of RCRAInfo.
Many of the new capabilities of e-Manifest can be implemented in RCRAInfo using the existing
modular architecture present in RCRAInfo. In addition, some of the more innovative design
aspects of e-Manifest could also be incorporated into RCRAInfo, improving both systems.
Furthermore, by leveraging e-Manifest and RCRAInfo modules, opportunities for reuse of
existing technology investments were present, reducing the burden of e-Manifest
implementation. These factors led to the decision to develop e-Manifest and RCRAInfo modules
as distinct, but interrelated entities which will meet the current and future needs of Industry,
Government and Public.
Acquisition Strategy Change
The EPA's system development work is focused on ensuring user needs are met from day one of
national system deployment. To accomplish this, the agency is conducting user-centered design
and development, and is utilizing agile software development methodologies. This approach
embodies continuous improvement through pilots and testing, using iterative processes, and
continued regular engagement with users and stakeholders throughout the process to provide on-
going opportunities for input.
Instead of locking in on one source, the new e-Manifest Program services contract (multi-vendor
indefinite delivery/indefinite quantity (IDIQ)) will utilize a variety of vehicles for the following
segments of the system:
• Project management including integration services.
• Paper manifest processing.
• User help desk and User training.
Quality assurance for manifest data amongst industry, states, and the EPA.
Services to calculate, collect, and support reporting of user fees for paper and electronic
manifest processing.
Support for stakeholder communication, including outreach and meeting support.
Research has shown that using this type of lean start-up methodology, with agile techniques,
lowers the cost of system development by addressing uncertainties promptly, and by ensuring
that the work being completed brings real value to users.
The agency will continue to work closely with users, adding more functionality in an incremental
manner and providing continuous improvement for the lifetime of the system. By taking this
iterative approach the EPA will refine remaining uncertainties from our architecture planning
work in the most cost effective manner.
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e-Manifest System Development
As a follow-on to the completed technical and conceptual architecture, e-Manifest embarked on a
pilot to create initial system functionality with the General Service Administrations (GSA) 18F
consulting shop. 18F provided the IT expertise to create the foundation of e-Manifest and also
provided agile project management support. Specifically, 18F:
• Introduced user-centered design/development, which engages industry/state users in the
early phases of development
• Created the development platform and hosting environment for e-Manifest
• Leveraged open source technologies (Trello, GitHub, biweekly online meetings
showcasing recent system updates) to allow users and other stakeholders to follow and
participate in system development
As part of the agile development focus, in September 2015, EPA, in partnership with 18F,
completed an initial system demonstration. This focused on a key aspect of the system: the
transaction at the end of the chain-of-custody when the hazardous waste arrives at the designated
waste management facility, and that facility signs the electronic manifest to verify that all the
hazardous waste types and quantities were received. Getting the system to properly electronically
execute this all-important manifest transaction was a critical first step. EPA worked with several
industry users to complete this initial system functionality.
Although not as straightforward as standard government IT development projects, this course
correction from traditional lifecycle system development ("waterfall") methodology to agile will
ultimately deliver a better system in a quicker, more value-added method going forward.
Starting with this initial system, EPA has been adding more functionality in an incremental
manner. Research has shown that using this type of lean start-up methodology with agile
techniques lowers the cost of current and future system development by addressing uncertainties
sooner rather than later. Therefore, EPA has been conducting user-centered design and
development, starting with the small scale demonstration phase. Open source code and project
engages industry and state users in the early phases of development, creation of development
platform, and hosting environment. EPA will expand engagement efforts to all users over time
(e.g., states with no systems, large and small generators, etc.).
The agile software development methodology embodies continuous improvement through
iterative development and delivers software in sprints. Agile embraces change, continuous and
regular feedback and improvement, value-driven delivery, full-team collaboration, and learning
through discovery. Agile techniques cannot eliminate the challenges intrinsic to high-discovery
software development but by focusing on continuous delivery of incremental value and shorter
feedback cycles, they expose challenges as early as possible to allow for immediate correction.
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EPA has adopted the lean start-up product development strategies with agile, user-centered
software design/development methodologies and as implemented the following:
• Two-week sprint intervals
• Using modular development practices, relying heavily on available off-the-shelf software
modules, by building individual working pieces of the system and integrating them into
the whole
• Addressing uncertainties that arose during the initial architecture planning work, and
engaging early with users and stakeholders
• Bringing down the cost of current and future development by addressing risk upfront and
ensuring that the work being completed brings actual value to stakeholders and users
• Continuously improving, using iterative processes, and engaging regularly with users and
stakeholders throughout the life of the program.
