### United States Government Ac countabilit y Office 

# GAO Testimony Before the Committee on Environment and Public Works, U. S. Senate



# ENVIRONMENTAL COMPLIANCE AND ENFORCEMENT EPA’s Effort to Improve and Make More Consistent Its Compliance and Enforcement Activities

Statement of John B. Stephenson, Director, Natural Resources and Environment For R e lea s e on De live ry Expe ct ed a t 9 : 3 0 a.m

. ED T Wedn esd a y, J une 2 8 , 2 0 06



### GAO-06-840T

### What GAO Found

**United States Government Accountability Office** 

### Why GAO Did This Study 

# H ighlights **Accountability Integrity Reliability June 2**  **006** 

# ENVIRONMENTAL COMPLIANCE AND ENFORCEMENT
**EPA's Efforts to Improve and Make More Consistent Its Compliance and**  **Enforcement Activities** Highlights of GA O-06 -840 T , te stimony before the Com m ittee on Enviro nment and Public Works, U. S. Senate

The Env i ronme n t a l Prot ect ion Agency (EPA ) enfo rces th e nation’s

en vi ronm en t a l l a ws and r e g u l a ti o n s through its Office of Enforce m e n t

an d Co mp lianc e Assu ranc e (OECA). While OECA provide s
over all directi on o n en for c emen t polic ie s an d oc ca siona lly take s di re ct en for c e m en t ac ti on , man y
e n forc ement re sponsibilitie s a r e carried ou t by EPA’s 10 r e gional offi ces

. In ad dition, th es e offi ces
ov ers e e th e e n for c em ent p r ogr a ms of s t a t e ag en c i es t h a t h a ve be en dele gat e d th e au thori t y to enfor c e feder a l en viro nmental pr otectio n regulations.

This te stimony is ba se d on G A O ’ s rep o rts on EP A’s en for c em en t

ac tivi ti es i ssu ed ov er th e p a st

sev e r a l ye ars and on obs er va ti ons from on goin g work th at is b e ing perf orm e d at th e r e ques t of this Committee an d the Su bcom mittee

on Interior , E nviro nment and Related Age n cie s , House Committee o n Appr opri a ti ons. GAO’s pr evi o u s r e por ts ex ami n ed th e ( 1 ) co nsi s te nc y amo n g EPA

r e g i o n s in ca rr y i ng ou t

en for c e m e n t ac tiviti es, (2) fa ct ors th at co ntri b u t e to an y inconsis tency, and (3) EPA’ s
ac ti ons to a d dress th es e fa ct ors. Our c u rr ent work e x ami n es h ow EPA, in cons u l tatio n wi th r egio n s and st at es, se ts pri o ri ti es f o r
com p l i an c e a nd en for c e m e n t an d how th e agen cy and s t ates det e rmine re spec t i v e compl i an ce and e n f o rc em en t rol e s and

re sponsibilitie s an d a lloc a te

reso urces for th ese pur pos es. EPA re gions vary substan t iall y in the a c tions they t a ke to enforc e environment a l r equir eme n ts, ac cord ing to GAO’s a n alys is of ke y manag e m e nt indicators th at EPA h ead quarters us es to monitor regional performance. These indicators include the number of inspections performed at regulated f acilities and the am ount of penalties assessed for noncompliance with environmental regu lations. In addition, the regions differ substantiall y in thei r overall stra tegi es to ov e r see state s w i thin their jurisdictions. For exampl e, contrary to EPA poli cy, some regions did not require state s to report al l si gnific ant violators, while other regio n s adhered to EPA’s poli cy in this regard.

GAO identified se ver al f a ctors that co ntribute to regional variations in enforcement. Thes e factors include (1) differe nces in philosophy among regional enforcement staff about how b e st to secure complian ce with environment a l r equir eme n ts; (2) inco mplete and unreliabl e enforcement data that imp e de EP A’s ab ility to accu ratel y determ i n e the extentto which vari a tions oc cur; and (3) a n antiquat ed workforce planning and allocation syste m that i s not adequat e for depl oyi n g staff in a manner to en sure consistenc y and effecti v e n ess in en forcing environ m ental r equi r ements.

