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Catalyst for Improving the Environment
Evaluation Report
EPA Must Implement Controls to
Ensure Proper Investigations Are
Conducted at Brownfields Sites
Report No. 11-P-0107
February 14, 2011

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Report Contributors:	Carolyn Copper
Jee Kim
Angela Bennett
Barry Parker
Andre von Hoyer, II
Tina Lovingood
Abbreviations
AAI
All appropriate inquiries
ARRA
American Recovery and Reinvestment Act of 2009
CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act
CFR
Code of Federal Regulations
CNMI
Commonwealth of the Northern Mariana Islands
EP
Environmental professional
EPA
U.S. Environmental Protection Agency
OBLR
Office of Brownfields and Land Revitalization
OGC
Office of General Counsel
OIG
Office of Inspector General
OSWER
Office of Solid Waste and Emergency Response
PO
Project officer
RCRA
Resource Conservation and Recovery Act

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At a Glance
Catalyst for Improving the Environment
Why We Did This Review
We conducted this review to
evaluate how the U.S.
Environmental Protection
Agency (EPA) is ensuring that
Brownfields Assessment
grantees adhere to all
appropriate inquiries (AAI)
requirements.
Background
Grantees awarded EPA
Brownfields Assessment
grants must meet AAI
requirements. AAI is the
process of evaluating a
property for potential
environmental contamination
and assessing potential
liability for contamination. To
ensure a proper investigation,
grantees must conduct AAI in
compliance with federal
regulations put into effect by
EPA on November 1, 2006,
and issue a report on findings.
For further information,
contact our Office of
Congressional, Public Affairs
and Management at
(202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2011/
20110214-11 -P-0107.pdf
EPA Must Implement Controls to Ensure Proper
Investigations Are Conducted at Brownfields Sites
What We Found
EPA does not review AAI reports submitted by grantees to assure that they
comply with federal requirements. Rather, EPA has relied on the environmental
professional conducting the AAI to self-certify that requirements are met. Of the
35 AAI reports we reviewed, from three EPA regions, none contained all the
required documentation elements. This occurred because the Agency does not
have management controls requiring EPA project officers to conduct oversight of
AAI reports. Management controls regarding EPA oversight of Brownfields grants
funded by the American Recovery and Reinvestment Act of 2009 (ARRA) are
also missing. EPA has issued specific guidance and management controls for
ARRA grant activities. However, the guidance and controls do not address
oversight of AAI reports.
Because of EPA"s lack of oversight and reliance on environmental professionals"
self-certifications, AAI investigations not meeting federal requirements may go
undetected by Agency staff. The Office of Inspector General found instances of
noncompliance that were not detected by Agency staff. Improper AAI
investigations introduce risk that the environmental conditions of a property have
not been properly or adequately assessed, which may lead to improper decisions
about appropriate uses of brownfields properties. Ultimately, threats to human
health and the environment could go unrecognized.
Noncompliant AAI investigations may result in future grant denials and possible
government reimbursement. The AAI reports the OIG reviewed were generated
from $2.14 million in grant awards. If conditions merit, EPA is authorized to take
back funds from noncompliant grantees. The OIG questions the value of the
reports we reviewed.
What We Recommend
We recommend that EPA establish accountability for compliant AAI reports, to
include those conducted under ARRA Brownfields grants; develop a plan to
review AAI reports to determine the reports" compliance with AAI documentation
requirements; and establish criteria to determine whether noncompliant grantees
should return federal grant money. The Agency did not clearly agree or disagree
with OIG recommendations. In its final response to the report, the Agency needs
to agree or disagree with recommendations and, as appropriate, provide a
corrective action plan to address the recommendations.

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# o \
I.® J
THE INSPECTOR GENERAL
February 14, 2011
MEMORANDUM
SUBJECT:	EPA Must Implement Controls to Ensure Proper Investigations
Are Conducted at Brownfields Sites
Report No. ll-P-0107
FROM:	Arthur A. Elkins, Jr
Inspector General
TO:	Mathy Stanislaus
Assistant Administrator
Office of Solid Waste and Emergency Response
This is our report on the subject evaluation conducted by the Office of Inspector General (OIG)
of the U.S. Environmental Protection Agency (EPA). This report contains the findings from our
evaluation of Brownfields Assessment grantees and their adherence to all appropriate inquiries
requirements and corrective actions that 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 resolution
procedures.
The estimated cost of this report, calculated by multiplying the project's staff days by the
applicable daily full cost billing rates in effect at the time, is $519,875.
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response to this
report within 90 calendar days of the report date. Your 90-day response should include
agreement or disagreement with OIG recommendations and appropriate corrective actions, along
with estimated or actual milestone completion dates for all recommendations. Your 90-day
response will be posted on the OIG's public website, along with our comments on your response.
Your response should be provided in an Adobe PDF file that complies with the accessibility
requirements of section 508 of the Rehabilitation Act of 1973, as amended. 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.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460

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If you or your staff have any questions regarding this report, please contact Wade Najjum,
Assistant Inspector General, at (202) 566-0832 or naiium.wade@epa.gov; or Carolyn Copper,
Director for Program Evaluation, Hazardous Waste Issues, at (202) 566-0829 or
copper.carolyn@epa.gov.

