APPENDIX I: Interim Financial Procedures Governing Use of the LUST Trust Fund Comptroller's Policy Announcement No. 87-13 OSWER Directive 9360.0-16a Guidance for Conducting Federal-Lead Underground Storage Tank Corrective Actions July 25, 1988
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460JUN 3 1987
COMPTROLLER POLICY ANNOUNCEMENT
ADMINISTRATION AND RESOURCES MANAGEMENT
MEMORANDUM SUBJECT: Interim Financial Policies and Procedures Governing Use of the Leaking Underground Storage Tank (LUST) Trust Fund FROM: David P. Ryan Comptroller TO: Assistant Regional Administrators Management Division Directors Senior Budget Officers Director, Office of Underground Storage Tanks Regional Comptrollers Financial Management Officers This memorandum provides interim Agency financial policies and procedures governing the use of the Leaking Underground Storage Tank (LUST) Trust Fund. In addition, this Policy Announcement clearly establishes the Agency's policy that States, with Cooperative Agreements, and EPA are responsible for pursuing cost recovery from responsible owner/operators. Until such time as more detailed policies and procedures are developed, you should adhere to the guidance provided in this Policy Announcement. BACKGROUND The recently funded LUST Trust Fund program was authorized by the Superfund Amendments and Reauthorization Act of 1986. Its purpose is the cleanup of petroleum (gasoline, diesel and aviation fuels) releases from underground storage tanks. The program is funded by an excise tax of 1/10 of one cent per gallon on motor fuels. The taxing authority was effective on January 1, 1987 and is expected to generate $500 million over five years. The new LUST Trust Fund, which is a cleanup program, is distinctly different from the existing UST regulatory and grant program, which is a "prevention" effort. UST activity is funded under the S&E and AC&C appropriations. The Agency's intent is that States play the primary role in implementing this new legislation. Cooperative Agreements between individual States and EPA will enable States to draw on Trust Fund resources for cleanups and certain associated program and directly-related administrative expenses. Consolidated Letter of Credit procedures will be utilized with each State, allowing the drawdown of monies as costs are incurred. States are expected to make a reasonable effort to pursue cost recovery from responsible owners/operators for sites that are State-lead cleanup. EPA will conduct cost recovery efforts, where reasonable, in those instances of direct Federal response actions. Although expected to be rare, EPA's direct Federal response would be called for in situations which pose an imminent threat to human health and the environment. EPA would be required to act in those life-threatening instances where; 1) there is no State Cooperative Agreement in place; 2) the State is unable to respond; 3) there is no identifiable owner/operator; or 4) the owner/operator refuses to act. Since cost recovery provisions are inherent in the legislation, both EPA and the States must have an accounting structure and system that is capable of tracking site-specific costs. This policy Announcement establishes the system structure and documentation requirements to support the cost recovery process. In addition to funding the State/EPA Cooperative Agreements, the Trust Fund also provides resources for administration of the Fund, including the cost of work years, enforcement actions, Federal response to emergencies, and cost recovery in connection with enforcement actions and cleanups. POLICIES AND PROCEDURES To ensure that all charges applicable to the new appropriation are recorded against the proper account number, and that the necessary documentation will be available in the event of subsequent cost recovery cases, we are establishing the following account structures and interim policies and procedures relative to the LUST Trust Fund. Appropriation, Account Structure and Activity Codes All offices that receive Advices of Allowance funded by the LUST Trust Fund, appropriation 68-20X8153, should charge their applicable personnel compensation and benefits (PC&B) and other operating expenses to the appropriate program element and attendant account number. The Financial Management System (FMS) 10-digit account number structure for LUST will allow tracking of costs by major activity type and on a site-specific basis in those rare instances where a direct Federal response is initiated. The account structure identifies Cooperative Agreements by State and major activity within State. There will be no site-specific tracking of State-lead cleanups in the FMS since States are responsible for pursuing cost recovery on their responses. Attachment I contains the LUST Trust Fund account number structure and should be followed closely when establishing account numbers. LUST activity codes and definitions are provided in attachment II. All State Cooperative Agreements will initially be obligated under activity code "G". Each time a State requests funds on a Letter of Credit drawdown, they must provide an activity code breakout based on the three major activity codes identified in Attachment II. The Regional Financial Management Office will make appropriate adjustments to distribute the Cooperative Agreement payments, from activity code "G:, to the various activity codes as each funding request is recorded in the FMS. Establishing Account Numbers Each allowance holder is