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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
19-P-0267
August 9, 2019
Why We Did This Project
We conducted this audit
to evaluate the
U.S. Environmental Protection
Agency's (EPA's) management
controls for implementing
Executive Order (EO) 13771,
Reducing Regulation and
Controlling Regulatory Costs.
We focused on the EO's
regulatory savings goals for
fiscal years (FYs) 2017 and
2018, the EPA's deregulatory
and regulatory actions, and the
EPA's compliance with the
Office of Management and
Budget's (OMB's) goal-setting
requirements.
EO 13771 was issued to
manage the costs associated
with existing and new
regulations established by
federal agencies. The EO
stipulates that for every new
regulation issued, at least two
existing regulations must be
identified for repeal. Also, for
FY 2017, the total incremental
cost of all new regulations,
including repealed regulations,
was to be no greater than zero.
The OMB issued subsequent
guidance establishing an
FY 2018 regulatory savings
goal of $40 million for the EPA.
This report addresses the
following:
• Compliance with the law.
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.oiq.
List of OIG reports.
EPA Exceeded the Deregulatory Goals of
Executive Order 13771
What We Found
In FYs 2017 and 2018, the
number of EPA deregulatory
actions was more than
double the number of EPA
regulatory actions.
In FYs 2017 and 2018, the EPA exceeded its
deregulatory expectations under EO 13771. In
addition, the EPA exceeded the savings goals
associated with the EO. Specifically, in FY 2017,
the EPA achieved an annualized cost savings of
$21.5 million via 16 deregulatory actions and
one regulatory action. In FY 2018, the EPA achieved an annualized cost savings
of $75.1 million via 10 deregulatory and three regulatory actions.
EO 13771 is commonly referred to by media outlets as the "two-for-one" EO.
Specifically, the EO requires that "for every one new regulation issued, at least
two prior regulations be identified for elimination." In addition, the EO states that
"any new incremental costs associated with new regulations shall... be offset by
the elimination of existing costs associated with at least two prior regulations." An
agency is in compliance with EO 13771 if, by the end of each fiscal year, its total
deregulatory actions number at least two times its total regulatory actions and its
cost savings goals are met.
The EPA did not develop internal guidance or management controls to implement
EO 13771. Other than an Administrator's memorandum establishing a Regulatory
Reform Task Force, charged with implementing EO 13771, the EPA relied solely
on OMB guidance to implement the EO. We found that both the transparency of
EO decision-making and the outreach for deregulatory recommendations could
be enhanced and clarified in the Administrator's direction to the Regulatory
Reform Task Force.
Recommendations and Planned Agency Corrective Actions
We recommend that the EPA enhance transparency regarding EO 13771
decision-making and outreach to interested stakeholders. Although the EPA
concurred—in whole or in part—with Recommendations 1a and 1b, the agency
did not provide sufficient corrective actions to meet the intent of the
recommendations. The agency disagreed with Recommendations 1c and 2. All
recommendations are unresolved.
Noteworthy Achievement
The EPA's National Center for Environmental Economics created a cost-
accounting tool that standardized analyses after encountering uncertainty among
program offices about how to satisfy OMB requirements for implementing

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