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EPA Must Implement Controls to Ensure Proper
Investigations Are Conducted at Brownfields Sites
11-P-0107
Table of C
Purpose		1
Background		1
Noteworthy Achievements		2
Scope and Methodology		3
Results of Review 		5
AAI Reports Do Not Meet Documentation Standards for Investigations		5
EPA Does Not Review AAI Reports for Compliance with Federal Rules 		7
EPA Lacks Controls to Ensure AAI Requirements Are Met for ARRA Work		7
Conclusions		7
Recommendations 		8
Agency Response and OIG Evaluation		8
Status of Recommendations and Potential Monetary Benefits		12
Appendices
A OSWER Response to Draft Report		13
B Distribution		19

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Purpose
The purpose of this Office of Inspector General (OIG) review was to evaluate
how the U.S. Environmental Protection Agency (EPA) is ensuring that
Brownfields Assessment grantees adhere to all appropriate inquiries (AAI)
requirements. EPA Brownfields Assessment grantees must meet AAI
requirements to comply with grant terms and conditions and federal regulations.
We sought to answer the question, "Are Brownfields grantees meeting EPA's
AAI Rule requirements to investigate and disclose1 environmental conditions and
are purchasers/owners maintaining continuing obligations2 at brownfield
properties?"
Due to priority issues identified during the course of our review, we did not
complete an evaluation of continuing obligations at brownfields properties.
Therefore, those issues are not addressed in this report.
Background
Brownfields are real property, the expansion, redevelopment, or reuse of which
may be complicated by the presence or potential presence of a hazardous
substance, pollutant, or contaminant. EPA's Brownfields Program awards grants
for the assessment and cleanup of these properties. Assessment grants provide
funding to inventory, characterize, assess, and conduct planning and community
involvement activities related to brownfields properties. AAI, also called
"environmental due diligence," is the process of evaluating a property for
potential environmental contamination. AAIs also assess the potential liability for
any contamination present at the property. Parties awarded federal Brownfields
Assessment grants must conduct AAIs in accordance with federal law and
regulations to obtain certain landowner liability protections under Superfund.3
From 2002 through 2009, EPA's Brownfields Program awarded 1,354 assessment
grants totaling $306.8 million. This total includes $25.8 million in American
Recovery and Reinvestment Act of 2009 (ARRA) funds.
In November 2006, EPA put into effect final regulations, or a rule, establishing
the federal requirements for conducting and documenting proper AAI
investigations. The AAI investigation seeks to identify potential environmental
conditions or problems at a property. It must involve reviews of historical records,
interviews with persons knowledgeable of the property, and visual inspection of a
property.
1	Title 40 Code of Federal Regulations section 312.21(c)(1) requires environmental professionals to document, "An
opinion as to whether the inquiry has identified conditions indicative of releases or threatened releases of
hazardous substances." The OIG considers this a disclosure of environmental conditions, where they exist.
2	AAI reports do not speak to continuing obligations. This is because it applies after a property is purchased.
3	Specifically, the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA.
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Grantees are required to ensure that the investigation is performed in accordance
with EPA's final rule. They may follow the standards set forth in ASTM
International's E1527-05 Standard Practice for Environmental Site Assessments:
Phase I Environmental Site Assessment Process. This ASTM standard and EPA's
final rule both require that an environmental professional (EP) must conduct or
oversee the AAI investigation. Grantees hire EPs to undertake the investigations.
To ensure the quality of all appropriate inquiries, the final rule includes specific
educational and experience requirements for an EP. EPA's final rule states that
the EP must document results in a written report and include:
•	An opinion statement regarding the identification of conditions
indicative of releases or threatened releases of hazardous substances
on, at, or to the subject property
•	An identification of data gaps that may affect the ability of the EP to
identify conditions indicative of releases or threatened releases of
hazardous substances on, at, or to the subject property, as well as
significance of the gaps
•	Qualifications and signature of the EP, including qualifications
statement
EPA's Office of Brownfields and Land Revitalization (OBLR) is the national
program office and manager of the Brownfields Program. OBLR is responsible
for awarding grants to qualified entities through a competitive process and
establishing national guidance for the program. Within each of the 10 EPA
regional offices, EPA Brownfields project officers (POs) have responsibility for
oversight and monitoring compliance with Brownfields grant terms and
conditions awarded to grantees in their jurisdictions.
Noteworthy Achievements
OBLR has provided states, federal agencies, local governments, nonprofits,
industry groups, and the private sector with AAI and continuing obligations
training. In November 2009, EPA provided training opportunities at the 2009
National Brownfields Conference. Specific training sessions at the conference
included "CERCLA Liability and All Appropriate Inquiry Training for Tribes"
and "Liability Protection: Progress Toward an ASTM Continuing Obligations
Standard." OBLR has issued several publicly available fact sheets on AAI
requirements. In March 2010, OBLR held a listening session on the AAI rule so
that OBLR could listen to the views of stakeholders and the general public on the
current AAI standards and practices.
