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5 S U.S. ENVIRONMENTAL PROTECTION AGENCY
% / OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Audit Report
Fiscal Year 2010 and 2009
Financial Statements for the
Pesticides Reregistration and
Expedited Processing Fund
Report No. 11-1-0156
March 10, 2011
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Report Contributors: Paul Curtis
Robert Smith
Bill Samuel
Catherine Allen
Sabrina Berry
Guillermo Mejia
Javier Negron
Demetrios Papakonstantinou
Myka Sparrow
Lynda Taylor
Abbreviations
CSRS
Civil Service Retirement System
EPA
U.S. Environmental Protection Agency
FERS
Federal Employees Retirement System
FIFRA
Federal Insecticide, Fungicide, and Rodenticide Act
FMFIA
Federal Managers' Financial Integrity Act
FY
Fiscal year
OCFO
Office of the Chief Financial Officer
OIG
Office of Inspector General
OMB
Office of Management and Budget
OPM
Office of Personnel Management
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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
11-1-0156
March 10, 2011
Catalyst for Improving the Environment
Why We Did This Audit
The Food Quality Protection
Act requires that we perform
an annual audit of the
Pesticides Reregistration and
Expedited Processing Fund
(known as the FIFRA Fund)
financial statements.
Background
The U.S. Environmental
Protection Agency (EPA) is
responsible for reassessing the
safety of older pesticide
registrations against modern
health and environmental
testing standards. To expedite
this reregistration process,
Congress authorized EPA to
collect fees from pesticide
manufacturers. The fees are
deposited into the FIFRA
Fund. Each year, the Agency
prepares financial statements
that present financial
information about the fund,
along with information about
EPA's progress in
reregistering pesticides.
Fiscal Year 2010 and 2009 Financial Statements
for the Pesticides Reregistration and Expedited
Processing Fund
Opinion
We rendered an unqualified, or clean, opinion on EPA's Pesticides Reregistration
and Expedited Processing Fund financial statements for fiscal years 2010 and 2009,
meaning they are fairly presented and free of material misstatement.
Internal Control Significant Deficiency Noted
We noted one significant deficiency in internal controls. EPA misapplied federal
retirement benefit cost factors in calculating fiscal year 2010 imputed cost related
to the Civil Service Retirement System and the Federal Employees Retirement
System. Imputed costs are costs that are not fully reimbursed. This $340,772
understatement is material for the FIFRA Fund and, if not corrected, would result
in a qualification of FIFRA's financial statements. The Agency has corrected fiscal
year 2010 imputed costs in the FIFRA Fund financial statements.
Compliance With Applicable Laws and Regulations
The Agency was in compliance with applicable laws and regulations.
Agency Comments and Office of Inspector General Evaluation
The Office of the Chief Financial Officer and the Office of Chemical Safety and
Pollution Prevention concurred with our general conclusions that the financial
statements are fairly presented and free of material misstatements.
For further information,
contact our Office of
Congressional, Public Affairs
and Management at
(202) 566-2391.
The full report is at:
www.epa.gov/oia/reports/2011/
20110310-11-1-0156.pdf
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I s UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ vl7# ~ WASHINGTON, D.C. 20460
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THE INSPECTOR GENERAL
March 10, 2011
MEMORANDUM
SUBJECT: Fiscal Year 2010 and 2009 Financial Statements for the
Pesticides Reregi strati on and Expedited Processing Fund
Report No. 11-1-0156
FROM: Arthur A. Elkins, Jr
Inspector General
TO: Steve Owens
Assistant Administrator for Chemical Safety and Pollution Prevention
Barbara Bennett
Chief Financial Officer
This is our report on the audit of the U.S. Environmental Protection Agency's (EPA's) Fiscal
Year 2010 and 2009 Financial Statements for the Pesticides Reregi strati on and Expedited
Processing Fund, conducted by the EPA Office of Inspector General (OIG). This report
represents the opinion of the OIG and does not necessarily represent the final EPA position.
Final determination on matters in this report will be made by EPA managers in accordance with
established audit resolution procedures.
The estimated direct labor and travel costs for this report are $84,143.
Action Required
Because this report contains no recommendations, you are not required to respond to this report.
We have no objections to the further release of this report to the public. This report will be
available at http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact Melissa Heist
at 202-566-0899 or Heist.Melissa@epa.gov. Paul Curtis at (202) 566-2523 or
Curtis.Paul@epa.gov. or Robert Smith at (202) 566-2531 or Smith.RobertL@epa.gov.
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Fiscal Year 2010 and 2009 Financial Statements for the
Pesticides Reregistration and Expedited Processing Fund
11-1-0156
Table of C
Inspector General's Report on the Fiscal Year 2010 and 2009
Financial Statements for the Pesticides Reregistration and
Expedited Processing Fund
Opinion on the FIFRA Fund Financial Statements 1
Evaluation of Internal Controls 1
Tests of Compliance With Laws and Regulations 3
Management's Discussion and Analysis Section of the Financial Statements 3
Prior Audit Coverage 4
Noteworthy Achievements 4
Agency Comments and OIG Evaluation 4
Attachments
1 Significant Deficiency 5
Incorrect Cost Factors Were Used to Compute Imputed Costs 6
2 Status of Recommendations and Potential Monetary Benefits 7
Appendices
A Fiscal Year 2010 and 2009 FIFRA Financial Statements
B Agency's Response to Draft Report
C Distribution
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Inspector General's Report on the
Fiscal Year 2010 and 2009 Financial Statements for the
Pesticides Reregistration and Expedited Processing Fund
The Administrator
U.S. Environmental Protection Agency
We have audited the Pesticides Reregistration and Expedited Processing Fund
(known as the FIFRA Fund) balance sheet as of September 30, 2010, and 2009,
and the related statements of net cost, changes in net position, and budgetary
resources for the years then ended. These financial statements are the
responsibility of U.S. Environmental Protection Agency (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 No. 07-04, Audit
Requirements for Federal Financial Statements, as Amended. These standards
require that we plan and perform the audit to obtain reasonable assurance as to
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.