EPA re cogni z es that whi l e som e v a ri at ion in enviro nmental enfo rcem ent is necessary to reflect loca l conditions, core enforcement requirements must be consist e ntly implemented to ensure fairness and equitabl e tre a tment. Consequently, similar vio l ations shoul d be met wit h similar enforcement responses regardless of geographic lo cat ion. In response to GAO findings and recommendations, EPA has initia t e d or planned several lon g -term actions that are intended to achie ve gr eater consist e ncy in stat e and regional enforcement actions. The s e in clude ( 1 ) a new State Re viewFra m ework process for mea s uring st ates’ p e rforma nce of core enforcement acti v iti e s, (2) a number of initiati ves to improve t h e ag enc y ’s c o mplianc e a nd enforcement data, and ( 3 ) enhancem en ts to the ag e n cy’s workforce pl anning and allo catio n syste m to i m prove the a genc y ’s abil ity to match its staff and technical cap abiliti e s w i th the needs of individual r e gions. However, these actions have yet to achieve si gnifi cant results and will likely r equ ire a number of years and a steady top-leve l commitment of staff and financial resources to substantially improve EPA ’ s abi lity to t a rget enforce m ent actions in a consistent an d equitable manner.

www.gao.g o v/ cgi

- bin/getrpt? GA O-06-840 T

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To view t he full product, click on t he link above. For mo re informa t ion, conta c t Joh n B. Stephenso n at (2 02) 512 -3841 o r stephen sonj@ga o .gov.Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss our work on the Environmental Protection Agency ’s (EPA) difficulties in ensuring consistent a nd equitabl e enforcement actions among its r egion s and among the states. Our testimony today is based on reports we have issued on EPA’s compliance and enforce m ent activiti e s over the past several years, 1 and p r ovides some observation s from the ongoing work that we are performing at your request and that of the S ubcommitte e on Interior , Environment and Related Agencies, House Committee on Appropriations. As you know, we are assessing how EPA, in consultati on with regions and state ag encies, sets priorities for compliance and enf o rcement an d how the a gency and the states de termine respective compliance and e n forcement roles and responsibilities and allocate resources for these purposes. As part of this effort, we are assessing EPA’s initiate d and pl an ned actions to address key factors that result in inconsistencie s—identified in our previ ous work—in carrying out its enforcement responsibilit ies. We expect to complete this ongoing revi ew on EPA and state en forcement and issue our report in March 2007.

EPA seeks to achie ve cl eaner air, pu rer water, and better pr otected l and in many different ways. Compliance with the nation ’s environmental laws is the goal, an d enforceme n t is a vital p a rt of the eff o rt to encou r age state and local go vernments, companies, and others who are reg u lated to me et their enviro nmental obligations. Enf o rcement de ters those who might otherwise seek to profit f r om violatin g the law, a n d levels the playing fi eld for environmentally co mpliant companies.

EPA administers its environmental enforcement responsibilities through its Office of Enforcement and Compliance Assurance (OECA). While OECA provi d es overall direction on enforcement policies, and occasionall y takes direct enforcemen t action, ma ny of its enf o rcement responsibilities are carri ed out by its 10 regional offices (regi ons). These regions, in addition to taking dir ect e n forcement action, o ver see the

1 See GA O, Environmenta l Pro tecti o n: More C o nsi ste ncy Nee d ed Among EP A Regi ons i n Approach to Enforcement , G A O/RCED-00-108 (Was hingt o n , D

. C. : J u ne 2 , 2 0 00); Huma n Capit al: Imple m e n t in g an Effe c t ive Wor kforc e Str a te gy Wou l d H e lp EP A to Ac hie ve Its Strategic Goals , GA O-01-812 (W ash i n gto n, D.C. : Ju ly 31, 200 1 ); a n d Clea n Wa ter Act : I m

p r

oved Resourc e P l a nni ng Would He lp EP A Bette r Re sp ond to Ch a n gi ng Need s a n d Fi sca l Con s tra i nts , GAO-05-7 2 1 (Was hingt o n , D

. C. : J u ly 22, 2005).

Page 1 G A O- 06 -8 40 Tenforcement programs of state ag enci es that hav e been del egat ed authority for enforcing f e deral enviro nmental protection requi r ements. 2

In my testimony today, I will describe the (1) ext e nt to which variations exist among EPA’s regions in enforc i n g environmental require m ents, (2) key factors that contribu te to any such variations, and (3) stat us of the agenc y ’s eff o rts to address these fac t ors.

