Jump to main content.

Semiannual Report to Congress October 1, 1995 through March 31, 1996

The EPA LogoEPA Office of Inspector General

Semiannual Report to Congress

October 1, 1995 through March 31, 1996

The report listed below is an electronic rendering of the official printed document. It has been formatted for electronic presentation and may not contain all the charts, figures, or other graphical information in the official report.

Section 1 -- Audits -- Significant Findings and Recommendations

Agency Management &nbsp|&nbsp Superfund &nbsp|&nbsp

Extramural Resources Management &nbsp|&nbsp Construction Grants


Costs and Benefits of Total Audit Efforts from October 1, 1995 to March 31, 1996

Dollars in Millions

As required by sections 5(a)(1) and (2) of the Inspector General Act of 1978, as amended, this section identifies significant problems, abuses, and deficiencies relating to the Agency's programs and operations along with recommendations for the current period. The findings described in this section resulted from audits and reviews performed by or for the Office of Audit. Audit findings are open to further review but are the final position of the Office of Inspector General.

Agency Management

The Inspector General Act requires the OIG to initiate reviews and other activities to promote economy and efficiency and to detect and prevent fraud, waste, and mismanagement in EPA programs and operations. Internal and performance audits and reviews are conducted to accomplish these objectives largely by evaluating the economy, efficiency, and effectiveness of operations. During this semiannual reporting period, the OIG conducted a number of major reviews of EPA programs, including reorganization issues in several regions; cost growth in EPA's Federal Advisory Committee Act committees; EPA's computer systems' preparations for the year 2000; and allegations about improper use of facilities at one laboratory. The following are the most significant internal audit, performance audit, and special review findings and recommendations pertaining to Agency management resulting from our efforts during this semiannual reporting period.

Reorganizations and Streamlining Plans Will Increase Personnel Costs(Report text)

Findings in Brief

Although the four regions we reviewed developed plans to reduce the number of supervisory positions, their reorganizations will cumulatively increase senior level employees by 19 percent and salary costs by an estimated $370,000.

Background

The National Performance Review (NPR) and a September 1993 Presidential memorandum launched governmentwide streamlining efforts. NPR set a goal of doubling the managerial span of control within five years, based on the premise that the elimination of managerial levels would reduce the size of the Federal workforce and save money.

We Found That

The four regions reviewed had developed plans to reduce the number of senior supervisory positions (grades 14 and above) to achieve the Agency goal of a 1:11 ratio. However, they also plan to promote personnel, cumulatively increasing the number of senior level employees from 342 to 408, or 19 percent, and estimated annual salary costs by $370,000. One region was planning a 33 percent increase in senior level employees.

As part of their reorganization plans, the four regions advertised, or planned to advertise, existing and newly created positions at higher grades. Nonsupervisory personnel were sometimes promoted to higher graded nonsupervisory positions, and displaced supervisory personnel were reassigned to nonsupervisory positions at the same grade or promoted to a higher grade than they held as supervisors. The regions did not follow EPA guidance and limit consideration for new supervisory positions. In December 1994, EPA issued guidance on options for reinventing organizations which stated that managers were to limit consideration for advertised supervisory positions to the affected group of supervisors. Furthermore, promoting lower graded employees to these positions was specifically prohibited. If sufficient applicants did not apply to fill the supervisory positions, managers could expand the scope of competition to other employees at the same grade level as the job advertised. While most promotions have not yet occurred due to an Agency-wide freeze, a Headquarters waiver has already allowed some to take place in one region.

We Recommended That

The Deputy Administrator:

What Action Was Taken

The final audit report (6400015) was issued to the Deputy Administrator on November 22, 1995. In responding to the report, the Deputy Administrator stated that while some increases in senior level positions may be appropriate at this time to meet the Agency's streamlining, reinvention, and diversity goals, significant increases should not become a permanent part of the Agency's grade structure. Further, he has asked the Office of Administration and Resources Management to work with other Headquarters and regional offices to develop a long-term strategy for effectively managing these issues.