In our opinion, the financial statements, 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 FIFRA Fund, as of and for
the years ended September 30, 2010, and 2009, in conformity with accounting
principles generally accepted in the United States of America.
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, 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.
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1
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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 control over
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) financial
reporting by obtaining an understanding of the Agency's internal controls,
determining whether internal controls have 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. We did not test all internal controls relevant to operating objectives
as broadly defined by the Federal Managers' Financial Integrity Act (FMFIA),
such as those controls relevant to ensuring efficient operations. The objective of
our audit was not to provide assurance on internal controls and, accordingly, we
do not express an opinion on internal controls.
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, in internal control 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,
in internal controls, 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. Because of inherent limitations in any internal
controls, misstatements, losses, or noncompliance may nevertheless occur and not
be detected. We noted a certain matter involving the internal controls and
operations that we considered to be a significant deficiency. We do not consider
this matter to be a material weakness.
Significant Deficiency: Incorrect Cost Factors Were Used to Compute
Imputed Costs
EPA misapplied federal retirement benefit cost factors in calculating fiscal year
(FY) 2010 imputed cost related to the Civil Service Retirement System (CSRS)
and the Federal Employees Retirement System (FERS). In August 2010, the
Office of Personnel Management (OPM) issued Benefits Administration Letter,
Number: 10-306, which provided FY 2010 retirement cost factors that should be
11-1-0156
2
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applied in FY 2010 year-end financial reporting. EPA did not exercise due care in
computing FY 2010 imputed costs and inadvertently used the FY 2009 retirement
cost factors. This error resulted in a material understatement of FY 2010 imputed
costs for the FIFRA Fund in the amount of $340,772. After we brought the issue
to the attention of Office of the Chief Financial Officer, that office made the
appropriate adjustment for the FY 2010 cost factors
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, 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 a
material weakness 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 did not report, and our audit did not
detect, any material weaknesses for FY 2010 impacting the FIFRA Fund.
Tests of Compliance With Laws and Regulations
As part of obtaining a reasonable assurance about whether the Agency's financial
statements are free of material misstatement, we tested compliance with those
laws and regulations that could either materially affect the FIFRA financial
statements or that we considered significant to the audit. The objective of our
audit, including our tests of compliance with applicable laws and regulations, was
not to provide an opinion on an overall compliance with such provisions.
Accordingly, we do not express such an opinion. We did not identify any
noncompliances that would result in a material misstatement to the audited
financial statements.
Management's Discussion and Analysis Section of the
Financial Statements
We reviewed samples of reregi strati on, amendment, and cancellation actions
completed in FY 2010 claimed in FIFRA Performance Measure 2 in the
Management's Discussion and Analysis, and found that all actions sampled were
supported. We also reviewed documentation for the cumulative status of
reregi strati on actions in Performance Measure 2 and found that the reported
cumulative status appears reasonable. There were no claimed FY 2010
accomplishments for the other performance measures shown in the Management's
Discussion and Analysis.
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Prior Audit Coverage
During previous financial-related audits, we reported a significant deficiency
because we could not assess the adequacy of Integrated Financial Management
System automated controls. EPA has taken additional steps to correct the
significant deficiency related to its financial system by undertaking a project to
replace its core financial application. The new EPA Financial System is
anticipated to go live in October 2012. We will continue to report a significant
deficiency concerning our inability to test application controls due to insufficient
system documentation until the new system is implemented. {Audit of EPA 's
Fiscal 2010 and 2009 Consolidated Financial Statements, Report No. 11-1 -0015,
issued November 15, 2010).
Noteworthy Achievements
We reviewed samples of reregi strati on, amendment, and cancellation actions
completed in FY 2010 claimed in FIFRA Performance Measure 2 in the
Management's Discussion and Analysis, and found that all actions sampled were
supported. This is the second consecutive year for which we found all such
actions supported, demonstrating the Agency's diligence in maintaining improved
internal controls. These improved internal controls remediated the deficiency
found in this area in prior years.
Agency Comments and OIG Evaluation
The Office of the Chief Financial Officer and the Office of Pesticide Programs
concurred with our general conclusions that the financial statements are fairly
presented and free of material misstatements.
Paul C. Curtis
Director, Financial Statement Audits
Office of Inspector General
U.S. Environmental Protection Agency
March xx, 2011
11-1-0156
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Attachment 1
Significant Deficiency
Table of Contents
1 - Incorrect Cost Factors Were Used to Compute Imputed Costs 6
11-1-0156 5
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Incorrect Cost Factors Were Used to Compute Imputed Costs
EPA misapplied federal retirement benefit cost factors in calculating FY 2010
imputed cost related to CSRS and FERS. In August 2010, OPM issued Benefits
Administration Letter, Number: 10-306, which provided FY 2010 retirement cost
factors that should be applied in FY 2010 year-end financial reporting. EPA did
not exercise due care in computing FY 2010 imputed costs and inadvertently used
the FY 2009 retirement cost factors. This error resulted in a material
understatement of FY 2010 imputed costs for the FIFRA Fund of $340,772.
Imputed costs related to pensions are the difference between pension service cost
and the employees' and federal pension contributions. The pension service cost is
determined by multiplying the basic pay paid to employees for each CSRS and
FERS category by the applicable cost factors. The FY 2010 cost factor for most
CSRS-covered employees was 30.1 percent and for most FERS-covered
employees was 13.8 percent. For FY 2009, these amounts were 25.8 percent and
12.3 percent, respectively.
The Office of the Chief Financial Officer (OCFO) has quality control procedures
in place that should have prevented this error; however, in this instance, the
control procedures were not effective. We identified this discrepancy during our
audit of EPA's FY 2010 financial statements and informed OCFO of the error in
November 2010. OCFO did not consider the impact of this error before issuing
the draft FIFRA financial statements. After we brought the issue to the attention
of OCFO, that office made the appropriate adjustment for the FY 2010 cost
factors. Accordingly, we have no recommendations.