EPA has made every effort to involve industry users in the development process to build the
strongest possible system. During the system development phase, the e-Manifest team is
working alongside industry, states, and other stakeholders, by focusing on issues raised and
addressing the issues, including the following:
• How the national e-Manifest system will connect with state and industry systems
• User testing of the web application
• Addressing state data access needs
The e-Manifest team communicates regularly with states, industry, and related stakeholders
about ongoing developments (i.e., continued release and testing of system iterations), updates on
e-Manifest related rules (i.e., user fees for the e-Manifest system and amendments to manifest
regulations), and the national launch of the e-Manifest system.
Our primary methods of communication include the following:
• The e-Manifest website
• User testing
• Conferences
• Site visits
• Regional implementation working groups
• Listserv (general interest and development-focused)
• Public webinars
• Blog posts
• GitHub - code repository and project management
• FACA Meetings
• Meetings with stakeholders.
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Provided e-Manifest is fully-funded, we will follow this path of milestones to system launch in
spring 2018.
• September 2015- initial system functionality completed.
• Spring of 2016 - minimal viable product development.
• Spring through fall of 2016 - early full scale development.
• Fall of 2016 through winter of 2018 - rolling iterative releases/testing of system.
• Calendar year 2018 - national deployment (collecting user fees).
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EPA's FY 2017 e-Manifest Financial Statements
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Principal Financial Statements:
Environmental Protection Agency
e-Manifest
BALANCE SHEET
As of September 30, 2017 and 2016
(Dollars in Thousands)
FY 2017 FY 2016
Assets:
Intragovernmental:
Fund Balance with Treasury (Note 2) $ 5,430 $ 5,230
Other (Note 3) 5_ 5
Total Intragovernmental 5,435 5,235
Property, Plant & Equipment, Net (Note 4) 3,088 944
Total Assets $ 8,523 $ 6,179
Liabilities:
Intragovernmental:
Accounts Payable and Accrued Liabilities $ 6 $ 9
Other (Note 5) 20_ 20
Total Intragovernmental 26 29
Accounts Payable & Accrued Liabilities 187 39
Payroll & Benefits Payable (Note 6) 142 149
Total Liabilities $ 355 $ 217
Net Position:
Unexpended Appropriations 5,143 5,086
Cumulative Results of Operations 3,025 876
Total Net Position 8,168 5,962
Total Liabilities and Net Position $ 8,523 $ 6,179
The accompanying footnotes are an integral part of these financial statements.
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Environmental Protection Agency
e-Manifest
STATEMENT OF NET COST
For the Fiscal Years Ended September 30, 2017 and 2016
(Dollars in Thousands)
Costs:
Gross costs
Expenses from Other Appropriations (Note 7)
Less:
Earned revenue
Net cost of operations
FY 2017
$ 1,030 $
214
FY 2016
962
205
$ 1,244 $ 1,167
The accompanying footnotes are an integral part of these financial statements.
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Environmental Protection Agency
e-Manifest
STATEMENT OF CHANGES IN NET POSITION
For the Fiscal Years Ended September 30, 2017 and 2016
(Dollars in Thousands)
FY 2017 FY 2016
Cumulative Results of Operations:
Net Position - Beginning of Period $ 876 $ (69)
Budgetary Financing Sources:
Appropriations Used 3,121 1,828
Income from Other Appropriations (Note 7) 214 205
Total Budgetary Financing Sources 3,335 2,033
Other Financing Sources (Non-Exchange):
Imputed Financing Sources 58_ 80
Total Other Financing Sources 58 80
Net Cost of Operations (1,244) (1,167)
Net Change 2,149 946
Cumulative Results of Operations $ 3,025 $ 876
Unexpended Appropriations:
Net Position - Beginning of Period $ 5,086 $ 3,240
Budgetary Financing Sources:
Appropriations Received 3,178 3,674
Appropriations Used (3,121) (1,828)
Total Budgetary Financing Sources 57 1,846
Total Unexpended Appropriations 5,143 5,086
Net Position $ 8,168 $ 5,962
The accompanying footnotes are an integral part of these financial statements.