FACA Committees' Costs Nearly Doubled Since 1993(Report text)

Findings in Brief

While we support EPA's strategy of using Federal Advisory Committee Act (FACA) committees to create partnerships with business and communities, the Agency needs to ensure that the operations of these committees are fiscally responsible. Although EPA has decreased the number of its FACA committees by one-third since 1993, their operating costs have increased 84 percent, and the number of Agency personnel involved has grown almost 57 percent.

Background

A February 1993 Executive Order directed executive departments and agencies to terminate at least one-third of FACA committees not required by statute. New advisory committees could be established only under compelling circumstances with the approval of the Office of Management and Budget. Additionally, a June 1994 Vice-Presidential memorandum directed each agency to reduce advisory committee costs by at least five percent.

We Found That

EPA's cost to operate FACA committees has increased from $4.9 million for 31 committees in 1993 to over $9 million for 22 committees in 1995. This is an 84 percent rise in the cost of committee operations with two-thirds of the costs supporting committees not required by statute.

The number of Agency personnel involved in FACA committee operations has also grown from 38 full-time equivalent (FTE) personnel at cost of $2.2 million in fiscal 1993 to 65 FTE at a cost of $3.6 million in fiscal 1995.

Over 70 percent of the fiscal 1995 salary costs for operational support was for high level employees. EPA's decentralized operations appeared to contribute to a duplication of similar administrative functions resulting in the involvement of more and higher paid personnel than necessary in committee operations.

Although a central Agency office administers FACA and consolidates cost data, it has no control over individual FACA committee funds. Each program office separately funds the FACA committees it establishes. This system does not allow EPA to fully consider costs in establishing committees or their priorities. Consequently, the Agency is not able to ensure that funds are used efficiently to obtain public advice. Efforts by EPA to decrease overall FACA committee costs have not been successful.

We Recommended That

The Deputy Administrator:

What Action Was Taken

The final report (6100147) was issued to the Deputy Administrator on March 29, 1996. In response to our draft report, the Deputy Administrator did not dispute the cost growth, but stressed the importance of FACA committees to Agency operations. He disagreed with most recommendations, but agreed to conduct a review of FACA administrative functions to find ways to streamline them. A response to the final report is due on June 27, 1996.

Year 2000 Could Cause Failure of Major Information Systems(Report text)

Findings in Brief

The Office of Information Resources Management (OIRM) has raised Agency awareness of data processing problems associated with the year 2000. However, OIRM has not acted sufficiently to reduce the imminent threat of major EPA systems failure.

Background

The upcoming century change is considered to be one of the most critical problems facing data processing, and industry has become increasingly aware of the potential impact of storing years in computers as two digit numeric fields (e.g., "1996" can be stored as "96"). The basic problems are inverse dates (interpreting "00" as occurring prior to "99") and resulting incorrect leap year assumptions. Since most systems perform date calculations, they could produce unreliable information, or even fail completely, on or before January 1, 2000.

We Found That

OIRM has been conducting an information campaign to alert system managers to problems and solutions associated with the year 2000. The Agency also reviewed 36 of its over 300 application systems, and developed a query program to help locate date codes needing modification within some systems. However, OIRM has not established specific guidance to educate managers regarding the magnitude of the problem.

For example, several managers were unaware of potential problems with system interfaces and incompatible historical data, which will complicate the modification process and directly affect the time and cost of resolving year 2000 problems. Yet every system we surveyed exchanges data with at least one other Agency system, and 54 percent exchange data with systems outside of EPA.

Also, each major application system is vulnerable to the faults of its hardware platform. OIRM did not develop consistent test plans to ensure that each operating system's idiosyncrasies will be tested and that programs will function as intended beyond the year 2000.

OIRM plans to allow information system managers to implement either the industry-recommended, four digit year expansion or to reprogram their systems and specify subsequent cut-off dates. Reprogramming solutions could hide the problem and scatter future "failure" dates randomly across the Agency. Also, these inconsistent methods for dealing with the year 2000 problem will affect how well Agency systems interact.