In summary, as we previ ously repor ted on region al efforts to enforce provisions of the Clean Water Act a nd the Clean Air Act, the regions vary substantially in the actions they take to enforce environmental requirements. These vari a tions show up in key management i ndicators that EPA headquarters o fficials hav e used to monitor regional performance, such as th e number of inspections performed at regulated facilities and the amount of penalt i e s assessed for noncompliance with environmental regulation s. For example, in fiscal year 2 000, th e number of inspections conducted u nder the Clean Air Act compared with the number of facilities i n each r egio n subject to EPA’s inspection under the act varied from a high of 80 perc en t in Region 3 to a low of 27 perc ent i n Regions 1 and 2.

We also rep o rted that it is important to understand the reason s for some o f these variati ons, such as a regional d e termination to conduct more indepth inspections at a f e wer number of facilities i n stead of conducting les s intensive examinations at many mo re faciliti e s. Accordingly, we recommended that EPA clarify whic h enforceme n t actions it expects to see consistently implemented across th e regions and direct th e regions to supplement its reporting with information that h e lps explain why variatio n occurred. We did not focus our work on the effect s of inconsistent enforcement on various t y pes of busi n esses, including small businesses, the particula r

focus of the Committee’s hearing to day. Howev e r, in performing our work we noted that a recent stud y for the Small Business Administration, 3 as well a s other studies, have sug gested that environmental requireme n ts fall most heavil yon s m all businesses. To the

2 F or many feder al environme n t a l prog rams , E P A ei ther aut h oriz e s s t ates to adminis t er the federal p rogra m or retains a u thority t o admi nister the prog r am for the stat e. The state programs that have bee n a ppr oved by EP A a r e des c ribed as “delegated” in t h is tes timony for clarity a n d cons is tency w i th EP A prog ram terminology

.

3 W. Ma rk Crain , T h e Impac t of Re gu lator y Costs on Small F i rms , a re port pr epared at the request of the Small Business Administration’ s Office of A d v o cacy (Washington, D

. C., September 200 5).

Page 2 G A O- 06 -8 40 Textent that t h is is the cas e, small businesses could be espe cially disadvantag e d by a n y in consistencie s and inequit ies in EPA’s enforcement approach. E P A has made progress towa rd resol v ing challenges in its enforcement activiti e s that we have p r eviously id entified. No netheless, each of th e challen ges i s complex and will require much mo re work and continued vi gilance to overcome.

Our work ha s identified several f actor s contributing to region al variations : (1) differences in the phi losophy of enforcement staff about h o w to best achiev e comp liance with environmental requirements; (2) inc o mplete and inadequate enforcement data, which ha mper EPA ’ s ability to accurately determine the extent of variations; a nd (3) an an tiquated workforce planning an d allocatio n system that is not adequ a t e for deploy ing staff to ensure great er consistency and effec t iveness in e n forcing envi ronmental requirements.

Finally, EPA recognizes t h at to ensur e fair and eq uitable treat ment, core enforcement requirements must be consistently implemented so that similar violations are met with sim ila r enforcement responses, regardless of geographi c location

. Accordingly, and in respo n se to our findings and recommendations, the a gency has in itiated or pla nned actio n s that are intended to achiev e gre a t er consistency in re gio n al and state enforcemen t activities. T h ese actions include th e following:

• Developing the State Rev i ew F r

amework . This framework involves a n e w process for conducting reviews and m easuring the performance of core enforcement programs in states wi th delegat ed au thority (as well as nondelegated programs implemented by EPA regi ons). Although the process is a promising means for ensu ring more consistent enforcement actions, it is too early to assess whet her the process will resu lt in more consistent e n forcement actions and a lev e l pla y i n g field for t h e regulat e d community across the nation.

• Improving management information . EPA has a number of ongoing activities to improve the agenc y ’s enf o rcement da ta, but the d a ta problems are long-standing and complex. It w ill likely require a number of years and a steady top- level commitment of staff and finan c i a l resources to substantially improve the data so that they c an be effectiv ely u s ed to target enforcement actions in a consistent a nd equitabl e manner.

• Enhancing workforce pl anning and allocation . For the past several years, EPA has taken measures to improve its ability to match its staff and technical capabilities with the needs of individual regions and states. For

Page 3 G A O- 06 -8 40 Texample, EP A develope d a human ca pital strateg yand p e rformed a study of its workforce compet encies. Non e theless, the agen cy still needs to determine how to deploy its employees among it s strategic g o als and geographi c l o cations so that it can most effective l y use its resources, including its compliance and enforce m ent resources.