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Environmental Protection Agency
e-Manifest
STATEMENT OF BUDGETARY RESOURCES
For the Fiscal Years Ended September 30, 2017 and 2016
(Dollars in Thousands)
FY 2017 FY 2016
Budgetary Resources:
Unobligated balance, brought forward, October 1: $ 3,965 $ 3,220
Recoveries of prior year unpaid obligations 597 37_
Unobligated balance from prior year budget authority, net 4,562 3,257
Appropriations (discretionary and mandatory) 3,178 3,674
Total Budgetary Resources $ 7,740 $ 6,931
Status of Budgetary Resources:
Obligations Incurred $ 5,465 $ 2,965
Unobligated Balance, end of year:
Apportioned 2,250 3,966
Unapportioned 25_
Total Unobligated balance, end of period 2,275 3,966
Total Status of Budgetary Resources $ 7,740 $ 6,931
Change in Obligated Balance Unpaid Obligations:
Unpaid obligations, brought forward, October 1 (gross) $ 1,265 $ 191
Obligations incurred, net 5,465 2,965
Outlays (gross) (2,978) (1,855)
Recoveries of prior year unpaid obligations (597) (37)
Unpaid obligations, end of year (gross) 3,155 1,264
Memorandum entries:
Obligated balance, start of year $ 1,265 $ 191
Obligated balance, end of year (net) $ 3,155 $ 1,264
Budget Authority and Outlays, Net:
Budget authority, net $ 3,178 $ 3,674
Agency outlays, net $ 2,978 $ 1,855
The accompanying footnotes are an integral part of these financial statements.
EPA's FY 2017 e-Manifest Financial Statements
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Environmental Protection Agency
e-Manifest
Notes to Financial Statements
For the Fiscal Years Ended September 30, 2017 and 2016
(Dollars in Thousands)
Note 1. Summary of Significant Accounting Policies
A. Reporting Entity
The U.S. Environmental Protection Agency (EPA or Agency) was created in 1970 by executive
reorganization from various components of other Federal agencies in order to better marshal and
coordinate Federal pollution control efforts. The Agency is generally organized around the media
and substances it regulates — air, water, land, hazardous waste, pesticides and toxic substances.
The Hazardous Waste Electronic Manifest System Fund (e-Manifest) was authorized by the
establishment of the Hazardous Waste Electronic Manifest System Act. The act mandates that
the Agency, within three years, establish a hazardous waste electronic manifest system that can
be accessed by any user. The act authorized the administrator to impose users' fees to pay the
costs incurred in developing, operating, maintaining, and upgrading the system, including any
costs incurred in collecting and processing data from paper manifests submitted to the system
after the date on which the system enters operations.
The e-Manifest fund charges some administrative costs directly to the fund, and charges the
remainder of the indirect administrative costs to Agency-wide appropriations. These amounts are
included as "Income from Other Appropriations" on the Statement of Changes in Net Position
and as "Expenses from Other Appropriations" on the Statement of Net Cost.
B. Basis of Presentation
These financial statements have been prepared to report the financial position and results of
operations of the EPA for the e-Manifest Fund in accordance with the Chief Financial Officers
Act of 1990 and the Government Management Reform Act of 1994. The reports have been
prepared from the books and records of the EPA in accordance with Office of Management and
Budget (OMB) Circular A-136 Financial Reporting Requirements, and the EPA's accounting
policies which are summarized in this note. These statements are therefore different from the
financial reports also prepared by the EPA pursuant to OMB directives that are used to monitor
and control the EPA's use of budgetary resources. The balances in these reports have been
updated from the EPA consolidated financial statements to reflect the use of fiscal year 2017 cost
factors for calculating imputed costs for Federal civilian benefits programs. These updates
impact the Balance Sheet, Statement of Net Cost, and Statement of Changes in Net Position.
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C. Budgets and Budgetary Accounting
Funding of the e-Manifest Fund will be provided by fees collected from users to offset costs
incurred by the EPA in carrying out these programs. Since inception on October 5, 2012 through
fiscal year 2017, funding for the e-Manifest fund was from appropriated funds. EPA did not
collect fees from inception of the fund through fiscal year 2017.
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 issues
standards for the federal government. The financial statements are prepared in accordance with
GAAP for federal entities.
Transactions are recorded on an accrual accounting basis and a budgetary basis. Under the
accrual method, revenues are recognized when earned and expenses are recognized when a
liability is incurred, without regard to receipt or payment of cash. Budgetary accounting
facilitates compliance with legal constraints and controls over the use of Federal funds.
E. Revenues and Other Financing Sources
In fiscal years 2017 and 2016, EPA did not collect any user fees for the e-Manifest fund, as the
system was still in development.
