### OFFICE OF INSPECTOR GENERAL

Catalyst for Improving the Environment 

## Evaluation Report



# Efforts to Manage Backlog of Water Discharge Permits Need to Be Accompanied by Greater Program Integration

Report No. 2005-P-00018

June 13, 2005Report Contributors:

Abbreviations Ira Brass Susan Barvenik Thom as Herrod Carolyn Bowers Dave Cofer Jam e s Haller

ASIW PCA A ssociation of State and Interstate W a ter Pollution Control Adm i nistrators CAFO Concentrated Anim al Feeding Operation EPA E nvironm ental Protection Agency ePIFT E lectronic Perm it Issuance Forecasting Tool FMFIA F ederal Managers’ Financial Integrity Act FY Fiscal Year GPRA Governm e nt Perform a nce and Results Act ICIS Integrated Comp liance Inform ation System NPDES N ational Pollutant Discharge Elim ination System OIG O ffice of Inspector General OW M O ffice of W a stewater Managem e nt PCS P erm it Comp liance System PER P erm itting f o r Environm ental Results TMDL Total Maximu m Daily Load W L A W aste Load AllocationU.S. Environmental Protection Agency 2005-P-00018 Office of Inspector General June 13, 2005 

# At a Glance

Catalyst for Improving the Environment
WhyWe Did This Review The Environm ental Protection Agency (EPA) has been concerned about the backlog of expired National Pollutant Discharge Elim ination Sy stem (NPDES) perm its for a num ber of y ears. We sought to determ ine:

• how successful EPA and States have been in elim inating the backlog; • the potential environm ental impact of the backlog; and • how well m easures reflect environm ental impacts. Background The NPDES perm it program , established by Congress, regulates discharges from point sources to water bodies. The goal is to reduce the discharge of pollutants to protect and improve water quality

. Perm its need to be renewed every 5 y ears. As of June 2003, EPA reported that the backlog of expired perm its needing renewal consisted of 1,120 m a jor perm it facilities, as well as 9,386 individual m i nor and 6,512 general m i nor perm it facilities.

For furthe r informa tion, c onta c t our Offic e of Congressional and Public L i aiso n at (202) 566-2391.
To v i e w the full re port, click on the follow i ng link:

www. e p a . g o v /o i g / r e p o r t s/ 2005/ 20050613-2005-P-00018.p d f 

### Efforts to Manage Backlog of Water Discharge Permits Need to Be Accompanied by Greater Program Integration
What We Found EPA and the States have had vary ing success in elim inating the backlog of NPDES perm its requiring renewal, and m o re still needs to be done. The NPDES perm it program is only one of m a ny EPA program s to improve surface water quality

. EPA needs to integrate its effo rts to elim inate the NPDES backlog with the other program s to improve and m a intain water quality based on Clean Water Act requirem e nts. To elim inate the NPDES perm its back log, EPA needs to address challenges involving resource constraints, increasing workload, comp lex perm itting issues, external sources of perm itting delay s , and oversight lim itations. EPA is now m a naging the NPDES perm it program through the “Perm itting for Environm ental Results” Strategy that increases focus on environm ental outcom es. Only a sm all portion of waters currently identified as being “imp aired” are associated with backlogged perm its. While the m a jority of backlogged perm its renewed had changes to discharge lim its, the m a jority of the controls in the prior perm its generally did not appear to ch ange. A large num ber of the new perm its contained lim its for new param e ters. Prioritizing perm itting resources according to potential environm ental impact could r esult in greater environm ental benefits. The significance of the backlog could grow as a result of increased efforts in other water protection program s that m a y necessitate NPDES perm it revisions. EPA’ s reporting on the NPDES backlog m easure under the Governm e nt Perform ance and Results Act did not provide an accurate view of the program status or an adequate m easure of envir onm ental results. Prior to Fiscal Year 2005 revisions, the m easures did not properly comp are progress against baselines, and the m easures focused on outputs (tasks perform ed) rather than outcom e s (environm ental results achieved). EPA had recognized these weaknesses and begun taking corrective actions. What We Recommend EPA needs to build on the steps alread y initiated to reduce the NPDES perm it backlog. We m a de various recom m e ndations to EPA to assist the Agency in such efforts. EPA needs to take various steps to integrate the NPDES perm it program with other point source program s that support the perm it program

. This would include creating a sy stem for assessing the effectiveness and efficiency of its efforts related to clean water. EPA al so needs to continue m aking improvem e nts related to its m easures, such as providi ng appropriate baselines. EPA provided extensive com m e nts in response to our dr aft report. The Agency emphasized that through the “Perm itting for Environm ental Results” Strategy it is taking steps to reduce the NPDES backlog and in general improve the quality of the Nation’s water bodies. We encourage EPA to continue refining this strategy

.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

OFFICE OF IN SPEC TOR GEN E R A L June 13, 2005
MEMORANDUM
SUBJECT: Efforts to Manage Backlog of W a ter Discharge Perm its Need to Be Accomp anied by Greater Program Integration Report No. 2005-P-00018
FROM: D an Engelberg /s/ Director, W a ter Issues – Office of Program Evaluation
TO: B enjam i n Grum bles Assistant Adm i nistrator, Office of W a ter

This is the f i nal report on the subject evaluation conducted by the Office of Inspector General (OIG) of the U.S. Environm ental Protection Agen cy (EPA). The cooperation of all EPA regions and 15 States contributed significantly to this report, and their participation is appreciated. This report contains findings that describe the issues identified by the OIG and recom m e nded corrective actions. This report represents the opinion of the OIG, and the findings do not necessarily represent the final EPA position. Final determ inations on m a tters discussed in this report will be m a de by EPA m a nagers in accordance with established audit resolution procedures. On January 25, 2005, the OIG issued a draft report to EPA for review and com m e nt. A response was subm itted on March 15, 2005, and an exit conference held on March 31, 2005. EPA' s response emphasized the importance of the Perm itting for Environm ental Results (PER) Strategy established in 2004 for m a naging the NPDES program

. EPA overall agreed that while the backlog alone m a y not provide an effective strategy to im prove water quality, perm its are a key elem ent in the structure and implem entation of the Clean W a ter Act. Further, EPA stated that the perm it prioritization effort, under the PER Strategy, is intended to help the NPDES program strike the proper balance between the continuing effort to reduce the backlog and the need to ensure the tim ely issuance of the m o st environm entally significant perm its. EPA provided com m e nts, clarifications, and additional inform ation on areas in the report and generally concurred, with suggested m odifications, to our recom m e ndations. EPA also provided inform ation on ongoing activities in som e of these areas. The OIG has incorporated these com m e nts, technical corrections, and supplem ental inform ation into the final report.Action Required In accordance with EPA Manual 2750, you are required to provide a written response to this report within 90 calendar days of the date of th is report. You should include a corrective action plan for agreed upon actions, including m ilestone dates. W e have no objections to the further release of this report to the public. This report will be available at http://www.epa.gov/oig. In addition to providing a written response, please e-m a il an electronic version to Brass. Ira@epa.gov. If you or your staff have any questions regarding this report, please contact m e at (202) 566-0830 or Ira Brass at (212) 637-3057.

# Table of Contents

At a Glance



## Chapters

1 Introduction
................................................. 1 P u r p o s e

.......................................................... 1 Background

....................................................... 1 Scope and Methodology

............................................. 5 R e s u l t s i n B r i e f

..................................................... 6
2 M anagement of Backlog Improving, But Challenges Continue

........ 7 EPA and States Have Been Addressing Challenges, B u t F u r t h e r A c t i o n C a n b e T a k e n

................................... 7 EPA Increasing Focus on Environmental Outcomes for Permit Issuance and Program Management

.......................... 1 5 Agency Comment and OIG Evaluation

.................................. 1 6
3 E nvironmental Impacts of Backlog Reduction Varyand MayBe Limited
....................................... 1 8 Backlogged Permits Do Not Appear to Be a Major Cause of Impairment

........ 1 8 D e l a y s i n R e i s s u i n g P e r m i t s M a yH a v e V a ry i n g E n v i r o n m e n t a l I m p a c t s

........ 2 0 E n v i r o n m e n t a l S i g n i f i c a n c e o f B a c k l o g C o u l d I n c r e a s e i n F u t u r e

.............. 2 2 EPA Should Continue Promoting Prioritization of Permit Issuance

............ 2 5 Agency Comment and OIG Evaluation

.................................. 2 6
4 B acklog Reporting Has Provided Inadequate Measure of Environmental Results

....................................... 2 8 Improvements in Backlog Measurement Affected Reported Progress

.......... 2 8 B a c k l o g M e a s u r e H a s N o t R e f l e c t e d E n v i r o n m e n t a l O u t c o m e s

............... 3 6 Agency Comment and OIG Evaluation

.................................. 4 1 5 EPA Can Take Various Actions to Reduce NPDES Permit Backlog and Improve Water Quality

................. 4 4 EPA’s Management of NPDES Backlog Highlights Importance of an Integrated Clean Water Program

..................... 4 4 EPA’s Steps to Improve Program Integration Need to Be Strengthened

........ 4 6 Recommendations

.................................................. 4 6 Agency Comment and OIG Evaluation

.................................. 4 9

i

## Appendices

A D etails on Scope and Methodology

.............................. 5 3
B D efinitions and Examples of Alternatives to General Permitting

...... 5 7 C C hanges in Permit Limits
...................................... 5 8
D Factors That Indicate a Permit Likelyto Have New Limits or Conditions When Reissued

......................... 5 9
E U niverse of Permits Counted in Backlog and Number of Current Permits

................................. 6 0
F A gencyComment

............................................ 6 1 G D i s t r i b u t i o n .................................................. 8 0

ii

# Chapter 1 Introduction Purpose National Pollutant Discharge Elim ination System (NPDES) perm its provide a regulatory approach for controlling point source discharges to surface waters. The Agency first reported the backlog as a m a terial weakness for the NPDES program , then tracked it internally as an Agency weakness after October 2002. Expired NPDES perm its m a y not incorporate the m o st up-to-date lim its and conditions to protect hum an health and aquatic life, thereby delaying needed improvem e nts in water quality. The Office of Inspector General (OIG) has issued two previous reports on issues relating to the backlog and reported it as an OIG Managem e nt Challenge until 2005. For this current report, we evaluated the following questions:

• H ow successful have EPA and the States been at m a naging the backlog?

• W hat is the potential f o r environm ental impact of the NPDES perm it backlog, including impacts on loadings reductions?

• H ow well does the NPDES perm it backlog m easure (percentage of m a jor and m i nor perm its backlogged) reflect environm ental impacts of delayed perm it reissuance or issuance? During our work, we also collected info rm ation on successful regional and State practices that m i ght be useful for others. 

### Background Permit Program Established Congress established the NPDES program through the 1972 am endm ents to the Federal W a ter Pollution Control Act. NPDES perm its regulate discharges from point sources (discharging through a discrete conveyance for water, such as a pipe or m a n-m a de ditch) through enforceable provisions designed to reduce the discharge of pollutants to surface waters to protect and im prove water quality. NPDES perm its are issued to a variety of dischargers and can be categorized by type of discharge regulated, f acility, and perm it. The perm it program originally focused on municipal Publicly Owned Treatm e nt W o rks and non-municipal (industrial) facilities, but has been expanding to include storm w ater, com b ined and sanitary sewer overflows, Concentrated Anim al Feeding Operations (CAFOs), and sludge (biosolids).

1EPA m a nages perm its through two designations – m a jor or m i nor perm its – as shown in Table 1.1:

Ta ble 1
. 1 : Pe rmit De s i gna tions T y p e Descrip tio n Majors Publicly Ow ned T r eatment W o rks having discharges greater than 1 million gallons per day or serving a population of 10,000 or more, industrial facilities scoring over 80 points based on rating criteria, and a limited num ber of discretionary majors (facilities not meeting the above cr iteria but designated majors by States). Minors Publicly Ow ned T r eatment W o rks of less t han 1 million gallons per day , and industrial facilities that fail to meet the criteria score of 80. Individual perm its are those issued to a single f acility, while a general perm it will result in mu ltiple f acilities within a specif i c category and geographic area being covered under one perm it. In June 2003, according to EPA’s status reports, the total universe of facilities reviewed fo r backlog accounting purposes within the NPDES program was 6,675 m a jor perm its (including at least 48 general m a jors), 45,419 individual m i nor perm its, and 50,587 general non-storm w ater perm itted m i nor facilities. In July 1999, EPA had estim ated that Phases I and II of the National Storm W a ter Program would add about 400,000 facilities for general perm it coverage, but general storm w ater perm its are excluded from the backlog definition.
Perm its, the result of a regulatory process, consist of general and specific conditions, enforceable lim its, and m onitoring and reporting requirem e nts. Perm it lim its are generally based on the m o re stringent lim it calculated using a water quality standard, an effluent guideline (a technologically based standard), or in som e cases best professional judgm ent. However, if the receiving waterbody has been assessed as impaired, a study is conducted to derive the Total Maximu m Daily Load (TMDL) – the m a ximu m am ount of a pollutant the waterbody can receive and still m eet water quality standards. W a ste Load Allocations (W LAs) allocate discharge allowances within the TMDL to point sources and are incorporated in an NPDES perm it to provide the discharge lim it for that pollutant. A flowchart depicting the NPDES perm it process based on our project work is provided in Figure 1.

2Fi gur e 1: S t y l i z ed Fl ow c h ar t of

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Authority for the NPDES program is currently delegated to 45 States. In these States, m o st perm its are issued by the State, and m a jor perm its (or a selection) are reviewed by the EPA region. EPA can issue a perm it in authorized States directly if a State does not address objections raised by EPA where the perm it conflicts with Federal requirem e nts. In the rem a ining five non-delegated States, EPA regions are the perm itting authority and issue the perm its. The Perm it Comp liance System (PCS) is the data base for NPDES reporting, and includes tracking f o r m a jor f acilities. PCS data f o r m i nors is not as comp lete as f o r m a jors. Two efforts are currently underway that address the perm itting program and impact the backlog. The Office of W a stewater Managem e nt believes that ongoing efforts led by the Office of Enforcem ent and Comp liance Assurance to m odernize the PCS system will help all aspects of perm it program m a nagem e nt, including perm it issuance. In anticipation of the m odernized system , EPA is revising the existing PCS policy to require perm it event data to be recorded for all

3facilities. However, the m odernization effort has encountered delays. The Office of W a stewater Managem e nt has also developed and begun implem enting the “Perm itting f o r Environm ental Results” (PER) Strategy that has three prim ary components addressing program results, e fficiency, and integrity. Office of W a stewater Managem e nt emphasizes the importance of this strategy in m a naging the overall NPDES perm it program ’s effectiveness. Backlog of Expired Permits Identified Under Federal regulations, perm its m a y be issued for a period of no m o re than 5 years. Perm its f o r new applications mu st be issued prior to a f acility beginning to discharge. Once issued, a perm ittee subm its an application to renew NPDES perm its prior to expiration. If the application is received but the new perm it is not issued prior to expiration, the expired perm it is adm i nistratively continued and enforceable until a new perm it is issued. 1 However, expired perm its m a y not be m odified. Based on the various inputs, EPA states that perm it renewals have the potential to af f

ect water quality in a num ber of ways, including m o re stringent technology-based lim its for existing perm its, lim its on new param e ters, water quality-based lim its, whole ef f l uent toxicity lim its, best m a nagem e nt practices, and improved m onitoring requirem e nts. A large num ber of NPDES perm its were expired and not reissued on a tim ely basis and becam e known as the “perm it backlog.” EPA tracked the backlog as a Federal Managers’ Financial Integrity Act m a terial weakness from 1998 to 2002, and downgraded the issue to an Agency level weakness and reported it as corrected in 2003. EPA developed the Perm it Issuance Fram ework in 1999 to provide interim m a nagem e nt of the NPDES perm it backlog. This docum ent discusses causes of the backlog and goals, and provides a description of strategic initiatives f o r reducing the backlog. There are descriptions, desired outcom e s, and short- and long-term actions developed for each of the following four initiatives:
1. Understand and better define the backlog. 2. Exam ine perm itting ef f i ciencies and f acilitate program m a tic and technical stream lining opportunities. 3. Provide funding and technical support for regions and States. 4. Encourage regions and States to share technical expertise and perm itting tools.

