Audit Report

OIG-16-051

RESTORE ACT

Gulf Coast Ecosystem Restoration Council’s Records 

Management System Needs Improvement

July 27, 2016

Office of

Inspector General

Department of the Treasury

Contents

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System Needs Improvement (OIG-16-051) 

Audit Report ................................................................................................ 1

Background ................................................................................................ 2

Initial Comprehensive Plan and Programmatic Environmental Assessment ...... 3

Results of Audit .......................................................................................... 4

Records Management System Needs Improvement ..................................... 4

 Recommendation ............................................................................. 7

Appendices

Appendix 1: Objective, Scope, and Methodology..................................... 10

Appendix 2: Management Response ...................................................... 12

Appendix 3: Background on RESTORE Act.............................................. 14

Appendix 4: Major Contributors to This Report........................................ 15

Appendix 5: Report Distribution............................................................. 16

Abbreviations

APA Administrative Procedure Act

Clean Water Act Federal Water Pollution Control Act

Council Gulf Coast Ecosystem Restoration Council

NEPA National Environmental Policy Act of 1969 as amended

PEA Programmatic Environmental Assessment

Plan Initial Comprehensive Plan

RESTORE Act Resources and Ecosystems Sustainability, Tourist

 Opportunities, and Revived Economies of the Gulf

 Coast States Act of 2012

Treasury Department of the Treasury

Trust Fund Gulf Coast Restoration Trust Fund
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This Page Intentionally Left Blank
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

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System Needs Improvement (OIG-16-051)

July 27, 2016

Justin R. Ehrenwerth

Executive Director, Gulf Coast Ecosystem Restoration Council

This report presents the results of our audit of the Gulf Coast 

Ecosystem Restoration Council’s (Council) Programmatic 

Environmental Assessment (PEA), which was developed to 

evaluate the potential environmental impacts related to the Initial 

Comprehensive Plan (Plan). We performed this audit as part of our 

ongoing oversight of programs, projects, and activities to be 

funded by the Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act 

of 2012 (RESTORE Act).1 Our audit objective was to assess 

whether the PEA complies with the RESTORE Act, the National 

Environmental Policy Act (NEPA),

2

as well as applicable provisions 

of other Federal laws, regulations, and guidance. Appendix 1 

provides more detail of our audit objective, scope, and 

methodology.

In brief, we concluded that the PEA conformed with the RESTORE 

Act and NEPA; however, we noted weaknesses in certain of the 

Council’s operations related to other Federal requirements. 

Specifically, the Council’s records management system needs 

improvement. Documentation was either missing or incomplete and 

what did exist was not organized to facilitate efficient retrieval of 

information. Furthermore, the Council lacked policies and 

procedures for maintaining records and it did not timely make all 

comments received related to the Draft Plan and Draft PEA 

available to the public as required by the E-Government Act.

3

Accordingly, we recommend that the Executive Director establish 

and implement appropriate records management policies and 

 

1 Pub. L. 112-141, 126 Stat. 588-607 (July 6, 2012)

2 42 U.S.C. § 4321 et seq.

3 44 U.S.C. § 101 et seq.
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procedures to document the decision making process and ensure 

transparency of the Council’s operations. The records management 

policies and procedures should address the handling and public 

disclosure of comments related to proposed rulemaking.

In a written response, the Council Executive Director concurred 

with the recommendation to establish and implement appropriate

records management policies and procedures. Furthermore, 

management’s response commented that the audit covered Council 

activities primarily in 2013, shortly after the enactment of the 

RESTORE Act and creation of the Council. At that time, the 

Council was administratively housed within the Department of 

Commerce and had very limited staffing and financial resources. 

Since audit fieldwork, the Council has become a fully-functioning 

independent agency, has hired a professional staff, and has 

established organizational processes, procedures, and controls. 

Management also stated that it took certain actions with respect to 

missing records. Management’s response, if implemented as 

stated, meets the intent of our recommendation. We have 

summarized the response in the recommendation section of this 

report. Management’s response is included in its entirety as 

appendix 2.