EPA’s enforcement program depends h eavily up on inspectio ns by region al or state enfo rcement staff as the pr imary means of detectin g vi olations and evaluati ng overall facility comp li ance. Thus, the qualit y and the content of t h e ag ency ’s and states’ i n spections, and the num ber of inspections undertaken to ensure ad equate coverage, are important indicators of the enforce m ent program’s effective n ess. However, as we reported in 2000 , EPA’s regional offi ces varied s ubstantially on the a c tio n s they take to enforce the Clean Water Act and Clean Air Act. Consistent with earlier observation s of EPA’s Office of Insp ector Gener a l and int e rnal agency studi es, we found these variat i ons in regio n al actions r e flected in the (1) number of inspections EPA and state en forcement personnel conducted at facilities di scharging po llutants within a region, (2) number and type of enforcement actions taken, and (3) th e size of the penalties assessed and the criteri a used in de t e rmining the penalties as sessed. For example, as figure 1 indi cates, the nu mber of inspections con ducted und er the Clean Ai r Act in fiscal year 2 000 c o mpared with the numbe r of facilities in each region subject to EP A’s inspection under the act varied from a high of 80 perc en t in Region 3 to a low of 27 perc ent i n Regions 1 and 2. 

# Regi onal Enforcement Activi ties V ary Substantially

Page 4 G A O- 06 -8 40 T**Figure 1: Percentage of Tot al Regulated F**  **acilities Inspected Und er the Clean Air Act**  **Du rin**  **g Fiscal Year 2**  **000, b y**  **EPA Reg i**  **o n** 

While the variations in enforcement raise questio n s about the need for greater cons istency, it is also important to get b e h i nd the dat a to understand the cause of t h e variation s and the ex tent to which they reflect a problem. For example, EPA attributed the low n u mber of inspections by its Region 5, in Chicago , to the region al office ’s de cision at the time to focus limited resources on performing detail ed and resource-intensive investigatio ns of the region’s numerous electric power plants, rather tha n conducting a greater nu mber of less intensive ins p ections.

We agree th at regional d a ta can be easily misinterpreted without the contextual i n formation needed to cl arify whethe r variation i n a giv e n instance is i n appropriate or whether it reflects th e appropriat e exercise of flexibility by regions and states to tail or their priorities to their individual needs and ci rcumstances. In this rega rd, we recommended that it would be appropri a te for EPA to (1) clarify which aspe cts of the en forcement program it expects to se e implemente d consisten t ly from region to region and which aspects may appropriatel y be subject to greater variation and (2) supplement region-b y -region dat a with contextual information that helps to exp l ain why var iations occu r and thereb y clarify th e extent to which variat i ons are problematic. **100**

**90**

**80**

**70**

**60**

**50**

**40**

**30**

**20**

**10**

**0 1 2 3 4 5 6 7 8 9 10** 

**EPA Re g**  **ion Percenta**  **g e** 

Source: GAO’s analysis of EPA data.

Page 5 G A O- 06 -8 40 TOur findings were also consistent wi th the findings of EPA’s Inspector General and OECA that regions var y i n the way they oversee statedelegat ed pr ograms. In this regard, c ontrary to EPA policy, s o me regions did not (1) conduct an adequate nu mber of oversight inspections of state programs, (2 ) sufficiently encourage s t ates to cons ider economic benefit in calcul a tin g penalti e s, (3) take more direct fed e ral actions where states were slow to act, and (4 ) require states to report all signific a n t violators. Regional a n d state offici als generall y indicated th at it was difficult for them to asce rtain the ext e nt of variati on in region al enforcem ent acti v ities , given th eir f o cus on acti v ities within their own geographic e nvironment. However, EPA headquarters officials responsible for the air and water programs noted that such variati on i s fairly commonplace and does pose problems. The director of OECA’s water enforcement division, for example, tol d us that, in reacting to s i milar violations, enforce m ent responses in certain regi ons are stron ger than th ey are in oth e rs and that such inconsistencies hav e increased.

Similarly, the director of OECA’s air enforcement division sai d that, gi ven the consider able auton o m y of the re gional offic e s , it is not surprising that variations exist in how they approach enforceme n t and state oversight. In this regard, t h e director noted, disp a r ities exist among regions in the number and quality of in spections co nducted an d in the number of permits written in relation to the number of sources requi r ing permits.