1 An environm ental group has filed a legal challenge regarding a facility in Hawaii having its NPDES permit admi nistratively continued.
4Through the recently adopted PER Strategy, EPA is also now providing for a prioritization approach for addressing backlogged perm its, focusing on environm ental results. EPA defines and reports on the backlog through a m easure based on the expiration date in PCS, including what types of perm its and how long after expiration a perm it will be considered backlogged. In its Federal Managers’ Financial Integrity Act reporting, EPA recognized the need to clean up the data and process for tracking the backlog to provide a m o re accurate picture of the universe of perm its. As backlog m a nagem e nt evolved, EPA also reached consensus with perm itting authorities to include non-storm w ater general perm its in the backlog inventory. The definition of the backlog has changed over tim e; in June 2003, the backlog definition included individual and generally permitted m a jor f acilities (including individual storm w ater perm its) and individually and generally perm itted m i nor f acilities with standard perm its (designated CAFO, storm w ater, or biosolids perm its not counted). Individual perm its awaiting reissuance are considered backlogged after 180 days; generally perm itted non

storm w ater f acilities, perm it applications, and perm its m i ssing expiration dates are considered backlogged im m e diately upon entry into PCS. As of June 2003, out of the potential universe described above, the backlog was reported as consisting of 1,120 m a jor, 9,386 individual m i nor, and 6,512 general m i nor nonstorm water facilities. 

### Scope and Methodology
W e conducted our field work from August 2003 to July 2004 in accordance with Government Auditing Standards, issued by the Comp troller General of the United States. W e focused on the national backlog of perm its in the NPDES program as defined by EPA from Novem b er 1998 through March 2004. W e lim ited the review to backlog issues and only addressed overall program m a tic issues; perm it quality issues, and comp liance and enf o rcem ent issues (including the issue of potentially expired versus adm i nistratively continued backlogged perm its) were outside of the scope of this study. W h ile addressing the backlog m e asure in term s of m a naging the program , impacts on perceptions of perm ittees or others regarding program m a nagem e nt were not addressed in this study. Our review involved all EPA regions and Headquarters, as well as 15 States. During this project, we conducted literature reviews, interviewed State and EPA officials, m a de site visits, and obtained data through three separate surveys. Data from PCS and other EPA data system s were also used to analyze the perm it backlog. The OIG has issued several reports addressing issues related to the NPDES perm it program , and issues raised in those reports, as well as various other studies, were taken into account during our review. Details on our scope and m e thodology, including the prior reports considered, are in Appendix A.

5W h ile this report addresses a num ber of program m a tic issues, it focuses on the backlog of perm its within the NPDES program

. W e lim ited our work according to EPA’s definition of the backlog, which encomp assed a subset of the NPDES perm itting universe. W h ile we addressed overall program m a tic changes that affected backlog m a nagem e nt, our work did not include a comp lete review of the NPDES program or the PER Strategy that EPA has been using since 2004 to m a nage the NPDES program

. 

### Results in Brief EPA and the States have had varying success in elim inating the backlog of NPDES perm its requiring renewal, and m o re still needs to be done. The NPDES perm it program is only one of m a ny EPA program s to improve surface water quality. EPA needs to integrate its ef f

o rts to elim inate the NPDES backlog with those other program s. As discussed in Chapter 2, EPA needs to address challenges involving resources, workload, perm it comp lexity, external sources of delay, and oversight. In Chapter 3, we note that only a sm all portion of waters currently identified as “imp aired” are associated with backlogged perm its, and EPA needs to prioritize its efforts to allocate perm it writing resources based on the greatest potential environm ental benefits. Chapter 4 discusses how reporting on the backlog m easure under the Governm e nt Perform a nce and Results Act did not provide an accurate view of the program status or an adequate m easure of environm ental results. Chapter 5 sum m arizes our overall conclusions and recom m e ndations. EPA has been taking various actions to address the NPDES perm it backlog, and needs to build on those steps already initiated. EPA is now m a naging the NPDES perm it program through the PER Strategy, designed to increase focus on environm ental outcom e s. W e encourage EPA to continue refining this strategy. In a March 2005 response to the draft report, EPA provided extensive com m e nts in response to our draft report. W e sum m arized EPA com m e nts, along with our evaluation of those com m e nts, at the end of Chapters 2 through 5. EPA com m e nts are reproduced in Appendix F.

6

# Chapter 2 Management of Backlog Improving, But Challenges Continue

EPA and the States have employed different approaches with varying success in reducing the backlog of NPDES perm its. The Clean W a ter Act requires that NPDES perm its be renewed at least every 5 years. To reduce the backlog of perm its requiring renewal, several challenges need to be addressed, including:

• R esource constraints • I ncreasing workload • I ncreasingly comp lex perm itting issues • E xternal sources of perm itting delays • C om munication/oversight lim itations EPA and State efforts have helped reduce the backlog through a variety of strategies, including perm itting ef f i ciencies. Additional m a nagem e nt approaches have included focusing on significant perm its. Questions rem a in as to whether backlog reduction will be m a intained. Additional efforts are underway to address ongoing and new challenges. In 2004, EPA began implem enting a PER Strategy that will help f o cus perm itting ef f

o rts on environm entally signif i cant perm its. 

### EPA and States Have Been Addressing Challenges, But Further Action Can be Taken This chapter deals with causes of the NPDES perm it backlog, and m a nagem e nt strategies and tools for better m a naging the backlog. EPA still needs to further address resource constraints, increasing workload, comp lex perm itting issues, external sources of delays, and com munication/oversight lim itations. Chapter 3 discusses the potential environm ental impact of perm it backlog reduction, and how environm ental significance is critical in m aking decisions on which perm its should be addressed first. Chapter 4 addresses m easures and adm i nistrative changes that m a y have an impact.



### Resource Constraints Continue to Hamper Efforts Budget lim itations continue to strain m a ny States’ abilities to m eet perm itting goals. Six of the 7 States and 2 of the 10 Regions surveyed regarding causes of the backlog indicated this concern. A second survey indicated resource constraints will continue to affect backlog m a nagem e nt. Further, in a 2002 report, the National Academy of Public Adm i nistration found the resource gap between State expenditures and resource needs was approxim a tely $0.7 to $1 billion for Clean W a ter Act program s. The Academy expects substantial additional State

7efforts will be necessary due to incorporating TMDL-based limits in perm its, since this likely will result in increased public involvem e nt, m o re resistance from applicants, and the use of such innovative approaches as pollutant trading. Regions and States have undertaken a num ber of strategies to address resource constraints. Following are som e strategies implem ented or being considered for addressing resource issues:

• O hio had perm it writers work on simp le (single-discharger) W L As while expert m odelers focused on TMDLs and other comp lex m odels. This allowed simp le allocations to be perform e d m o re promptly.

• M innesota used staff work plans to better m onitor productivity for perm it issuance tim eliness, num ber of perm its expected, tim eliness of establishing effluent lim its, and other landm arks.

• I ndiana is considering overtim e, reprogram m i ng funds (with EPA assistance) to pursue use of Senior Environm ental Employee Position employees, shifting employees on a part-tim e basis, trying to identify financial resources from other areas (such as shifting Federal air funds), filling non-perm it vacancies, and identifying special assistance to address resource issues.

• I llinois recently authorized a system for collecting perm it fees, and Michigan was counting on fees to replace half the general fund.

• R egion 10 had a 3-year plan for issuing perm its. The plan describes goals for the program and a schedule to m eet supporting objectives, including backlog goals; addresses disinvestm e nts; and has a perm it selection process, including priority criteria, and a two-tier priority workload list f o r perm its to be issued.

• R egion 8 provided Colorado with contractor assistance, through a national contract, to elim inate its m a jors backlog. (Four regions identified the use of contractor assistance as a particularly successful practice.) There are potential drawbacks or challenges for som e of these strategies, including impacts on com m itm ents in other program s due to shifting resources (e.g., lower achievem e nts for the other program s), and the am ount of training needed for part-tim e or temporary reassignm ents. 

### Workload M a nagement Approaches Had Varying Success
EPA’s and States’ Clean W a ter perm itting program s have been f acing a growing workload. In addition to issuing NPDES perm its for traditional point sources reflected in the backlog m easure, they are responsible for other duties and perm its (e.g., storm w ater, CAFOs, biosolids, and State-specific non-NPDES perm its). Som e of these other classes of perm ittees have been growing dram atically. EPA

8and States have used different perm it workload m a nagem e nt approaches and efficiencies with varying success. W e identified two categories of approaches: (1) overall perm it m a nagem e nt and prioritization of reissuance, and (2) adoption of tools to increase efficiency. Permitting Strategies Address Both Overall Workload and Backlog EPA and States have devised general workload m a nagem e nt approaches to address the increasing workload. These strategies are designed to improve perm itting efficiency and decrease the size of the backlog, or to target their efforts toward perm its or categories of perm its of interest. These approaches typically group perm its according to som e com m on factor, such as location, tim e in the backlog, or facility type. Permitting According to Rotating Basins: Perm itting according to a “rotating basin” approach uses the natural boundaries of a watershed, basin, or sub-basin to define groups of perm its for perm itting and m a nage other clean water functions. Regions identified various approaches at the State level that were successful. Approaches vary am ong States. For example:

• M ichigan m a nages non-contiguous sub-basins across the State to balance the workload. Each year, all perm its scheduled to be addressed that year expire at the beginning of the year, allowing Michigan to work on mu ltiple related perm its as needed.

• N orth Carolina uses sub-basins to m a nage perm itting and m a y divide these sub-basins to even out workloads as necessary. In general, a different basin is perm itted each m onth. However, one of the key barriers previously identified by States to issuing all perm its within a specif i c basin was an uneven perm itting workload across basins and special Federal initiatives that divert resources f r om basin perm itting cycles (e.g., EPA perm it backlog strategy). Som e States abandoned a rotating basin/ watershed approach after it drove up their backlog or have not adopted it despite considering it. Prioritizing Within an Overarching Approach or as an Independent Strategy: Prioritizing perm its can be particularly useful to accomp lish environm ental or other m a nagem e nt goals where 100-percent perm it coverage is unlikely. Perm its are being prioritized for issuance by a num ber of different approaches and factors, including the rotating watershed/basin approach, backlog reduction, being a m a jor perm it, being a new perm it, and enforcem ent issues. Regions also indicated that while a num ber of States are not using hum an health or environm ental factors for prioritizing perm its f o r reissuance, a num ber are, including such f actors as: downstream drinking water sources, upstream of likely hum an exposure, endangered species, perm it likely to have changes, and toxic discharges.

9Examples of different prioritization approaches are highlighted below:

• N ew York established the Environm ental Benefit Perm it Strategy in 1994 that consists of a perm it renewal process (see Chapter 4) and a form al perm it prioritization process. The prioritization process scores and ranks m a jors and significant m i nor perm its using 13 priority ranking factors.

• R egion 10 developed a database to assist in prioritizing perm itting ef f

o rts according to established criteria: priority, tribal, and general perm it criteria. Priority criteria included elem ents such as perm it f acilities in the oil and gas, m i ning, and food packing industries; new sources; and high profile facilities.

• R egion 3 developed a prioritization tool – called the “Daunting Dozen” – to focus efforts on the oldest backlogged m a jors in the region.

• N orth Carolina prioritizes perm its by identif ying those m i nor f acilities that will not need significant changes or resources, and “expediting” these through issuance by staff that are new or generally have less technical experience. They assign m o re difficult perm its to experienced perm it writers.

• W ashington has perm it priority ranking criteria and has also been continuing to adjust its process in identif ying perm its with little or no changes eligible f o r reauthorization. Tools and Efficiencies MayIncrease Permit Coverage EPA and States have developed or are considering perm itting tools and efficiencies for improving perm it issuance rates. Several have been successful, while others have potential risks, lim itations, or drawbacks. Reducing Certain Activities May Reduce Workload: States m a y reduce activities that are outside of backlog accounting in order to focus perm itting resources on m a nagem e nt of the backlog. These activities include perm itting of non-NPDES perm its, m aking certain types of m odifications a lower priority, or not pre-reviewing applications. Minnesotahas a Custom er Assistance Center that handles routine questions not requiring a perm it writer to respond. However, som e States have stopped doing all or part of required PCS data entry, which can result in PCS not providing accurate oversight data. Also, 7 of the 8 States responding to our questionnaire and 7 of the 10 EPA regions indicated it would be helpful in reducing the backlog if perm its did not have to be reissued as frequently. However, since the 5-year perm it term is dictated by the Clean W a ter Act, m aking a change would require an Act of Congress.
Alternatives to Traditional Individual Permitting Can Increase Efficiency: Individual perm itting alternatives, such as general perm its, can increase ef f i ciency by consolidating sim ilar facilities under one perm it. A general perm it covers

10mu ltiple facilities within a specific category and geographic area (e.g., county, State). As of March 2004, about half of the facilities eligible for consideration under the backlog definition were covered by general permits. Specifically, out of a total of 100,261 facilities, 48 m a jor facilities in Region 10 and 51,382 m i nor facilities nationwide are covered by general perm its. However, although a greater utilization of general perm its offers significant efficiency opportunities, there can be lim itations and drawbacks. For example:

• N ot all f acilities in a State are likely to be appropriate f o r general perm it coverage, and it m a y also not be appropriate f o r all f acilities in a general category to be covered by a general perm it.

• T here m a y be insufficient resources available to take advantage of general perm itting.

• I f a single general perm it expires and becom e s backlogged there is the potential to see a large increase in the State’s backlogged facilities.

• G eneral Statewide perm its m a y need to be m a naged independently in conjunction with a rotating basin m a nagem e nt. For example, a general Statewide perm it would likely perm it f acilities that would norm a lly be associated with dif f

e rent basin perm itting cycles. EPA com m e nted that Michigan has indicated they are experiencing a lot of success with this hybrid approach. However, if general perm its are issued on a per basin basis, this m a y require issuance of m o re than one general perm it and processing of notices of intent at different tim e periods.