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Scope and Methodology
We conducted our review in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the
evaluation to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions. We believe that the evidence obtained provides
a reasonable basis for our findings and conclusions based on our evaluation
objectives. We performed our review from January through October 2010.
We conducted our review in EPA headquarters, Regions 1 and 5, and two U.S.
territories located in EPA Region 2 (Puerto Rico) and Region 9 (Commonwealth
of the Northern Mariana Islands, or CNMI). We selected Regions 1 and 5 because
of the high dollar value of grants awarded to these regions from fiscal years 2002
through 2008. These regions also had a high number of grants per PO (high
workload), which we believed could impact grant oversight opportunities. We
selected the territory locations based on the potential for lower levels of EPA
grant oversight and limited access to resources as compared with locations within
the continental United States. We were unable to review AAI reports from Puerto
Rico (Region 2) because its grantees had not yet completed any AAI reports.
The scope of AAI reports we reviewed included only those that were to adhere to
EPA's final November 2006 requirements. From Regions 1, 5, and 9 (CNMI), we
selected a total of eight community-wide Assessment grants. Community-wide
Assessment grants address more than one site within a community. Seven grants
from Regions 1 and 5 were randomly selected, and one grant from CNMI was
judgmentally selected. These eight Assessment grants represented $2.14 million
in grant awards and generated 35 AAI reports. Table 1 shows the regional
distribution of grants and AAI reports we selected and reviewed.
Table 1: Regional distribution of reports and grants OIG reviewed

No. of AAI reports
No. of grants
Region 1
16
5
Region 5
10
2
Region 9
9
1
Total
35
8
Source: OIG analysis.
We visited Regions 1 and 5 and interviewed POs and Brownfields Program
managers about EPA's management controls and their grants management. We
also interviewed the PO and manager responsible for the Region 9 CNMI grant.
We reviewed EPA's Guidance to Recipients for Implementing the Brownfields
Assessment, Revolving Loan Fund (RLF) & RLF Supplemental, Cleanup and Job
Training Cooperative Agreements Awarded Under the American Recovery and
Reinvestment Act of2009 and interviewed POs in Regions 1 and 5 to identify
EPA's management controls for AAI reports funded by ARRA grants.
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All of the selected AAI reports stated that the EPs conducted the AAI
investigation in compliance with the ASTM standard, which is allowed under
EPA rules. We reviewed the reports for the following AAI final rule and ASTM4
standard documentation requirements:
1.	EP Qualification Statement [requirement of FINAL RULE Title 40
Code of Federal Regulations (CFR) section 312.21(d)]
As required by Title 40 CFR section 312.21(d), the report shall include the
following statements of the EP(s) responsible for conducting the AAI
assessment and preparation of the report.
[I, We] declare that, to the best of [my, our] professional
knowledge and belief, [I, we] meet the definition of Environmental
Professional as defined in §312.10 of this part. [I, We] have the
specific qualifications based on education, training, and experience
to assess a property of the nature, history, and setting of the subject
property. [I, We] have developed and performed the all appropriate
inquiries in conformance with the standards and practices set forth
in 40 CFR Part 312.
2.	EP Signature(s) [requirement of FINAL RULE Title 40 CFR section
312.21(d)]
The EP(s) responsible for the AAI assessment shall sign the report.
3.	EP Statement on Data Gaps [requirement of FINAL RULE Title 40
CFR section 312.21(c)(2)]
The report shall identify and comment on significant data gaps5 that affect
the ability of the EP to identify conditions indicative of release or
threatened release.
4.	EP Opinion Statement (in Conclusion section) [requirement of ASTM
El527-05 sections 12.8, 12.8.1, 12.8.2]
The report shall include a conclusion section that summarizes all
recognized environmental conditions connected with the property. The
report shall include one of the following statements:
4	Compliance with ASTM requirements is included because all 35 reports the OIG reviewed sought to comply with
the AAI requirements using the ASTM standard. The AAI final rule does not address whether the AAI rule or the
ASTM standard provide the compliance standard, and EPA has not issued a legal opinion on this matter.
5	In 2007 and 2009, Brownfields Program staff provided AAI training information stating, "no discussion of data
gaps" was a "common problem" in 2009 and "deficiency" in AAI reports in 2007. The 2009 training information
also provided that under the final rule, "documentation of data gaps is no longer discretionary."
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We have performed a Phase I Environmental Site Assessment in
conformance with the scope and limitations of ASTM Practice E
1527 of [,insert address or legal description], the property. Any
exceptions to, or deletions from, this practice are described in
Section [ ] of this report. This assessment has revealed no evidence
of recognized environmental conditions in connection with the
property.
or
We have performed a Phase I Environmental Site Assessment in
conformance with the scope and limitations of ASTM Practice E
1527 of [,insert address or legal description], the property. Any
exceptions to, or deletions from, this practice are described in
Section [ ] of this report. This assessment has revealed no evidence
of recognized environmental conditions in connection with the
property except for the following: (list).