responsible for establishing the appropriate account number(s) in the FMS for LUST Trust Fund activity within their program area. Regional Financial Management Offices will use the Collection of Account Number (CAN) process for entering their account numbers. Headquarters allowance holders should contact Scott Culver in the Financial Reports and Analysis Branch (FRAB) on 475-8725 to establish LUST Trust Fund account numbers. FRAB is responsible for verifying the accuracy and authorized use of the various account numbers. To ensure proper accountability, allowance holders should establish a central point of contact with their offices for controlling issuance and use of the Trust Fund account numbers. Site-specific identifiers for LUST Federal responses will be assigned in the Regions based on the procedures currently used to assign Superfund site numbers. There is no restriction on using site identifiers for LUST that have been previously assigned to a Superfund site, since they are distinguished by different appropriations and program element symbols. Charging Methods The following methods must be used when charging costs to the LUST Trust Fund Appropriation. The allowance holder must have adequate FTE ceiling and dollars prior to charging any costs to a LUST Trust Fund account number. A. Timekeeping Procedure for Employees Performing LUST Trust Fund Work. General. Allowance holders engaging in work activities to carry out the provisions of the LUST program are provided LUST FTE ceilings and dollar allowance. The allowance holder, or designee, is responsible for the complete and accurate charging of personnel time to LUST. In addition, specific documentation must be maintained to support all charges to the Trust Fund. The standard Agency Payroll Distribution Timesheet (EPA Form 2560-28) serves as 1) documentation of payroll charges to a LUST Trust Fund account number, and 2) the source documentation for entry of payroll labor distribution data into the payroll system. Supervisors are responsible for assuring that timesheets are properly prepared and submitted to their employees' timekeeper for submission to the servicing Financial Management Office to permit timely entry into the payroll labor cost distribution system. Employee Account Number Identification. Employees who are expected to work more than 50% of their time on LUST will be assigned a LUST fixed account number. Employees expected to work less than 50% of their time on LUST will be assigned a regular, non-LUST, fixed account number. A fixed account number will assigned to each employee by the allowance holder, or designee, through the supervisor. Salaries and benefits for an employee will charged to that employee's fixed account number unless the timesheet indicates that another account number should be charged for all or part of the employee's time for that pay period. Timesheet Requirements for LUST Trust Fund Work. Whenever an employee charges a LUST account number, a timesheet must be maintained unless the employee has a LUST fixed account number and all of the employee's work was related to that fixed account number. Employees who do not have a LUST fixed account number, and want to charge costs to LUST, must fill out daily timesheets accounting for all hours in that pay period. Detailed instructions for completing the timesheet can be found on the reverse of the timesheet form. The special instructions on the timesheet for Superfund site-specific charges apply to site-specific LUST Trust Fund charges also. All employees who perform site-specific LUST Trust Fund work must use a site-specific account number containing the appropriate site and activity codes on their timesheet. These codes are contained n the last three digits of the account number (four digits for Headquarters staff) assigned to each site. B. Other Costs Requirements for LUST Trust Fund Work. Other costs, such as travel, printing, supplies, equipment, and contracts, should be charged, where applicable, to the appropriate LUST Trust Fund account number. Particular attention should be paid to any Federal-lead contractual effort to ensure that costs applicable to the LUST Trust Fund are charged accordingly, including identification to specific sites for direct Federal response actions. C. Allocation of Costs for LUST Trust Fund Work. The previous two sections addressed "direct" charging of costs for LUST Trust Fund work. However, in some instances, Agency costs cannot be identified as benefiting solely one or another appropriation. For example, a work assignment under an Agency contract may benefit both the Superfund and LUST programs. As an alternative, these costs may be "allocated" among the benefiting appropriations. FTEs and PC&B Costs. An office that wants to allocate their FTEs and PC&B costs to more than one appropriation must receive Office of the Comptroller's approval of the method they wish to use to allocate these costs. We will be issuing a Policy Announcement shortly detailing procedures to follow. In the interim, please contact the Fiscal Policies and Procedures Branch of assistance. Travel. If it is not practical to segment travel to identify costs benefiting one or another appropriation, travel costs should be charged to the program that benefits predominately from that travel. Equipment and Supplies. Purchase of equipment, supplies, or equipment rentals should be allocated where necessary in accordance with the criteria defined in the Financial Management