.



### F L O R I D A D E P A R T M E N T O F E N V I R O N M E N T A L P R O T E C T I O N

I N T E R N A L A U D I T S E C T I O N

Total Maximum Daily Load Program Review

Division of Environmental Assessment and Restoration

Report # IA-03-14-2008-52

June 2008

3900 Commonwealth Boulevard Mail Station 41 · Tallahassee, FL 32399-3000OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

i Promoting Accountability, Integrity and Efficiency TABLE OF CONTENTS

ONTENTS C O N T E N T S AGE P

SCOPE AND OBJECTIVES 1

METHODOLOGY 1

BACKGROUND 2

RESULTS & CONCLUSION 2

RECOMMENDATION 7

DIVISION RESPONSE 8OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

1 Promoting Accountability, Integrity and Efficiency SCOPE AND OBJECTIVES

The scope of this report includes a review of contracts and related issues in the Total Maximum Daily Load (TMDL) Program within the Division of Environmental Assessm ent and Restoration (division), Bureau of Watershed Manage ment (bureau) to date.

The objectives are to evaluate compliance with contra ct management and administration practices as well as determine the current status of the TMDL Program.

METHODOLOGY

The review included tests of division records, interviews with staff and ot her procedures as follows:

 Reviewing internal controls related to contract management and administration;

 Random sampling of TMDL contract agreements;

 Reviewing the adequacy of the cu rrent monitoring file system;

 Comparing contract amounts/rates to grante e invoices and requests for reimbursement;

 Reviewing the most current reports, in cluding, but not limited to, the following:

 Office of Program Policy Analysis and Government Accountability (OPPAGA) report # 05-42, August 2005

 Office of Inspector General (OIG) report # IA-03-14-2006-067, March 2006

 Program Report to the Legislatur e and Governor, February 2005;

 Meetings with key personnel in the di vision and Office of General Counsel; and

 Collecting the most current data related to the TMDL Program.

RESULTS AT A GLANCE

3⁄4 The contract file system was adequate, easily accessible, and well-organized.
3⁄4 Invoices and progress reports were properly maintained and monitored.
3⁄4 The current status of the progr am was obtained and summarized.

WHAT HAS CHANGED SINC E OUR LAST REVIEW?

3⁄4 Additional development and adoption of TMDLs.

WHAT HAS REMAINED THE SAME?

3⁄4 The number of Basin Management Action Plan s (BMAPs) implemented since June 2005. The Ocklawaha River is the only basin currently un dergoing BMAP implementation. The division anticipates adopting two additional BMAPs by June 2008.
3⁄4 Proposed rule 62-305, Florida Administrative Code ( FAC) which sets forth the criteria rankings for grant applicants remains in draft form and has not progressed to the rulemaking process.OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

2 Promoting Accountability, Integrity and Efficiency BACKGROUND

A Total Maximum Daily Load (TMDL) specifies the maximum amount of a pollutant that a waterbody can

receive and still meet wate r quality standards, and allocates pollutant loadings among point and nonpoint pollutant sources. The TMDL Program provides funding for best manageme nt practices and capital project expenditures in order to be tter manage and help redu ce pollutant levels in th e state’s 52 major hydrologic basins. State appropriations of $21,429,490 have been provided in fiscal year 2007-08.

Under section 303 (d) of the 1972 Clean Water Act, states are required to develop lists of impaired waters. These impaired waters do not meet water quality st andards even after point sources of pollution have installed the minimum required levels of pollution control technology. In addition, the law requires that states establish priority ra nkings for waters on the lists and devel op TMDLs for these waters. States must

take into account the seve rity of pollution and uses to be made of the water which may include fishing, swimming, and drinking water. The list must identif y each pollutant that is causing the impairment.

Chapter 99-223, Laws of Florida, sets forth the process by which the sec tion 303 (d) list is refined through more detailed water quality assessments. It also establishes the means for adopting TMDLs, allocating pollutant loadings among contributing sources, and implementing polluti on reduction strategies.

The Division of Environmental Assessment and Restor ation develops, allocates, and implements TMDLs through a watershed-based management approach (m anaging water resources within their natural boundaries) that addresses the state’s 52 ma jor hydrologic basins in five groups.