11-1-0156
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Attachment 2
Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
No recommendations
Claimed
Amount
Agreed To
Amount
11-1-0156
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Appendix A
FYs 2010 and 2009 PESTICIDES REREGISTRA TION
and EXPEDITED PROCESSING FUND (FIFRA)
FINANCIAL STATEMENTS
CJHj
4 PROfc-0
Produced by the U.S. Environmental Protection Agency
Office of the Chief Financial Officer
Office of Financial Management
11-1-0156
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TABLE OF CONTENTS
Management's Discussion and Analysis
Principal Financial Statements
11-1-0156
EPA's FY 2010 Annual FIFRA Financial Statements
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Management's Discussion and Analysis
11-1-0156
EPA's FY 2010 Annual FIFRA Financial Statements
1
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MANAGEMENT'S DISCUSSION AND ANALYSIS
The Agency's Office of Pesticide Programs (OPP) was established to administer the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA) to protect public health and the
environment. The law requires the Agency to balance public health and environmental concerns
with the expected economic benefits derived from pesticides. The guiding principles of the
pesticide program are to reduce risks from pesticides in food, the workplace, and other exposure
pathways and to prevent pollution by encouraging the use of new and safer pesticides.
In accordance with FIFRA and the Federal Food, Drug, and Cosmetic Act (FFDCA), the
pesticide program administers the Revolving Fund for Certification and Other Services
(Tolerance Fund) and the Pesticides Reregi strati on and Expedited Processing Fund (FIFRA
Fund). As of 1996, fees for both tolerance and reregi strati on are deposited to the FIFRA
account, which is available to the EPA without further appropriation.
Tolerance Program Description
As part of its authority to regulate pesticides, EPA is responsible for setting "tolerances."
If the pesticide is being considered for use on a food or feed crop or as a food or feed additive,
the applicant must petition EPA for establishment of a tolerance (or exemption from a tolerance)
under authority of the FFDCA. A tolerance is the maximum legal limit of a pesticide residue on
food commodities and animal feed. Tolerances are set at levels that ensure that the public is
protected from health risks posed by eating foods that have been treated with pesticides in
accordance with label directions.
In 1954, Congress authorized the collection of fees for the establishment of tolerances for
raw agricultural commodities (Section 408 of FFDCA). Congress, however, did not authorize
the collection of fees for food additive tolerances (Section 409 of FFDCA). EPA, therefore, does
not collect fees for food additive tolerances. The Agency also does not collect fees for Agency-
initiated actions such as the revocation of tolerances for previously canceled pesticides. Fees
collected from tolerances for raw agricultural commodities were deposited to the U.S. Treasury
General Fund until 1963 when Congress established the Tolerance Fund.
In 1996, pesticide reform legislation included provisions for additional fees to support
reregi strati on activities. Passage of the Food Quality Protection Act (FQPA) of 1996 requires
tolerances to be reassessed as part of the reregi strati on program. Effective January 1997, all fees
related to tolerance activities were deposited in the FIFRA Fund. With passage of the Pesticide
Registration Improvement Act (PRIA) of 2003 and the Pesticide Registration Improvement
Renewal Act in 2007, no additional tolerance petition fees will be deposited to the FIFRA Fund
through FY 2012.
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EPA's FY 2010 Annual FIFRA Financial Statements
2
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Pesticide Reregistration Program Description
As part of its authority to regulate pesticides, EPA is responsible for re-registering
existing pesticides. The FIFRA legislation, requiring the registration of pesticide products, was
originally passed in 1947. Since then, health and environmental standards have become more
stringent and scientific analysis techniques much more precise and sophisticated. In the 1988
amendments to FIFRA (FIFRA '88), Congress mandated the accelerated reregistration of all
products registered prior to November 1, 1984. The amendments established a statutory goal of
completing reregistration eligibility decisions (REDs) by 1997. The legislation allows for
various time extensions which can extend the deadline by three years or more. The statutory
requirement for the completion of reregistration food-use (REDs) is 2006, in conjunction with
the new tolerance reassessment program. For the non-food-use active ingredient REDs, the
current legal deadline under PRIA for completion of reregistration is October 3, 2008.
Congress authorized the collection of two kinds of fees to supplement appropriated funds
to support reregistration program: an annual maintenance fee and a one-time reregistration fee.
Maintenance fees are assessed on registrants of pesticide products and were structured to collect
approximately $14 million per year. Reregistration fees are assessed on the manufacturers of the
active ingredients in pesticide products and are based on the manufacturer's share of the market
for the active ingredient. In fiscal years 1992 through 1999, approximately 14% of the
maintenance fees collected, up to $2 million each year, were used for the expedited processing of
old chemical and amended registration applications. Fees are deposited into the FIFRA
Revolving Fund. By statute, excess monies in the FIFRA Fund may be invested. Waivers
and/or refunds are granted for minor use pesticides, antimicrobial pesticides, and small
businesses.
In 1996, pesticide reform legislation included provisions for additional fees to support
reregistration activities. Passage of the FQPA of 1996 implemented the following changes in the
Pesticide Reregistration Program: reauthorized collection of maintenance fees through 2001 to
complete the review of older pesticides to ensure they meet current standards (increased annual
fees from $14 million to $16 million per year for 1998, 1999, and 2000 only) and required all
tolerances (over 9,700) to be reassessed by 2006. EPA's 2002 appropriations bill extended
authority to collect maintenance fees by one year for the amount of $17 million; and the FY 2003
appropriations extended the authority to collect fees again by one year in the amount of $21.5
million. Passage of PRIA in FY 2004 extended the authority to collect maintenance fees through
FY 2008 (with annual fee amounts at $26 million in FY 2004; $27 million in FY 2005-2006; $21
million in FY 2007; and $15 million in FY 2008). Passage of the Pesticide Registration
Improvement Renewal Act (commonly known as PRIA 2) on October 9, 2007 extended the
authority to collect maintenance fees through FY 2012 (with annual fee amounts at $22 million
each FY). PRIA 2 includes the provision for use of maintenance fees to offset the costs of
registration review beginning in FY 2008.