Results of Review
EPA does not review AAI reports to assure the reports meet EPA's AAI final rule
requirements. None of the 35 AAI reports we reviewed, generated from $2.14
million in grant awards, contained all the required elements to document that AAI
was done in compliance with federal requirements. This occurred because the
Agency does not have management controls requiring EPA POs to conduct
oversight of AAI reports to assure they meet federal documentation requirements.
The POs that we interviewed do not conduct oversight of AAI reports to assure
compliance with federal requirements. EPA relies on EPs to self-certify
compliance with federal AAI requirements. Missing controls for AAI report
review also apply to EPA oversight of Brownfields grants funded by ARRA.
According to EPA, grantees who do not comply with federal requirements for
proper AAI investigations may be ineligible for future grants. Improper AAI
investigations create risk that the environmental conditions of a property have not
been properly or adequately assessed. Consequently, decisions about uses of
redeveloped or reused brownfields properties may be based on improper
assessments. Ultimately, threats to human health and the environment could go
unrecognized.
AAI Reports Do Not Meet Documentation Standards for
Investigations
None of the 35 AAI reports we reviewed contained all the required elements for
documenting and reporting that AAI investigations meet federal requirements.
There was variability in the level of noncompliance in individual reports.
However, all the reports were noncompliant with some aspect of the requirements
for proper documentation of an AAI investigation. Specifically:
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1.	EP Qualifications Statement: All 35 reports failed to include the
required statement to certify the qualifications of the EP. 16 of the 35
reports (46 percent) included deviations from the required qualifications
statement. Among the 16, either no statement was included, or the
required statement was abbreviated or modified. The remaining 19 reports
(54 percent) generally contained all three required sentences of the
statement, but included wording that was inconsistent. For example,
several statements used the terms "we" and "our" when only one EP
signed the qualifications statement.
2.	EP Signature(s): Nine of the 35 reports (26 percent) were not signed
by the responsible EP.
3.	EP Statement on Data Gaps: Seven of the 35 reports (20 percent) did
not include a statement on data gaps.
4.	EP Opinion Statement (in Conclusion section): All 35 reports failed
to include the required EP opinion statement in the Conclusion section. Of
this number, 33 reports, or 94 percent, included deviations from the
required opinion statement, e.g., missing sentences, abbreviated or
modified sentences, replacing "I" with the name of the environmental
firm, or stating "general" conformance. The remaining two reports
generally contained all parts of the statement, but also included some
minor deviations, e.g., rewording or additional wording and omissions that
do not alter the meaning of the statement.
Modifications and departures from use of required language for EP qualification
statements and signatures fails to assure that a qualified EP conducted or oversaw
the site investigation as required. The discrepancies in the opinion statements and
missing statements on data gaps encountered in the investigation fail to assure that
the work performed was sufficient to identify environmental conditions at the site.
These discrepancies introduce a risk that potential threats to human health and the
environment may fail to be recognized.
If conditions merit, EPA can take back funds from noncompliant grantees. We
question the value of the reports generated from the $2.14 million in federal grant
awards. EPA may, under Title 40 CFR section 31.43(a)(l)-(3), remedy materially
noncompliant cooperative agreement terms and conditions by any or all of the
following:
•	Temporarily withholding payments
•	Disallowing all or part of cost activities
•	Initiating a whole or partial suspension or termination
EPA may also, under CERCLA section 104(k)(7)(C) and the cooperative
agreement terms and conditions, take such actions as:
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•	Terminating the grant
•	Requiring the grantee to repay funds received
•	Pursuing other legal remedies available to EPA
EPA Does Not Review AAI Reports for Compliance with Federal
Rules
EPA does not review AAI reports for requirements, and it has no requirements or
guidance for conducting oversight of AAI reports. EPA relies on self-certification
by an EP to ensure compliance, consistent with the intent and requirements of the
AAI rule. The rule requires that AAI reports include a declaration (signed by the
EP) that activities performed by, or under the supervision of, the EP were
performed in conformance with the rule. EPA's AAI rule does not require that
EPA POs review AAI reports. OBLR's Assessment Grant Administrative Manual
does not describe duties for POs in AAI report review. An OBLR manager stated,
"as a general rule, nobody" reads through the AAI reports. This manager also
stated that OBLR is not responsible for oversight of AAI reports. POs stated that
they do not review AAI reports for requirements because such reviews are not
their responsibility, but rather are the responsibility of either the states or EPs.
The results of our review demonstrate shortcomings in EPA's approach of relying
on self-certification to ensure that federal requirements for AAI investigations are
met and assuming that EPs are adhering to their responsibilities.
EPA Lacks Controls to Ensure AAI Requirements Are Met for ARRA
Work
In fiscal year 2009, EPA's Brownfields Program awarded 89 Assessment grants,
totaling $25.8 million, from ARRA funds.6 EPA has issued guidance and
implemented management controls for ARRA funds. ARRA guidance directs that
funds are spent and accounted for properly and efficiently, and that some results
and outcomes are timely and accurately documented. EPA's Brownfields
Recovery Act guidance requires additional reporting steps for ARRA grantees.