• G eneral perm it data is not captured well in the current PCS system , hamp ering oversight. Apart from general perm its, States are also using non-traditional approaches to issue perm its, such as perm its by rule, cookie-cutter perm its, rollover perm its, reauthorized perm its, reduced effort perm its, expedited perm its, and batch perm itting (see Appendix B f o r descriptions). In general, these approaches help to m a nage workload by grouping perm its of sim ilar types, needing less work or revision. Electronic Tools Present Opportunities : States and regions believe that autom a ting perm itting tasks, with tools such as electronic perm itting and tracking as well as autom a ting data entry, can improve perm it issuance rates. Eight of 10 regions also indicated they would like EPA assistance in the area of electronic signatures to enable electronic perm itting and Discharge Monitoring Reports. EPA and States have developed a num ber of electronic tools. For example:

11• M ississippi’s backlog decreased from 20 percent in October 2002 to 7 percent in Septem ber 2003 by using “Ensite” – an in-house computer software program – to increase perm it writing efficiency.

• M ichigan has a computerized NPDES Managem e nt System with several integrated electronic functions (inc luding application logging and tracking, perm it writing, public noticing, com munication with supporting units, and updating PCS), resulting in such savings as reduced staff tim e for data entry. However, although prom ising, transitioning to a new data system can have significant short-term costs. For example, Kentucky’s perm it backlog has increased, and the State attributes the existing increase in its backlog in part to the tim e and resources spent to transition to and m a intain a new m a nagem e nt system

. Continuing challenges with system f

unctionality have led to additional perm it processing delays as well as shifts in staff resources. EPA states that it is increasing outreach efforts regarding electronic tools in 2005. EPA established a Clean W a ter Act 104(b)(3) cooperative agreem ent with the Association of State and Interstate W a ter Pollution Control Adm i nistrators (ASIW P CA) to collect and share good strategies and practices am ong States as well as participate in the PER process. Headquarters Initiated Tools for Addressing the Backlog: EPA Headquarters had proposed or introduced a num ber of perm itting tools, although som e regions indicated they were unaware of som e of them

. Additional tools are under developm ent W h ile there were som e criticism s regarding tim e or resource requirem e nts, regions generally provided positive com m e nts, indicating the various tools contributed to benef its such as consistent high quality perm its, increased perm it efficiency, and reduced burdens. Examples of tools include:

• A perm it quality review checklist

• P erm it Application Software System (e-PASS) for electronic applications

• C entral Tenets of the NPDES Program

• T he electronic Perm it Issuance Forecasting Tool (ePIFT)

• N PDES perm it writer training

• I nternet accessible NPDES perm its

• A perm it prioritization checklist (criteria f o r identif ying high priority perm its)
As an outcom e of the PER process, EPA also expects to be able to identify opportunities to further assist perm itting authorities. 

### States and EPA Mu st Address Increasing Complexities
W h ile EPA has been addressing the increasing comp lexity of writing perm its, it needs to continue exploring ways to efficiently address this issue. Most States and regions responding to our survey identified perm it comp lexity as a significant

12contributor to the June 2003 backlog. They cited the increasing comp lexity of the perm it process and increasing sophistication of facilities, third parties, and new or revised regulations. Adding comp lexity is the inclusion of lim its calculated using TMDL m e thodologies, new water quality st andards, new or revised effluent guidelines, and requirem e nts of new or additional studies. Following are examples of steps taken to address comp lexity:

• E PA noted that short term m odifications of standards through variances provide m o re tim e to fully study an issue. For example, Region 5 subm itted inform ation that “Ohio has a group variance for m e rcury that has m a de the stringent new water quality standards essentially a non-issue in perm it renewals.”

• T here has been som e coordination of inform ation developm ent across program s that could reduce the tim e and resources needed to develop data for perm itting. Two examples are Colorado’s coordination of perm it drafting with the Assessm ent unit, and Region 7 working with States to coordinate TMDL and perm it schedules to promptly address the m o st significant issues. EPA also highlighted North Carolina’s rotating basins program , indicating there has been a good use of linkages.

• R egion 3 identified as a successful practice the use of a team of EPA and State staff to address the oldest backlogged m a jor perm it in the region, along with assistance from EPA Headquarters and national experts in the industry. Eight of 10 EPA regions indicated they want m o re technical support for perm it issuance from EPA. 

### External Backlog Causes Present Difficulties

W h ile individually a num ber of external causes of the backlog were not considered to be a significant source of delay, collectively, several States and regions noted they can be a significant problem

. External causes involved perm itted f acilities and third parties. Examples of actions taken f o llow. Applications: Som e perm itting authorities cited delays related to subm ission of applications less than 180 days prior to expiration or applications that are incomp lete as a significant cause of the backlog. Rem i nder letters can be sent out about a year prior to perm it expiration to request tim ely subm ittal of perm it applications f o r perm it reissuance. One State issues penalties f o r perm its that expire due to late applications. Region 5 indicated that in Minnesota, central review of applications helped ensure that only com p lete applications were sent to perm it writers. Comments on draft or final permits: Public com m e nts and hearings on perm its are an important part of the process but can lead to delays in perm it issuance. Som e perm itting authorities are focusing on increased public com munications to
13address these delays. EPA has begun posting m a jor perm its on the Internet. Som e perm it authorities are bundling public notices, although if hearings are requested delays could still occur. Michigan has im proved public inform ation by providing Internet access to all public notices and fact sheets for proposed perm itting actions, access to electronic NPDES perm it application form s, and listing of new and reissued general perm its. Required consultations, in addition to public comments: Certain actions require consultations with other Federal agencies, State organizations, or tribes, and efforts have been m a de to m ake consultations m o re efficient. Region 6 has been working m o re with States to improve the 401 certification process. A perm it quality review checklist has been developed to increase likelihood of an approvable perm it by EPA, but while a m odified tool is used in som e Region 3 States we did not find any other im plem entation. EPA Region 10 indicated that additional outreach and technical assistance (explaining EPA’s perm itting process to tribes and the Fish and W ildlife Service) could reduce consultation tim e on perm its. Permit limit calculations delayed due to delayed or expected WLAs, water quality standards, or effluent guidelines: Perm it lim its are largely derived using outputs f r om other program s, such as the water quality standards, ef f l uent guidelines, and TMDL program s. However, delays in these program s can cause delays in reissuing perm its. Perm itting authorities m a y hold up issuing perm its when there are pending TMDLs or water quality standards. The use of reopener clauses has allowed som e perm itting authorities to reissue perm its without potentially delaying incorporation of W L As until the next tim e the perm it is reissued (possibly by up to 5 years). EPA has stated it will be working to reduce the water quality standards backlog that has delayed som e new water quality standards. Perm itting authorities surveyed regarding causes of the 2003 backlog generally indicated that perm its were not being held up due to pending revision of effluent guidelines. However, in som e cases, old, m i ssing or outdated effluent guidelines have presented a problem for a State. The State m a y m ake comp lex engineering determ inations to replace the effluent guidelines, and challenges m a y arise due to the reissued perm its being m o re stringent than those which would be calculated using the older national guidelines.



### Opportunities Exist for Improved Communication
EPA has taken a num ber of steps to improve com munication to better address the backlog. However, additional efforts to increase com munication could lead to further improvem e nts in perm it m a nagem e nt and reducing the backlog. EPA reports using a num ber of channels for com munication such as: m onthly calls and m eetings with States through ASIW PCA; training and practitioner m eetings f o r perm it writers; a comp rehensive W e b site with additional training in

14specific program areas; and periodic m eetings between States and EPA regions, including State program reviews by regions.
There has been no annual m eeting for surface water perm itting as there is for other program s, such as pretreatm e nt, TMDLs, and biosolids. A national perm itting f o rum would be a way f o r all States and regions to work together to identify inconsistencies and address issues. EPA indicates a National Meeting with States and regional NPDES m a nagers is planned for Septem ber 2005. EPA has been working with organizations like ASIW PCA to have a better exchange of inform ation with States. EPA regions are also working with States to improve NPDES perm it backlog m a nagem e nt. For example, in Region 5, the Stream lining W o rkgroup captured State challenges, proposed solutions for various levels of governm e nt, and provided a forum to exchange inform ation on positive experiences.
W h ile EPA m a intains a potentially valuable NPDES backlog W e b site with postings of backlog status reports and other background inform ation, several States contacted were unaware about the availability of inform ation. For example, one State was not aware of EPA’s adjustm e nt of the backlog tim e period to 180 days after expiration. 

### EPA Increasing Focus on Environmental Outcomes for Permit Issuance and Program Management
Elim inating or m a naging the backlog is just one elem ent of water quality m a nagem e nt and the NPDES program

. Potential environm ental impacts of perm itting and the backlog are described in Chapter 3. In the 1999 Guidance docum ent, EPA outlined strategic initiatives and a mu lti-step process ofshortand long-term actions for m a naging the NPDES perm it backlog. EPA has been developing and implem enting the PER Strategy, which consists of three prim ary components, described by EPA as:

• Program Results - To m a xim i ze benef its, perm its will be prioritized by identifying environm entally significant perm its within and am ong watersheds. This elem ent requires identification of data to characterize the universe and a screening checklist.

• Program Efficiency - Best practices will be identif ied and shared to increase ef

f i ciencies. EPA will docum ent research on current practices and legal authorities as well as provide support and technical assistance.

• Program Integrity - Tools will be used to continually assess program perform a nce and ensure continued success. EPA is developing selfassessm ent questionnaires, a m a nagem e nt report providing a snapshot of State perform a nce over four areas, and State NPDES program profiles to be used in
15conjunction with the other tools. EPA is developing perform a nce assessm ent and feedback m echanism s as well as updating NPDES program oversight guidance. EPA continues to refine and develop this strategy, which contains a Com munication and Outreach elem ent addressing training, outreach, and com munication, and a cooperative agreem ent with ASIW PCA for a workgroup as well as regional liaisons. EPA has been actively collecting State data and using inform ation to develop publicly available State profiles, and has also been developing NPDES m a nagem e nt reports for the program ’s perform a nce. * * *
Conclusions and recom m e ndations for this chapter are in Chapter 5, where they are integrated with conclusions and recom m e ndations from other chapters. 

### AgencyComment and OIG Evaluation EPA provided additional inform ation and recom m e ndations for clarifications to this chapter of the draft report. W e have m a de revisions as appropriate to reflect this inf o rm ation.
EPA also stated in its com m e nt that beginning in 2004, the PER Strategy establishes a new vision for m a naging the NPDES program using the PER Strategy' s elem ents: integrity, efficiency, and environm ental results. EPA requested that the report emphasize the role of implem entation of the PER Strategy in addressing overall perm it program effectiveness, particularly with respect to water quality improvem e nts. W e have added discussion of PER in several places to give EPA credit for actions taken. It should be noted that PER is a new approach designed to address a num ber of the causes of the backlog. The discussion of causes and strategies provides m o re historic inform ation, and since PER was only recently implem ented (in 2004), we expect it will have m o re signif i cant impact in the f u ture. EPA also concurred with the OIG’s assessm ent that resource constraints hamp er a perm itting authority' s ability to m eet perm itting goals. EPA said that declining State resources are one of the m o st problem atic issues f a cing perm itting authorities. In addition, EPA com m e nted that, as noted in the report, m a ny perm itting authorities have stepped up to the challenge using various approaches to increase efficiencies. As is discussed in Chapter 3 in m o re detail, we generally agree with EPA’s com m e nt that incorporating new or revised effluent guidelines in permits that have been backlogged should be a priority, as is reflected by EPA’s identification of this issue as a prioritization factor. However, the survey responses indicated that perm its were not being backlogged to wait for the revision or promulgation of

16an effluent guideline. Therefore, a lthough EPA indicates incorporating effluent guidelines in a perm it that is 15 years old is important, this is a different issue than anticipation of a new or revised guideline being the cause of a permit being in the backlog. Therefore, we did not m odify the discussion of the significance of waiting for new or revised effluent guidelines as a cause of the backlog.

17

# Chapter 3 Environmental Impacts of Backlog Reduction Vary and May Be Limited

The overall environm ental impact of the NPDES perm it backlog has been lim ited, but there is variability across perm its. Backlogged perm its are associated with only a sm all portion of waters currently identified as being “im p aired.” Further, while the m a jority of backlogged perm its when renewed had changes to their discharge lim its and a large num ber of the new perm its contained lim its for new param e ters, the m a jority of the controls in the prior perm its did not change and f

acilities were of ten already in comp liance with the new lim its that were reviewed. This suggests that EPA' s recent steps to prioritize perm itting resources according to potential environm ental impact are on the right track as long as EPA obtains needed inform ation. Although the significance of the backlog has been lim ited in the past, it could grow as a result of increased efforts in other water protection program s that m a y necessitate NPDES perm it revisions. 

### Backlogged Permits Do Not Appear to Be a Major Cause of Impairment A critical question about the NPDES perm it backlog is how large of a role backlogged perm its have played in delaying the achievem e nt of clean water goals. Based on our review of available data, the backlog has played only a mi nor role in impairing waters. Our analysis indicated that backlogged perm its affected only a very sm all portion of the 26,209 State-identified impaired waters (reported in EPA’s April 2004 303(d) fact sheet). W e were not able to precisely quantify the relationship of backlogged perm its to impaired waters (the likelihood of a water being impaired if a discharging facility had a backlogged perm it) due to several m e thodological issues. Therefore, directly linking impacts of backlogged perm its to impaired waters was not possible in this study for several reasons, including:

• W aters listed as unimp aired that are actually unassessed; although we have not assessed it, a web-link for access to this type of data has been added to the W A TERS database.

• N ot all perm its being georeferenced (although these are known).

• D if f i culties in determ ining whether the pollutant of concern is discharged by the perm itted facility because it m a y not m a tch PCS param e ters.

• V ariation am ong State water quality standards, percent of waters assessed, and 303(d) listing process between States. However, analysis of existing best-available data provides support for the conclusion that individual backlogged perm its play a lim ited role in known impaired waters. NPDES perm it pollution sources (point sources) are not

18believed to be the prim ary source of water quality impairm e nts. In FY 2002, 2 EPA estim ated generally that about:

• 10 percent of waters (approxim a tely 2,600) were impaired solely due to point sources.

• 50 percent (approxim a tely 13,000) were due to a com b ination of point and nonpoint sources.

• 40 percent were impaired only by nonpoint sources. The greater estim ated nonpoint source contributions (associated with 90 percent of impaired waters comp ared to 60 percent of impaired waters associated with point source) are due to a certain extent to the large num ber of successes in lim iting point source pollution as a result of the Clean W a ter Act. Over 10 years ago, in 1993 guidance, EPA stated that, “the m a jority of the rem a ining water quality impairm e nts ... result from nonpoint source pollution and other nontraditional sources....” More recently, EPA' s FY 2005 National W a ter Program Guidance states that nonpoint source pollution (and other nontraditional sources), addressed under Section 319 of the Clean W a ter Act, is the largest single cause of water pollution. In its response to our draft report, EPA stated that conclusions cannot be m a de regarding impacts of point source contributions until TMDLs involving point sources are comp leted. However, EPA FY 2002 training m a terial stated that it was also likely that “in m a ny of the 50 percent of the impaired waters where both point and nonpoint sources are significant contributors, nonpoint sources contribute considerably m o re pollutant loads than do point sources” (see footnote 2 for citation). W h ile we do not recom m e nd drawing water- or f acility-specif i c conclusions f r om the data at this point, available inform ation suggests that backlogged perm it impacts should be considered within both the context of point source and nonpoint source contributions to impaired waters.

