Regional Enforcement Activities Vary Substantially

EPA’s enforcement program depends heavily upon inspections by regional  or state enforcement staff as the primary means of detecting violations  and evaluating overall facility compliance. Thus, the quality and the  content of the agency’s and states’ inspections, and the number of  inspections undertaken to ensure adequate coverage, are important  indicators of the enforcement program’s effectiveness. However, as we  reported in 2000, EPA’s regional offices varied substantially on the actions  they take to enforce the Clean Water Act and Clean Air Act. Consistent  with earlier observations of EPA’s Office of Inspector General and internal  agency studies, we found these variations in regional actions reflected in  the (1) number of inspections EPA and state enforcement personnel  conducted at facilities discharging pollutants within a region, (2) number  and type of enforcement actions taken, and (3) the size of the penalties  assessed and the criteria used in determining the penalties assessed. For  example, as figure 1 indicates, the number of inspections conducted under  the Clean Air Act in fiscal year 2000 compared with the number of  facilities in each region subject to EPA’s inspection under the act varied  from a high of 80 percent in Region 3 to a low of 27 percent in Regions 1  and 2.
While the variations in enforcement raise questions about the need for  greater consistency, it is also important to get behind the data to  understand the cause of the variations and the extent to which they reflect  a problem. For example, EPA attributed the low number of inspections by  its Region 5, in Chicago, to the regional office’s decision at the time to  focus limited resources on performing detailed and resource-intensive  investigations of the region’s numerous electric power plants, rather than  conducting a greater number of less intensive inspections.
We agree that regional data can be easily misinterpreted without the  contextual information needed to clarify whether variation in a given  instance is inappropriate or whether it reflects the appropriate exercise of  flexibility by regions and states to tailor their priorities to their individual  needs and circumstances. In this regard, we recommended that it would  be appropriate for EPA to (1) clarify which aspects of the enforcement  program it expects to see implemented consistently from region to region  and which aspects may appropriately be subject to greater variation and  (2) supplement region-by-region data with contextual information that  helps to explain why variations occur and thereby clarify the extent to  which variations are problematic.
Our findings were also consistent with the findings of EPA’s Inspector  General and OECA that regions vary in the way they oversee state- delegated programs. In this regard, contrary to EPA policy, some regions  did not (1) conduct an adequate number of oversight inspections of state  programs, (2) sufficiently encourage states to consider economic benefit  in calculating penalties, (3) take more direct federal actions where states  were slow to act, and (4) require states to report all significant violators.  Regional and state officials generally indicated that it was difficult for  them to ascertain the extent of variation in regional enforcement activities,  given their focus on activities within their own geographic environment.  However, EPA headquarters officials responsible for the air and water  programs noted that such variation is fairly commonplace and does pose  problems. The director of OECA’s water enforcement division, for  example, told us that, in reacting to similar violations, enforcement  responses in certain regions are stronger than they are in others and that  such inconsistencies have increased.
Similarly, the director of OECA’s air enforcement division said that, given  the considerable autonomy of the regional offices, it is not surprising that  variations exist in how they approach enforcement and state oversight. In  this regard, the director noted, disparities exist among regions in the  number and quality of inspections conducted and in the number of permits  written in relation to the number of sources requiring permits.
In response to these findings, a number of regions have begun to develop  and implement state audit protocols, believing that having such protocols  could help them review the state programs within their jurisdiction with  greater consistency. Here, too, regional approaches differ. For example:    Region 1, in Boston, has adopted a comprehensive “multimedia” approach  in which it simultaneously audits all of a state’s delegated environmental  programs.
Region 3, in Philadelphia, favors a more targeted approach in which air,  water, and waste programs are audited individually.
In Region 5, in Chicago, the office’s air enforcement branch chief said that  he did not view an audit protocol as particularly useful, noting that he  prefers regional staff to engage in joint inspections with states to assess  the states’ performance in the field and to take direct federal action when  a state action is inadequate.
We recognize the potential of these protocols to achieve greater  consistency by a region in its oversight of its states, and the need to tailor  such protocols to meet regional concerns. However, we also believe that  EPA guidance on key elements that should be common to all protocols  would help engender a higher level of consistency among all 10 regions in  how they oversee states.