Steps include detailing progress on interim measures such as reporting on when
assessments start and loan/subgrants are signed. However, EPA does not have
guidance, and has not implemented new controls, to assure that deliverables from
ARRA-funded Brownfields grants, such as AAI reports, adhere to federal
requirements. The shortcomings we found in the non-ARRA AAI reports we
reviewed could extend to the AAI reports on ARRA-funded Brownfields grants.
Conclusions
EPA's lack of oversight and reliance on EPs' self-certifications creates risk that
AAI investigations not meeting federal requirements may go undetected by
6 This information can be found at http://www.epa.gov/brownfields/grant annpunce/recovact5509.pdf.
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Agency staff. Our findings demonstrate that a sample of AAI reports, generated
from $2.14 million in federal grant awards, did not meet federal requirements for
documenting that a proper AAI investigation was conducted. These instances of
noncompliance went undetected. Noncompliant AAI investigations may result in
future grant denials and possible government reimbursement. Improper AAI
investigations introduce risk that the environmental conditions of a property have
not been properly or adequately assessed. Consequently, decisions about
appropriate uses of redeveloped or reused brownfields properties may be based on
improper assessments. Ultimately, threats to human health and the environment
could go unrecognized. EPA should properly account for and award federal grant
funds to rule-abiding grantees to demonstrate its environmental protection
priorities and values, and to promote compliance with federal grant requirements.
Recommendations
We recommend that the Assistant Administrator for Solid Waste and Emergency
Response:
1.	Establish EPA accountability for rule-compliant AAI reports that are
funded by Brownfields Assessment grants, including ARRA-funded
AAI reports.
2.	Develop a plan to review post-final-rule AAI reports to determine the
reports' compliance with AAI documentation requirements.
3.	Establish EPA criteria for disallowing federal costs for noncompliant
AAI reports produced under Brownfields Assessment grants and take
action to disallow costs as appropriate.
Agency Response and OIG Evaluation
The Office of Solid Waste and Emergency Response (OSWER) provided Agency
comments. The Agency's comments included legal analysis provided by the
Office of General Counsel (OGC). A summary of the legal comments was
included in OSWER's comments. We reviewed the Agency's comments and
made changes to the report, where appropriate. Appendix A provides the full text
of OSWER's comments and the OIG's response. The OGC legal analysis is not
included in the report because it was not designated for distribution outside of
EPA. The Agency informed the OIG that it plans to issue the legal analysis in
their 90-day response to the final report.
OSWER's response to OIG recommendations 1, 2, and 3 was incomplete.
OSWER stated a "willingness to work" with the OIG in addressing the
recommendations but did not provide corrective action plans and milestone
dates. In its 90-day response to this report, OSWER needs to agree or disagree
with recommendations and provide appropriate corrective action plans and
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estimated or actual milestone completion dates for recommendations 1, 2, and
3. In a meeting prior to issuing this final report, we informed the Agency of
our evaluation of its response and the additional information it needs to
provide us in its 90-day response.
In its comments, OSWER requested that the following sections of the report
be deleted, modified, or clarified:
•	OSWER requested that the OIG clarify that "self certification" by
an EP does not require EPs to certify the results of the AAI. We
did not make this change because our report does not state that EPs
certify the "results of the AAI investigation." Rather, our finding
is that EPA relies on the self-certification of EPs to ensure
compliance with federal AAI requirements.
•	OSWER requested that we remove references in our report to "a
disclosure requirement regarding environmental conditions at a site"
and "continuing obligations." OSWER stated that, "there is nothing in
the AAI rule that requires disclosure of environmental conditions of a
property." First, our report does not state a requirement to disclose
"environmental conditions of a property." Second, our report contains
one reference to "disclose" in this context. Specifically, in stating the
purpose of our work (see OIG report page 1), we ask, "Are
Brownfields grantees meeting EPA's AAI Rule requirements to
investigate and disclose environmental conditions and are
purchasers/owners maintaining continuing obligations at brownfield
properties?" Also, we note that Title 40 CFR section 3 12.1(d)
"Disclosure obligations," states, "None of the requirements of this part
limits or expands disclosure obligations under any federal, state, tribal,
or local law, including the requirements under CERCLA sections
101(40)(c) and 107(q)(l)(A)(vii) requiring persons, including
environmental professionals, to provide all legally required notices
with respect to the discovery of releases of hazardous substances. It is
the obligation of each person, including environmental professionals,
conducting the inquiry to determine his or her respective disclosure
obligations under federal, state, tribal, and local law and to comply
with such disclosure requirements." Also, Title 40 CFR section
312.2 l(c)( 1) requires EPs to document, "An opinion as to whether the
inquiry has identified conditions indicative of releases or threatened
releases of hazardous substances." This requirement for EPs to
document an opinion on environmental conditions can be a disclosure
of environmental conditions where they exist. We also disagree with
OSWER's comment that we change OIG references to "continuing
obligations." We are aware that continuing obligations are a separate
issue from AAI. Nothing in our report states otherwise. Further, the
OIG report states that the OIG did not evaluate continuing obligations
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issues. However, we clarified references to continuing obligations in
the final report to avoid potential confusion.