In term s of overall causes of impaired waters, the perm it backlog is lim ited. W h ile we could not describe a relationship between the status of permits as backlogged and the likelihood of waters being impaired, we analyzed three EPA data sets that m a tched NPDES perm its to impaired waters to look at the relative association of backlogged perm its to known impaired waters. W h ile two of the data sets are prelim inary and all draw from PCS data that contain som e locational data gaps, we found a sm all num ber of impaired waters (ranging from approxim a tely 3 to 14 percent) appear to be associated with backlogged perm its (see Appendix A for description and m e thodology). This supports our general conclusions based on an estim ated 60 percent of impaired waters likely to be affected by point sources,

2 Clean W a ter Act Module, W a tershed Academy. See http://www.epa.gov/watertrain/cwa/cwa28.htm (last updated October 28, 2002) andhttp://www.epa.gov/wate rtrain/cwa/right52.htm (last updated March 12, 2003). More recent figures show: 10% point sources only; 43% nonpoint sources only; 47% com b ination of point and nonpoint sources for 1998 303(d) list – see http://www.epa. gov/owow/tm dl/tptm dl (last updated February 16, 2005).
19and the backlog of perm its now being less than 20 percent of the traditional NPDES universe. 

### Delay s in Reissuing Permits MayHave Vary ing Environmental Impacts Analysis of data from a large subset of previously backlogged m a jor perm its indicate that delays in perm it reissuance can have varied environm ental impacts. W h en the backlog was identified as a m a terial weakness and m a nagem e nt challenge, while reissuance of perm its was valuable for a num ber of reasons, an overriding concern was that expired NPDES perm its m a y not incorporate the m o st up-to-date lim its and conditions to protect hum an health and aquatic life, thereby delaying needed improvem e nts in water quality. EPA’s position is that perm it renewals can impact water quality in a num ber of ways such as through m o re stringent technology-based lim its for existing perm its, lim its on new param e ters, water quality-based lim its, whole ef f l uent toxicity lim its, best m a nagem e nt practices, and improved m onitoring requirem e nts. This analysis is lim ited to nationally available data for num eric lim its. W h ile as discussed above, backlogged perm its do not appear to be a significant cause of impaired waters, analysis of final num eric lim it changes and lim ited exam ination of related discharges further supports EPA’s new direction in prioritizing perm its for reissuance according to potential environm ental significance. Finally, building on this type of analysis would also help develop a detailed understanding of the sources of these lim it changes (such as water quality standards, ef f l uent guidelines, and TMDLs) that would assist in m a naging the Clean W a ter program s. W h ile a large m a jority of the backlogged m a jor perm its reviewed (2,166 of the 2,681, or 81 percent) had at least one lim it change, 3 the m a jority of pre-existing controls on pollutants did not appear to change (about one-third of the continuing controls on discharges showed changes). However, about half of the perm its also contained controls for new param e ters. (See Appendix C.) Out of the 5,555 m a jor perm its recorded as current in June 2003, we analyzed about half (2,681 which appeared to have been delayed over 45 days and had a prior permit with m a tching lim it data). For a national review, analysis was lim ited to the data available in a national data system (lim its), and conclusions are also lim ited and qualified by overall PCS data concerns. (See Appendix A for m e thodology in selection and screening of perm it data and perm it lim it records). By comp aring prior backlogged and current perm it lim its, we identified changes including increasing, decreasing, and additional lim its for previously controlled pollutants as well as for newly lim ited pollutants. Any identified change in a perm it could be viewed as significant and, therefore, this analysis supports the continued

3 Limit increase, decrease, new additional limit for a previously controlled pollutant, or limit for a new param e ter. Deletions of limits were not counted as a change.
20tim ely reissuance of perm its. In the analysis of num eric lim its, the addition of lim its for the first tim e for new param e ters could also be of greater environm ental significance than som e of the other changes noted, but we were unable to quantify this impact for perm it delays; the param e ter m a y have been discharged and m onitored or m a y only have been perm itted to discharge at the tim e of the perm it renewal. Our next step focused on lim its identified as becom i ng m o re stringent due to concerns that these would have represented delayed environm ental benefits, and to exam ine whether perm it lim it changes were representative of delayed environm ental impacts, including benefits. Even where PCS data show that perm it lim its are becom i ng m o re stringent, the impact of the perm itting delays varies and not all cases m a y have resulted in environm ental degradation. Analysis of a sm all subset of reviewed data, about 200 perm its and approxim a tely 1,000 total final quantity m a ximu m and average lim its 4 which becam e m o re stringent, showed that m o st related discharges were already in comp liance with the revised lim it. This data represents a subset of the perm its identif ied with decreased lim its overall and f o r quantity lim its due to data constraints, so conclusions are not generalized. Facility discharges while under the prior (backlogged) perm it were in comp liance with the revised lim its for the m a jority reviewed. The data illustrates both that lim it changes upon reissuance of a backlogged perm it is not only variable but also that it m a y not equate to environm ental degradation due to delayed perm it issuance (see Table 3.1 below).

Ta ble 3
. 1 : Dis c h a r ge Monitoring Re port Da ta From Prior Pe rmits Compa r e d to Qu an titativ e L i mit Decreases in Rev i sed Permits Backlogged

Permits Quantitativ e Maximum Limit Decreases Quantitativ e Av erag e Decreases Dis c h a r ge Monitoring Re port da ta a v a ila ble from prior pe rmit c o v e ra ge pe riod 5 265 710 503

Dis c h a r ge Monitoring Re port da ta re porte d unde r prior pe rmit c o mply w i th rev i sed current limit 196 579 404

Dis c h a r ge Monitoring Re port da ta re porte d unde r prior pe rmit v i ola t e rev i sed cu rren t limit at least o n c e 68 (max i mum) 54 (average) 131 99

Of v i olations identified, all v i olations of current limit also v i olated prior limit 25 (max i mum) 16 (average) 50 24

4 This subset m a y not include all PCS data for decreased quantitative m a xim u m and average limits as various types of param e ters were excluded from the analys is such as flow, tem p erature, dissolved oxygen, and pH. The data are shown for illustrative purposes only and should not be generalized.

5 These permits and limits are a subset of those iden tified with at least one limit decrease and of the set of changes identified for quantitative limits due to data constraints.
21This analysis also supports prioritization of perm it reissuance due to various indicator factors. W h ere discharges were above the revised perm it lim it, the delay in perm it reissuance m a y be m o re environm entally significant. However, where the f acilities’ discharges were also not in comp liance with the prior lim its, backlog status of the perm it m a y not be the sole factor in possible delays in environm ental benef its or improvem e nts seen f r om perm itting activities. These m i ght be impacted by comp liance and enforcem ent or other issues. W e did not attemp t to determ ine why facilities m e t new permit conditions beforehand. However, explanations include that the f acility adjusted to an upcom ing change prior to perm it receipt, or that the change was not significant. (See Appendix A for m e thodology for Discharge Monitoring Report comp arison.) Overall, the results of our analysis support the prioritization of perm it reissuance according to factors indicating potential environm ental significance. Our analysis indicates that environm ental significance of reissuance of previously backlogged perm its is variable. 

### Environmental Significance of Backlog Could Increase in Future
EPA is m aking changes that will af f

ect a num ber of clean water program s that support NPDES perm itting and which, in all likelihood, will increase the NPDES program ’s importance. Consequently, this m a y increase the importance of the backlog in the future. Further, EPA’s encouraging identification and prioritization of perm itting resources f o r perm its likely to need changes will af f

e ct the environm ent. In the future, m o re perm it lim its m a y change on reissuance based on planned activities in supporting program s. Perm it lim it changes are driven by regulatory, f

acility, or environm ental f actors, m a ny of which EPA has identif ied in a national review checklist (see Appendix D for additional factors identified). To better describe the future potential for environm ental significance in the backlog, we reviewed inform ation for three national program s for which we expected planning inf o rm ation or data to be available at the national level (water quality standards, TMDLs, and effluent guidelines) as well as two recent national initiatives (watershed perm itting and pollutant trading). Although national data were not readily available to analyze individual perm its, overall, we expect these program s to increase the value of perm it reissuance. Currently, States m a y be better positioned than EPA to identif y priority perm its in the backlog f o r perm it reissuance based on likely perm it lim it changes. Details f o llow. Water Quality Standards. New and revised water quality standards should increase the environm ental significance of backlogged perm its, since they are one of the bases for deriving perm it lim its. W h ile we could not determ ine the current ef

f

ect of delayed water quality standards on the backlog due to the backlog of water quality standards or delayed triennial reviews, inf o rm ation on overall program m a nagem e nt indicates there will be changes in water quality standards that are likely to affect perm its. In 2000, EPA reported water quality standards 22subm issions had been steadily increasing since 1996. Additionally, EPA also recently issued revised and new hum an health criteria, which is likely to lead to m o re perm its in the backlog changing due to new or revised water quality standards. EPA’s 2003-2008 Strategic Plan reflects EPA’s com m itm ent to ensuring effective operation and adm i nistration of the standards program , including triennial review and revision as required by the Clean W a ter Act. In the 2005 national program guidance, EPA notes that it is working to increase the num ber of States and authorized Tribes perf orm i ng triennial reviews. EPA’s planned activities also indicate the potential f o r m o re water quality standards changes. According to the FY 2005 Congressional Justification, EPA will be focusing on reducing the backlog of water quality standards, establishing highest attainable uses, and strengthening the scientific foundation. The 2005 national guidance also states EPA expects to develop criteria docum ents for 15 pollutants by 2008, as well as develop nutrient criteria, adopt biological criteria, and provide assistance for adoption of water quality standards. Also, there are a num ber of em erging contam inants and issues that will need to be addressed. Total Maximum Daily Loads. More EPA-approved TMDLs addressing impaired waters are expected in the f u ture, which will increase the environm ental significance of perm it reissuance through incorporation of W L As to address point source contributions to impaired waters. W h ile it is possible that pre-TMDL water quality-related data m a y be incorporated into a perm it or W L As will result in the sam e lim it as conventional calculations, com p letion of future EPAapproved TMDLs is likely to be related to m o re perm it changes. W a ters not m eeting water quality standards are reviewed f o r inclusion on the impaired waters list requiring a TMDL to address the impairm e nt. About 9,738 TMDLs were approved from 1996 through early 2004 and, currently, about 40,000 TMDLs will need to be comp leted (although not all of these will be associated with point sources). There are various reasons to expect an increase in the num ber of TMDLs that m a y be associated with NPDES perm its. New and revised water quality standards could drive new and revised impaired waters assessm ent. Also, only one-third of waters have been assessed for whether they m e et designated uses, and while EPA expects the rem a inder to have a lower rate of impairm e nt, m o re impairm e nts m a y nonetheless be identified. Effluent Guidelines. Because EPA is reducing resources to the effluent guidelines program , we believe that over tim e this program could have a dim i nished impact on the environm ental significance of backlogged perm its and as of reissuance of perm its in the program as a whole. The effluent guidelines program is the technology-based com ponent of the clean water program ; EPA identifies the pollution reduction capabilities of industries, and develops national requirem e nts that perm it writers use when writing perm its. Effluent guidelines contribute a lim it change where they are new or revised since an industrial perm it in a covered sector was last reissued (where the technology lim it is m o re stringent than the standards based one); the m a jority of effluent guidelines were 23promulgated in the 1970s and 1980s and, although subsequently reviewed, few have had subparts updated according to the draft effluent guidelines strategy published in Novem b er 2002. EPA’s Strategic Plan for 2003-2008 states that regulations are now in place for m o st m a jor industrial classes. EPA recently dram atically reduced the resources to the effluent guidelines program , and, according to EPA’s plans, few m a jor facilities in the June 2003 NPDES backlog are anticipated to be affected by effluent guidelines in the near term

. W e believe that this could result in a decline in the environm ental significance of backlogged perm its. Although the impact of this program in all likelihood will decline in the future, perm its currently in the backlog will continue to be af f

ected by changes in the guidelines. Several guidelines were written in the last decade and there are plans to develop new guidelines, although possibly at a slower rate. Watershed Permitting and Pollutant Trading. There are several innovative approaches within Clean W a ter Act program s that can increase the sources of lim it changes and, therefore, the likelihood of changes needed in reissued permits. Consequently, any affected perm its that are backlogged will also have a higher environm ental signif i cance. W a tershed perm itting and pollutant trading can provide alternative m eans for developing perm it lim its:

• E PA is prom oting use of a watershed approach designed to develop NPDES perm its f o r mu ltiple point sources located within a def i ned geographic area (e.g., watershed-based individual perm it, watershed general perm it, integrated municipal perm its).

• E PA’s recent pollutant trading policy allows facilities to m e et regulatory obligations by purchasing environm entally equivalent pollution reduction f r om other sources if consistent with water quality standards. Using new approaches like watershed perm its or trading m a y result in changes to perm its f o r NPDES perm itted f acilities. If there are delays in reissuing af f

e cted perm its and in incorporating any resulting new lim its, this m a y result in delay in seeing benefits from these program s. Further considerations for these two program s relate to categorizing the environm ental significance of perm its and m a naging interactions between program elem ents. Major perm its m a y receive perm itting priority over m i nors because of their designation as a m a jor and rather than because of relative environm ental importance of perm it reissuance. EPA supports issuance of perm its within a watershed m a nagem e nt fram ework, such as a rotating basin approach, in which point source perm itting decisions should be m a de based on environm ental priorities outlined in basin m a nagem e nt plans. As part of this effort, EPA established a flexible policy allowing for a backlog where perm itting authorities dem onstrate progress toward implem enting a watershed perm itting approach. Also, pollutant trades between two f acilities not being addressed in a particular perm itting cycle m a y require a perm itting authority to address perm its not expected in that year’s annual workload, while needing to 24address m a jor perm its can require perm itting outside of a planned 5-year rotating basin perm itting cycle. 