The reregistration process is being conducted through reviews of groupings of similar
active ingredients called cases. There are five major phases of reregistration:
~ Phase 1 - Listing of Active Ingredients. EPA publishes lists of active ingredients and
asks registrants whether they intend to seek reregistration. (Completed in FY 1989)
11-1-0156 EPA's FY 2010 Annual FIFRA Financial Statements 3
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~ Phase 2 - Declaration of Intent and Identification of Studies. Registrants notify EPA if
they intend to reregister and identify missing studies. (Completed in FY 1990)
~ Phase 3 - Summarization of Studies. Registrants submit required existing studies.
(Completed in FY 1991)
~ Phase 4 - EPA Review and Data Call-Ins (DCIs). EPA reviews the studies, identifies and
"calls-in" missing studies by issuing a DCI. A "DCI" is a request to a pesticide registrant
for scientific data to assist the Agency in determining the pesticide's eligibility for
reregi strati on. (Completed in FY 1994)
~ Phase 5 - Reregi strati on Decisions. EPA reviews all studies and issues a Reregi strati on
Eligibility Decision (RED) for the active ingredient(s). A "RED" is a decision by the
Agency defining whether uses of a pesticide active ingredient are eligible or ineligible for
reregi strati on. The registrant complies with the RED by submitting product specific data
and new labels. EPA reregisters or cancels the product. Pesticide products are re-
registered, based on a RED, when it meets all label requirements. This normally takes 14
to 20 months after issuance of the RED.
Research Program Description
EPA's pesticides and toxics research program continues to examine risks resulting from
exposure to pesticides and toxic chemicals. The research is designed to support the Agency's
efforts to reduce current and future risks to the environment and to humans by preventing and/or
controlling the production of new chemicals and products of biotechnology that pose
unreasonable risk, as well as assessing and reducing the risks of chemicals and products of
biotechnology already in commerce. The research program's major goals are: (1) to provide
predictive tools to prioritize testing requirements; enhance interpretation of data to improve
human health and ecological risk assessments; and inform decision-making regarding high
priority pesticides and toxic substances; (2) to develop probabilistic risk assessments to protect
natural populations of birds, fish, other wildlife, and non-target plants; and (3) to provide the
tools necessary to make decisions related to products of biotechnology.
In providing research on methods, models, and data to support decision-making regarding
specific individual or classes of pesticides and toxic substances that are of high priority, the
program is developing:
• Predictive biomarkers, quantitative structure activity relationships, and alternative test
methods for prioritizing and screening chemicals for a number of adverse effects (e.g.,
neurotoxicity, reproductive toxicity) that will lead to a reduction in and more efficient use
of whole animals in toxicity testing; and
• Data and protocols on the impact of waste water treatment technologies on pesticides and
their products of transformation.
To support the development of probabilistic risk assessments to protect endangered
populations of birds, fish, other wildlife, and non-target plants from pesticides while making sure
farmers and communities have the pest control tools they need, this program has four key
research components:
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EPA's FY 2010 Annual FIFRA Financial Statements
4
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• Extrapolation among wildlife species and exposure scenarios of concern;
• Population biology to improve population dynamics in spatially-explicit habitats;
• Models for assessing the relative risk of chemical and non-chemical stressors; and
• Models to define geographical regional/spatial scales for risk assessment.
Methods for characterization of population-level risks of toxic substances to aquatic life and
wildlife also are being developed as part of the Agency's long-term goal of developing
scientifically valid approaches for assessing spatially-explicit, population-level risks to wildlife
populations and non-target plants and plant communities from pesticides, toxic chemicals and
multiple stressors while advancing the development of probabilistic risk assessment.
Additionally, research to support decision-making related to products of biotechnology
includes:
• Development of methods to assess the potential allergenicity of genetically engineered
plants.
• Characterization of the environmental impact of genetically engineered plants and
developing methods to reduce them.
Enforcement and Compliance Assurance Program Description
The Pesticide Enforcement and Compliance Assurance Program focuses on pesticide
product and user compliance. These include problems relating to pesticide worker safety,
certification and training of applicators, ineffective antimicrobial products, food safety, adverse
effects, risks of pesticides to endangered species, pesticide containers and containment facilities,
and e-commerce and misuse. The enforcement and compliance assurance program provides
compliance assistance to the regulated community through its National Agriculture Compliance
Assistance Center, seminars, guidance documents, brochures, and other forms of communication
to ensure knowledge of and compliance with environmental laws.
EPA's grant support to states' and tribes' pesticide programs emphasizes its commitment
to maintaining a strong compliance and enforcement presence. Agency Cooperative Agreement
priorities for FY2008 - FY2010 include the enforcement of worker protection standards;
compliance monitoring and enforcement activities related to the newly promulgated pesticide
container and containment rules, and program performance reporting. Core program activities
include inspections of producing establishments; dealers/distributors/retailers; e-commerce;
imports and exports, and pesticide misuse. Additionally, through the Cooperative Agreement
resources we support inspector training and training for state/tribal senior managers, scientists,
and supervisors.
Highlights and Accomplishments
Tolerance Performance Measures
As mandated by PRIA 2, no Tolerance fees were collected and deposited to the FIFRA
Fund in FY 2010.
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EPA's FY 2010 Annual FIFRA Financial Statements
5
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Measure: Tolerance re-evaluations.
Results: The tolerance reassessment program was completed in FY 2007; therefore, no
further tolerance reassessment decisions were needed or completed in FY 2010. At the end of
FY 2007, EPA had completed 9,721 tolerance reassessment decisions, addressing 100% of the
9,721 tolerances that required reassessment.
Reregistration (FIFRA) Financial Perspective
During FY 2010, the Agency's obligations charged against the FIFRA Fund for the cost
of the reregi strati on programs and other authorized pesticide programs were $24.5 million and
143.0 workyears. Of these amounts, OPP obligated $22.4 million of this cost and funded the
143.0 workyears.
Appropriated funds are used in addition to FIFRA revolving funds. In FY 2010, the
Enacted Operating Plan included approximately $40.0 million in appropriated funds for
reregi strati on program activities. The unobligated balance in the Fund at the end of FY 2010
was $1.7 million.
