Office of Inspector General

U.S. Environmental Protection Agency

At a Glance

23-F-0005
December 29, 2022

Why We Did This Audit

We performed this audit pursuant
to the Frank R. Lautenberg
Chemical Safety for the 21st
Century Act, which amends the
Toxic Substances Control Act.
The Lautenberg Act requires the
U.S. Environmental Protection
Agency to prepare and the Office
of Inspector General to audit the
Toxic Substances Control Act
Service Fee Fund financial
statements each year. Our
primary objectives were to
determine whether:

•	The financial statements were
fairly stated in all material
respects.

•	The EPA's internal controls
over financial reporting were
in place.

•	EPA management complied
with laws and regulations.

The Toxic Substances Control
Act requires that the fees the
EPA charges be sufficient and
not more than reasonably
necessary to defray
approximately 25 percent of the
costs of administering specific
sections of the Act.

This audit supports an EPA
mission-related effort:

•	Operating efficiently and
effectively.

This audit addresses a top EPA
management challenge:

•	Managing business operations
and resources.

Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.gov.

List of OIG reports.

The EPA's Fiscal Years 2020 and 2019 Toxic
Substances Control Act Service Fee Fund
Financial Statements

We found the fund's
financial statements,
except for expenses
and income from other
appropriations, to be
fairly presented.

The EPA Receives a Qualified Opinion

We rendered a qualified opinion on the EPA's fiscal
years 2020 and 2019 Toxic Substances Control Act,
or TSCA, Service Fee Fund financial statements,
meaning that, except for material errors in expenses
and income from other appropriations, the fiscal
years 2020 and 2019 financial statements were
fairly presented.

Material Weakness Noted

The EPA materially understated the fiscal year 2019 "Expenses from Other
Appropriations" line item of the financial statements by nearly $25 million.

Compliance with Applicable Laws, Regulations, Contracts, and
Grant Agreements

We did not identify any instances of noncompliance that would result in a
material misstatement to the audited financial statements.

Other Governmental Reporting Requirements

During our user fee analysis, we found that the TSCA fee structure in the fees
rule during fiscal years 2020 and 2019 appeared reasonable based on the data
available when the EPA developed the fees rule. However, the TSCA fees
collected did not adequately offset the fiscal years 2020 and 2019 actual or
projected costs of administering certain provisions of TSCA, primarily because
there were fewer fee-triggering activities than the EPA had projected for that
period.

Recommendation and Planned Agency Corrective Actions

We recommend that the chief financial officer correct the methodology for
accounting for TSCA direct and indirect expenses from other appropriations to
ensure that all costs for administering sections 4 and 5, parts of section 6, and
section 14 of the Act are properly recorded and reported in the financial
statements. The EPA agreed with our recommendation and provided
acceptable planned corrective actions. This recommendation is resolved with
corrective actions pending.

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