### EPA Should Continue Promoting Prio ritization of Permit Issuance EPA is developing and implem enting various overall strategies to m o re efficiently reissue perm its and, thus, ultim ately reduce the potential universe of the backlog (see Chapter 2). Fewer perm its in the backlog, expired for less tim e, would assist in reducing the potential significance of the backlog sim p ly in term s of num bers and age of perm its. However, if 100-percent perm it coverage cannot be achieved and m a intained while ensuring high quality perm its, it is important f o r EPA to prioritize this work to achieve the greatest environm ental benefits possible. The continuance of current perm it and priority issuance targets through 2008 shows that EPA recognizes that addressing backlogged permits is likely to rem a in a challenge into the future. Therefore, it is m oving State and regional perm it writers to focus attention on that part of the backlog that is m o st likely to be a problem for water quality. The principal way it is doing this is having States and regions identif y “priority perm its” and work toward the goal of m a intaining 95 percent of them as current. However, EPA regional and Headquarters officials recognize that the num ber of backlogged perm its could increase in response to this 95-percent goal, which would require resolution of potentially m o re comp lex issues and therefore take longer to reissue these perm its.
Other considerations som e tim es conflict with EPA’s encouragem ent of States and regions to emphasize perm it writing f o r those f acilities where a reissued perm it would m o st benefit water quality. For example, m odification of an existing, current perm it m a y be as or m o re environm entally significant than reissuing a backlogged perm it. In addition, som e States prioritize issuance of new perm its over reissuance of existing perm its, in part because these facilities could not legally begin discharging without the issuance of a final NPDES perm it. W h ile the backlog ostensibly accounts for these new perm its, several States and regions contacted stated that new perm it applications are not recorded in PCS until a f i nal perm it is issued (see Chapter 4). Data gaps and errors currently hamp er EPA’s ability to prioritize perm its based on desired characteristics. There are known data gaps in PCS, especially for m i nors. Other national databases are incomp lete or difficult to incorporate into perm itting decision m aking. The NPDES Perm itting Division developed two web-based characterization tools to help pre-screen potentially environm entally significant perm its using national inform ation, but they are currently impacted by data lim itations. EPA has asked States to develop the priority perm its lists for backlog reissuance with regional input, but EPA will need to develop appropriate oversight tools to m a nage this effort.
* * *

25Conclusions and recom m e ndations for this chapter are presented in Chapter 5, where they are integrated with conclusions and recom m e ndations from other chapters. 

### AgencyComment and OIG Evaluation In its response to the draft report, EPA acknowledged that perm its in and of them selves do not protect water quality, but are a key elem ent in the structure and the Agency' s implem entation of the Clean W a ter Act. Overall, EPA agreed that addressing the backlog alone m a y not provide an effective strategy to im prove water quality; the NPDES program is one part of the implem entation of the Clean W a ter Act architecture. EPA did not agree that the backlog reduction has had a lim ited impact on water quality. EPA indicated that to reach this conclusion, the report relies on an analysis of Discharge Monitoring Report results on existing limits from a sm all subset (12 percent of the samp le) of reissued perm its. EPA com m e nted that this discussion should be augm ented to reflect the variety of ways in which perm it renewal has an ef f

ect on water quality (f or example, m o re stringent technology-based lim its for existing perm its, lim its on new param e ters, water quality-based lim its, whole ef f l uent toxicity lim its, best m a nagem e nt practices, improved m onitoring requirem e nts). EPA further stated that the analysis om its very important parts of the perm it program universe, such as control of storm w ater and indirect discharges thr ough the pretreatm e nt program

. EPA stated that this analysis focused on the effects of the backlog and therefore did not address the NPDES program outside of the backlog definition.
The m o st significant source of impairm e nts of waters is acknowledged by EPA to be nonpoint source pollution. Our analysis also indicated the backlog of perm its played a lim ited role as a source of impairm e nt. Further, our review focused on the backlog and backlogged perm it lim its by design, and we therefore added descriptions of NPDES program areas th at were outside of the scope of the project overall to address EPA’s com m e nts regarding scope of the review. W e agree with EPA that there are other components of perm its that were not addressed by our analysis of final num eric lim its in previously backlogged perm its that had been reissued. However, the analysis of perm it changes was lim ited to where data was available in a national database and the scope of the analysis was clarif ied in the text. The records originally reported in the draf t as not analyzed because of changes in unit codes were analyzed using a standard unit code data colum n from PCS, and this inform ation was added to the analysis. This caused changes in num bers reported in the draft. W e refram ed the discussion of the analysis of the lim its and of the associated Discharge Monitoring Report analysis to reflect the lim ited nature of this study. W h ile the results m a y not be generalized, they illustrate examples where perm it lim its m a y not have substantially changed as well as exam ples of lim it changes not necessarily having contributed to environm ental degradation as discharge changes m a y not have been required. Therefore, we draw the sam e conclusions that EPA 26should prioritize reissuance of perm its within resource constraints to m a xim i ze environm ental improvem e nts. W e also clarified points throughout the chapter as well as addressed any technical issues raised by EPA, as appropriate.
Several com m e nts referred to the effluent guidelines program

. Overall, EPA believed that the report should give greater recognition to the impact that implem entation of effluent guidelines promulgated in the last decade or m o re will have on water quality as it continues to implem ent the NPDES program

. EPA stated that perm its last updated 6, 8, or 10 years ago will not reflect the improved technology-based lim its that are contained in the guidelines promulgated during the 1990s and earlier in this decade. Two prom inent examples of guidelines that are expected to have a substantial im pact are the 316(b) rule and the CAFO regulations. EPA stated that all the effluent guidelines promulgated in the last 15 years would still be relevant today f o r any perm its that expired bef o re a new effluent guideline was issued. EPA also stated that perm its in the backlog are of varying ages. These reasons describe why EPA considers it a priority.
EPA further com m e nted that the issue of guidelines is significantly downplayed because the num ber of guidelines being revised or developed related to point sources is very sm all. EPA stated that this can be m i sleading because som e of the recent guidelines have potential for significant impact (for example powerplant intake structures, CAFOs, centralized waste treatm e nt, etc.). If a perm it has been backlogged for a significant num ber of years, these new guidelines m a y not yet be reflected in the perm it. EPA also indicated that it should be m e ntioned that effluent guidelines are one of the factors EPA is using for priority perm its.
W e agree with EPA that inclusion of new or revised effluent guidelines in permits m a y result in significant changes in perm its, as described in a prior OIG report (see Appendix A). However, this project focuses on impacts of delayed reissuance of perm it lim its in backlogged perm its. As EPA points out, som e f

acilities adjust to expected ef f l uent guidelines even bef o re a perm it is revised, reducing the significance on environm ental impacts of delayed perm it reissuance. Also, while inclusion of effluent guidelines in a revised perm it m a y be significant, the impact of the program depends on how m a ny of the backlogged perm its have an associated new or revised effluent gui deline to be incorporated. Therefore, we have revised the discussion to reflect potential significance of effluent guidelines where incorporated but still conclude that the num ber of new or revised ef f l uent guidelines that will affect discharges of facilities with backlogged perm its in the future will nonetheless determ ine the overall impact on the backlog.

27

# Chapter 4 Backlog Reporting Has Provided Inadequate Measure of Environmental Results

EPA’s Governm e nt Perform a nce and Results Act (GPRA) backlog m e asure reporting did not provide an accurate view of the status of the NPDES permit program or an adequate m easure of environm ental results. These m e asures were not useful for m aking m a nagem e nt decisions because:

• M easures incorporated data reflecting backlog definition changes and data corrections that were not accounted for in baselines.

• T he m easures generally were of outputs that did not necessarily reflect outcom e s (environm ental impact) of implem ented m a nagem e nt strategies.
The baseline and m easure for the backlog have been comp letely revised to be consistent for FY 2005. Until that tim e, the failure to replace the baseline resulted in an inappropriate baseline being comp ared against m easures. This includes the effects of program m a nagem e nt or changes (e.g., inactivations and changes to general perm itting) in the perm it universe and backlog accounting. GPRA m akes agencies accountable to Congress and the public on their perform a nce by requiring reporting on goals, resource needs, and results. Other EPA GPRA m easures relying on perm it data are also impacted. EPA has recognized weaknesses and begun improving program oversight and m odernizing the PCS database. 

### Improvements in Backlog Measurement Affected Reported Progress In the FY 2005 National Program Guidance, EPA published a new com b ined m easure for backlogged perm its with a baseline from October 2002 that reflects increased accuracy and improved program m easurem ent. An additional m easure developed in conjunction with PER has also now begun tracking backlogged perm its prioritized for reissuance. However, due to the refinem e nts needed to improve the m easure and program oversight, prior GPRA backlog reports showing improvem e nts were impacted by m easure changes, data corrections, and an inconsistent baseline. Overall improvem e nts in the m easure included both data cleanup as well as m odifications in tracking to better reflect the program

. As a result, EPA (1) changed the backlog definition, which contributed to improvem e nts in the reported m easure; (2) oversaw the data cleanup of thousands of inactive facilities in PCS that inflated the 1998 backlog m easure and the perm itting universe; and (3) corrected other data errors identif ied. Although EPA explained the backlog definition changes in the data verification and validation section of annual plans and reports, EPA did not accordingly revise the GPRA baseline until 2005 to reflect the m easure revised in 2002. Therefore, 28the historic tables showing mu ltiple years’ reporting appear comp arable when they need to be interpreted in the context of the then-ongoing changes. Difficulties interpreting the data m a y be compounded because they are represented as comp arable across years; the FY 2004 Annual Plan Verification and Validation of Perform a nce Measures states: “The data are suitable for yearto-year comp arisons of officially tracked perm it status.” Table 4.1 shows the actual results for percentage of currently perm itted facilities as reported annually for GPRA. The GPRA reporting form at for FY 2005 changed in the Annual Plan and Congressional Justification, but according to an EPA m e m o and National Program Guidance, the backlog is still being tracked. However, the new backlog goal reflects a com b ined perm it m easure and baseline from 2002. Table 4.1: Percentage of “Current” Permits (Not Backl ogged) Reported Through GPRA as Co mp ared to Orig in al Backlo g an d GPRA Baselin e

Permit Ty pe Original Backlo g in Nov
.

1998 GPRA Baselin e

May 1999** FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 Major 74% 73% 71% 72% 75% 83% 84% 86% Minor* 52% 54% 62% 70% 75% 74% 84% 87% * D efinition of w h ich permits are counted in the minor category has changed over time. ** May 1999 GPRA baseline show n in GPRA reports, including the F Y 2004 Annual Plan. How e ver, the Annual Report for F Y 2004 does not show a baseline. The OIG and EPA identified the backlog as a significant m a nagem e nt problem in FY 1998. EPA identified the backlog as a corrected m a terial weakness in FY 2002. In the 2002 Integrity Act report, the Agency stated that, in Novem b er 1998, 26 percent of m a jors and 48 percent of m i nors did not have current perm its. By the end of FY 2002 the Agency downgraded the Federal Managers’ Financial Integrity Act status of the backlog based in part on the percentage of improvem e nt reported, as indicated in the Integrity Act section of the FY 2002 Annual Report: Since the Agency identified this weakness in 1998, it has achieved 56 percent of targeted reduction in the backlog of major point source permits and achieved 58 percent of targeted reduction in the backlog for minor point source permits. EPA’s comprehensive strategy for improving the NPDES permit program has resulted in noteworthy progress, and it establishes a management control framework for continued improvement. Backlog improvem e nts have resulted from adm i nistrative changes (e.g., data cleanup, changes to the backlog definition) and continued perm it issuance. The cleanup of databases improved the accuracy of the universe of perm its and m odif i cations to the backlog def i nition better ref l ect current perm itting approaches – however, these are important considerations when evaluating 29backlog improvem e nts reported. The altered approaches, practices, and tools designed for perm it issuance identified in Chapter 2 were beneficial, but did not explain all of the improvem e nt in the backlog reported by EPA in 2003. Changes in the perm it backlog universe reflect a m o re accurate accounting of the num ber of active perm its but also change the denom inator, so that the changes in the percentage of current perm its over tim e m a y reflect m o re than simp ly changes in rates of perm it issuance. For example, from Novem b er 1998 to June 2003 (and updating to March 2004):

• by March 2004, there were alm o st 600 m o re current m a jors but about 100 fewer perm its in the m a jors universe;

• there were about 2,300 m o re current m i nors reported in June 2003, but by March 2004 there were only about 450 m o re current individual m i nors than in 1998, while the individual m i nors universe decreased by about 22,500; and

• there were about 3,600 fewer current facilities covered by general permits in 2003 than in October 2000, and only about 2,600 fewer current facilities reported in March 2004, but the general perm itted m i nor universe also decreased by about 10,000 by March 2004. Details are in Appendix E. Significant Portion of Reported Improvement Due to Definition Changes EPA has incorporated a num ber of changes (see box on next page) since the original backlog reporting in the m easure and baseline established beginning in FY 2005 (to be used through 2008). EPA reported these changes in the data verification sections of the Annual Plans and Reports to develop a m o re accurate universe and m easure. W h ile these changes result in overall improvem e nts to the m easure, the results of these changes also include additional backlog improvem e nts from an adm i nistrative change extending the tim e allowed after perm it expiration before including a perm it in the backlog. Prior to January 2002, any perm it expired m o re than 45 days was included in the backlog (allowing for data entry according to PCS data entry arrangem e nts between States and Regions). EPA states that a focus on perm its languishing in the backlog rather than those delayed weeks or m onths due to adm i nistrative hurdles prompted a backlog definition change. In January 2002, EPA redefined the backlog to include perm its only 180 days after perm it expiration. According to the Agency, the additional tim e was needed to allow f o r delays in PCS data entry; allowance for incomp lete applications; draft perm its requiring revisions from public com m e nts, and other reasons extending the perm it issuance process.
At the tim e of this change, EPA reports it was already beginning to steer toward identifying high and low priority perm its, recognizing that while inventories of

30the backlog were important, they m a y not necessarily correlate with environm ental improvem e nts. A priority perm it approach (and m easure) is now in place as part of PER (discussed below). W h ile this change m a y m o re accurately Ch an g es to Backlo g Defin i tio n : 1998-2004 reflect EPA’s focus, it also 1. F r om November 1998 through December 2001, contributed to an additional the backlog percentage w a s based on dividing all individual permits (non-Stormw ater), individual major improvem e nt in the backlog stormw ater permits, and general (non-Stormw ater) status in June 2003 by major permits expired 45 day s or longer, plus the increasing reported current total number of permits w i th no issuance data and/or no expiration date, by the total number of active perm it coverage 3 percent for permits as defined. individual m i nors and 2. As of January 2002, permits w e re considered 3.6 percent for m a jors. backlogged if expired 6 m onths or greater. 3. Beginning w i th the September 2002 backlog In March 2004, EPA also reports, individual permits issued by EPA in authorized States w e re no longer reported as State permits but separately as EPA permits. extended the length of tim e allowed before a perm it application is considered 4. Beginning w i th the early Spring 2003 backlog reports, the backlog percentage w a s changed to backlogged from im m e diately reflect the current perc entage rather than backlog to over 1 year. EPA is percentage. considering further m odifying 5. Beginning w i th October 2002 backlog reports, minor facilities covered by non-Stormw ater general permits listed in ePIF T w e re included in the definition the def i nition to dif f

e rentiate perm it applications received of the backlog. without comp lete inform ation 6. In March 2004, applications w e re counted after (see external causes of the 1 y ear as backlogged. backlog discussion in Chapter 7. EPA is proposing backlog credits for incomplete 2). However, it is difficult to applications and delay s due to initial implementation determ ine the impact of this change on the backlog because several of the States and regions contacted indicated they have ceased recording applications in PCS. Thus, new perm it applications were not always entered until a f i nal perm it was issued; while technically not an environm ental impact since a point source legally cannot discharge without a perm it, new perm its m a y be important due to econom ic impacts. W h ile providing the State with m o re control over the perm itting process, if applications are not entered into PCS until a perm it is f i nal, the m easure undercounts the workload the perm itting authorities are processing. Although we are unable to precisely estim ate the impact of the changes to the application backlog criteria, available PCS data f o r original perm it issue date indicates approxim a tely 125 m a jors and about 4,380 m i nors in the active universe of perm its have been originally issued since Novem b er 1998, although there were m a ny perm its that did not have this data for analysis. EPA has taken a series of steps revising and improving the backlog m e asure and data, which have been incorporated into a new FY 2005 m easure and accomp anying 2002 baseline. In one significant change, EPA am ended the