The Fund has two types of receipts: fee collections and interest earned on investments.
Of the $22.1 million in FY 2010 receipts, more than 99.9% were fee collections.
Reregistration Program (FIFRA) Performance Measures
The following measures support the program's strategic goals of Healthy Communities
and Ecosystems as contained in the FY 2010 President's budget.
Measure 1: Number of Reregistration Eligibility Documents (REDs) completed.
Results: All Reregistration Eligibility Decisions (REDs) were completed by the end of FY 2008.
No REDs were completed in FY 2010. Of the 613 chemical cases (representing approximately
1,150 pesticide active ingredients), that initially were subject to reregistration, 384 cases have
completed REDs. An additional 229 reregistration cases were voluntarily canceled before EPA
invested significant resources in developing REDs. 613 reregistration cases (100%) had
completed the reregistration eligibility decision making process by the end of FY 2008.
Measure 2: Number of products reregistered, canceled, or amended. Over 20,000
products are or eventually will be subject to product reregistration. Many products,
however, contain more than one active ingredient. Since products are reassessed
separately for each active ingredient, EPA will conduct approximately 38,000 product
reviews.
Results: In FY 2010, 484products were reregistered; 40 products were amended; 1188
products were cancelled; and 6 products were suspended. Currently, a universe of 22,039
products is undergoing or has completed product reregistration. The status of those products at
the end of FY 2010 was as follows: 4,369 products had been reregistered; 1,179 product
registrations had been amended; 7,412products were cancelled; 20products were suspended;
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EPA's FY 2010 Annual FIFRA Financial Statements
6
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and 9,059 products had actions/decisions pending. The Agency's goal in FY 2011 is to complete
1,500 product reregistration actions.
Measure 3: Progress in Reducing the Number of Unreviewed, Required
Reregistration Studies.
Results: EPA completed the last REDs in 2008, so all necessary studies to make
reregistration eligibility decisions for all active ingredients subject to reregistration have been
reviewed. At this time, the Agency does not plan to spend additional resources examining these
records.
Measure 4: Number and Type of DCIs Issued to Support Product Reregistration by
Active Ingredient.
Results: Regarding Data Call-In notices (DCIs) under FIFRA section 3(c)(2)(B) to
support product reregistration for pesticide active ingredients included in REDs, EPA completed
the last remaining REDs and reported DCI information for those REDs in FY 2008. There is no
further activity to report for FY 2010.
Measure 5: Future Schedule for Reregistrations.
The last REDs were completed in FY 2008, therefore there are no remaining candidates
for future decisions.
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EPA's FY 2010 Annual FIFRA Financial Statements
7
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PRINCIPAL
FINANCIAL STATEMENTS
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EPA's FY 2010 Annual FIFRA Financial Statements
8
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TABLE OF CONTENTS
Financial Statements
Balance Sheet 10
Statement of Net Cost 11
Statement of Changes in Net Position 12
Statement of Budgetary Resources 13
Notes to Financial Statements
Note 1. Summary of Significant Accounting Policies 14
Note 2. Fund Balance with Treasury 17
Note 3. Other Assets - Advances to Working Capital Fund 17
Note 4. General Property, Plant and Equipment 17
Note 5. Other Liabilities 18
Note 6. Payroll and Benefits Payable, non-Federal 18
Note 7. Income and Expenses from Other Appropriations 19
Note 8. Exchange Revenues, Statement of Net Cost 21
Note 9. Intragovernmental Costs and Revenue 21
Note 10. Reconciliation of Net Cost of Operations to Budget (formerly the
Statement of Financing) 22
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EPA's FY 2010 Annual FIFRA Financial Statements
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Environmental Protection Agency
FIFRA
Balance Sheet
As of September 30, 2010 and 2009
(Dollars in Thousands)
FY2010 FY2009
ASSETS
Intragovernmental:
Fund Balance With Treasury (Note 2)
$ 4,174 $
7,124
Other (Note 3)
92
92
T otal Intragovernmental
$ 4,266 $
7,216
Property, Plant & Equipment, Net (Note 4)
909
909
Total Assets
$ 5,175 $
8,125
LIABILITIES
Int rago vernment al:
Accounts Payable and Accrued Liabilities
163
200
Other (Note 5)
200
220
T otal Intragovernmental
S 363 $
420
Accounts Payable & Accrued Liabilities
$ 265 $
493
Payroll & Benefits Payable (Note 6)
2,269
2,733
Other (Note 5)
7,039
8,190
Total Liabilities
$ 9,936 $
11,836
NET POSITION
Cumulative Results of Operations
(4,761)
(3,711)
Total Net Position
(4,761)
(3,711)
Total liabilities and Net Position $ 5,175 $ 8,125
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The accompanying notes are an integral part of these statements.
EPA's FY 2010 Annual FIFRA Financial Statements
10
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Environmental Protection Agency
FIFRA
Statement of Net Cost
For the Years Ended September 30, 2010 and 2009
(Dollars in Thousands)
FY2010 FY 2009
COSTS
Gross Costs (Note 9) $ 25,877 $ 26,214
Expenses from Other Appropriations (Note 7) 36,268 47,744
Total Costs 62,145 73,958
Less:
Earned Revenue (Notes 8, 9) 23,231 23,716
NET COST OF OPERATIONS (Note 10) $ 38,914 $ 50,242
The accompanying notes are an integral part of these statements.
11-1-0156 EPA's FY 2010 Annual FIFRA Financial Statements 11
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Environmental Protection Agency
FIFRA
Statement of Changes in Net Position
For the Years Ended September 30, 2010 and 2009
(Dollars in Thousands)
FY 2010
FY 2009
Net Position - Beginning of Period
Beginning Balances, as Adjusted
(3,711)
$ (3,711) $
(2,798)
(2,798)
Budgetary Financing Sources:
Nonexehange Revenue - Securities Investment
Income from Other Appropriations (Note 7)
Total Budgetary Financing Sources
7
36,268
$ 36,275 $
8
47,744
47,752
Other Financing Sources (Non-Exchange)
Imputed Financing Sources
Total Other Financing Sources
1,589
$ 1,589 $
1,577
1,577
Net Cost of Operations
(38,914)
(50,242)
Net Change
(1,050)
(913)
Cumulative Results of Operations
S (4,761) S
(3,711)
The accompanying notes are an integral part of these statements.