F. Funds with the Treasury
The e-Manifest Fund did not have any receipts for fiscal years 2017 and 2016.
G. Investments in U. S. Government Securities
Investments in U. S. Government securities are maintained by Treasury (Bureau of Fiscal
Services) and are reported at amortized cost net of unamortized discounts. Discounts are
amortized over the term of the investments and reported as interest income. E-Manifest will hold
the investments to maturity, unless needed to finance operations of the fund. No provision is
made for unrealized gains or losses on these securities because, in the majority of cases, they are
held to maturity. Only fees collected will be invested in U.S. Government securities. The e-
Manifest fund has not collected any fees for fiscal years 2017 and 2016.
H. General Property, Plant and Equipment
General property, plant and equipment for e-Manifest consists of software in development. Internal
use software includes purchased commercial off-the-shelf software, contractor developed
software and software that was internally developed by Agency employees. In FY2017, EPA
reviewed its capitalization threshold levels for PP&E. The Agency performed an analysis of the
values of software assets and increased capitalization threshold from $250 thousand to $5 million
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to better align with major software acquisition investments. The $5 million threshold will be
applied prospectively to software acquisitions and modifications/enhancements placed into
service after September 30, 2016. Software assets placed into service prior to October 1, 2016
were capitalized at the $250 thousand threshold. Internal use software is capitalized at full cost
(direct and indirect) and amortized using the straight-line method over its useful life, not
exceeding five years.
I. 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.
J. Accrued Unfunded Annual Leave
Annual, sick and other leave is expensed as taken during the fiscal year. Annual leave earned but
not taken at the end of the fiscal year is accrued as an unfunded liability. Accrued unfunded
annual leave is included in the Balance Sheet as a component of "Payroll and Benefits Payable."
Sick leave earned but not taken is not accrued as a liability. It is expensed as it is used.
K. 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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L. 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 may differ from those
estimates.
Note 2. Fund Balance with Treasury
FY 2017 FY 2016
Entity Assets
$ 5,430 $
5,230
Note 3. Other Assets
FY 2017
FY 2016
Other Intragovernmental Assets:
Advance to Working Capital Fund
$ 5 $
5
Note 4. General Property, Plant and Equipment
As of September 30, 2017 and 2016, e-Manifest incurred costs related to the development of
information technology software associated with the Hazardous Waste Electronic Manifest
System of $3,088 and $944 respectively.
Note 5. Other Liabilities
The Payroll and Benefits Payable, non-Federal, are presented on a separate line of the Balance
Sheet and in a separate footnote (see Note 6).
FY 2017 FY 2016
Other Intragovernmental Liabilities:
Covered by Budgetary Resources Employer
Contribution- Payroll $ 20 $ 20
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EPA's FY 2017 e-Manifest Financial Statements
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Note 6. Payroll and Benefits Payable, non-Federal
The presentation of Payroll and Benefits Payable was updated for FY 2017 to combine
withholdings payable and accrued payroll payable to employees. Accrued Payroll Payable in FY
2017 was $77 thousand, and in FY 2016 was $80 thousand.
FY 2017 FY 2016
Covered by Budgetary Resources:
Accrued Payroll Payable
$ 77 $
80
Thrift Savings Plan Benefits payable
2
2
Total
79
82
Not Covered by Budgetary Resources:
Unfunded Annual Leave Liability
$ 63 $
67
Total
$ 142 $
149
Note 7. Income and Expenses from Other Appropriations
The Statement of Net Cost reports program costs that include the full costs of the program
outputs and consist of the direct costs and all other costs that can be directly traced, assigned on a
cause and effect basis, or reasonably allocated to program outputs.
Beginning with fiscal year 2017, the Agency began applying an indirect rate to account for
administrative expenses paid through other appropriations. For fiscal years 2017 and 2016 the
indirect rate was 20.79% and 21.38% respectively. As illustrated below, there is no impact on e-
Manifest's Statement of Changes in Net Position.