Background

The RESTORE Act established the Gulf Coast Restoration Trust 

Fund (Trust Fund) within the Department of the Treasury (Treasury) 

to provide funds for environmental and economic restoration of the 

Gulf Coast region that was damaged by the 2010 Deepwater 

Horizon oil spill. Deposits into the Trust Fund will be comprised of 

80 percent of all civil and administrative penalties paid after

July 6, 2012, under the Federal Water Pollution Control Act (Clean 

Water Act).4 The Council is responsible for 60 percent of the 

RESTORE Act funds as the administrator of the Council-Selected 

Restoration Component and the Spill Impact Component. The 

RESTORE Act also required that the Council develop an Initial 

Comprehensive Plan to oversee the overall environmental and 

economic restoration of the Gulf Coast region. Details of the 

RESTORE Act are provided in appendix 3.

 

4 33 U.S.C. § 1251 et seq.
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Initial Comprehensive Plan and Programmatic Environmental 

Assessment

The RESTORE Act required the Council to publish the Plan no later 

than July 6, 2013. The Initial Comprehensive Plan was to include: 

(1) a list of projects or programs authorized prior to July 6, 2012, 

that have not yet commenced, the completion of which would 

further the purposes and goals of the act; (2) a description of the 

manner in which amounts from the Trust Fund projected to be 

made available to the Council for the succeeding 10 years will be 

allocated; and (3) subject to available funding, a prioritized list of 

specific projects and programs to be funded and carried out during 

the 3-year period immediately following the date of publication of 

the Plan.

While developing the Plan, the Council was creating the Plan’s 

companion PEA to ensure compliance with NEPA and other 

applicable environmental laws and statutes. NEPA is a law 

designed to support compliance with environmental laws and 

regulations. NEPA requires Federal agencies to consider the 

potential environmental consequences of their “proposed actions”, 

as well as a range of reasonable alternatives, before deciding 

whether and in what form to take an action. At the time the 

Council was developing the Plan and PEA, litigation was still

ongoing with BP Exploration & Production Inc. and the Council 

faced many uncertainties with regard to the timing and scale of the 

RESTORE Act programs. Due to these uncertainties, the Council 

ultimately decided to publish the Plan without including specific 

programs and projects.5 With no projects and programs in the Plan, 

the Council decided to change the stated “proposed action” of the 

PEA from implementation of programs and projects to the creation 

of the Plan. Development of a programmatic-level NEPA document, 

under the above circumstances is not required but is considered a 

best practice for programs of the scale and duration similar to that 

described in the Council’s Plan. A Council official told us that even 

though the PEA was not required, the Council voluntarily 

 

5 RESTORE Act: Gulf Coast Ecosystem Restoration Council Faces Challenges in Completing Initial 

Comprehensive Plan, OIG-14-003 (October 25, 2013), reported that the Council published its Initial 

Comprehensive Plan but did not include all of the elements required by the RESTORE Act.
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System Needs Improvement (OIG-16-051) 

completed the PEA to demonstrate its commitment to complying 

with environmental laws and regulations. 

The Council issued the Draft Plan and Draft PEA for public 

comment in the Federal Register on May 23, 2013. Following 

publication of the Draft Plan and Draft PEA, the Council held six 

public comment meetings prior to the close of the comment period 

for both documents on July 8, 2013. The Council approved the 

Plan and Final PEA on August 28, 2013. 

Results of Audit

We concluded that the PEA conformed with the RESTORE Act and 

NEPA. Specifically, the RESTORE Act required the development of 

the Plan, and the PEA was developed to evaluate the potential 

environmental impacts related to the Plan. The PEA complied with 

NEPA in that it addressed the required aspects of the Council’s 

“proposed action” which was creation of the Plan.6 That said, we 

noted weaknesses in the Council meeting other Federal 

requirements related to records management and accessibility.

Finding Records Management System Needs Improvement

Records Management

Council’s documentation related to the Plan and the PEA was either 

missing or incomplete and what did exist was not organized to 

facilitate efficient retrieval of information. Furthermore, the Council 

lacked policies and procedures for maintaining records. The Federal 

Records Act7requires each agency to make and preserve records 

containing adequate and proper documentation of the organization, 

functions, policies, decisions, procedures, and essential 

 

6 NEPA, specifically 42 U.S.C. § 4332(c), requires the responsible official of major Federal actions 

significantly affecting the quality of the human environment to include in proposals a detailed statement 

on: (1) the environmental impact of the “proposed action”; (2) any adverse environmental effects which 

cannot be avoided, should the proposal be implemented; (3) alternatives to the “proposed action”; 

(4) the relationship between local short-term uses of the environment and the maintenance and 

enhancement of long-term productivity; and (5) any irreversible and irretrievable commitments of 

resources which would be involved in the “proposed action” should it be implemented.