In response to these find ings, a numbe r of regions have b egun to develop and implement state au dit protocol s, believin g t h at havin g such protoco l s could help t h em review the state pro g rams within their jurisdiction with greater cons istency. Her e , too, reg i o n al approa c h es differ. F o r example:

• Region 1, i n Boston, has adopted a comprehensive “multimedia” approach in which it simultaneously audits all of a state’s d e legat ed en vi ronmental programs.

• Region 3, i n Philadelphia , favors a more targeted approach in which air, water, and waste programs are audited individu ally.

• In Region 5, in Chicago, the office ’s ai r enforcement branch ch ief said that he did not vi ew an audit protocol as particularly useful, notin g that he prefers regional staff to engag e in joi n t inspectio ns with states to assess the states’ p e rformance in the field a nd to take di rect federal action when a state a c tio n is inadequ ate.

Page 6 G A O- 06 -8 40 TWe recogniz e the pote n ti al of these p r otocols to a c hieve great er consistency by a regi on i n its oversight of its states, and the n eed to tail or such protocols to meet regional conc erns. However, we also b e lieve that EPA guidan ce on k ey el ements that should be co mmon to all protocols would help engend e r a higher lev e l of consistency among al l 10 regio n s in how they ov ersee states.

While EPA’s data show v a riations in key measure s associated with the agenc y ’s enf o rcement program, they do li ttle to e xplain the c auses of the variations. Without information on causes, it is difficult to determine the extent to wh ich variation s represent a problem, a r e preventab l e, or reflect appropriate regional an d state flexibi lity in appl yi ng national program goals to uniq u e circumstances. Our work identified the follo wing causes: (1) differences in philosophical ap proaches to enf o rcement, (2) incomplete and inac cur a te nation al enforcement data, and (3 ) an antiquate d workforce planning a nd allocation sy stem.

While OECA has issued policies, me morandums, and other d o cuments to guide regio n s in their ap proach to en forcement, the consider able autonomy built into EPA’s decentralized, multilevel organizational structure allows regional offices con s iderable lat i tude in ad a p ting headqu arters’ direction i n a way the y believ e best suits their jurisdiction. The variatio n s we identified often re flect differe nt enforcement approaches in determining whether t h e region sh ould (1) rely predominantly on fines and other tr aditional enforcement methods to deter nonco m pliance an d to bring vi olators into compliance or (2) place greater relia nce on altern ative strate gies, such as compliance assistance (workshop s, site visits, and other acti v ities to identify and res o lve potential co mpliance problems). Regions have also differed on whether deterrence c ould be a c hi eved b e st through a small number of high-profile, resource-intensive c a ses or a larger n u mber of smaller cases t h at establish a more widespread, albei t lower profile, enforc ement presenc e . Further complicatin g matters are the wide d i fferences a m ong states in their enforcement approaches and the vari ous ways in which regio n s respond to these diff erences. So me regions step more readily into c a ses when they consider a state’s actio n t o be inad equ ate, while ot her regions are more concerned about infringi ng on the d i scretion of states that have been delegat ed en forcement responsibilities. While all of these app r oaches may be permissible, EPA has experien ced problems in identifying and communicating the e x te nt to which var iation eit h er represents a problem 

# Several Factors Contribute to V

a

ri ations in Regional Enforcement Programs

Regions Differ in Their Philosophical Approaches to Enforcement

Page 7 G A O- 06 -8 40 Tor the appro p riate exerci se of flexib il ity by regi on s and states to apply national pro g ram goals to their uniqu e circumstances.

OECA needs accurat e an d complete enforcement data to d e termine whether regions and states are consi s tently implementing co re program requirements and, if not, whether sign ificant v a riations in meeting these requirements should be corrected. T h e region or the state res ponsible for carrying out the enforcement program is responsible for entering data int o EPA’s national datab a se s. However, both the qu ality of and q u ality controls over these data were critic ized by state and regional staff we interviewed.

Internal OECA studies have also ack nowledged t h e seriousness of the data problem. An OECA wo rk group, the “ T argeting Pr ogram Review Team,” stated that k ey functions related to d a ta qu ality, s u ch as the c onsistent entry of info rmation by regions and s t ates, were n o t working properly and that there were important information gaps in E P A’s enforce m ent-related databases. A nother OEC A work grou p concluded in 2006, “OECA managers do not hav e a vailabl e to t h em timely, complete, a nd detailed analyses of r egional or n a tional perf ormance.” A third OECA work group asserted that the situatio n has deteri orated from past years, n o ting:

“managers in t h e regions and in OECA headq u arters have be come increasingly frustrated that they are n o t receiving f r o m [the Office o f Compliance] t h e re ports a n d data analyses they nee d to m a nage their programs...[and th ere] has been less attention to the data in the national systems, a comme nsurate decline in data q

u ality, a nd insufficient use of data by
enforcement/c o mpliance managers.”
Consistent with our findings and recommendations, EPA’s Office of Inspector General recen t ly reporte d that, “OECA’ s 2005 pu bli c ly-reported GPRA [Government Performance an d Re sults Act] performance measures do not effect ively charac terize chang e s in compliance or oth e r outcomes because OE CA lacks reliable compli ance rat e s a nd other reli able outcom e data. In the absence of complian ce rates, OECA reports prox ies for compliance to the public and does no t know if compliance is actually going up or down. As a result, OECA does not have all th e data it needs t o make management and p r ogram decisions. What is missing most, the biggest gap, is information about co mpliance rat e s. OECA cannot demonstrate the reliabilit y of other m easures because it has not verified that estimated, predict e d, or facilit y self-reported outcomes actually took place. Some measures do not clearl y l i nk to OECA’s strategic g o als. Finally, OECA frequently changed its pe rformance measures from year to 

## National Enforcem ent Data Are Incompl e te and Inaccurate

Page 8 G A O- 06 -8 40 Tyear, which reduced tra n sparency.” For example, between fis cal y ears 1999- 2005, O ECA reporte d on a low o f 23 performance measur es to a high of 69 measu r es, dependi ng on the fis cal y ear.

Although EPA is working to improve its data, the problems are extensive and comple x. For example, the Insp ector Gener a l recentl y r e ported that OECA cannot generat e programmatic compliance information for five of six program areas; lacks knowledge of the number, location, and levels of compliance for a signific ant portion of its regulat e d universe; and concentrates most of its regulatory activities on l a rge entiti es and knows little about t h e identities or cumulative impact of small entities. Consequentl y, the Inspector Genera l reported, OECA currently cannot develop programmatic compliance i n formation, adequat ely r e port on the size of the universe for which it ma intains responsibility, or rely on the regulated un iverse data t o assess the effectiv enes s of enforce m ent strategies. 4

As we reported, EPA’s process for budgeting an d allocatin g resources does not full y consider t h e ag ency ’s current workload, eith er for specific statutory req u irements, such as those included in the Clean W a ter Act, or for broader goals and ob jectives in th e ag ency ’s strategic pl an. Instead, in preparing its requests for funding and staffing, EPA makes incremental adjustments, largely base d on historical preced ent s , and thus its process does not refl ect a bottom

- up review o f the nature or distribution of the current workload. While EPA has initiated sever al projects ov er the past decade to i m prove its workload and workforce assessment systems, it continues to face major challen ges i n this area

If EPA is to substantially improve it s resource planning, we reported, it must adopt a more rigorous and systematic process for (1) obtaining reliable dat a on key wor k load indic a t ors, such as the qual ity of water in particular ar eas, which c an be used t o budget an d allocat e re sources, and (2) designing budget an d cost acco u n ting systems that are ab le to isolate the resource s needed an d allocat ed t o key e n forc ement activi t ies. 

## EP A

’ s W o rkfor ce Planning and Allocation System Is Not Adequate for Effectivel y Deployi n g Staff to Regions

4 EPA Office of I n spector Gene ral, Li mi ted Kn owled g e of th e Uni v erse of Re gula ted Enti ti es I m

p e d es EPA’ s Abi l i t y to Demonstr a te Ch a n ges i n Regula tory Co mp li a nce, Report No . 200 5-P

- 00024, Sept ember 19 , 2005

.

Page 9 G A O- 06 -8 40 TWithout reliable workforce information, EPA cannot ensure consistency in its enforcement acti v ities by hiring th e right number or type of staff or allocatin g e x isting staff resources to meet current or future needs. In this regard, since 1990, EPA has hired th ousands of employees without systematically consideri n g the workforce impact of chang e s in environmental statutes and regula tio n s, technolo g ical advan ces in affecting t h e skills and expertise need ed to conduct enforcement actions, or the expan s ion in state environmental staff. EPA has yet to f a ctor these workforce changes into i t s allocation of existing s t aff resource s to its headqu arters and region al offices to m eet its stra tegic goals. Consequentl y, should EPA either downsize or incr ease its enforcement and compliance staff, it would not have t h e information needed t o determine how many employees are appropriate, what tec hnical skills they must have, and ho w best to alloc a te employe e s among strategic goals and geo grap hic locatio n s in order to ensure that reductions or increases co uld be absor b ed with minimal adverse impacts in carrying out the ag en cy’s mission.