FY 2017 FY 2016
Income from Other Appropriations
$
214
205
Expenses from Other Appropriations
(214)
(205)
Net Effect
$
-
-
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Note 8. Reconciliation of Net Cost of Operations to Budget
Resources Used to Finance Activities:
Budgetary Resources Obligated
Obligations Incurred
Less: Spending Authority from Offsetting
Collections and Recoveries
Obligations, Net of Offsetting Collections
Other Resources:
Imputed Financing Sources
Income from Other Appropriations
Net Other Resources Used to Finance Activities
Total Resources Used to Finance Activities
Resources Used to Finance Items
Not Part of the Net Cost of Operations:
Change in Budgetary Resources Obligated
Resources that Fund Prior Period Expenses
Resources that Finance Asset Acquisition
Total Resources Used to Finance Items Not Part of the
Net Cost of Operations
Total Resources Used to Finance the Net Cost of Operations
Components of the Net Cost of Operations That Will
Not Require or Generate Resources in the Current Period:
Components Requiring or Generating Resources in Future Periods:
Increase in Annual Leave Liability
Total Components of Net Cost of Operations that Require or
Generate Resources in Future Periods
Total Components of Net Cost of Operations That Will Not
Require or Generate Resources in the Current Period
Net Cost of Operations
FY 2017 FY 2016
$ 5,465 $ 2,965
(597) (37)
4,868 2,928
58 80
214 205
272 285
$ 5,140 $ 3,213
$ (871) $ (1,104)
(3,088) (944)
(3,959) (2,048)
$ 1,181 $ 1,165
FY 2017 FY 2016
$ 63_ $ 2
63 2
63_ 2
$ 1,244 $ 1,167
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Appendix B
Agency Response to Draft Report
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sr„
^ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
im | WASHINGTON, D.C, 20460
OCT 2 2 2018
MEMORANDUM
SUBJECT:
FROM:
Response to the Office of Inspector General Draft Report No. OA-FY18-0088,
"EPA's Fiscal Years 2016 and 2017 Hazardous Waste Electronic Manifest
System Fund Financial Statements, " dated September 17, 2018
Mull) W. Greaves. Chief financial Ofiieer-
Office of the Chief Financial Officer \ >
Nigel Simon, Acting Principal Deputy Assistant Administrator and Sc
Information < Jfficer
01 lice offand and 1 mergenc> Management
Vaughn Noga. Principal Deputy Assistant Administrator and Deputy Chief
Information Officer ~^i-K - '* -
Office of Environmental Information ' v
TO: Paul C. Curtis, Director of Financial Statement Audits
Office of Inspector General
Thank you for the opportunity to respond to the issues and recommendations in the draft report. The
following is a summary of the U.S. Environmental Protection Agency's overall position along with its
position on each of the report recommendations. For the report recommendation with which the agency
agrees, we have provided either high-level intended corrective actions and estimated completion dates,
to the extent we can, or reasons why we are unable to provide a corrective action or estimated
completion date. For the report recommendation with which the agency disagrees, we have explained
our position and proposed alternatives to recommendations.
AGENCY'S OVER AT J, POSTTTON
The EPA Docket Center provides an agency-wide service that is jointly funded by participating
programs. Each year, participating programs must make a payment to the partnership based on a fixed
allocation to support the overall work of the Docket Center. These allocations are determined annually
based on historical workloads for each participating program.
To make their annual Partnership payment, the participating programs prepare their own purchase
requests, which are submitted through the approval chain within their own office, to allocate funding
directly to the Docket Center contract. The amount in question was placed on the Docket Center contract
by the OLEM as part of this annual payment to the Docket Center Partnership. As the managing partner,
t.Hufrrot Address, ^URLJ • hstp npa gov
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19-F-0086
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the OEI receives monthly invoices based on the total hours worked by the Docket Center contract staff
in support of the Partnership, not for any specific type of work. The OEI then pays these invoices using
funds provided by the Docket Center Partners as part of their annual payment to the Partnership.
Because the funds placed on the Docket Center contract support Docket Center functions overall and not
any specific type of work, the OEI does not track what costs are associated with specific Docket Center
activities. As such, the OEI does not have documentation showing which costs, if any, involved e-
Manifest-related Docket Center activities.
The agency's docket is currently not set up to break out funds per docket activity. Funds are
provided by each headquarters and regional office, which in turn receives funds by office based on fixed
allocations. As a result, we request the OIG reconsider the assignment of recommendation 3 to the
appropriate office.
AGENCY'S RESPONSE TO ATTDTT RECOMMENDATIONS
The agency concurs with recommendations 1 and 2 and non-concurs with recommendation 3.
Agreement
No.
Recommendation
Assigned to:
High-Level Intended
Corrective Action(s)
Estimated
Completion by
Quarter and FY
1
Evaluate and revise the EPA's
intragovernmental accrual
reconciliation methodology to
prevent adjustments to the
Hazardous Electronic
Manifest System Fund that
cannot be directly matched to
the funds with reasonable
precision.