	Several Factors Contribute to Variations in Regional Enforcement Programs

While EPA’s data show variations in key measures associated with the  agency’s enforcement program, they do little to explain the causes of the  variations. Without information on causes, it is difficult to determine the  extent to which variations represent a problem, are preventable, or reflect  appropriate regional and state flexibility in applying national program  goals to unique circumstances. Our work identified the following causes:  (1) differences in philosophical approaches to enforcement, (2)  incomplete and inaccurate national enforcement data, and (3) an  antiquated workforce planning and allocation system.

		Regions Differ in Their Philosophical Approaches to Enforcement

While OECA has issued policies, memorandums, and other documents to  guide regions in their approach to enforcement, the considerable  autonomy built into EPA’s decentralized, multilevel organizational  structure allows regional offices considerable latitude in adapting  headquarters’ direction in a way they believe best suits their jurisdiction.  The variations we identified often reflect different enforcement  approaches in determining whether the region should (1) rely  predominantly on fines and other traditional enforcement methods to  deter noncompliance and to bring violators into compliance or (2) place  greater reliance on alternative strategies, such as compliance assistance  (workshops, site visits, and other activities to identify and resolve  potential compliance problems). Regions have also differed on whether  deterrence could be achieved best through a small number of high-profile,  resource-intensive cases or a larger number of smaller cases that establish  a more widespread, albeit lower profile, enforcement presence. Further  complicating matters are the wide differences among states in their  enforcement approaches and the various ways in which regions respond  to these differences. Some regions step more readily into cases when they  consider a state’s action to be inadequate, while other regions are more  concerned about infringing on the discretion of states that have been  delegated enforcement responsibilities. While all of these approaches may  be permissible, EPA has experienced problems in identifying and  communicating the extent to which variation either represents a problem  or the appropriate exercise of flexibility by regions and states to apply  national program goals to their unique circumstances.

		National Enforcement Data Are Incomplete and Inaccurate

OECA needs accurate and complete enforcement data to determine  whether regions and states are consistently implementing core program  requirements and, if not, whether significant variations in meeting these  requirements should be corrected. The region or the state responsible for  carrying out the enforcement program is responsible for entering data into  EPA’s national databases. However, both the quality of and quality  controls over these data were criticized by state and regional staff we  interviewed. “managers in the regions and in OECA headquarters have become increasingly frustrated  that they are not receiving from  the reports and data analyses  they need to manage their programs… has been less attention to the data in the  national systems, a commensurate decline in data quality, and insufficient use of data by  enforcement/compliance managers.”
Consistent with our findings and recommendations, EPA’s Office of  Inspector General recently reported that, “OECA’s 2005 publicly-reported  GPRA  performance measures  do not effectively characterize changes in compliance or other outcomes  because OECA lacks reliable compliance rates and other reliable outcome  data. In the absence of compliance rates, OECA reports proxies for  compliance to the public and does not know if compliance is actually  going up or down. As a result, OECA does not have all the data it needs to  make management and program decisions. What is missing most, the  biggest gap, is information about compliance rates. OECA cannot  demonstrate the reliability of other measures because it has not verified  that estimated, predicted, or facility self-reported outcomes actually took  place. Some measures do not clearly link to OECA’s strategic goals.  Finally, OECA frequently changed its performance measures from year to  year, which reduced transparency.” For example, between fiscal years  1999-2005, OECA reported on a low of 23 performance measures to a high  of 69 measures, depending on the fiscal year.
Although EPA is working to improve its data, the problems are extensive  and complex. For example, the Inspector General recently reported that  OECA cannot generate programmatic compliance information for five of  six program areas; lacks knowledge of the number, location, and levels of  compliance for a significant portion of its regulated universe; and  concentrates most of its regulatory activities on large entities and knows  little about the identities or cumulative impact of small entities.  Consequently, the Inspector General reported, OECA currently cannot  develop programmatic compliance information, adequately report on the  size of the universe for which it maintains responsibility, or rely on the  regulated universe data to assess the effectiveness of enforcement  strategies.