The department receives documentary stamp funding fo r the implementation of projects to reduce urban nonpoint source pollution discharg ed to impaired waters. These funds ar e restricted to projects that reduce pollutant loadings to water bodies on the state’s verified list of impaired waters or to water bodies with a DEP proposed or adopted TMDL. These funds are used primarily for stormwater retrofitting projects undertaken by local governments. Typically, the de partment provides up to $1,000,000 in grant funding for these water quality improvement projects. All proj ects require a minimum of 50% matching funds. Additionally, some of these funds are used for projects to develop, refine, demonstrate, or monitor urban nonpoint source best management practices.

RESULTS AND CONCLUSIONS

OBJECTIVE 1: To review contract administration and compliance. The program monitors some 58 contract agreements. Th e majority of these contract agreements require the grantee to submit progress reports, reimbursement request s, and invoices at least mo nthly or quarterly. The bureau chief and an environmental sp ecialist are responsible for the financial and administrative duties

related to these contracts. Technical staff within the bureau verify the sc opes of work and monitor completion of the technical deliverables.OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

Promoting Accountability, Integrity and Efficiency

3 The environmental specialist receives progress reports and reimbursement requests and reviews them for accuracy and completeness. He then checks with the tech nical staff to verify that the technical aspects of the project are being met and deliverables provided. The documents are then submitted to the bureau chief for review and approval. Once approved, the inform ation is entered into an Excel spreadsheet and monitored in order to ensure the reporting requirements are fulfilled. The documents are placed in a file organization system. The files are lo cated in two separate filing cabinets and are neatly organized in such a way that makes them easily accessible.

Each project file is divided into three sections: contracts and amendmen ts, invoices, and progress reports. A sample of five contract files was selected for this review: S0107, S0113, S0162, S0261, and S0269. The files were reviewed for accuracy, organization, and adequate documentati on. There were no issues related to the file organization system or the records maintained by the bureau.

OBJECTIVE 2: To determine the cu rrent status of the TMDL Program. In January 2008, we met with the bureau chief to discu ss the objectives of this review and gain a better understanding of the program, funding s ources, internal controls, and curr ent status of the program.

The major surface water basins have been grouped into a basin rotation schedule as presented in the table

below. In order to visualize the current status of the TMDL Program, we highlighted the active phase for each group in the basin rotation schedule in blue.

Basin Rotation Schedule For TMDL Development and Implementation

YEAR 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10

Group 1 PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 Group 2 PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 1 PHASE 2 PHASE 3 PHASE 4 Group 3 PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 1 PHASE 2 PHASE 3 Group 4 PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 1 PHASE 2 Group 5 PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 PHASE 1

1 st Five-year Cycle – High-priority Waters 2 nd Five-year Cycle – Medium-priority Waters

Each group has a cycle of five phases on a rotating schedule: Phase 1: Preliminary evaluation of water quality. Phase 2: Strategic monitoring and assessme nt to verify water quality impairments. Phase 3: Development and adoption of TM DLs for waters verified as impaired. Phase 4: Development of Basin Management Action Plan (B-MAP) to achieve the TMDL. Phase 5: Implementation of the BMAP and monitoring of results.

In addition to the basin rotation sche dule, there are several other items wh ich help explain th e current status of the program and what may be expected over the ne xt year. For example, the bureau established 97 TMDLs for impaired water bodies in the last year and expects to establish 419 additional TMDLs by theOFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

Promoting Accountability, Integrity and Efficiency

4 end of 2009. The total cumulative percentage of TMDL s developed by the end of 2009 is expected to reach 72%. The remaining 28% is schedule d to be completed by the end of 20 11. This schedule is determined by a June 1999 consent decree agreed to by the United St ates Environmental Protection Agency (EPA) and Earthjustice, an environmental law firm.

After reviewing the consent decree, we noted that ma ny water bodies categorized as “high priority” were placed in lower priority groupings. For example, the South Indian River Basi n is listed as “high priority” in the consent decree, but it was placed in group 5 as opposed to group 1. We found 16 instances in which a “high priority” water body was placed in group 4 or 5 of the basin rotation schedule. In addition, 18 “low priority” water bodies were placed in “high priority ” groupings. After further review and discussion with the division director and the bureau chief, we lear ned the consent decree schedule was decided by the EPA and Earthjustice. The two parties based their schedul e on the department’s basin rotation schedule. All “high priority” waters were captured in cycle 1. Thus, where the specif ic group within the cycle was placed appears to not be an issue as long as they were captured in cycle 1.