31backlog definition to include general non-storm w ater m i nor perm its once consensus was reached with perm itting authorities on the backlog inventory and to m o re accurately describe perm itting of facilities as regions and States started using m o re general perm its. In October 2002, this change increased the universe of m i nor facilities in the backlog reports by 64,825, of which only 8,124 were actually backlogged. W h ile the resulting m easure m o re accurately reflected the perm itting universe, it also increased the apparent improvem e nt in the m i nors backlog in 2002 because EPA started reporting on the backlog status of general perm itted m i nor f acilities but did not adjust the goal description or original baseline for the m easure. W h ile not in the reporting tables, the inform ation on the definition change was noted in the Data Verification Section of the reports. The FY 2003 Annual Report stated the goal for issuing m i nor perm its was m e t while there was a continuing challenge in m eeting the m a jors goal due to comp eting priorities and increasing comp lexity of perm its in a watershed context. Although EPA identif ied these as the sam e goals with dif f

e rent targets, in actuality the goal and target for m a jors stayed the sam e while the goal and target for m i nors both essentially changed from FY 2002 to 2003. However, the inclusion of generally perm itted m i nor f acilities was not clearly stated and the associated level of achievem e nt was higher than would have been reported. W h ile backlog tracking practices m ake it impractical to go back in tim e to adjust the 1999 baseline, EPA could have clarified that the reported values for the years preceding FY 2003 were not com p arable to the new m easure (see Tables 4.1 and 4.2). EPA also could have established a new GPRA baseline including the correct universe of perm its from which to m easure progress as was done within the Office of W a stewater Managem e nt or as shown in the backlog status reports. In the FY 2005 National W a ter Program Guidance, EPA has resolved this issue by com b ining the entire m easure (including for m a jor and m i nor perm its) and using a com b ined 2002 baseline.

32T a b l e 4.2: Differen t Backlo g Go al Base lin es fo r GPRA an d Office o f W astew ater Ma na ge me nt GPRA Baseline (May1999) fo r Current Permit Cov e rage Office o f W astew ater Ma na ge me nt Ba s e line

for Current Permit Co v e rag e (in 2000) Baselin e Sh o w n in Backlo g Sta t us Re ports (in 2003) Majors 72% 72.1% (January 2000) Indiv i dua l Minors 54% * 66.7% (August 2000)

Minors (w ith non-s t ormw a t e r General permits) N/A * 88.2% (October 2000)

Min o r s: Co mb in ed Indiv i dua l Minors w i th non-s t ormw a t e r General permits N/A* N/A N/A 66.7% (August 2000) N/A

80.8% (October 2000)

* Individual minor permits used for the baseline in GPRA for “minors.”
Properly Identifying Inactive Permi ts Removed Significant Number from Backlog Because inaccurate PCS data exaggerated the num ber of perm its in the backlog for active dischargers, recent PCS data cleanup accounted for rem oval of significant num bers of perm its previously counted in the backlog. The PCS data cleanup was necessary, but the backlog baselines should have been replaced with comp arable data so that changes in the m easure reflect program m a tic improvem e nts and not PCS data cleanup. EPA defined the backlog to include only those applications and individual perm its that are active dischargers (f acility inactive code “A” in PCS). However, over tim e, perm itted facilities discontinue discharging, or perm it applications are withdrawn without a corresponding change to their PCS status. Inactive facilities and applications erroneously still coded as active inflated the Novem b er 1998 backlog for m i nors by alm o st 40 percent based on inactivations through April 2004 (see Table 4.3). W e did not consider perm its rem oved from the backlog due to inactivations to have environm ental impacts.

33Table 4.3: Inactiv ation of Pe rmits Backlogged in Nov e mber 1998 (No v emb e r 30, 1998 - A p ril 9, 2004) Number of permits in Permits fro m No v e mb er 1998 b acklo g th at w e re in activ ated * Permit Ty pe No v e mb er 1998 rep o r ted b acklo g I G Tota l Majors Indiv i dua l Minors 1,791 30,988 61 12,054 2 276 6 3 12,330 I = Inactive (Permits for inacti ve facilities no longer discharging). G = General (Permits covered under general permit instead of individual). * = For facilities w i th both ex piration and inactivation date data in PCS. Also, as current perm its are being inactivated, States and EPA have had to issue perm its for facilities in the backlog, issuing new perm its, as well as renewing expiring perm its at a rate high enough to still m a intain and improve current perm it percentage levels. The impact of inactivations is difficult to quantify, since som e “current” perm its are inactivated shortly before expiration or being given backlog status while others are inactivated earlier. Although the backlog m easure m a y be appropriate for som e m a nagem e nt purposes, perm it issuance statistics should also be used to track State program m a nagem e nt that could otherwise be obscured by necessary PCS perm it universe data m a nagem e nt. EPA recognizes that perm itting authorities have improved perm it issuance in the face of declining resources, additional program s com i ng online, and other comp eting interests. As these m a y not be well reflected by the backlog m easure (e.g., m o st storm w ater perm its are not included in the backlog accounting inventory), perm it issuance and other m easures included in the Managem e nt Report m i ght be considered to reflect this. EPA continues to support cleanup of PCS data. EPA has supported inactivation of non-discharging perm its and assisted with the data cleanup through contractor support. EPA believes that there are still som e perm anently inactive facilities that have not been updated in PCS but that this is a program m a nagem e nt issue that needs to be addressed by the perm itting authorities. EPA is still providing resources to support States in comp leting links to PCS from State databases as well as cleaning up existing data. States have been trying to comp lete data links to PCS to be able to upload up-to-date inform ation to EPA’s system instead of having to perform double data entry. EPA’s continued assistance appears beneficial, since 7 of 10 EPA regions and 4 of 8 States in our survey group indicated a desire for EPA assistance for PCS data cleanup. EPA believes that raising awareness of the im plication of “bad inventories” will prevent the reoccurrence of the 1998 situation when it was impossible to obtain reliable inventories. Initially, PCS indicated that there were about 71,000 facilities with individual perm its and there was no way of knowing which f

acilities were inactive (they appeared as legitim ate f acilities). This was comp licated also by anom alies in PCS where inactivated f acilities are only

34temporarily in non-discharge status. EPA states that the Integrated Comp liance Inf o rm ation System (ICIS) will allow f o r linkages to be drawn to improve reporting abilities. EPA also provided an example of a PCS data entry agreem ent with one State that includes cooperating to update and m a intain perm it tracking for active facilities and inactivating facilities that no longer discharge. Other Data Errors Undermine Backlog M easure Backlog accounting is also affected by other data errors (such as PCS expiration, or issuance and effective dates m i ssing, out of sequence or in the future). Also, lack of ePIFT guidance has resulted in a lack of uniformity in reporting generally perm itted facilities as backlogged. Missing inform ation, particularly, for m i nors, is a known PCS problem that will hamp er environm ental characterization (see Chapter 3). Further, although not impacting the backlog m easure because the perm it expiration date was updated, we identified 930 perm its to be rem oved from the analysis of perm it changes; these current perm its appear to still have the prior perm its’ lim its listed in PCS. This is an issue recognized by the Office of Enf o rcem ent and Comp liance Assurance, and this issue lim ited our ability to analyze perm it changes as reported in Chapter 3. Oversight Improvements Prompted Changes in Reported Backlog EPA Headquarters and regions, as well as States, have undertaken a num ber of oversight activities, including recent State profile data collection, resulting in improved inform ation leading to necessary adjustm e nts of backlog data. For example, EPA has identified non-standard usage of PCS requiring adjustm e nts to backlog data in two States and a region. In one instance, EPA rem oved what had appeared to be about 20,000 generally perm itted “facilities” from the backlog accounting universe in Region 6 where pipes were being counted instead of facilities. Also, recently EPA needed to adjust data for Minnesota and New Jersey because of non-standard use of PCS. Additionally, because “A” type perm its are not currently included as a source of backlog data, the m easure m a y be over- or underestim ating CAFO perm its. Backlog M easure Still Does Not Capture Some State M a nagement Approaches
Two overall State m a nagem e nt approaches are also not well-represented by the backlog accounting:

• I n Michigan, all perm its expiring in a given year expire on the sam e date at the beginning of the fiscal year, resulting in a cyclical backlog pattern. Michigan finds this m a nagem e nt approach beneficial because it allows them to address mu ltiple, related perm its as needed within a rotating basin approach. However, 180 days after the expiration date, the backlog m easure shows the rem a inder of perm its scheduled to be addressed in the year are reissued as

35backlogged, which then is reduced over the course of the next 6 m onths. Due to adoption of a different perm it m a nagem e nt approach, the backlog m e asure (including 180-day delay from expiration date) does not reflect Michigan’s m a nagem e nt approach well.

• N ew York implem ented a system of adm i nistrative renewals of expiring perm its which lessened the usefulness of the backlog m easure. Upon receiving “short form ” renewal applications, the State adm i nistratively renewed perm its, updating the issuance and expiration dates without a corresponding technical review of a full perm it application. Perm its requiring changes were identified as prioritized perm its and any substantive changes to these perm its were m a de by m odifications following a technical review. EPA did not consider the adm i nistratively renewed perm it to be backlogged because the expiration date in PCS is “current” - even though these perm its are substantively no different than an expired or backlogged perm it in another State. After alm o st 10 years, EPA Region 2 and New York recently agreed on steps to revise the State’s perm itting process to comp ly with Federal requirem e nts (see Chapter 5 recom m e ndations and discussion of com m e nts for further details). W h ile adm i nistrative renewal will no longer be allowed for four specified permit types (e.g., perm its needing a new lim it consistent with a wasteload allocation in an EPA-approved TMDL, etc.), the backlog status f o r these will not be af

f

ected until the current perm it expires, som e tim es years in the f u ture. The deadline is October 2006 for full im plem entation of the program changes in New York. Although we cannot precisely quantify the impact this practice has had on the backlog m easure, it doubtless contributed to EPA’s overstating the improvem e nt. However, the impact was not insignificant because, in June 2003, approxim a tely 6 percent of the current m a jor perm its nationwide were in New York. In June 2003, the backlog status report indicated that 344 of 354 (97 percent) of New York’s m a jor perm its were current. 

### Backlog Measure Has Not Refl ected Environmental Outcomes In addition to inconsistent perm itting strategies and inconsistent data, the usefulness of the backlog m easure has been underm ined because it is not closely tied to the environm ental outcom e s discussed in Chapter 3. Although simp ly having a current perm it has value, the backlog m easure is an output m easure that should be m o re closely tied to the program ’s environm ental outcom e goals of reducing loadings and improving water quality. The backlog m easure fails to reflect that, even assum i ng current or backlogged perm its have a consistent m eaning, they in and of them selves do not reflect environm ental improvem e nt. The 90-percent current perm it target of the backlog goal does not have a clear relationship to environm ental impact in term s of loadings or water quality. EPA has developed a new m easure for priority perm its under its PER Strategy based, to som e degree, on environm ental characteristics. However, in the m eantim e, the backlog m easure has been and is being used in m a nagem e nt

36decisions. Therefore, the backlog m easure m a y be driving som e inefficient decisions. Further, the GPRA m easures designed to reflect environm ental outcom e s from the NPDES program (and supporting program s) are flawed due to m a ny of the sam e issues affecting the backlog m easure. Inconsistencies M ake Backlog M easure Unclear Current reissued perm its are not equal in term s of environm ental impacts. Perm its are not comp arable output units in term s of environm ental impact or even issuance resource requirem e nts. Determ ination of environm ental significance is comp licated for a num ber of reasons. A State’s perm it m a y govern discharges of pollutants that are of concern in a downstream or adjoining State, or water quality impacts of som e m i nor perm its could be m o re signif i cant than som e m a jors, depending on discharge clusters and other factors. W a ter quality of waters receiving point source discharges is not determined by whether discharges are regulated by current perm its; rather, it is determ ined by water quality m onitoring and assessm ent. EPA stated in response to the draft report that it views the backlog m easure as capturing program integrity rather than environm ental significance. However, the backlog m easure has not provided the m a nagem e nt inform ation that EPA intended as described in the 2004 Annual Perform a nce Plan and Congressional Justification. EPA had stated that “Together the PCS and (e)EPIFT data are intended to m easure NPDES program coverage of f

acilities with up-to-date perm it requirem e nts.” The backlog m easure assum e s an equality between “current” perm its and up-to-date lim its. However, perm its defined as “current” by the backlog m easure are not necessarily consistent in containing up-to-date lim its. Inconsistent m eanings of the term “current perm it” underm ine the reported m easure. For example:

• Modifications: Som e current perm its need m odifications to reflect new inf o rm ation or changes in environm ental or f acility status. PCS m odif i cation data showed that approxim a tely 2,000 of the 5,500 current m a jor perm its as of June 2003 had m odifications based on PCS data showing records with between 1 and 7 m odifications.

• Expired permits: Som e apparently current perm its were actually expired (up to 180 days) and therefore m a y have lim its no longer up to date. For the June 2003 backlog, 375 of 5,555 current m a jors (7 percent) and 2,131 of 36,033 current individual m i nors (6 percent) were actually expired. Because the ePIFT data is updated quarterly for a known period of tim e, general perm it data provided is not necessarily up-to-date.

• Limits not updated in a current permit: All lim its m a y not be up to date upon issuance of a current perm it, which is not reflected in the m easure. For example, som e current perm its are issued before a necessary TMDL and W L A

37is available to lim it discharges of impairing pollutants; however, while a W L A m a y not be available, the Agency indicated that pre-TMDL inform ation could be incorporated into the perm it. Also, perm its m a y be updated but not the lim its in PCS. New York’s adm i nistrative renewal process updates PCS dates but does not update lim its in the perm it. Also, perm it tracking dates m a y be current but lim its m a y be interim and not yet require comp liance with f i nal lim its.