OCFO-OC-
CFC
Concur. The EPA has
Completed 7/27/18
eliminated the e-
Manifest Fund from the
prorated analysis for the
accrual distribution.
2
Adjust the fiscal year 2017 e-
Manifest financial statements
to reverse the impact to the
Hazardous Waste Electronic
Manifest System Fund of
intragovernmental accrued
liabilities that cannot be
directly matched to the fund.
OCFO-OC-
GLARB
Concur. The EPA made
Completed 7/27/18
an adjustment to the
fiscal year 2017
e-Manifest financial
statements to reverse
the impact to the
Hazardous Waste
Electronic Manifest
System Fund of
intragovernmental
accrued liabilities that
cannot be directly
matched to the fund.
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Disagreement
No.
Issue
Assigned to:
High-Level Intended
Corrective Action(s)
Estimated
Completion by
Quarter and FY
Establish adequate internal
controls to maintain sufficient
supporting documentation to
verify Hazardous Waste
Electronic Manifest System
Funds are used as intended.
OEI
Non-concur: The
N/A
EPA's OEI, which is
responsible for the EPA
Docket Center contract
task order, does not
maintain information
that would enable the
OIG to determine
whether $44,929 paid to
a contractor using e-
Manifest funds were
appropriate. The
invoices for this
contract task order are
based on total hours
worked in support of
the Docket Center, not
on specific Docket
Center activities
performed. The OEI
staff tracks the cost of
the work performed in
the Docket Center to
support the agency's
docketing activities, but
not for work performed
on any specific docket.
The OEI pays the
invoices for this
contract using the
funding placed on the
Docket Center contract
by the participating
programs as part of
their annual payment to
support the Docket
Center Partnership. As
such, the program that
applies the funding to
the contract should
address the internal
control issue.
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CONTACT INFORMATION
If you have any questions regarding this response, please contact the OCFO's Audit Follow-up
Coordinator, Benita Deane, at deane.benita@epa.eov or (202) 564-2079.
cc: David Bloom
Howard Osborne
Barry Breen
Harvey Simon
Jeanne Conklin
Meshell Jones-Peeler
Malena Brookshire
Sherri' L. Anthony
Bob Trent
Benita Deane
Kecia Thornton
Carrie Hallum
Jennifer Judd
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Appendix C
Distribution
The Administrator
Chief of Operations
Chief of Staff
Deputy Chief of Staff
Chief Financial Officer
Assistant Administrator for Land and Emergency Management
Principal Deputy Assistant Administrator for Land and Emergency Management
Principal Deputy Assistant Administrator for Mission Support
Deputy Assistant Administrator for Environmental Information and Chief Information Officer,
Office of Mission Support
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Director, Office of Continuous Improvement, Office of the Administrator
Deputy Chief Financial Officer
Associate Chief Financial Officer
Controller, Office of the Chief Financial Officer
Deputy Controller, Office of the Chief Financial Officer
Director, Accounting and Cost Analysis Division, Office of the Chief Financial Officer
Chief, General Ledger Analysis and Reporting Branch, Accounting and Cost Analysis Division,
Office of the Chief Financial Officer
Deputy Assistant Administrator for Land and Emergency Management
Director, Office of Resource Conservation and Recovery, Office of Land and Emergency
Management
Deputy Director, Office of Resource Conservation and Recovery, Office of Land and Emergency
Management
Associate Director, Program Implementation and Information Division, Office of Resource
Conservation and Recovery, Office of Land and Emergency Management
Branch Chief, Permits Branch, Office of Resource Conservation and Recovery, Office of Land
and Emergency Management
Branch Chief, Information Collection and Analysis Branch, Office of Resource Conservation
and Recovery, Office of Land and Emergency Management
Associate Branch Chief, Information Collection and Analysis Branch, Office of Resource
Conservation and Recovery, Office of Land and Emergency Management
Chair, Fee Rule Workgroup, Permits Branch, Office of Resource Conservation and Recovery,
Office of Land and Emergency Management
Director, Office of Resources and Business Operations, Office of Mission Support
Director, Office of Enterprise Information Programs, Office of Mission Support
Director, Administrative Operations Division, Office of Resources and Business Operations,
Office of Mission Support
Agency 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 Land and Emergency Management
Audit Follow-Up Coordinator, Office of Resource Conservation and Recovery, Office of Land
and Emergency Management
Audit Follow-Up Coordinator, Office of Mission Support
19-F-0086
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