EPA plans to contract out systems reprogramming efforts, but the lack of detailed plans, budget uncertainties, and contracting time delays make it questionable whether EPA systems will be ready in time. To date, only two systems are currently year 2000 compliant, and four major systems have experienced problems accepting dates beyond 1999. Industry recommends that systems be fully tested and ready for implementation by the end of 1997, to allow for one full year of normal processing, as well as year-end and quarter-end processing.

We Recommended That

The Acting Director, Office of Information Resources Management:

What Action Was Taken

We issued our final report (6400036) to the Acting Director, Office of Information Resources Management, on March 14, 1996. In responding to the draft report, the Agency agreed that the year 2000 issue poses a serious problem and partially agreed with our three recommendations, while being reluctant to impose a "one size fits all" solution on existing Agency systems. A response to the final report is due on June 12, 1996.

Unauthorized Use of Gulf Ecology Division(Report text)

Findings in Brief

Non-Federal personnel were allowed to perform research at the Gulf Ecology Division (GED) laboratory without proper authorization, and some directly assisted on EPA research activities in violation of Federal law. In addition, proper security over access to GED facilities had not been established.

Background

In April 1995, we received allegations that: (1) students from the University of West Florida (UWF) were performing unauthorized, private research at GED's laboratory; (2) a scientist employed by the University of South Alabama used GED's laboratory without an agreement or relationship between EPA and the University; and (3) two EPA scientists had proposed using the GED facilities for a privately funded research project without proper approval.

We Found That

All of the allegations were true. Students and/or faculty from at least three universities had worked or were currently working at GED's laboratory without any authorized agreement, contract with EPA, or assessment of user fees. In addition, two GED scientists solicited private funding for research at GED without proper approval. A May 1995 Office of Research and Development (ORD) management review identified the MOU as a significant problem, and it is currently being revised to reflect GED's new mission.

Some of these non-Federal personnel were directly assisting GED staff on EPA research projects which violates statutory prohibitions against Federal agency acceptance of voluntary services. In addition, non-Federal use of EPA facilities without proper authorization raises questions of EPA's liability in case of accidents, injuries, or compensation claims, as well as ownership of patents and proprietary information resulting from the research.

The former laboratory director implemented a Memorandum of Understanding (MOU) with UWF without proper approval, and many of the unauthorized uses of GED facilities were justified by GED staff based on questionable or vague provisions in this unapproved MOU. ORD received the proposed MOU in 1992, but did not provide a timely response or intervene when the MOU was implemented without approval.

Further, GED officials did not establish proper security over access to the facility because they believed the risk of unauthorized access was minimal. Anyone could enter the facility during normal business hours without identification or proper authorization. In addition, information required on the entrance log was insufficient to properly identify individuals entering GED after normal business hours. Due to the large fluctuation of non-Federal personnel who work at the laboratory, control over unauthorized access is difficult without some type of 24-hour restriction.

We Recommended That

The Assistant Administrator for Research and Development:

What Action Was Taken

The final special review report (6400045) was issued to the Assistant Administrator for Research and Development on March 30, 1996. In response to the draft report, the Assistant Administrator included corrective actions and milestone dates for completion of planned actions that were considered adequate for resolution of all except two of our recommendations. The Agency disagreed with our conclusions regarding GED's acceptance of voluntary services, a violation of Federal law; and the non-Federal use of EPA laboratory facilities. A response to the final report is due by June 30, 1996.

Air Toxics From R&D Facilities Not Regulated(Report text)

Findings in Brief

Although EPA has initiated improvements on facility air toxics emission standards, it has not designated research and development (R&D) facilities as a separate category for regulation. Consequently, without independent state regulation, toxic emissions from R&D facilities are unrestricted.

Background

The 1990 Clean Air Act Amendments (CAAA) required EPA to identify categories for major sources of toxic air pollutants, including a separate category for R&D facilities, and to establish emission standards for each source category. EPA's Office of Air Quality Planning and Standards (OAQPS) is responsible for promulgating technology-based Maximum Achievable Control Technology (MACT) standards.