•	OSWER requested that we revise our report to clarify that
references to AAI reports including an assessment of potential
liability for any contamination present at a site may not be
applicable in all instances. The frequency with which potential
liability assessments are included in AAI reports was not a focus
of the OIG's work. Therefore, we do not have independent
information to support such a statement.
•	OSWER requested that the OIG report clarify that, in many
instances, Brownfields Assessment grantees will not be purchasing
or owning the subject property and, as such, liability protection as
a bona fide prospective purchaser, an innocent landowner, or a
contiguous property owner would not be applicable. The OIG's
work did not focus on how frequently liability protections would
be needed for Brownfields grantees. Therefore, we do not have
independent information to support such a statement.
•	OSWER also requested that we address our references to specific
language being required for the EP opinion statements. OSWER's
concern is that specific language is not a requirement under EPA's
AAI final rule. All 35 AAI reports we reviewed sought to comply
with the AAI requirements using the ASTM standard, which is
allowed. The final rule does not address whether the AAI rule
requirements or the ASTM standard serve as the compliance
standard when a grantee has selected ASTM, and EPA has not
issued a legal opinion on this matter. The OIG was diligent in
clearly identifying AAI and ASTM standards used in evaluating
the reports we reviewed and making the distinction between these
standards in our draft report. In the final report, we added language
to clarify why we evaluated the ASTM requirement.
•	OSWER also requested that we clarify that data gaps must only be
addressed in AAI reports when the lack of information precludes
the EP from reaching necessary conclusions regarding conditions
indicative of releases or threatened releases. The specific reporting
requirement related to data gaps is provided in Title 40 CFR
section 312.21(c)(2) of the final rule, and requires EPs to identify
data gaps. The OIG's finding on data gaps is based on EPA
Brownfields Program communications in 2007 and 2009 training
information that "no discussion of data gaps" is a "common
problem"(2009) and "deficiency"(2007) in AAI reports. The 2009
training information also provided that under the final rule,
"documentation of data gaps is no longer discretionary." In our
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opinion, the Brownfields Program has communicated an
expectation that the data gaps requirement includes stating that
there were no data gaps when that is the case. We have clarified
this issue in our final report.
Finally, EPA's comments stated, "Unlike cleanup and remediation activity under
Superfund, RCRA [Resource Conservation and Recovery Act] or emergency
response authorities, EPA does not directly supervise assessment or cleanup
activity funded under our Brownfields Cooperative Agreements. Rather, those
activities are supervised under the appropriate State or Tribal Response Program,
which would ensure that the activity is completed properly and is protective of
human health and the environment." Based on our work, we believe this statement
could be wrongly interpreted to mean that State and/or Tribal Response Programs
supervise AAI work. The information we obtained from EPA's Brownfields
Program staff shows that EPA regional Brownfields POs are responsible for
verifying with the grantee that AAI rule was met.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Claimed
Amount
Ag reed-To
Amount
Establish EPA accountability for rule-compliant AAI
reports that are funded by Brownfields Assessment
grants, including ARRA-funded AAI reports.
Develop a plan to review post-final-rule AAI reports
to determine the reports' compliance with AAI
documentation requirements.
Establish EPA criteria for disallowing federal costs
for noncompliant AAI reports produced under
Brownfields Assessment grants and take action to
disallow costs as appropriate.
Assistant Administrator for
Solid Waste and
Emergency Response
Assistant Administrator for
Solid Waste and
Emergency Response
Assistant Administrator for
Solid Waste and
Emergency Response
1 0 = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is undecided with resolution efforts in progress
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Appendix A
OSWER Response to Draft Report
MEMORANDUM
SUBJECT: OIG Draft Evaluation Report: EPA Must Implement Controls to Ensure Proper
Investigations are Conducted at Brownfields Sites
FROM: Mathy Stanislaus
Assistant Administrator
TO:	Arthur Elkins, Jr.
Inspector General
Thank you for the opportunity to review and comment on the draft Office of Inspector
General (OIG) report entitled "EPA Must Implement Controls to Ensure Proper Investigations
Are Conducted at Brownfields Sites." We appreciate the Office of Inspector General's efforts in
evaluating grantee compliance with certain requirements related to the conduct of All
Appropriate Inquiries (AAI), and we have appreciated the opportunities to discuss this with OIG.
As was discussed during the recent meeting between our Offices, the Office of General
Counsel (OGC) has identified several aspects of the draft report that warrant further examination
by OIG, and I have attached their legal analysis of these issues.
OIG Response 1: The OGC legal analysis is not included in our report because it was not
designated for distribution outside of EPA.