11-1-0156 EPA's FY 2010 Annual FIFRA Financial Statements 12
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Environmental Protection Agency
FIFRA
Statement of Budgetary Resources
For the Years Ended September 30, 2010 and 2009
(Dollars in Thousands)
FY 2010 FY2009
BUDGETARY RES OURGES
Unobligated Balance, Brought Forward, October 1: $ 4,133 $ 6,601
Recoveries of Prior Year Unpaid Obligations - 315
Budgetary Authority:
Spending Authority from Offsetting Collections
Earned:
Collected 23,237 23,713
Change in Unfilled Customer Orders:
Advance Received (1,151) (1,936)
Total Spending Authority from Offsetting Collections 22,086 21,777
Total Budgetary Resources $ 26,219 $ 28,693
STATUS OF BUDGETARY RESOURCES
Obligations Incurred:
Reimbursable
Total Obligations Incurred
Unobligated Balances:
Apportioned
Total Unobligated Balances
Total Status of Budgetary Resources
24,473 24,560
24,473 24,560
1,746 4,133
1,746 4,133
$ 26,219 $ 28,693
FY 2010 FY2009
CHANGE IN OBLIGATED BALANCE
Obligated Balance, Net:
Unpaid Obligations, Brought Forward, October 1 $ 2,990 $ 3,659
Adjusted Total 2,990 3,659
Total Unpaid Obligated Balance, Net 2,990 3,659
Obligations Incurred, Net 24,473 24,560
Less: Gross Outlays (25,036) (24,914)
Less: Recoveries ofPrior Year Unpaid Obligations, Actual (315)
Total, Change in Obligated Balance 2,427 2,990
Obligated Balance, Net, End of Period:
Unpaid Obligations 2,427 2,990
Total, Unpaid Obligated Balance, Net, End of Period $ 2,427 $ 2,990
NET OUTLAYS
Net Outlays:
Gross Outlays
Less: Offsetting Collections
Total, Net Outlays
25,036
(22,086)
2,950
24,914
(21,778)
3,136
The accompanying notes are an integral part of these statements.
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EPA's FY 2010 Annual FIFRA Financial Statements
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Environmental Protection Agency
FIFRA
Notes to Financial Statements
(Dollars in Thousands)
Note 1. Summary of Significant Accounting Policies
A. Reporting Entity
The U.S. Environmental Protection Agency (EPA or the 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 FIFRA Revolving Fund was authorized in 1988 by amendments to the Federal Insecticide,
Fungicide and Rodenticide Act (FIFRA). The 1988 amendments mandated the accelerated re-
registration of all products registered prior to November 1, 1984. Congress authorized the
collection of maintenance fees to supplement appropriations to fund re-registration and to fund
expedited processing of pesticides. Maintenance fees are assessed on registrants of pesticide
products. FIFRA also includes provisions for the registration of new pesticides (funded in part
from the PRIA or Pesticide Registration Fund), monitoring the distribution and use of pesticides,
issuing civil or criminal penalties for violations, establishing cooperative agreements with the
states, and certifying training programs for users of restricted chemicals. Appropriated funds,
with the exception of partial funding of registration from Pesticide Registration Service Fees in
the Pesticide Registration Fund, pay for these activities. The FIFRA Revolving Fund is
accounted for under Treasury symbol number 68X4310.
FIFRA may charge some administrative costs directly to the fund and charge the remainder of
the administrative costs to Agency-wide appropriations. Costs funded by Agency-wide
appropriations for FYs 2010 and 2009 were $36,268 thousand and $47,744 thousand,
respectively. 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 Reregi strati on and Expedited Processing (FIFRA) Revolving Fund
as required by the Chief Financial Officers Act of 1990. The reports have been prepared from
the books and records of EPA in accordance with Office of Management and Budget (OMB)
Circular A-136 Financial Reporting Requirements, and EPA's accounting policies which are
summarized in this note. These statements are therefore different from the financial reports also
prepared by EPA pursuant to OMB directives that are used to monitor and control 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 FY 2010 cost factors for calculating
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EPA's FY 2010 Annual FIFRA Financial Statements
14
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imputed costs for Federal civilian benefits programs. These updates impact the Balance Sheet,
Statement of Net Cost, and Statement of Changes in Net Position.
C. Budgets and Budgetary Accounting
Funding of the FIFRA Revolving Fund is provided by fees collected from industry to offset costs
incurred by EPA in carrying out these programs. Each year EPA submits an apportionment
request to OMB based on the anticipated collections of industry fees.
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 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. All
interfund balances and transactions have been eliminated.
E. Revenues and Other Financing Sources
EPA's 2002 appropriations bill extended authority to collect maintenance fees by one year in the
amount of $17 million and the FY 2003 appropriations extended the authority to collect fees
again by one year in the amount of $21.5 million. Passage of the Pesticide Registration
Improvement Act (PRIA) in 2004 extended the authority to collect maintenance fees through FY
2008 (with annual fee amounts at $26 million in FY 2004; $27 million in FY 2005-2006; $21
million in FY 2007; and $15 million in FY 2008). Passage of the Pesticide Registration
Improvement Renewal Act (commonly referred to as PRIA II) in 2007 extended the authority to
collect maintenance fees through FY 2012 (with annual fee amounts set at $22 million each year
from 2008-2012). For FYs 2010 and 2009, the FIFRA Revolving Fund received funding from
maintenance fees collected on existing registered pesticide products and from interest collected
on investments in U.S. Government securities. For FYs 2010 and 2009 revenues were
recognized from fee collections to the extent that expenses are incurred during the fiscal year.