We Found That

EPA had neither developed an R&D source category nor planned to do so. As a result, these facilities operate without restriction in states that have no independent regulation, and industry could take advantage of R&D status to avoid complying with air toxics regulations. Agency officials knew little about the number of major R&D facilities or the emissions they produce. However, state officials could name dozens of specific unregulated R&D facilities that may emit major quantities of air toxics.

Although the Agency is not meeting the statutorily mandated schedule, OAQPS was adopting initiatives to expedite and improve the MACT development process. Through their most well-known initiative, the MACT Partnership Program, EPA and states work together with industry and environmentalists to reduce the time and resources needed for completing the MACT standards. In addition, under the Tiering program, EPA regulations (both planned and under development) are classified according to anticipated cross-Agency concerns, impact on the public, political interest, and controversy with other Federal agencies. This initiative would exempt some regulations from high level review to speed the process.

Also, we found that the CAAA's method for computing the emission limit, called the "MACT floor," is not completely defined. For example, the emission limit calculated from the top 12 percent of industry sources could result in a standard which does not require any emissions control. Regardless of its shortcomings, OAQPS officials believe that the current law provides for set limits and strengthens their position when dealing with industry.

We Recommended That

The Director, OAQPS, establish a separate category covering research and development facilities.

What Action Was Taken

The final report (6100140) was issued to the Director, OAQPS, on March 19, 1996. In responding to the draft report, the Director concurred with our observations and conclusions concerning the development process for MACT standards. Also, the Director agreed that emissions from major sources at R&D facilities lack regulation and that a separate category would be established. A response to the final report is due by June 17, 1996.

Improvements Needed in Ohio's Leaking Underground Storage Tank (LUST) Program

Findings in Brief

The Ohio Bureau of Underground Storage Tanks Regulation (BUSTR) effectively directed LUST resources to cleanup of high priority sites, but overstated accomplishments and did not attempt to recover most cleanup costs.

Background

The Resource Conservation and Recovery Act authorizes EPA to use cooperative agreements to provide LUST Trust Funds to States for the cleanup of LUSTs. BUSTR, which is part of the Ohio Department of Commerce, administers the LUST program in Ohio.

We Found That

BUSTR effectively used two systems to identify and clean up high priority LUST sites posing the greatest threat to human health and the environment. The first system identified emergency sites requiring immediate action, and the second evaluated the long-term effects of each release.

However, BUSTR did not report program accomplishments in accordance with EPA guidance. Actual accomplishments were less than what was reported for confirmed releases, cleanups initiated, cleanups completed, and enforcement actions. These overstatements provided the Agency with an inaccurate basis for comparing Ohio activities with other states.

BUSTR had not recovered Federal and state funds spent to clean up 121 LUST sites because it had not completed the development of its cost recovery program. Also, BUSTR did not maintain complete cost documentation on LUST cleanups which prevented identification of sites with the greatest cost recovery potential.

We Recommended That

The Regional Administrator, Region 5, work with BUSTR to ensure that it:

What Action Was Taken

The final report (6100095) was issued to the Regional Administrator, Region 5, on February 5, 1996. In responding to the draft report the Regional Administrator agreed to take corrective action to address all the findings and recommendations in the report. Accordingly, no further response was required and we closed the report upon issuance.

Inadequate Evacuation Plan and Accessibility Pose Safety Risks(Report text)

Findings in Brief

EPA's Occupant Emergency Plan (OEP) for Waterside Mall (WSM) was outdated and insufficiently complete to protect employees and contractors. Also, survey respondents believed additional actions are needed to make WSM safer and more accessible to the physically challenged.

Background

EPA is required to develop and maintain an evacuation plan for safeguarding over 5,000 Agency employees and contractors at WSM in an emergency. Our review included a survey of EPA Headquarters employees having mobility- or sensory-related physical challenges.