Manual, Chapter 17, Section 6. Essentially, purchases less than $25,000 per item may be charged to the program that predominately benefits. Purchases of $25,000, or greater should be divided based on the estimated proportion of use in support of each program. Multiple Apportion Funded Contracts. If any task or sub-task under a contract is funded from more than one appropriation, and the costs of that activity cannot be directly charged, the Project Officer must request the Director, Financial Management Division's approval of the proposed method for allocating those costs. Cost Recovery The Superfund Amendments and authorization Act of 1986 clearly states that the owner of operator is liable for cost incurred by EPA or a State with respect to the release of petroleum from an underground storage tank. Therefore, EPA will pursue cost recovery on Federal-lead cleanups and the States are expected to do so on State-lead cleanups. Pending guidance on LUST fiscal systems and cost recoveries, States must comply with the cost recovery requirements as specified in the Cooperative Agreements. For Federal-lead actions, charging and documentation requirements are the same as for Superfund. All costs identifiable to a specific site should be charged to a site-specific account number. Records for LUST cost recovery actions will be maintained in a accordance with existing Superfund requirements. Detailed guidance on the LUST cost recovery process is being developed and will identify both State and Financial Management Office requirements. State Cooperative Agreements The major thrust of this new Trust Fund program will be through the EPA/State Cooperative Agreements negotiated by the Regional UST Coordinators. State officials are expected to be closer to the local situation and generally know more than Federal officials about the underground storage tanks and site conditions in their respective jurisdictions. The agency's intent is that these initial Cooperative Agreements be negotiated and proved quickly in order to facilitate early distribution of Trust Fund resources. Such early action will ensure rapid program development, initiation of cleanups or other corrective action and enforcement activity. Effective Date These interim policies and procedures are effective immediately. They will remain in effect until more detailed guidance is developed. At that time, you will notified that this Policy Announcement is superseded. Inquires If you have any questions regarding this Policy Announcement, please contact Fiscal Policies and Procedures Branch staff, Doug Barrett on 382-5658 or Liz Milstead on 382-4205. Attachments cc: Headquarters Allowances Holders Hazardous Waste Management Division Directors J. Richard Bashar Alvin Pesachowitz John J. Sandy Vincette L. Goerl Tony Musick John Elliott Carole Ansheles FMD Branch Chiefs
LUST Trust Fund Account Number Structure
The LUST Trust Fund 10-digit account number consists of the following :
- First Position - Source of funds Code.
The first position of the account number is an alpha-numeric field representing the appropriate year. For 1987, the first position is "7".
- Second, Third and Fourth Positions - Program
The second, third and fourth positions of the account number consist of the first three characters of the six-digit program element number.
- Fifth and Sixth Positions - Allowance
The fifth and sixth positions represent the allowance holder, i.e., "88" for the Office of Underground Storage Tanks; "01" for Region I.
- Seventh position - Regional
Identifier/Responsibility Center and State
The seventh position of the account number is a multi-purpose field and its use depends on whether the account number is for a Regional allowance, (i.e., allowance Holders 01 through 10) or a Headquarters allowance, (i.e., Allowance Holders 11 - 88).
- Headquarters Allowance Holders - The use of
the seventh position by Headquarters allowance holders
depends on whether the account number is site-specific
or nonsite-specific. For site-specific numbers this
field is used to identify the Region where the site is
located and therefore must have a numeric character
0-9 (0 for Region 10). For nonsite-specific account
numbers the seventh position represents the
Responsibility Center (i.e., Division, Branch,
- Regional Allowance Holders - The use of the seventh position by Regional Allowance Holders depends on whether the account number is for funding an EPA.State Cooperative Agreement or some other type of charge. For cooperative Agreements this position is used to identify the State that the agreement is with. Page 3 of this attachment provides the codes used to identify the States. For all charges other than Cooperative Agreements, this field represents the Responsibility Center.
- Headquarters Allowance Holders - The use of the seventh position by Headquarters allowance holders depends on whether the account number is site-specific or nonsite-specific. For site-specific numbers this field is used to identify the Region where the site is located and therefore must have a numeric character 0-9 (0 for Region 10). For nonsite-specific account numbers the seventh position represents the Responsibility Center (i.e., Division, Branch, Project, etc).
- Eight Position - Activity Code.
The eighth position of the account number consists of an alpha-numeric character which represents the major activities under the LUST Trust Fund. See Attachment II for a listing of the LUST activity codes and their definitions.