7 44 U.S.C. § 3101 et seq.
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transactions of the agency designed to furnish the information 

necessary to protect the legal and financial rights of the 

Government and of persons directly affected by the agency’s 

activities. 

The Council was missing the following records, which are typically 

part of NEPA-related action and decision files: (1) organizational 

governance and standard operating procedures, (2) technical and 

programmatic references cited in the PEA, and (3) documentation 

of the analysis and disposition of individual comments received 

related to the Plan and PEA. In addition, we found that the 

Council’s records did not include a summary for one of the public

comment meetings related to the Draft Plan and Draft PEA, 

although summaries for other meetings were present.

8

Records related to the Plan and the PEA were primarily comprised 

of comments received from the public in response to the Federal 

Register publication of the Draft Plan and Draft PEA on May 29, 

2013. Council staff posted the comments on the Council’s external 

website as well as retained them internally. Although the Council 

summarized its disposition of comments overall, it did not maintain 

any records documenting its dispositions to individual public 

comments. Furthermore, there were no written procedures 

describing how comments should be sorted, inventoried, and 

ultimately addressed in the PEA. The Executive Director told us 

that the official “Response to Public Comments” document, made 

available on the Council’s website, represents the Council’s 

disposition of comments; notes and analyses on the disposition of 

specific comments were not maintained after the comments were 

reviewed and categorized. Additionally, some records supporting 

the Plan and PEA were housed in individual staff email accounts. 

The retention of those records in multiple locations and within 

individual email accounts does not allow for efficient document 

retrieval and creates a risk of potential loss or corruption of data.

NEPA does not mandate any specific recordkeeping practices; 

however, the NEPA process is subject to judicial challenge under 

 

8 The Council conducted eight public engagement sessions during the development process for the draft 

Plan and PEA, as well as six public comment meetings during the review period for the draft 

documents.
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the Administrative Procedure Act (APA).

9 NEPA specifies the 

process by which Federal agencies should review and document 

impacts on the environment, incorporating other laws, statutes, 

executive orders, and regulations, which specify the threshold 

criteria for pollutants and other environmental and natural resource 

considerations. Since NEPA is procedural, Federal agency NEPA 

actions are generally considered administrative actions, and 

therefore, judicial review of NEPA cases is brought to the courts 

under the APA. The APA enables individuals and groups to 

challenge actions or decisions made by Federal agencies if they 

believe an agency did not appropriately follow its procedures, or 

that procedures were improperly implemented. Judicial review of 

administrative actions is generally confined to the administrative 

record compiled by an agency, including development of NEPA 

documents. Accordingly, a strong records management system is 

critical to demonstrate compliance with requirements and 

withstand judicial challenges.

When asked about the issues identified with the records 

management, a Council official told us the primary cause was that 

there are no documented policies or procedures for recordkeeping 

by individual Council staff or contractors, and no person or group

was designated to handle the recordkeeping system. Council 

officials also attributed the incomplete records to the fact that the 

Council was a new Federal entity with limited resources operating 

under time constraints imposed by the RESTORE Act for issuing 

the Plan and the PEA.

Records Accessibility

As another matter, we noted issues regarding the public 

accessibility to the Council’s records. Although the Council 

attempted to make all comments on the Draft Plan and Draft PEA

available, an administrative error resulted in stakeholders not 

having timely access to all comments. Only 24,000 of the 41,000 

comments received by the Council could be found on the Council’s

 

9 5 U.S.C. § 500 et seq.
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website as of May 2013.

10 The E-Government Act requires that to 

the extent practicable, agencies shall make all submissions made 

by interested parties through the rulemaking process publically 

available online.

When asked about the discrepancy in comments, the Executive 

Director told us that former staff made an error posting form letters 

from non-governmental organizations to the Council’s website. 

Once the error was brought to his attention, he ensured that the 

correct form letters were promptly posted. Council officials noted 

that limited resources and the tight deadlines involved with 

developing and finalizing the Plan and PEA contributed to the 

administrative error. Another contributing factor was the fact that 

the Council outsourced its website hosting and the Council had 

limited access to updating the website.

As a result of the posting error, the public was unable to timely 

review all comments made on the Draft Plan and Draft PEA.