• Permit quality: Perm it quality problem s could include lack of or m i scalculation of a lim it, possibly resulting in lim its that m a y not be as protective of water quality standards. (See next section). However, som e perm its that are not current according to the backlog definition, and so do not appear to contain current lim its, m a y not actually be causing negative environm ental impacts. As noted in Chapter 3, although som e facilities m a y not have a current perm it, the f acility m a y be discharging at rates that already comp ly with the revised lim it once reissued. Therefore, the backlog m easure of current perm its m a y be confusing when correlated to environm ental impacts. EPA Did Not Provide a Sufficiently M eaningful Explanation of Basis for Goal Although the 90-percent goal m oves the status of the program forward from the baselines, EPA did not provide an environm entally or program m a tically m eaningful explanation of the basis of that goal. The level was set based on an assump tion that there would not be a backlog if States and EPA m a intained roughly a 20-percent rate of expiration and reissuance of permits annually; therefore, EPA assum e d that a 10-percent backlog would equate to a 6-m onth backlog. However, the backlog m easure does not reflect length of tim e in the backlog, and after 2002, all perm its in the backlog are over 6 m onths old by definition. Although new perm its are entering the backlog and others are being reissued, of the perm its that could be analyzed, approxim a tely 286 m a jors and 2,293 individual m i nors found in the Novem b er 1998 backlog rem a ined in the June 2003 backlog. This issue of long-delayed perm its raises the question of when and how EPA should be involved in reissuing long-delayed perm its, especially those impacting impaired waters, assum i ng EPA has the authority to take such action.
Six of the eight States contacted believed the 90-percent goal was about right; one preferred the ability to fluctuate to a 30-percent backlog, and another believed 15-20 percent was m o re appropriate. EPA seem s to be deemphasizing the goal’s definition by am ending it to exclude perm its backlogged due to rotating basin approach, adjusting for incom p lete applications, and considering the possible affects from a new backlog m easure. Although there are also concerns that the 95-percent priority goal m a y deflect achievem e nt of the

3890-percent goal, EPA accepts this possibility due to the focus on addressing higher priority perm its that m a y take longer to reissue. EPA has already begun taking steps to improve the relevance of the backlog m easure. It has, as previously described, developed the PER Strategy as well as the 95-percent priority perm it goal, encouraged States and regions to use environm ental significance criteria in selecting priority perm its, continued to support a workgroup’s efforts to develop a checklist to evaluate environm ental significance, and is asking regions to approve Perm it Issuance Plans for any perm itting authorities at less than an overall 70-percent issuance rate. Also, in conjunction with developm ent of the State profiles, EPA is providing a Managem e nt Report for the NPDES perm it program that includes the backlog as one m easure am ong a num ber of others relating to program perform a nce. Previously Reported Backlog M easure Could Have Led to Inefficient Results EPA and States are using the backlog m easure in a num ber of m a nagem e nt decisions:

• S om e States have adjusted where they allocate their resources.

• R egions are using the m easure for agreem ent negotiations with States, and m o st are also using it to gauge regional progress in the NPDES program

.

• S om e regions are using it as an indication of the potential for environm ental improvem e nts.

• S om e regions use the m easure when m aking resource decisions regarding funding or staff allocations and in directing funding to States. The backlog needed to be reduced for reasons including satisfying statutory requirem e nts, improving oversight data, and addressing environm entally significant perm itting issues. However, because of the uses of and attention on the m easure of the backlog and its variable relationship to environm ental outcom e s, it m a y have unintended negative consequences, including the following:

• Reduced quality: Pressure to reduce the backlog by expediting perm it reissuances could negatively impact perm it quality. A specific review of perm it quality was outside our scope. However, challenges in about a third of authorized States show concerns regarding the effectiveness of the NPDES perm it program

. Further, EPA itself noted in its FY 2004 Congressional Justification:

39Recently completed permit quality reviews (PQRs) have also provided clear indications that the quality of those permits that are being issued is not what it should be to ensure that permits include requirements that result in achievement of water quality standards. Failure to address these problems of timeliness and quality may lead to additional withdrawal petitions or lawsuits against state NPDES programs.

• Oversight lost: As discussed in Chapter 2, EPA has encouraged the increased use of general perm its to address the backlog. However, because PCS does not provide suf f i cient inf o rm ation to track the backlog of f

a cilities with general perm its, let alone the environm ental impact, EPA essentially loses oversight data f o r these f acilities. EPA had to develop a separate database (ePIFT) to track sum m ary data on general perm it expiration.

• Overall approaches can be disrupted: Overall perm it m a nagem e nt approaches can be disrupted by focusing only on backlog m e asure results. For example, while EPA is encouraging watershed or rotating basin m a nagem e nt approaches to focus on environm ental results, som e States have had to address m a jors out of the basin sequence due to concentration on the backlog m easures. Several States and regions com m e nted that the emphasis on m a jors was no longer appropriate (see Chapter 3).

• Resources may be inappropriately redirected: Because the m easure does not include all NPDES perm its, surface water perm itting, or water quality m a nagem e nt areas, m a naging to the backlog could result in redirecting resources from other areas that m a y be achieving equal or higher environm ental results. For example, neither non-NPDES State perm itting nor other activities addressing nonpoint source pollution are included in the backlog m easure. Other important areas within the NPDES program , such as biosolids and significant aspects of the storm w ater program , are also not included in the definition. EPA regions noted areas of potential environm ental significance not included in the backlog definition, such as storm w ater perm itting, perm it m odifications, perm it appeals, TMDLs, biosolids, industrial pretreatm e nt, specific types of perm its, general perm its, new discharger/new sources, strategy and policy, perm it quality guidance, and the old backlog having environm ental and/or workload impacts. One State was even considering requesting to shift Federal resources from the air program to address the NPDES perm it backlog. Decisions on resource allocations and potential shif ts need to be inf o rm ed by the relative resulting benefits of the activity. Backlog M easure Problems Affect Other Water Program M easures As noted, the NPDES perm it program incorporates outputs of other Clean W a ter Act program s, such as ef f l uent guidelines, water quality standards, and

40TMDLs. Outcom e-related m easures for these program s assum e or require implem entation through an NPDES perm it and comp liance with the lim its. Therefore, problem s with the NPDES perm it program , including the backlog, can have an adverse effects on expected outcom e s for those other program s. The perm it backlog and data issues relating to NPDES perm its can affect other program outcom e s reported in GPRA. Standardizing data on pollutants for water quality standards, TMDL listings, and NPDES perm its – even if only on a State-by-State basis – would provide m o re usable inform ation. Two program m easures dependent on perm its for enforceable implem entation are:

• TMDL measure: The actual accomp lishm ent of EPA’s planned FY 2003 GPRA m easure of the num ber of approved TMDLs being incorporated into NPDES perm its was not reported due to lack of available national data. This m easure would have provided context for which backlogged perm its on impaired waters were having a negative impact due to delayed perm it issuance, which could have incorporated an existing W L A designed to correct the impairm e nt.

• Loadings reductions for effluent guidelines and NPDES program: The m e thodologies used to calculate loadings reductions from effluent guidelines for perm its issued and for the perm it program could be applied to the perm its in the backlog to provide a sim ilar outcom e m easure of estim ated loadings reductions delayed due to the backlog. Although the perm it and effluent guidelines program s are both designed to reduce loadings, perm it lim its m a y increase in response to increased industrial production or other factors. Reissuance of perm its with increases and unchanged lim its (identified in Chapter 3) should be incorporated into the overall loadings estim ates or reported separately to provide accurate program outcom e m a nagem e nt inform ation.
* * *
Conclusions and recom m e ndations for this chapter are presented in Chapter 5, where they are integrated with conclusions and recom m e ndations from other chapters. 

### AgencyComment and OIG Evaluation EPA provided a num ber of com m e nts regarding the discussion of the backlog m easure both in its March 2005 response to the draft report and in discussion during the exit conference. Overall, with the developm ent of the com b ined backlog m easure and new baseline for FY 2005 through FY 2008 and the developm ent of the PER related m easure and goal for prioritized backlogged perm its, EPA is addressing m a ny of the concerns raised by the prior years’ GPRA reporting. EPA stated its intent was to give a m o re accurate picture of the

41universe of perm its and requested recognition of this or that the backlog estim ate was not accurate because EPA knew of other universes that were not included.
EPA noted that the m o st recent Federal Managers’ Financial Integrity Act (FMFIA) update recom m e nds that the backlog no longer be an Agency weakness since m echanism s /processes are in place to assure tim ely water quality improvem e nts through the NPDES program

. EPA described the shift to emphasis on issuing priority perm its (95 percent goal) along with the m a intenance of the overall 90 percent current perm its goal and the developm ent of NPDES program profiles under the PER strategy to ensure the overall integrity/quality of the NPDES program

. EPA also stated that it is important to note the ongoing efforts led by Office of Enforcem ent and Comp liance Assurance to implem ent ICIS-NPDES (the replacem ent for PCS) will help all aspects of perm it program m a nagem e nt including perm it issuance, comp liance, and enf o rcem ent. EPA stated that this will f u rther enhance their ability to improve the accuracy for GPRA reporting. EPA also requested several adjustm e nts to our draft report to reflect inform ation contained in backlog and FMFIA reports concerning the m a nner in which the backlog was being reported. EPA stated “[a]n integral part of the backlog reduction strategy was to determ ine the true nature of the backlog and workload through the cleanup of PCS data and inclusion of all facilities being perm itted (addition of general perm its inform ation). Due to the nature of available databases and inform ation collected, it was not practical to retroactively update the perm it universe baseline because this changes m onth-to-m onth. Adding general perm ittees as part of the backlog changed the m easure by expanding the universe of perm its. This better represents the actual universe, and EPA acknowledges these changes in FMFIA, but it does not recalculate the baseline. Each of the refinem e nts in the baseline was docum ented through FMFIA reporting.”
W e agree that the PCS data cleanup was necessary and recognize this change in our report as a necessary and valuable step in im proving oversight of the program and m a nagem e nt of the backlog. W e also recognize that EPA has also established a new com b ined backlog m easure and baseline in the FY 2005 National W a ter Program Guidance. Further, a priority perm it m e asure has been established designed to reflect environm ental factors.
W h ile we recognize these improvem e nts, our report also describes the historic backlog GPRA m easure and reporting. Although the changes in the historic backlog data and m easure are reflected in the section for “Verification and Validation of Perform a nce Measures” of the Plan and Report docum ents, the associated reporting tables did not clearly represent this inform ation. As of FY 2003 and 2004 reporting, the May 1999 baseline did not represent the sam e universe of perm its for m i nors and did not reflect other significant changes such as the extension of tim e prior to backlog accounting and the cleanup of the PCS

42data. However, progress in re-perm itting f acilities is overstated if m easured f r om the original baseline due to subsequent changes in the definition of the m easure. W h ile the May 1999 baseline m i ght not have been practical to update for the sam e date, it could have been replaced with a m o re representative baseline from October 2000. Even the new baseline data contains data that is known to need adjustm e nt, including m i sreporting of 20,000 pipes as perm its and different data entry approaches for two States. In addition, while ICIS m a y contain improvem e nts that will lead to great accuracy for GPRA reporting, we were not able to confirm the final required data elem ents. The PCS m odernization effort has encountered a num ber of delays and cost impedim e nts. EPA further com m e nted that the approach used by New York is being resolved through discussions between the State and EPA Region 2. EPA requested that the discussion section be rem oved and replaced with “EPA cannot recalculate the backlog because these perm its are no longer expired but should work with New York to assure appropriate m odifications are m a de and state clearly when discussing the backlog that New York has these m odifications to accomp lish.”
W e recognize that there are ongoing activities in New York and within EPA to resolve the issues highlighted in the draft report. W e have not deleted all discussion of the topic in the report as this was an issue for about 10 years and impacted the accuracy of the backlog m easure at the State and national level. Although we could not precisely quantify the im pact, New York’s adm i nistrative renewal process inf l ated the backlog m easure’s report of f

acilities with current perm its. As we had noted, based on a State audit report in 2001, New York had encountered difficulty m eeting its goal of reissuing 10 percent of its prioritized perm its even though at this rate it would not be able to keep up with expiring perm its (assum i ng an average of 20-percent perm it expiration annually). Other issues identified that were not directly connected to the backlog included the lim ited opportunity for public com m e nt for m odifications as opposed to comp lete perm it renewals and the use of a “short form ” application. W h ile adm i nistrative renewal will no longer be allowed for four specified perm it categories, the deadline for full implem entation of the program changes is October 2006.

43

# Chapter 5 EPA Can Take Various Actions to Reduce NPDES Permit Backlog and Improve Water Quality

EPA and States have taken various actions to elim inate the NPDES perm it backlog, but can do m o re to address continuing and anticipated challenges. Further, because the NPDES perm it program is not the only program involved with improving surface water quality, elim inating the backlog alone m a y not have a significant impact on improving national water quality. EPA and States need to balance ef f

o rts to elim inate the backlog with other ef f

o rts to improve water quality. Further, EPA needs to ensure that its efforts to reduce the backlog do not result in it quickly reissuing perm its that are not as effective as they should be to improve water quality. Also, EPA needs to improve its reporting of the GPRA backlog m easure. Due to the overlapping nature of the issues in Chapters 2 through 4, we are providing overall conclusions and recom m e ndations in this chapter. 

### EPA’s Management of NPDES Backlog Highlights Importance of an Integrated Clean Water Program Since FY 1998, when the OIG and EPA identified the backlog of expired NPDES perm its as a “m anagem ent challenge” and “m aterial weakness,” EPA oversaw a dram atic reduction in the size of the reported backlog. As a result, EPA and States are better positioned to address threats to water quality f r om point sources through the NPDES perm it program

. However, the backlog has not disappeared and som e perm its from the Novem b er 1998 backlog rem a ined in the June 2003 backlog. Further, significant num bers of facilities have been added to the NPDES program in recent years, and comp lex perm itting issues have arisen, increasing workload and the potential f o r a large backlog in the f u ture. The reduction of the backlog has also m a de visible other stresses on the perm it program that hinder EPA’s achieving clean water goals. Challenges identified in this report include inadequate funding, ineffective com munications, and organizational impedim e nts. Although an NPDES perm it is a program output that conveys enforceable m eans of protecting water quality, the ultim ate goal of the NPDES program is m a intaining and improving water quality through reduced discharges from point sources. Because program outputs m a y only be weakly associated with desired outcom e s, improvem e nts in m e asures of outputs, such as the size of the backlog, m a y provide only a mu ted signal of the extent of progress toward achieving environm ental goals. The significant effort to reduce the size of the backlog, although important for improving overall m a nagem e nt of the NPDES program , did not result in

44signif i cant water quality improvem e nts. The backlog appears to be of lim ited signif i cance as a national source of identif ied water quality impairm e nts. A large m a jority of reissued m a jor backlogged perm its reviewed had at least one lim it change or controlled a new param e ter. However, reissued backlogged perm it lim its had varied environm ental impacts based on the changes we were able to review while control of new param e ters m a y be associated with greater environm ental impacts. W h ile we did not address the question of perm it quality, our review indicated two key reasons why the backlog m a y not have significantly contributed to water quality impairm e nt:

• S ignificant discharge reductions m a y not have been needed upon perm it reissuance because facilities adjusted operations in anticipation of a new perm it or because additional perm it lim it adjustm e nts will likely occur in the future as planned activities are undertaken by EPA in supporting program s.