If you or OIG legal counsel would like to discuss these, OGC has indicated its willingness to do
so. Similarly, we would appreciate the opportunity to discuss with you further the general
statements in the draft report regarding disallowing costs related to specific deficiencies in AAI
reports or documentation.
OIG Response 2: OIG staff met with Agency staff to discuss these comments and the OGC
analysis on January 10, 2011.
We agree with the positions set forth in OGC's memorandum, which help place the AAI
rule in to the proper context in relation to the nature of brownfields funded assessments and
cleanups. Unlike cleanup and remediation activity under Superfund, RCRA or emergency
response authorities, EPA does not directly supervise assessment or cleanup activity funded
under our Brownfields Cooperative Agreements. Rather, those activities are supervised under
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the appropriate State or Tribal Response Program, which would ensure that the activity is
completed properly and is protective of human health and the environment
OIG Response 3: We disagree with the above paragraph as it applies to AAI investigations. The
information we obtained from EPA's Brownfields Program staff shows that EPA regional
Brownfields POs are responsible for verifying with the grantee that AAI rule was met. If State
and Tribal Response Programs are to be supervising AAI activities, that is not a common
understanding in the Brownfields Program.
As is set forth in the attached opinion, we recommend that the following sections of the
Report be deleted, modified or clarified: (1) The references to "self certification" by
environmental professionals should clarify that the AAI rule does not require the environmental
professional to certify the results of the AAI when signing the report. Rather, the environmental
profession must sign the report to document that the signatory meets the requirements of an
environmental professional, and that the activities performed were done in conformance with the
federal requirements. The environmental professional is not "certifying" the environmental
conditions at a property;
OIG Response 4: The Agency has mischaracterized the OIG statements pertaining to "self-
certification." The OIG report does not state that EPs certify "the results of the AAI
investigation," or the "environmental conditions of a property." Rather, the OIG's stated finding
is that EPA relies on the self-certification of EPs to ensure compliance with federal AAI
requirements. The OIG strives to communicate in plain language. In plain language, the
declarations that the AAI rule requires EPs to include and sign can also be considered self-
certifications. Specifically, Title 40 CFR section 312.21(d) states:
The environmental professional must place the following statements in the written
document identified in paragraph (c) of this section and sign the document:
[I, We] declare that, to the best of [my, our] professional knowledge and belief, [I,
we] meet the definition of Environmental Professional as defined in § 312.10 of
this part.
[I, We] have the specific qualifications based on education, training, and
experience to assess a property of the nature, history, and setting of the subject
property. [I, We] have developed and performed the all appropriate inquiries in
conformance with the standards and practices set forth in 40 CFR Part 312.
(2) references to a disclosure requirement regarding environmental conditions at a site. There is
nothing in the AAI rule that requires disclosure of environmental conditions of a property;
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OIG Response 5: Our report does not state a requirement to disclose "environmental conditions
of a property." In addition, our report contains one reference to "disclose" in this context.
Specifically, in disclosing the purpose of our work (see OIG report page 1), we ask, "Are
Brownfields grantees meeting EPA's AAI Rule requirements to investigate and disclose
environmental conditions and are purchasers/owners maintaining continuing obligations at
brownfield properties?" Title 40 CFR section 312.21(c)(1) requires EPs to document, "An
opinion as to whether the inquiry has identified conditions indicative of releases or threatened
releases of hazardous substances." We believe this requirement for EPs to document an opinion
on environmental conditions can be a disclosure of environmental conditions, where they exist.
Also, Title 40 CFR section 312.1(d) "Disclosure obligations," states, "None of the requirements
of this part limits or expands disclosure obligations under any federal, state, tribal, or local law,
including the requirements under CERCLA sections 101(40)(c) and 107(q)(l)(A)(vii) requiring
persons, including environmental professionals, to provide all legally required notices with
respect to the discovery of releases of hazardous substances. It is the obligation of each person,
including environmental professionals, conducting the inquiry to determine his or her respective
disclosure obligations under federal, state, tribal, and local law and to comply with such
disclosure requirements."
(3) references to the necessity for AAI reports to address "continuing obligations" at brownfield
sites. "Continuing obligations" is a phrase used by EPA to describe required activities to
maintain liability protection, and an AAI report would not speak to this;
OIG Response 6: The OIG is aware that the issue of continuing obligations is separate from
AAI. Nothing in the OIG report states otherwise. When the OIG announced its work in this area,
we had plans to look at how continuing obligations requirements were being met. However, the
OIG stated in its draft report to OSWER, "Due to priority issues identified during the course of
our review, we did not complete an evaluation of continuing obligations at brownfield properties
Therefore, those issues are not addressed in this report." This statement remains in this final
report. We also added clarifying references to continuing obligations in the final report to avoid
potential confusion.
(4) Clarify that references to AAI reports including an assessment of potential liability for any
contamination present at a site may not be applicable in all instances. AAI reports can be
relevant to liability, because they provide an assessment of site conditions, including the
presence of contamination. The AAI rule does not, however, require those conducting AAI to
undertake analysis or make determinations regarding the liability of any party;
OIG Response 7: The frequency with which potential liability assessments are included in AAI
reports was not a focus of the OIG's work. Therefore we do not have independent information to
support such a statement.