		EPA’s Workforce Planning and Allocation System Is Not Adequate for Effectively Deploying Staff to Regions

As we reported, EPA’s process for budgeting and allocating resources  does not fully consider the agency’s current workload, either for specific  statutory requirements, such as those included in the Clean Water Act, or  for broader goals and objectives in the agency’s strategic plan. Instead, in  preparing its requests for funding and staffing, EPA makes incremental  adjustments, largely based on historical precedents, and thus its process  does not reflect a bottom-up review of the nature or distribution of the  current workload. While EPA has initiated several projects over the past  decade to improve its workload and workforce assessment systems, it  continues to face major challenges in this area  If EPA is to substantially improve its resource planning, we reported, it  must adopt a more rigorous and systematic process for (1) obtaining  reliable data on key workload indicators, such as the quality of water in  particular areas, which can be used to budget and allocate resources, and  (2) designing budget and cost accounting systems that are able to isolate  the resources needed and allocated to key enforcement activities.
Without reliable workforce information, EPA cannot ensure consistency in  its enforcement activities by hiring the right number or type of staff or  allocating existing staff resources to meet current or future needs. In this  regard, since 1990, EPA has hired thousands of employees without  systematically considering the workforce impact of changes in  environmental statutes and regulations, technological advances in  affecting the skills and expertise needed to conduct enforcement actions,  or the expansion in state environmental staff. EPA has yet to factor these  workforce changes into its allocation of existing staff resources to its  headquarters and regional offices to meet its strategic goals. Consequently,  should EPA either downsize or increase its enforcement and compliance  staff, it would not have the information needed to determine how many  employees are appropriate, what technical skills they must have, and how  best to allocate employees among strategic goals and geographic locations  in order to ensure that reductions or increases could be absorbed with  minimal adverse impacts in carrying out the agency’s mission.

	EPA Has Initiated or Planned Actions to Achieve Greater Consistency in Enforcement Activities

Over the past several years, EPA has initiated or planned several actions to  improve its enforcement program. We believe that a few of these actions  hold particular promise for addressing inconsistencies in regional  enforcement activities. These actions include (1) the creation of a State  Review Framework, (2) improvements in the quality of enforcement data,  and (3) enhancements to the agency’s workforce planning and allocation  system.

		EPA’s State Review Framework Holds Promise, but It Is Too Early to Assess Its Effectiveness

The State Review Framework is a new process for conducting  performance reviews of enforcement and compliance activities in the  states (as well as for nondelegated programs implemented by EPA  regions). These reviews are intended to provide a mechanism by which  EPA can ensure a consistent level of environmental and public health  protection across the country. OECA is in the second year of a 3-year  project to make State Review Framework reviews an integral part of the  regional and state oversight and planning process and to integrate any  regional or state corrective or follow-up actions into working agreements  between headquarters, regions, and states. It is too early to assess whether  the process will provide an effective means for ensuring more consistent  enforcement actions and oversight of state programs to help ensure a level  playing field for the regulated community across the country. Issues that  still need to be addressed include how EPA will assess states’  implementation of alternative enforcement and compliance strategies,  such as strategies to assist businesses in their efforts to comply with  environmental regulations; encourage businesses to take steps to reduce  pollution; offer incentives (e.g., public recognition) for businesses that  demonstrate good records of compliance; and encourage businesses to  participate in programs to audit their environmental performance and  make the results of these audits and corrective actions available to EPA,  other environmental regulators, and the public.