Recommendation 

We recommend that the Executive Director establish and 

implement appropriate records management policies and 

procedures to document the decision making process and ensure 

transparency of the Council’s operations. The records management 

policies and procedures should address the handling and public 

disclosure of comments related to proposed rulemaking.

Management Response

The Council Executive Director concurred with the

recommendation to establish and implement appropriate records

management policies and procedures. The response noted that the 

policies and procedures have been implemented and address

records management generally, and specifically the handling and

 

10 Comments that were missing from the original posting were submitted from one organization, the 

National Wildlife Federation. Of the approximately 17,000 comments that were missing, fewer than 200 

were unique modifications to the National Wildlife Federation form letter. Form letters are used by 

non-governmental organizations to encourage their members to voice support or opposition to Federal 

proposed rulemaking.
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public disclosure of comments related to proposed rulemaking and

other Council actions requiring public notice and comment.

Furthermore, management’s response commented that the audit 

covered Council activities primarily in 2013, shortly after the 

enactment of the RESTORE Act and creation of the Council. At 

that time, the Council was administratively housed within the 

Department of Commerce and had very limited staffing and 

financial resources. Since audit fieldwork, the Council has become 

a fully-functioning independent agency, has hired a professional 

staff, and has established organizational processes, procedures, 

and controls.

 Management also stated that it took certain actions with respect to 

missing records: [our report identified that the Council was missing 

the following records, which are typically part of NEPA-related 

action and decision files: (1) organizational governance and 

standard operating procedures, (2) technical and programmatic 

references cited in the PEA, and (3) documentation of the analysis 

and disposition of individual comments received related to the Plan 

and PEA.] The response provided the following:

 in 2014 the Council adopted written organizational Standard 

Operating Procedures that include detailed governance 

processes and procedures;

 NEPA regulations do not require or contemplate the 

maintenance of separate copies of publicly-available 

materials when referenced to in an environmental impact 

statement;

 the Council archives all public comments, Council responses,

and records of public meetings in connection with Council 

actions for which public comment is sought; and

 the Council created an Environmental Compliance Library on 

the Council website.

OIG Comment

Management’s response, if implemented as stated, meets the 

intent of our recommendation.
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* * * * * *

We appreciate the courtesies and cooperation extended by your 

staff as we inquired about these matters. Major contributors to this 

report are listed in appendix 4. A distribution list for this report is 

provided as appendix 5. If you have any questions, you may 

contact me at (202) 927-5762 or Eileen Kao, Audit Manager, at 

(202) 927-8759.

/s/

Deborah L. Harker

Director, Gulf Coast Restoration Audit
Appendix 1

Objective, Scope, and Methodology

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System Needs Improvement (OIG-16-051) 

As part of our oversight of programs, projects, and activities 

authorized by the Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act

of 2012 (RESTORE Act), we conducted an audit of the Gulf Coast 

Ecosystem Restoration Council’s (Council) Programmatic 

Environmental Assessment (PEA). The objective of our audit was to 

assess whether the PEA complies with the RESTORE Act, the

National Environmental Policy Act (NEPA), as well as applicable 

provisions of other Federal laws, regulations, and guidance. 

To accomplish our objective, we contracted with Booz Allen 

Hamilton Inc., a consulting firm with environmental service 

expertise, to assist us with this effort. We conducted fieldwork at 

the Department of Commerce’s office in Washington, D.C., 

between October 2013 and June 2014, which comprised the 

following steps.

 We reviewed applicable Federal laws, regulations, and 

procedures related to the Council and its development of the 

PEA, including:

 RESTORE Act of 2012; 

 NEPA of 1969 as amended;

 Council on Environmental Quality NEPA Regulations, 

40 CFR Part 1500-1508, November 28, 1978;

 Federal Records Act of 1950 as amended;

 Administrative Procedure Act of 1946 as amended;

and

 Freedom of Information Act of 1967 as amended.

 We reviewed the Council’s website and key documents, 

including:

 The Initial Comprehensive Plan and accompanying 

PEA, August 28, 2013, and

 Public comments made on the Draft Initial 

Comprehensive Plan and Draft PEA.

 We performed the following steps to a sample of comments 

on the Draft Initial Comprehensive Plan and the Draft PEA.