A new group 1 list was posted on the Web site in February and should be adopted in the near future with TMDLs expected to be established by September 2008. As the population of TMDLs continues to grow, the bureau will reevaluate each group on a cyclical ba sis and assess whether or not BMAPs have been implemented and are achieving results.

The following table lists the funding sources and amounts for the program. Since our last report issued in March 2006, the General Revenue Fund was replaced by th e Water Protection and Sust ainability Trust Fund authorized by section 403.890(1)(b), F.S. Twenty per cent of the funds deposited into this account are directed for the TMDL Program. The TMDL Progr am has received approximately $156.5 million from fiscal years 2000-01 through 2007-08.

TMDL FUNDING SUMMARY

YEAR Doc Stamps General Trust Fund* Annual Total

FY 2000-01 $2,500,000 $2,500,000

FY 2001-02 $2,800,000 $2,800,000

FY 2002-03 $2,800,000 $2,200,000 $5,000,000

FY 2003-04 $2,800,000 $2,200,000 $5,000,000

FY 2004-05 $9,280,000 $6,600,000 $15,880,000

FY 2005-06 $8,500,000 $5,000,0 00 $50,000,000 $63,500,000

FY 2006-07 $14,400,000 $20,000,000 $34,400,000

FY 2007-08 $6,000,000** $21,429,490** $27,429,490

TOTAL $49,080,000 $16,000,000 $91,429,490 $156,509,490

*Water Protection and Sustainability Trust Fund **Amount is approximate and may be subject to change.OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

Promoting Accountability, Integrity and Efficiency

5 A portion of program funds received annually are alloca ted to operations. Operations include expenditures such as staff salary, travel, monitoring, cont ractor services, TMDL development and BMAP implementation. The amount of funding allocated to opera tions depends on the availability of funds and the workload assigned for that fiscal year. The worklo ad may vary based on the number of TMDLs to be developed and the umber of BMAPs to be implemented. From 2003 to 2006, $19.23 million (21.51%) of $89.38 million was used to fund operations.

YEAR Operations Total Funds Operations/Total Funds

FY 2002-03 $ 1,790,000 $ 5,000,000 35.80%

FY 2003-04 $ 2,200,000 $ 5,000,000 44.00%

FY 2004-05 $ 6,600,000 $ 15,880,000 41.56%

FY 2005-06 $ 8,640,000 $ 63,500,000 13.61%

TOTALS $ 19,230,000 $ 89,380,000 21.51%

The Office of Program Policy Analysis & Government Accountability (OPPAGA) issued report #05-42 in August 2005. The following are excerpts from the report:

“The department’s efforts to develop and implement TMDL s are still in the early stag es. As a result, it is too early to determine if the program ha s improved water quality in the state.”

“The department has taken actions to begin implementing TMDLs.”

“To date, the department has established 52 TMDLs and has negotiated basin plans establishing the specific actions necessary to achieve the TM DLs and reduce pollutant levels. Ho wever, as of June 2005, only one Basin Management Action Plan (BMAP) has been fu lly developed and is in the process of being implemented.”

Since OPPAGA’s report, the number of BMAPs implemented remains the same. The Ocklawaha River is the only waterbody currently under going BMAP implementation. No wa ter bodies have been removed from the impaired list. The bureau chief estimates it could take a number of ye ars before demonstrable effects of the program can be measured and for wa terbodies to be removed from the impaired list.

A 2003 OPPAGA report concluded the department’s overall appro ach for developing TMDLs was reasonable; however, OPPAGA recomm ended the following action to help improve the program and better manage its costs.

“The department should further differentiate between types of water bodies, wh ich would avoid designating canals and drainage ditches as impa ired and having to establish TMDLs for such low priority water bodies. This would allow the department to focus attention on developing TMDLs for high priority water bodies.”OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

Promoting Accountability, Integrity and Efficiency

6 The bureau attempted to address this issue beginni ng February 2006 by forming a Reclassification Policy Advisory Committee. The objective was to allow more efficient and effective use of tax dollars while allowing the bureau to focus on higher priority water bodi es. The reclassification policy would need to be approved by the Environmental Regulation Commissi on (ERC). However, the policy attracted opposition due to concerns that the department was abandoning water quality protec tion. The reclassification effort ended January 2007.