		Efforts Are Underway to Improve Data, but Critical Gaps Remain

Regardless of other improvements EPA makes to the enforcement  program, it needs to have sufficient environmental data to measure  changes in environmental conditions, assess the effectiveness of the  program, and make decisions about resource allocations. Through its  Environmental Indicators Initiative and other efforts, EPA has made some  progress in addressing critical data gaps in the agency’s environmental  information. However, the agency still has a long way to go in obtaining  the data it needs to manage for environmental results and needs to work  with its state and other partners to build on its efforts to fill critical gaps in  environmental data. Filling such gaps in EPA’s knowledge of  environmental conditions and trends should, in turn, translate into better  approaches in allocating funds to achieve desired environmental results.  Such knowledge will be useful in making future decisions related to  strategic planning, resource allocations, and program management.
Nevertheless, most of the performance measures that EPA and the states  are still using focus on outputs rather than on results, such as the number  of environmental pollution permits issued, the number of environmental  standards established, and the number of facilities inspected. These types  of measures can provide important information for EPA and state  managers to use in managing their programs, but they do not reflect the  actual environmental outcomes that EPA must know in order to ensure  that resources are being allocated in the most cost-effective ways to  improve environmental conditions and public health.
EPA also has worked with the states and regional offices to improve  enforcement data in its Permit Compliance System and believes that its  efforts have improved data quality. EPA officials said that the system will  be incorporated into the Integrated Compliance Information System,  which is being phased in this year. According to information EPA  provided, the modernization effort will identify the data elements to be  entered and maintained by the states and regions and will include  additional data entry for minor facilities and special regulatory program  areas, such as concentrated animal feeding operations, combined sewer  overflows, and storm water. Regarding the National Water Quality  Inventory, the Office of Water recently began advocating the use of  standardized, probability-based, statistical surveys of state waters so that  water quality information would be comparable among states and from  year-to-year.
While these efforts are steps in the right direction, progress in this area has  been slow and the benefits of initiatives currently in the discussion or  planning stages are likely to be years away from realization. For example,  initiatives to improve EPA’s ability to manage for environmental results  are essentially long-term. They will require a long-term commitment of  management attention, follow-through, and support—including the  dedication of appropriate and sufficient resources—for their potential to  be fully realized. A number of similar initiatives in the past have been  short-lived and unproductive in terms of lasting contributions to improved  performance management. The ultimate payoff will depend on how fully  EPA’s organization and management support these initiatives and the  extent to which identified needs are addressed in a determined,  systematic, and sustained fashion over the next several years.

		EPA Has Improved the Management of its Human Capital System, but Challenges Remain in Allocating Staff to Match Enforcement Requirements in its Regions

Since the late 1990s, EPA has made progress in improving the management  of its human capital. EPA’s human capital strategic plan was designed to  ensure a systematic process for identifying the agency’s human capital  requirements to meet strategic goals. Furthermore, EPA’s strategic  planning includes a cross-goal strategy to link strategic planning efforts to  the agency’s human capital strategy. Despite such progress, effectively  implementing a human capital strategic plan remains a major challenge.  Consequently, the agency needs to continue monitoring progress in  developing a system that will ensure a well-trained and motivated  workforce with the right mix of skills and experience. In this regard, the  agency still has not taken the actions that we recommended in July 2001 to  comprehensively assess its workforce—how many employees it needs to  accomplish its mission, what and where technical skills are required, and  how best to allocate employees among EPA’s strategic goals and  geographic locations. Furthermore, as previously mentioned, EPA’s  process for budgeting and allocating resources does not fully consider the  agency’s current workload. With prior years’ allocations as the baseline,  year-to-year changes are marginal and occur in response to (1) direction  from the Office of Management and Budget and the Congress, (2) spending  caps imposed by EPA’s Office of the Chief Financial Officer, and (3)  priorities negotiated by senior agency managers.
EPA’s program offices and regions have some flexibility in realigning  resources based on their actual workload, but the overall impact of these  changes is also minor, according to agency officials. Changes at the margin  may not be sufficient because both the nature and distribution of the  workload have changed as the scope of activities regulated has increased  and as EPA has taken on new responsibilities while shifting others to the  states. For example, controls over pollution from storm water and animal  waste at concentrated feeding operations have increased the number of  regulated entities by hundreds of thousands and required more resources  in some regions of the country. However, EPA may be unable to respond  effectively to changing needs and constrained resources because it does  not have a system in place to conduct periodic “bottom-up” assessments of  the work that needs to be done, the distribution of the workload, or the  staff and other resource needs.
Mr. Chairman, to its credit, EPA has initiated a number of actions to  improve its enforcement activities and has invested considerable time and  resources to make these activities more effective and efficient. While we  applaud EPA’s actions, they have thus far achieved only limited success  and illustrate both the importance and the difficulty of addressing the  long-standing problems in ensuring the consistent application of  enforcement requirements, fines and penalties for violations of  requirements, and the oversight of state environmental programs. To finish  the job, EPA must remain committed to continuing the steps that it has  already taken. In this regard, given the difficulties of the improvements  that EPA is attempting to make and the time likely to be required to  achieve them, it is important that the agency remain vigilant. It needs to  guard against any erosion of its efforts by factors that have hampered past  efforts to improve its operations, such as changes in top management and  priorities and constraints on available resources.
Mr. Chairman, this concludes my prepared statement. I would be happy to  respond to any questions that you or Members of the Committee may  have.