 We reviewed the comments received on the Council’s 

website and categorized them into two categories

described below.
Appendix 1

Objective, Scope, and Methodology

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 Form Letters used by non-governmental 

organizations to encourage their members to 

voice support or opposition to a rulemaking.

 Individual Responses comprised of comments 

received by mail, email, and “Council’s 

Planning, Environmental, and Public Comment 

Portal”.

 We selected a random sample of comments from 

the Form Letter and Individual Responses 

categories. We reviewed a sample of 20 comments 

from the Form Letter Category and 40 comments 

from the Individual Responses Category. We did 

not project results to the entire population.

 We interviewed key Council officials responsible for 

developing the PEA.

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix 2

Management Response

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Appendix 2

Management Response

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System Needs Improvement (OIG-16-051) 
Appendix 3

Background on RESTORE Act

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System Needs Improvement (OIG-16-051) 

As of April 2016, the Trust Fund had received approximately 

$816 million as a result of the government’s settlement with the 

Transocean defendants and $127 million as a result of its 

settlement with Anadarko Petroleum Corporation.1In July 2015, 

BP Exploration & Production Inc. agreed to settle with the Federal

government and the Gulf Coast States. A U.S. District Judge from 

the Eastern District of Louisiana approved the terms of the 

settlement on April 4, 2016, where BP Exploration & Production 

Inc. agreed to pay $20.8 billion. Of the $20.8 billion, $5.5 billion 

plus interest relates to civil and administrative penalties under the 

Clean Water Act. Of this amount, $4.4 billion (80 percent) will be 

deposited into the Trust Fund over 15 years. 

The RESTORE Act allocates money in the Trust Fund to five 

components, as follows: (1) 35 percent will be made available to 

the Gulf Coast States (Alabama, Florida, Louisiana, Mississippi, and 

Texas) in equal shares under the Direct Component; (2) 30 percent 

plus 50 percent of interest earned on the Trust Fund will be made 

available for grants under the Council-Selected Restoration

Component; (3) 30 percent will be made available for grants under 

the Spill Impact Component; (4) 2.5 percent plus 25 percent of

interest earned on the Trust Fund will be made available to the 

Science Program Component; and (5) 2.5 percent plus 25 percent 

of interest earned on the Trust Fund will be made available to the 

Centers of Excellence Research Grants Program Component. 

Treasury’s Office of the Fiscal Assistant Secretary is responsible 

for administering the Direct Component and the Centers of 

Excellence Research Grants Program Component. The National 

Oceanic and Atmospheric Administration is responsible for 

administering the Science Program Component. The Council is 

responsible for administering the Council-Selected Restoration 

Component and the Spill Impact Component.

 

1 On February 19, 2013, the civil settlement between the Department of Justice and Transocean 

defendants (Transocean Deepwater Inc., Transocean Offshore Deepwater Drilling Inc., Transocean 

Holdings LLC, and Triton Asset Leasing GmbH) was approved. Among other things in the settlement, 

the Transocean defendants paid a $1 billion civil penalty plus interest. Of this amount, $800 million plus 

interest was deposited into the Trust Fund. On December 16, 2015, the civil settlement between the 

Department of Justice and Anadarko Petroleum Corporation was approved. Anadarko agreed to civil 

penalties of $159.5 million. Of this amount, approximately $127 million has been deposited into the 

Trust Fund.
Appendix 4

Major Contributors to This Report

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Deborah L. Harker, Audit Director

Eileen J. Kao, Audit Manager

Marco T. Uribe, Auditor-in-Charge

Usman Abbasi, Auditor

Kajuana A. Britt, Referencer
Appendix 5

Report Distribution

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System Needs Improvement (OIG-16-051) 

Gulf Coast Ecosystem Restoration Council

Chairperson, Department of Agriculture

Department of the Army Council Designee

Department of Commerce Council Designee

Environmental Protection Agency Council Designee

Department of Homeland Security Council Member

Department of the Interior Council Designee

State of Alabama Council Designee

State of Florida Council Designee

State of Louisiana Council Designee

State of Mississippi Council Designee

State of Texas Council Designee

Executive Director

Department of the Treasury

Deputy Secretary

Under Secretary for Domestic Finance

Fiscal Assistant Secretary

Deputy Assistant Secretary, Fiscal Operations and Policy

Office of Management and Budget

OIG Budget Examiner
Treasury OIG Website

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