The Office of Inspector General conduc ted a review of the program and re ported the results in report # IA03-14-2006-067 issued in March 2006. The following are excerpts from the report:

“Currently, the program uses a criteria documented by proposed rule to determine whether a submitted project application qualifies for funding. Proposed rule 62-305, FAC sets forth procedures to apply and receive funding from the TMDL program. This rule is in draft form, as the divi sion has not yet progressed to the rulemaking process. A definite rule making schedule has not yet been es tablished, al though it is expected in 2006. Part of these procedures includes requirements for submitted projects to provide load reduction estimates and effectiveness monitoring.”

“To date, there has been adequate funding for all su itable projects submitted to the program. According to the Chief of Watershed Management, as the progra m progresses and TMDLs are implemented, there may

come a time in the near future wher e there are more suitable projects than available f unding. Anticipating this, program management has include d a section in the proposed rule fo r project selection criteria that incorporates a point system fo r funding projects.”

We met with the deputy general counsel and the TMDL Program attorney to disc uss the steps involved in formally adopting a proposed rule. For example, we discussed all of th e processes including the initial step of issuing a “Notice of Rule Development” to the final step of filing the rule with the Secretary of State. Next, we discussed the current status of proposed ru le 62-305, FAC. Currentl y, proposed rule 62-305, FAC

remains in draft form. The status has remained unc hanged since our last report. The Office of General Counsel (OGC) did not provide a reason for the delay in rule development and adoption.

Conclusion: The TMDL Program has received approxima tely $156.5 million since fiscal year 2000-01. Over the past eight years, the bureau has managed and administered 58 contract agreements to achieve program objectives. These contracts are carefully mon itored by bureau staff to ensure there is no waste or

misuse of funds. The files were reviewed for accu racy, organization, and adequate documentation. We determined the bureau has an adequate monitoring file system as there we re no issues related to contract management and administration.OFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

Promoting Accountability, Integrity and Efficiency

7 The TMDL Program is making progress with regard s to the development and adoption of TMDLs for impaired water bodies. According to the bureau, 156 TMDLs have been adopted, an additional 100 TMDLs are going through the adoption process, and another 83 TMDLs are in the development stage. The total cumulative percentage of TMDLs deve loped is currently at 51%. The remaining 49% is expected to be complete by the end of 2011.

As previously stated, the number of water bodie s undergoing BMAP development and implementation remains unchanged since our last review as the Ocklawaha River is the only waterbody currently undergoing BMAP implementation, phase 5, fi rst five year cycle. This may be attributed to the complexity of the program, the time it takes for local governme nts and residents to reach common consensus on difficult issues, and the time it takes to acquire the necessary land. The division has recently adopted two

additional BMAPs.

RECOMMENDATION

We recommend the necessary actions be taken by the division and by the Office of General Counsel (OGC) to expedite the adoption of proposed rule 62-305, FAC. The rule would allow the division to be better prepared when applicant demand for grant monies exceed the amount available by providing a system for ranking applications. The next step involves OGC publis hing a Notice of Rule Development and to set up a public workshop for discussion. OGC is not currently aware of any obstac les which would hinder the next

step.

To promote accountability, integrity and efficiency in state government, the OIG completes audits and reviews of agency programs, activitie s, and functions. Our review was conducted under the authority of Section 20.055, Florida Statutes, and in accordan ce with the International Standards for the Professional Practice of Internal Auditing published by the Institute of Intern al Auditors and Principles and Standards for Offices of Inspector General publis hed by the Association of Inspectors General. The review was conducted by Adam Earp and supervised by Greg White.

Please address inquires regarding this report to the OIG’s Audit Director by telephone at (850)245-3151. Copies of final reports may be view ed and downloaded via the internet at http://www.dep.state.fl.us/ig/reports/default.htm . Copies may also be obt ained by telephone (850)245- 3151, by fax (850)245-2970, in person or by mail at Depar tment of Environmental Protection, Office of Inspector General, 3900 Commonwealth Boulevard, Mail Station #41, Tallahassee, FL 32399.

Joseph Aita, Director of Auditing Pinky G. Hall, Inspector GeneralOFFICE OF INSPECTOR GENERAL TMDL Program Review

IA-03-14-2008-52 June 2008

Promoting Accountability, Integrity and Efficiency

8 

### DIVISION RESPONSEPromoting Accountability, Integrity and Efficiency 9