- Ninth and Tenth Positions - Non-Site/Site
The ninth and tenth positions are reserved for site identification. The site identifier is an alpha-numeric code. The codes to be assigned follow a set pattern: Series one consists of 01 - 99; Series two is A1 - A9, B1- B9, etc.; Series three is 1A - aZ, 2A - 2Z, etc.; series four is AA - Az, BA - BZ, etc. Exceptions: Do not use the letters "I" or "O" in any series, since they are easily confused with "ones" and "zeros." The identifier "00" indicates non-site specific costs and is also used when obligating State Cooperative Agreements. Site-specific numbers will established only for direct Federal response.
LUST TRUST FUND ACCOUNT NUMBER
TEN-DIGIT ACCOUNT NUMBER
LUST PROGRAM ELEMENT
REGIONAL/RESPONSIBILITY CTR/STATE IDENTIFIER
NOTE: this is an example of a Region I account number for a State Cooperative Agreement with Connecticut.
- 7FPY011700 State LOC Drawdown for Activity Code 7
- 7FPY01C700 Regional Charge Non-site specific
- 7FPY88B700 Headquarters Charge Non-site specific
- 7FPY881E01 Headquarters Site-specific charge for a Region I site
- 7FPY01CE01 Regional Site-specific Charge
State Codes for Use in 7th Position
of Account Number on LUST
State Cooperative Agreements
|Region I||Region II||Region III||Region IV||Region V|
|CT . . . 1
ME. . . 2
MA. . . 3
NH. . . 4
RI. . . . 5
VT . . . 6
|NJ . . . 1
NY. . . 2
PR. . . 3
VI . . . 4
|DE . . . 1
DC. . . 2
MD. . . 3
PA . . . 4
VA . . . 5
WV. . . 6
|AL. . . 1
FL. . . 2
GA. . . 3
KY. . . 4
MS. . . 5
NC. . . 6
SC. . . 7
TN. . . 8
|IL . . . 1
IN. . . 2
MI. . . 3
MN . . 4
OH. . . 5
WI . . . 6
|Region VI||Region VII||Region VIII||Region IX||Region X|
|AR . . . 1
LA . . . 2
NM. . . 3
OK. . . 4
TX . . . 5
|IA. . . . 1
KS . . . 2
MO. . . 3
NB . . . 4
|CO. . . 1
MT. . . 2
ND. . . 3
SD . . . 4
UT . . . 5
WY. . . 6
|AZ. . . 1
CA. . . 2
HI . . . 3
NV. . . 4
SA. . . 5
GU. . . 6
PI. . . . 7
CQ. . . 8
|AK. . . 1
ID . . . 2
OR. . . 3
WA . . 4
LEAKING UNDERGROUND STORAGE TANK TRUST FUND ACTIVITY CODES
"7" - General Support and Management (Extramural and Intramural)
Includes all intramural support and management costs which benefit the overall LUST Trust Fund program's management. Also includes extramural costs associated with general management, administrative support, program guidance and implementation, training, general community relations support, report and proposal writing, contingency planning, and contractor support.
"E" - Site Cleanup Actions (Extramural and Intramural)
Includes all costs associated with site responses taken
to prevent or mitigate threats to public health, welfare, or
the environment posed by a release (or suspected release) or
petroleum from an underground storage tank, including
emergency responses, site investigations, exposure
assessments, the planning and design or corrective actions,
and the conduct, management and oversight of long-term
remedial corrective actions.
For site-specific Federal lead actions and technical assistance, includes all costs (extramural and intramural) associated with the Environmental Response Team (ERT), the Technical Assistance Team (TAT), ERCS,EERU, laboratory analysis costs, and ESD laboratory quality assurance.
"4" - Enforcement (Extramural and Intramural)
Includes all activities necessary to identify a potentially responsible party (PRP), such as PRP searches, title searches, and financial assessments. Also includes activities involved in issuance of letters, notices and orders to PRP's to provide information, test tanks, correct leaks and conduct cleanups associated with petroleum releases from an underground storage tank. Includes oversight of responsible party cleanups, whether taken in response to an enforcement action (e.g., letters, notices,orders, orders on consent, consent decrees, judicial decrees, etc.) or not. Includes all activities associated with the development and support of cost recovery cases.
"G" - State Cooperative Agreements (Extramural)
Used solely for recording initial obligation of LUST Trust Fund State Cooperative Agreements in the financial Management System. Each time the individual States request funds on a Letter of Credit drawdown, they will provide an activity code breakout based on the three codes defined above. The respective Regional Financial Management Office will process appropriate adjustments to distribute the costs to the correct activity code.