F. Funds with the Treasury
The FIFRA fund deposits receipts and processes disbursements through its operating account
maintained at the U.S. Department of Treasury. Cash funds in excess of immediate needs are
invested in U.S. Government securities.
G. Investments in U. S. Government Securities
Investments in U. S. Government securities are maintained by Treasury (Bureau of Public Debt)
and are reported at amortized cost net of unamortized discounts. Discounts are amortized over
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EPA's FY 2010 Annual FIFRA Financial Statements
15
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the term of the investments and reported as interest income. FIFRA holds 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.
H. General Property, Plant and Equipment
General property, plant and equipment for FIFRA consists of software in development. All
funds (except for the Working Capital Fund) 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 two to 10 years.
I. Accounts Receivable and Interest Receivable
FIFRA receivables are mainly for interest receivable on investments.
J. Liabilities
Liabilities represent the amount of monies or other resources that are 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. For FIFRA, liabilities are liquidated from fee receipts and interest earnings, since
FIFRA receives no appropriation. Liabilities of the Agency, arising from other than contracts
can be abrogated by the Government acting in its sovereign capacity.
K. 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 the
Balance Sheet as a component of "Payroll and Benefits Payable."
L. 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.
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EPA's FY 2010 Annual FIFRA Financial Statements
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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.
M. 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.
Note 2. Fund Balance with Treasury
FY 2010 FY 2009
Revolving Funds: Entity Assets $ 4,174 $ 7,124
Note 3. Other Assets - Advances to Working Capital Fund
FIFRA advances funds to the EPA's Working Capital Fund to pay for computer, postage, and
other administrative support services. As of September 30, 2010 and 2009, funds advanced that
will be applied to future costs as incurred were $92 thousand.
Note 4. General Property, Plant and Equipment
In FY 2009, FIFRA incurred $909 thousand in costs related to the development of information
technology software associated with the "Pesticide Registration Improvement System". No new
assets were acquired in FY 2010.
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EPA's FY 2010 Annual FIFRA Financial Statements
17
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Note 5. Other Liabilities
For FYs 2010 and 2009, 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 2010 FY 2009
Other Intragovernmental Liabilities - Covered by
Budgetary Resources
Employer Contributions - Payroll $ 200 $ 220
Total $ 200" $ 220"
Other Non-Federal Liabilities - Covered by
Budgetary Resources
Advances from Non-Federal Entities
Total
$
$"
7,039
7,039
$
$'
8,190
8,190
Note 6. Payroll and Benefits Payable, non-Federal
FY 2010 FY 2009
Covered by Budgetary Resources
Accrued Payroll Payable to Employees $ 589 $ 636
Withholdings Payable 277 347
Thrift Savings Plan Benefits Payable 32 35
Total $ 898" $ 1,018
Not Covered by Budgetary Resources
Unfunded Annual Leave Liability $ 1,371 $ 1,715
At various periods throughout FYs 2010 and 2009, employees with their associated payroll costs
were transferred from the FIFRA fund to the Environmental Programs and Management (EPM)
appropriation. (See graph in Note 7 below showing trend of hours charged per month to the
FIFRA fund for FYs 2010 and 2009.) These employees were transferred in order to keep
FIFRA's obligations and disbursements within budgetary and cash limits. When resources
became available, the employees charging to FIFRA increased in order to utilize resources as
much as possible. The Agency expects that the practice of transferring employees when
FIFRA's resources are low, and restoring employees when funds become available, will continue
throughout FY 2010 and probably beyond that period.
This process has led to variations between the year-end liabilities for FYs 2010 and 2009. The
liabilities covered by budgetary resources (both intragovernmental and non-Federal) represent
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EPA's FY 2010 Annual FIFRA Financial Statements
18
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unpaid payroll and benefits at year-end. At the end of FY 2010, 149 employees were charging
all or part of their salary and benefits to FIFRA compared to 189 employees for the end of FY
2009. As of September 30, 2010 these liabilities were $200 thousand and $898 thousand for
employer contributions and accrued funded payroll and benefits, as compared to FY 2009's
balances of $220 thousand and one million, respectively.
In contrast, the unfunded annual leave liability is a longer term liability than the funded
liabilities. At various periods throughout FYs 2010 and 2009, approximately 243 and 256
employees, respectively, in total have been under FIFRA's accountability. During the last pay
period of FY 2010, many FIFRA employees had been transferred to EPM so the liability was
computed based on 149 employees charged to FIFRA during the pay period before the last pay
period. Both the September 30, 2010 and 2009 liability balances for unfunded annual leave were
accrued to cover the employees charged to FIFRA close to the end of the fiscal year for a total of
$1,371 thousand and $1,715 thousand, respectively.
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.
During FYs 2010 and 2009, EPA had two appropriations which funded a variety of
programmatic and non-programmatic activities across the Agency, subject to statutory
requirements. The EPM appropriation was created to fund personnel compensation and benefits,
travel, procurement, and contract activities. Transfers of employees from FIFRA to EPM at
various times during these years (see Note 6 above) resulted in an increase in payroll expenses in
EPM, and these costs financed by EPM are reflected as an increase in the Expenses from Other
Appropriations on the Statement of Net Cost. The increased financing from EPM is reported on
the Statement of Changes in Net Position as Income from Other Appropriations.
In terms of hours charged to FIFRA each month, the transfers of employees and their associated
costs during FYs 2010 and 2009 are shown below. Note that a decrease in hours charged to
FIFRA normally signifies an increase in EPM's payroll costs, and vice versa. In addition,
Pesticide registration was separated from FIFRA starting with FY 2004 and Pesticide has its own
set of financial statements.
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EPA's FY 2010 Annual FIFRA Financial Statements
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FIFRA - Total Employee Hours by Month
45,000
40,000
35,000
30,000
x 25,000
2 20,000
15,000
10,000
5,000
f J? J? ^ ^ ^ j? J?
•FY2009 Total Hours
•FY 2010Total Hours
EPM costs related to FIFRA are allocated based on specific EPM program codes which have
been designated for Pesticide activities. As illustrated below, there is no impact on FIFRA's
Statement of Net Position.