	Contact and Staff Acknowledgments

If you have any questions about this testimony, please contact me at (202)  512-3841 or stephensonj@gao.gov. Major contributors to this testimony  include Ed Kratzer, John C. Smith, Ralph Lowry, Ignacio Yanes, Kevin  Bray, and Carol Herrnstadt Shulman.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.

Summary:
Why GAO Did This Study

The Environmental Protection Agency (EPA) enforces the nation's environmental laws and regulations through its Office of Enforcement and Compliance Assurance (OECA). While OECA provides overall direction on enforcement policies and occasionally takes direct enforcement action, many enforcement responsibilities are carried out by EPA's 10 regional offices. In addition, these offices oversee the enforcement programs of state agencies that have been delegated the authority to enforce federal environmental protection regulations. This testimony is based on GAO's reports on EPA's enforcement activities issued over the past several years and on observations from ongoing work that is being performed at the request of the Senate Committee on Environment and Public Works, and the Subcommittee on Interior, Environment and Related Agencies, House Committee on Appropriations. GAO's previous reports examined the (1) consistency among EPA regions in carrying out enforcement activities, (2) factors that contribute to any inconsistency, and (3) EPA's actions to address these factors. Our current work examines how EPA, in consultation with regions and states, sets priorities for compliance and enforcement and how the agency and states determine respective compliance and enforcement roles and responsibilities and allocate resources for these purposes.

What GAO Found

EPA regions vary substantially in the actions they take to enforce environmental requirements, according to GAO's analysis of key management indicators that EPA headquarters uses to monitor regional performance. These indicators include the number of inspections performed at regulated facilities and the amount of penalties assessed for noncompliance with environmental regulations. In addition, the regions differ substantially in their overall strategies to oversee states within their jurisdictions. For example, contrary to EPA policy, some regions did not require states to report all significant violators, while other regions adhered to EPA's policy in this regard. GAO identified several factors that contribute to regional variations in enforcement. These factors include (1) differences in philosophy among regional enforcement staff about how best to secure compliance with environmental requirements; (2) incomplete and unreliable enforcement data that impede EPA's ability to accurately determine the extent to which variations occur; and (3) an antiquated workforce planning and allocation system that is not adequate for deploying staff in a manner to ensure consistency and effectiveness in enforcing environmental requirements. EPA recognizes that while some variation in environmental enforcement is necessary to reflect local conditions, core enforcement requirements must be consistently implemented to ensure fairness and equitable treatment. Consequently, similar violations should be met with similar enforcement responses regardless of geographic location. In response to GAO findings and recommendations, EPA has initiated or planned several long-term actions that are intended to achieve greater consistency in state and regional enforcement actions. These include (1) a new State Review Framework process for measuring states' performance of core enforcement activities, (2) a number of initiatives to improve the agency's compliance and enforcement data, and (3) enhancements to the agency's workforce planning and allocation system to improve the agency's ability to match its staff and technical capabilities with the needs of individual regions. However, these actions have yet to achieve significant results and will likely require a number of years and a steady top-level commitment of staff and financial resources to substantially improve EPA's ability to target enforcement actions in a consistent and equitable manner.