Over the pas t several y e a r s, EPA has initiated or p l anned sev e ral actions to improve its enforcement program. We belie ve th a t a few of th ese actions hold particu l ar promise for addre ssing inconsistencies in regi onal enforcement activiti e s. These actions include (1) the creation of a State Review Framework, (2) im provements in the qu ality of enf o rcement dat a , and (3) enha ncements to the ag ency ’ s workforce planning an d allocatio n system.

The State Review Framework is a new process fo r conducting performance reviews of enforcement and compli ance activiti e s in the states (as well as for no ndeleg a te d programs implemented b yEPA regions). These reviews are intended to provide a mechanism by which EPA can ens u re a consistent level of environmental and publi c health protection across the country. OECA is in the second year of a 3-year project to make Stat e Re view Framewor k reviews an integral part of the regional an d state oversi ght and pl an ning process and to inte g r ate any regional or s t ate correcti ve or follo w-up actions i n to working agreements between hea d quarters, regions, and st ates. It is too early to assess whethe r the process will provide an effecti ve means for ensuring more consistent enforcement actions and oversight of st ate progra ms to help ensure a leve l playing fi eld for the regu lated community across the country. Issues that still need to be addressed incl ude how EPA will assess states’ 

# EP A Has Initiated or Planned Actions to Achieve Greater Consistency in Enforcement Activi ties

EP A

’ s State Review Framework Holds Promise, but It Is T oo Early to Assess Its Effectiveness

P a g e 10 G A O- 06 -8 40 Timplementation of altern ative enforc ement and c o mpliance strategies, such as strategies to assi st busine sse s in their efforts to comp ly with environmental regulation s; encourag e businesses to take steps to reduce pollution; of fer incentives (e.g., publi c recognitio n) for businesses that demonstrate good record s of compliance; an d encourage busi n esses to participate i n programs to audit their environmental performance and make the re sults of these audits and corrective a c tions avail a ble to EPA, other enviro nmental regulators, and the public.

Regardless of other improvements EPA makes to the enforce m ent program, it needs to ha v e sufficient environmental data to measure changes in environmental conditions, assess the effectiven ess of the program, and make deci sions about resource all o cations. Th rough its Environmental Indicator s Initiative and other eff o rts, EPA has made some progress in addressing critical data g a ps in the a g e ncy’s e nvir onmental information. However, the agency still has a long way to go in obtaining the data it n eeds to manage for en vir onmental results and ne eds to work with its stat e and other partners to build on its efforts to fill critical gaps in environmental data. Filli ng such gaps in EPA’s knowledge of environmental condition s and trends should, in t u rn, translate into better approaches in allocatin g funds to achieve d e sired environmental results. Such knowledge will be useful in making future decisions related to strategic pla nning, resou r ce alloc a tio n s, and prog ram management.

Nevertheles s, most of the performan ce measures that EPA an d the states are still using focus on outputs rather than on results, such as the number of environmental polluti on permits issued, the n u mber of environmental standards established, and the number of facilities inspected. These types of measures can provid e important information for EPA and state managers to use in mana ging their pr ograms, but they do not reflect the actual envir onmental outcomes that EPA must k now in order to ensure that resources are being allocate d in the most cost-effectiv e ways to improve environmental conditions an d public health.

EPA also has worked with the states and region al offices to i m prove enforcement data in its P e rmit Compliance S y ste m and believ e s that its efforts have improved data qualit y. E P A officials said that the system will be incorpor ated into th e Integrated Compliance Information System, which is being phased in this year. A ccording to i n formation 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 facilit ies and special regul a tory program 

## Efforts Are Underway to Improve Data, but Critical Gaps Re main

P a g e 11 G A O- 06 -8 40 Tareas, such as concentr ated animal feeding op erations, combined sewer overflows, and storm water. Regardi ng the Natio n al Water Q u ality Inventory, t h e Office of Water recen tly beg an ad vocating the use of standardized, probabilit y-based, stat isti cal surveys of state waters so that water qualit y information would be comparable among states and from year-to-ye ar.