Income From Other Expenses From Other Net
Appropriations Appropriations Effect
FY 2010 $
36,268 $
36,268
$
0
FY 2009 $
47,744 $
47,744
$
0
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EPA's FY 2010 Annual FIFRA Financial Statements
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Note 8. Exchange Revenues, Statement of Net Cost
For FYs 2010 and 2009, the exchange revenues reported on the Statement of Net Cost include
both Federal and non-Federal amounts.
Note 9. Intragovernmental Costs and Exchange Revenue
FY 2010 FY 2009
COSTS:
Intragovernmental $ 8,221 $ 6,663
With the Public 17,656 19,551
Expenses from Other Appropriations 36,268 47,744
Total Costs $ 62,145 $ 73,958
REVENUE:
With the Public 23,231 23,716
Total Revenue $ 23,231 $ 23,716
NET COST OF OPERATIONS $ 38,914 $ 50,242
Intragovernmental costs relate to the source of the goods or services not the classification of the
related revenue.
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EPA's FY 2010 Annual FIFRA Financial Statements
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Note 10. Reconciliation of Net Cost of Operations to Budget (formerly the Statement of
Financing)
FY 2010 FY 2009
RESOURCES USED TO FINANCE ACTIVITIES:
Budgetary Resources Obligated
Obligations Incurred $ 24,473 $ 24,560
Less: Spending Authority from Offsetting
Collections and Recoveries (22,086) (22,093)
Obligations, Net of Offsetting Collections $ 2,387 $ 2,467
Other Resources
Imputed Financing Sources $ 1,589 $ 1,577
Income from Other Appropriations (Note 6) 36,268 47,744
Net Other Resources Used to Finance Activities $ 37,857 $ 49,321
Total Resources Used To Finance Activities $ 40,244 $ 51,788
RESOURCES USED TO FINANCE ITEMS
NOT PART OF NET COST OF OPERATIONS
Change in Budgetary Resources Obligated for Goods $ (993) $ (1,016)
Resources that Fund Prior Period Expenses (343) (10)
Resources that Finance Asset Acquisition (822)
Total Resources Used to Finance Items Not Part of the Net Cost of Operations $ (1,336) $ (1,848)
Total Resources Used to Finance the Net
Cost of Operations $ 38,908 $ 49,940
COMPONENTS OF 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 - 453
Other 6_ (151)
Total components of Net Cost of Operations that Require or Generate
Resources in Future Periods 6 302
Net Cost of Operations $ 38,914 $ 50,242
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EPA's FY 2010 Annual FIFRA Financial Statements
22
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Appendix B
Agency's Response to Draft Report
March 1, 2011
MEMORANDUM
SUBJECT: OPP Response to Draft Audit Report: Fiscal Year 2010 and 2009 Financial
Statements for the Pesticides Reregistration and Expedited Processing Fund
FROM: Stephen A. Owens
Assistant Administrator
Barbara Bennett
Chief Financial Officer
TO: Paul C. Curtis, Director
Financial Statement Audit (2422T)
Thank you for the opportunity to respond to the February 18, 2011, Draft Audit Report:
Fiscal Year 2010 and 2009 Financial Statements for the Pesticides Reregistration and Expedited
Processing Fund. We appreciate the Office of Inspector General's (OIG) careful evaluation of
the Office of Pesticide Program's (OPP) financial statements for 2010 and 2009. We also
appreciate your acknowledgement for the second year in a row of OPP's diligence and improved
internal controls.
We concur with the OIG's general conclusions that our financial statements are fairly
presented and free of material misstatement. The protection of human health and the
environment from unreasonable adverse effects of pesticides is a responsibility we take very
seriously and we welcome OIG's input on our work.
We appreciate OIG's work with OPP to improve the effectiveness of our programs, and
we have no additional comments on the Audit Report. If you have any questions concerning our
response you may contact Marty Monell, Deputy Director, Office of Pesticide Programs on 703-
305-7090, or Jim Kearns, Acting Chief, Financial Management and Planning Branch, OPP on
703-308-0420.
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Appendix C
Distribution
Office of the Administrator
Chief Financial Officer
Assistant Administrator for Chemical Safety and Pollution Prevention
Assistant Administrator for Administration and Resources Management
Deputy Chief Financial Officer
Agency Followup Coordinator
General Counsel
Associate Administrator for Congressional and Intragovernmental Relations
Associate Administrator for External Affairs and Environmental Information
Director, Office of Pesticide Programs, Office of Chemical Safety and Pollution Prevention
Deputy Director, Office of Pesticide Programs, Office of Chemical Safety and Pollution Prevention
Senior Advisor, PRIA Implementation, Office of Pesticide Programs, Office of Chemical Safety
and Pollution Prevention
Acting Director, Biopesticides and Pollution Prevention Division, Office of Pesticide Programs,
Office of Chemical Safety and Pollution Prevention
Director, Pesticide Re-Evaluation Division, Office of Pesticide Programs, Office of Chemical
Safety and Pollution Prevention
Director, Registration Division, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
Director, Antimicrobials Division, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
Director, Information Technology and Resources Management Division, Office of Pesticide
Programs, Office of Chemical Safety and Pollution Prevention
Director, Office of Human Resources, Office of Administration and Resources Management
Director, Office of Financial Management, Office of the Chief Financial Officer
Director, Office of Financial Services, Office of the Chief Financial Officer
Director, Reporting and Analysis Staff, Office of the Chief Financial Officer
Director, Financial Policy and Planning Staff, 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, Payroll Management and Outreach Staff, Office of Financial Services,
Office of the Chief Financial Officer
Staff Director, Accountability and Control Staff, Office of Financial Services, Office of the
Chief Financial Officer
Audit Followup Coordinator, Office of the Chief Financial Officer
Audit Followup Coordinator, Office of Chemical Safety and Pollution Prevention
Audit Followup Coordinator, Office of Administration and Resources Management
FIFRA Audit Coordinator, Office of Pesticide Programs, Office of Chemical Safety and
Pollution Prevention
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