We Found That

Much of EPA's WSM OEP was inadequate and could hinder the Agency's ability to safely and quickly evacuate personnel in an emergency. Seventy-six percent of physically challenged survey respondents did not know what to do in an emergency.

Specifically, the list of key evacuation personnel was outdated, and no stairwell, elevator, or exit monitors were designated. Data needed on physically challenged staff was incomplete, and detailed emergency procedures to protect them, such as use of the elevator for evacuation, were not included in the OEP. Further, building evacuation routes had not been posted, and basic provisions of the OEP had not been disseminated to appropriate staff or generally communicated to WSM employees. The OEP did not provide any emergency policy and procedures for contractors.

The Agency had not established a formal process to annually update, test, and obtain approval of the WSM OEP. In addition, annual training for key personnel had not been conducted, and several monitors told us that they had not had any training in more than five years.

In recent years, EPA and the General Services Administration (GSA) have resolved major barriers to accommodate the physically challenged at WSM. However, our survey respondents believed that additional improvements could make WSM safer and more accessible, especially in stairs, hallways, and parking facilities. Many of the survey respondents believed that barriers, some of which may violate accessibility standards, pose a danger to their health and safety, and have impeded their job performance.

We Recommended That

The Acting Assistant Administrator for Administration and Resources Management:

What Action Was Taken

The final report (6100150) was issued to the Acting Assistant Administrator for Administration and Resources Management on March 28, 1996. In response to the draft report, the Agency generally agreed with most of our recommendations, but disagreed with some aspects of the findings. A response to the final report is due on June 26, 1996.

Canceled Payment Activities Were Effectively Managed

Findings In Brief

In general, EPA effectively monitored and controlled canceled payment activities and properly resolved most negotiated canceled checks, limiting the risk of significant loss to the Agency. However, EPA could improve case file maintenance and timely recovery of duplicate payments at certain accounting offices.

Background

EPA authorizes the Department of Treasury to disburse Agency funds to employees, vendors, contractors, and grantees. The Agency submits certifications that Treasury relies on to print and mail checks, and to transmit funds electronically. If a check needs to be cancelled after issuance, Treasury credits the funds back to the Agency's appropriation or fund account. However, checks can still be negotiated because Treasury does not notify financial institutions that the checks have been canceled. If a canceled check is subsequently negotiated, Treasury identifies this as a payment over cancellation (POC), and charges the Agency with the amount of the check. Between October 1990 and May 1995, Treasury identified 88 canceled EPA checks resulting in POCs totaling more than $1.3 million. EPA has 15 accounting offices that are involved in payment cancellation activities.

We Found That

In general, the Agency effectively controlled check cancellation activities and resolved canceled checks that had been negotiated. Specifically, the Research Triangle Park accounting office properly managed canceled payment activities, systematically maintained files, and ensured that canceled checks did not result in duplicate or improper payments.

The Chicago accounting office adequately resolved most of the POCs we reviewed. However, the office did not timely resolve one POC resulting in a $999,999 duplicate payment when a grantee negotiated both an original and a replacement check. The grantee had use of the $999,999 overpayment for nearly 2 years before the Chicago office corrected the situation.

The Washington Financial Management Center (WFMC) established a computer database and case files as control records for check cancellation cases. Two WFMC accounting sections did not keep their record systems current or follow up on cases timely. For example, files could not be located for 44 of 115 check cancellation cases. The database maintained by WFMC to control canceled check cases did not include 25 unresolved cases. In addition, 30 cases were open over a year, and 20 others more than six months.

We Recommended That

The Director, Financial Management Division (FMD), direct WFMC staff to:

What Action Was Taken

The final report (6100074) was issued to the Director, FMD, on November 30, 1995. In response to the draft report, the Director, FMD, stated that WFMC has revamped and strengthened the procedures on the existing filing system. Also, WFMC will update the database to show whether cases are open or closed, and ensure timely follow-up on an ongoing basis. The corrective actions were responsive to our recommendations and we closed the audit report in our tracking system.

Top of page

 

Local Navigation

Jump to main content.