While these efforts are steps in the ri ght directio n, progress in this area h a s been slow and the ben e f i ts of initiatives currentl yin the discussion or planning sta ges are like l y to be years away from realization. F o r example, initiatives to improve EPA’s ability to manage for environmental results are essential l y long-term. They will require a long- t erm commi t ment of management attention, f o llow-through, and supp ort—including the dedication o f appropriate and suffici ent resources—for their potential to be fully reali z ed. A number of similar initiatives in the past have been short-lived and unproductive in t e rms of lasting contributions to improved performance management. The ulti mate payoff will depend on how fully EPA’s organization and management support these initiatives and the extent to wh ich identifie d needs are addressed in a determine d , systematic, and sustaine d fashion ov er the next s everal years.

Since the lat e 19 90s, EP A has made progress in improving the manageme n t of its human capital. EPA’s human capital strate gic plan was designed to ensure a systematic proc ess for identifying the ag ency’s huma n capital requirements to meet strategic go als. Furthermore, EPA’s strategic planning in c l udes a cros s-goal strategy to link str a tegic plann i ng efforts to the ag ency ’s human capi t al strategy. Despite such progress, effectiv ely implementing a human c a pital strate gic plan remains a major challen ge. Consequentl y, the agen c yneeds to c ontinue monitoring progress in developin g a system that will ensure a well-trained and motivat ed workforce with the right mix of skills and experi ence. In this regard, the agency still has not taken the acti o n s that we recommended in July 2001 t o comprehensively assess its workforc e—how many employees it needs to accomplish its mission, what and wher e techni cal skills are required, an d how best to allocate employees amo n g EPA’s strategic goals and geographi c l o cations. Fu rthermore, as previously mentioned, EPA’s process for budgeting a nd allocati n g resources does not full y consider t h e agenc y ’s curr ent workload. With pri o r years’ all o cations as t h e baseline , year-to-year changes are marginal an d occur in response to (1) direction from the Office of Management and B udget and th e Congress, (2) spending caps imposed by EPA’s Office of the Chief Finan c ial Officer, and (3) priorities negotiated b ysenior agen c ymanagers. 

## EP A Has Improved the Managem ent of its Human Capital System, but Challenges Remain in Allocating Staff to Match Enforcem ent Requirem ents in its Regions

P a g e 12 G A O- 06 -8 40 TEPA’s program offices and regions h ave some flexibility in realigning resources based on thei r actual workload, but th e overall impact of thes e changes is al so minor, according to a gency offici als. Changes at the margi n may not be s u fficient because both th e nature and distribution of the workload have ch anged as the scope of activiti e s regulated h a s increased and as EPA has taken on new responsib ilities while shifting ot hers to the states. For example, con t rols over pollution from storm water and animal waste at con centrated f e eding op er ations have in creased the number of regulated en tities by hun dreds of t housands and required more resources in some regions of the country. Ho wever, EPA may be u n able to respond effectiv ely t o changi ng n eeds and co nstrained resources because it does not have a s y stem in place to co ndu ct periodic “ bottom-up” assessments of the work that needs to b e done, th e distribution of the workload, or the staff and oth e r resource needs.

Mr. Chairman, to its cred it, EPA has initiated a nu mber of actions to improve its enforcement activiti e s an d has invest e d consider able time an d resources to make these activities mo re effectiv e and effici ent

. While we applaud EP A’s actions, t h ey ha ve thu s far achiev e d only limite d success and illustrate both the i m portance and the difficulty of addressing the long-standin g problems in ensuring t h e consisten t application of enforcement requirements, fines and penalties for violations o f requirements, and the o v ersight of stat e en vironmental programs. To finish the job, EPA must remain committed to continuin g the steps t h at it has already t a ke n. In this reg a rd, give n th e difficulties of the improvements that EPA is attempting to make and the time like l y to be re qu ired to achiev e the m , it is important that th e ag ency re main vigilan t . It needs to guard ag ainst any erosio n of its efforts by factors that hav e h a mpered pa st efforts to improve its op erations, such as chan ges in top mana gement and priorities and constraints on avail a bl e resources.

Mr. Chairman, this concl udes my prepar ed statement. I would be happ y t o respond to any questions that you or Members of the Committee may have.

If you have any qu estions about this testimony, please cont act me at (202) 512-3 841 or stephensonj@gao.gov . Major contributors to this testimony include Ed Kratzer, Joh n C. Smith, Ralph Lowry, Ignacio Y anes, Kevin Bray, and C a rol Herrnstadt Shulman. 

# Contact and Staff Acknowledgments

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