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(5) clarification that, in many instances, brownfields assessment grantees will not be purchasing
or owning the subject property and, as such, liability protection as a bona fide prospective
purchaser, an innocent landowner, or a contiguous property owner would not be applicable;
OIG Response 8: The OIG's work did not focus on how frequently liability protections would
be needed for Brownfields grantees. Therefore, we do not have independent information to
support such a statement.
(6) references to specific language being required for the environmental professional opinion
statement. There is not a requirement that prescribed wording or language be used in the opinion
statement;
OIG Response 9: This comment reflects a concern associated with the fact that the AAI rule
does not require the opinion statement requirement per the ASTM standard.
The OIG's report clearly states that the specific wording used in our evaluation of the opinion
statements is an ASTM requirement. The AAI regulation, which allows use of either AAI or
ASTM standards (see Title 40 CFR section 312.11, "References"), states:
The following industry standards may be used to comply with the requirements set
forthin §§ 312.23 through 312.31:
(a) The procedures of ASTM International Standard El 527-05 entitled
"Standard Practice for Environmental Site Assessments: Phase I Environmental
Site Assessment Process."
All 35 reports that the OIG reviewed sought to comply with the AAI requirements using the
ASTM standard. The final rule does not address whether the AAI rule or the ASTM standard
provides the compliance standard, and EPA has not issued a legal opinion on this matter. The
OIG clearly designated in its draft and final reports the items that specifically pertain to the
AAI and ASTM standard. The OIG added additional clarification language on why the
ASTM standard requirement was evaluated in the final report.
(7) clarification that "data gaps" must only be addressed when the lack of information precludes
the environmental professional from reaching necessary conclusions regarding conditions
indicative of releases or threatened releases. If conclusions can be reached in the absence of
data, the AAI report would not need to address these data gaps.
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OIG Response 10: The specific reporting requirement related to data gaps is provided in Title 40
CFR section 312.21(c)(2) of the final rule. Specifically:
II. An identification of data gaps (as defined in §312.10) in the information developed as
part of the inquiry that affect the ability of the environmental professional to identify
conditions indicative of releases or threatened releases of hazardous substances.. .on, at,
in, or to the subject property and, comments regarding the significance of these data gaps.
Further, EPA's Brownfields Program communicated in 2007 and 2009 training information that
"no discussion of data gaps" is a "common problem" in 2009 and "deficiency" in AAI reports in
2007. The 2009 training information also provided that under the final rule, "documentation of
data gaps is no longer discretionary." In our opinion, this represents an EPA interpretation that
the data gaps requirement includes stating that there were no data gaps when that is the case. We
have clarified this issue in the final report.
Additionally, the draft report recommended that we "establish EPA criteria for
disallowing federal costs for noncompliant AAI reports produced under Brownfields site
assessment grants and take action to disallow cost as appropriate." While OSWER does not
want to suggest to the public that failure to meet every technical requirement of AAI might
require that costs be disallowed, we agree that we should work with OIG to establish appropriate
criteria, to alert grantees to potential bases for disallowance of costs. We look forward to
working with your staff regarding this recommendation.
OIG Response 11: In its 90-day response, OSWER needs to provide corrective actions plan
and estimated or actual milestone completion dates for OIG recommendation 3.
Finally, the draft report identified deficiencies in the consistency and completeness of
some of the documentation reviewed in the Regions' project files. In particular, the report
expresses a concern that some AAI reports do not include a signature of a qualified
Environmental Professional, and may not include the required statements regarding the
qualifications of the person signing the report or the stipulation that the AAI investigation was
conducted in compliance with the requirements established under CERCLA and included in the
AAI final rule. In response to these findings, OBLR will develop and distribute, and conduct
appropriate outreach and training, to Brownfields Assessment Grantees and to Regional
Brownfields program staff additional guidance related to the rule's documentation requirements,
and we will work with your Office on the specifics of this corrective action.
OIG Response 12: OSWER has not clearly responded to OIG recommendations 1 and 2. In
its 90-day response, OSWER needs to state concurrence/nonconcurrence with these
recommendations and provide a corrective action plan, including estimated or actual
milestone completion dates for these recommendations.
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Again, thank you for the opportunity to provide our comments and to transmit the
Office of General Counsel's comments and input. We remain available to discuss these
items further, and to develop appropriate action items as noted above.
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Distribution
Office of the Administrator
Assistant Administrator for Solid Waste and Emergency Response
Director, Office of Brownfields and Land Revitalization
Regional Administrator, Region 1
Regional Administrator, Region 2
Regional Administrator, Region 5
Regional Administrator, Region 9
Agency Followup Official (the CFO)
Agency Followup Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Audit Followup Coordinator, Office of Solid Waste and Emergency Response
Audit Followup Coordinator, Region 1
Audit Followup Coordinator, Region 2
Audit Followup Coordinator, Region 5
Audit Followup Coordinator, Region 9
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