• A significant portion of the reported decrease in the backlog was due to adm i nistrative actions (such as rem oving backlogged perm its by inactivating them ) that, although necessary and important, did not directly affect water quality. Now that EPA has approached its backlog target, it needs to m a nage NPDES perm itting to not only m a intain and improve on achievem e nts but, m o re importantly, ensure the needed steps are taken to achieve clean water goals. An NPDES perm it is the product of a series of decisions m a de in relation to a variety of different program s. W h ether the NPDES perm it program is operating effectively is a very different, and m o re comp lex, question than whether 90 percent of perm its are current. Maintaining backlog targets involves perm it stream lining and efficiencies, m easurem ent of progress, and (m ore recently) issuing priority perm its to achieve output goals of the NPDES program

. To be confident that the NPDES program is achieving its environm ental potential in achieving water quality goals, EPA needs to use an integrated approach rather than simp ly increase perm it outputs. EPA needs to know if the NDPES program is supported not only by tim ely perm it issuance but strong scientific and technical bases f o r lim its, as well as comp liance with lim its, to prom ote clean and healthy ecosystem s. EPA also needs the appropriate data system s to m onitor how well the program is achieving goals, and the public and Congress need the right m easure to hold the Agency accountable for progress in cleaning the nation’s waterways. EPA has begun new initiatives and approaches to address som e of its future challenges. Improvem e nts in com munication, training, and collaboration am ong EPA and States will provide an additional boost to the NPDES program

. The backlog m a y increase in importance as the other program s that support NPDES (e.g., water quality standards and TMDLs) increase in productivity. On the other hand, as EPA and States direct m o re attention to reissuing on tim e the m o re

45significant backlogged perm its, the environm ental significance of backlogged perm its m a y lessen. Although the net result of these changes on the backlog and the environm ent is unclear, it could very well produce a m o re effective and ef

f i cient perm itting program that better protects water quality. 

### EPA’s Steps to Improve Program Integration Need to Be Strengthened In the 2003-2008 Strategic Plan, EPA states, “progress toward water quality improvem e nts will largely depend on success in integrating program s on a watershed basis; engaging diverse stakehol ders in solving problem s; and applying innovative ideas such as water quality trading, to deliver cost-effective water pollution control.” Through its PER initiative, EPA has dem onstrated a com m itm ent to improving the way that EPA and States m a nage the NPDES program
. Beginning in 2004, the PER Strategy establishes a new vision for m a naging the NPDES program

. EPA states that the PER Strategy' s elem ents of integrity, ef f i ciency, and environm ental results will guide m a nagem e nt into the future. The Agency is preparing m a nagem e nt reports of the perm it program , and has developed profiles of State program s. It has also announced that it is directing resources to address backlogs of water quality standards, and taking steps directed at TMDLs and perm its. The new backlog m easure based on priority perm it issuance begins to integrate environm ental concepts into the original, simp ler m e tric. These potentially valuable steps are based on the concept of an integrated approach to addressing the backlog and m a naging the program for the future. EPA needs to build on the steps already initiated by improving m a nagem e nt and oversight, strengthening com munication a nd training, and improving perform a nce m easures. Although the challenges facing the NPDES program are comp lex and EPA has initiated actions, there are f u rther steps that the Agency can take to reduce obstacles. Details on these issues are in Chapters 2 through 4, but the specific recom m e ndations are presented in this chapter due to the overlapping nature of m a ny of the issues. W e believe that taking these steps will result in a stronger clean water perm itting program that better protects the nation' s waters. 

### Recommendations To address NPDES perm it backlog and overall program integration with the point source program s that support the perm it program to achieve improved water quality, we recom m e nd that the Assistant Adm i nistrator f o r W a ter direct staf f to:
5-1 Create a system for assessing the effectiveness and efficiency of the clean water program in achieving clean water goals by assessing the impacts of the activities – such as TMDLs, water quality standards, and ef f l uent guidelines – that are designed to contribute to those goals. This would also aid the Agency in evaluating the impact of NPDES perm it issuance.

46EPA has already com m itted to doing this f o r the ef f l uent guidelines program , stem m i ng from a recom m e ndation we m a de in an earlier report.
5-2 Determ ine whether recently developed m a nagem e nt reports included in the State profiles provide the full set of oversight inform ation for the NPDES program

. These should better f acilitate m a nagem e nt decisions in relation to the program and surface water quality in general. In addition, the m easures in the m a nagem e nt report specific to backlog m a nagem e nt should also be addressed as follows:

a. For the priority perm its m easure, EPA should study the effects of this approach and evaluate the progress toward the 95-percent goal. The study should determ ine if achieving this m easure will assist EPA in achieving its overall watershed objective. It should also collect data to evaluate the 5-year perm it period for nonpriority perm its and any use of a priority factor that distinguishes between m a jor and m i nor perm its f

o r prioritizing perm it reissuance.
b. For the current m a jors and m i nors m easure, EPA should determ ine and describe the m a nagem e nt inform ation provided. For example, different criteria for the backlog m a y be appropriate to capture program integrity versus perm its with current lim its. Therefore, this description should consider State use of adm i nistrative renewals and other expedited reissuances, PCS data lim itations, m odifications, and TMDL-related perm its reissued prior to the comp letion of a W L A. Also, in conjunction with the new focus on priority backlogged perm its described in recom m e ndation 5-2a, EPA should determ ine the percentage f o r the overall backlog where it will take action both on a national and State level

. 5-3 For the data needed to m a nage the NPDES backlog and integrate m a nagem e nt of the perm its program , ensure that system atic data collection is in place. EPA should evaluate the data quality and data input that support m easures and m a nagem e nt decisions, and develop a corrective action plan if deficiencies are identified. As EPA is in the process of revising the existing PCS Policy, which establishes m a ndatory data elem ents, any data needs (e.g., m i nors data, identification of water quality standards lim its, etc.) for PCS should be incorporated where possible. To address the national NPDES perm it backlog GPRA m easures and m a nagem e nt, we recom m e nd that the Assistant Adm i nistrator for W a ter direct staf f to:
5-4 E nsure that the m easure is clearly defined and the baseline is appropriate for the 2005-2008 GPRA m easure (code 59) reported in the FY 2005-2008

47Managem e nt System Matrix in the national guidance docum ent. Specifically, EPA should:

a. Clarify that the units of the baseline and m easure include Federal as well as State perm its.
b. Determ ine the appropriate date and data for the baseline from which to m easure changes.

c. Not selectively rem ove perm its from the m easure without clearly explaining why perm its are being rem oved and the effect on the m easure. d. Provide a footnote for the baseline and m easure describing the impact of New York’s perm it m a nagem e nt approach on the m easure. This note m a y also be appropriate for backlog status reports posted on the internet. EPA could include reporting departm e nt-initiated m odif i cation rates until revisions in the adm i nistrative reissuance process to exclude certain perm its would be reflected in the backlog. W h en this occurs is dependent on the expiration date of the permits, which m a y be several years in the future of perm its.
5-5 D eterm i ne whether EPA has the authority to reissue NPDES perm its, particularly for facilities contributing to impaired waters, if the responsible State has not reissued a perm it already expired for an extended length of tim e. 5-6 Report an outcom e m easure for backlogged perm its by applying the existing m e thodologies used to develop GPRA m easures of loadings reductions for the NPDES perm it program and effluent guidelines program
. EPA should report the counterpart to the reported loadings reductions achieved by reporting the delayed loadings reductions associated with the applicable perm its in the backlog. EPA should also review the loadings reduction m odels to ensure actual perm it results, including reissued perm its with lim its that rem a in the sam e or allow increased discharges over previous levels. In a prior OIG report (Effectiveness of Effluent Guidelines Program for Reducing Pollutant Discharges Uncertain, Report No. 2004-P-00025 ), we also recom m e nded that EPA develop effluent guidelines perform a nce m easures based on actual discharges rather than estim ates. Finally, EPA should consider providing guidance to States about how to utilize the delayed loadings reductions calculated for backlogged perm its (described in this recom m e ndation) when they prioritize perm its for reissuance.

48To address the NPDES perm it program and backlog m a nagem e nt on a State level, we recom m e nd that the Assistant Adm i nistrator f o r W a ter direct staf f to:
5-7 W ork with Region 2 officials to comp lete review and revision of New York’s NPDES perm it program according to the m ilestones shown in a July 2004 letter. In addition to New York’s agreem ent not to renew perm its identified within four categories expected to require changes, EPA should take additional actions. First, EPA should also track departm e nt initiated m odification rates of perm its in the State. Second, EPA should work with the State to identif y appropriate perm its f o r prioritization of reissuance/m odifications, including those identified within the four categories shown in the July 2004 letter. Finally, EPA should ensure that all appropriate categories for excluding perm its from the renewal process are represented, including categories that m a y be appropriate for the future (e.g., perm its that m a y be associated with new or revised water quality standards). EPA could consider a general statem ent regarding identification of other perm its with perm it lim it or condition changes needed. 

### AgencyComment and OIG Evaluation Overall, EPA agreed that addressing the backlog alone m a y not provide an effective strategy to improve water quality. The NPDES program is one part of the implem entation of the Clean W a ter Act architecture. EPA acknowledged that perm its in and of them selves do not protect water quality, but are a key elem ent in the structure and the Agency' s implem entation of the Clean W a ter Act. However, the Agency requested that discussion of water quality impacts due to perm it renewal be augm ented to reflect the variety of ways in which perm it renewal has an effect on water quality (for example, m o re stringent technology-based lim its f

o r existing perm its, lim its on new param e ters, water quality-based lim its, whole effluent toxicity lim its, best m a nagem e nt practices, improved m onitoring requirem e nts). EPA also recom m e nded that the report recognize that overall program integrity (issuing perm its as required by statutes) and pursuit of environm ental improvem e nts are both important. In response to our draft report’s statem ent on a need for proper balance for water quality program s, EPA stated that one dim e nsion is the proper balance between the continuing effort to reduce the backlog as a program m a nagem e nt goal and the need to ensure that the m o st environm entally significant perm its are issued in a tim ely fashion. The perm it prioritization effort initiated in 2004, under the PER Strategy, is intended to help the NPDES program strike the proper balance, and discussion of the prioritization effort woul d help clarify this issue. From the perspective of the Of f i ce of W a ter, sustaining an ef f

ective perm itting program as the TMDL and standards program s continue to evolve is essential to the protection of water quality.

49W e acknowledge EPA’s com m e nts that the NPDES program is just one aspect of the Clean W a ter Act program s and that, while key components in addressing point source pollution, perm its do not in and of them selves address water quality. As a result, addressing the backlog alone m a y not have significant impacts on overall water quality. W e agree with EPA’s com m e nts regarding other aspects of perm it renewals that have potential impacts and included inform ation in Chapter 3. W e also agree with EPA’s com m e nts regarding the backlog m easure reflecting program integrity efforts and added inform ation in Chapter 4. Further, we agreed with EPA’s com m e nts on balancing reduction of the backlog with the need to address environm entally significant perm its. Inform ation addressing the PER Strategy and prioritization m easure has been added throughout the report. EPA also provided com m e nts regarding the draft recom m e ndations. EPA indicated that it will be able to address the intent of the recom m e ndations via its prospective approach to m a naging the NPDES program as em bodied in the PER Strategy and the Office of W a ter Strategic Plan. EPA stated that a num ber of the steps suggested have already been initiated. EPA also provided specific com m e nts that have been incorporated to clarify recom m e ndations and, in som e cases, resulted in re-num bering of the recom m e ndations due to deletion or com b ining.
As EPA inf o rm ed us that perm it-specif i c inf o rm ation is not subm itted f o r each perm it on the priority perm it list, we have m odified the draft recom m e ndation 5-1 but still encourage the use of inf o rm ation to help evaluate the ef f

ectiveness of “feeder program s.” Inform ation on which program s are or are not generating outputs leading to perm it lim it changes on a State basis could generate valuable m a nagem e nt inform ation from the perm it program for those feeder program s. W e encourage EPA to continue to use PER and its integrity component as well as other data sets available to assess the effectiveness of feeder program s – such as water quality standards, ef f l uent guidelines, and TMDLs – on NPDES perm it lim it changes and discharges. EPA should prioritize perm its for reissuance and continue taking whatever steps feasible to better integrate the various program s on a watershed basis in order to ultim ately improve surface water quality as described by EPA in the 2003-2008 Strategic Plan.
EPA recom m e nded that several of the recom m e ndations that relate to m easures in the Managem e nt Report should be consolidated. W e agreed and consolidated draft recom m e ndations 5-9 and 5-10 regarding m easures in the final recom m e ndation 5-2.
EPA com m e nted that draft recom m e ndation 5-3, which addresses data issues, be revised. EPA stated that “[b]ecause we have revised ICIS and Ask W A TERS to address our needs, the issue that rem a ins is data quality and data input. W e suggest this be reworded to focus on this.” W e agreed that the recom m e ndation should be clarified to address data elem ents and not data system s and revised the recom m e ndation accordingly.

50Draft recom m e ndation 5-4 dealt with GPRA reporting. EPA recom m e nded that we state that the GPRA baseline needs to reflect a PCS retrieval correction for a Region 6 Oil and Gas Perm it that inadvertently counted pipes, inflating the num ber of perm its. W ith the correction, the baseline is expected to decline by about 20,000 perm its. For the issues related to New York, EPA suggested this be reworded to capture that perm its which should have been m odified in New York be added to the priority perm it list f o r New York. W e agree with EPA that the baseline for the revised 2005 backlog m easure m a y not be accurate and revised the recom m e ndation to reflect the need for an accurate baseline. EPA agreed with draft recom m e ndation 5-5 and indicated they were already taking action. EPA is holding a conference in Septem ber and has had m onthly conference calls all year. Regarding draft recom m e ndation 5-6, EPA requested the recom m e ndation be deleted since States request training and help determ ine location and frequency, and because EPA pr ovides several types of training. EPA is also in the process of developing online training m odules for deriving water quality-based ef f l uent lim its and m a y consider adding other aspects of the NPDES program to the web-based tool. Based on the inform ation provided in com m e nts, the exit conference, and other followup regarding ongoing activities, we deleted draft recom m e ndations 5-5 and 5-6. EPA provided no com m e nts on draft recom m e ndation 5-7 and it is unchanged. Regarding draft recom m e ndation 5-8, EPA reported that Region 2 and New York are addressing the issue as a result of the PER review. EPA requested that this recom m e ndation be deleted as New York has agreed and is revising this program in response to a letter from Region 2. Due to the importance of proper implem entation of the NPDES program in delegated States and about 10 years passing before final EPA review, we ar e not deleting the recom m e ndation but are revising it to reflect the m ilestone dates agreed to by the State and Region 2. EPA should continue efforts to m eet m ilestones described in a July 2004 letter from New York to Region 2. The m ilestones are based on a draft work plan to be subm itted by February 2005 with associated interim approval m ilestones; by Septem ber 1, 2005, EPA is expected to approve the program and public participation should be initiated in New York. Program changes should be finalized and implem ented by New York as of October 1, 2006. Regarding recom m e ndations 5-9 and 5-10, which we consolidated into recom m e ndation 5-2, EPA also requested that draft recom m e ndation 5-10 be revised. EPA requested that the aspect regarding m a jor and m i nor perm its be deleted since EPA com b ined its goal for 2005. W h ile we recognize that EPA com b ined the m easure, as the distinction between m a jor and m i nor perm its m a y impact prioritization of reissuance, we did not delete this aspect of the recom m e ndation. EPA suggested that the recom m e ndation for an evaluation should be com b ined to capture whether they are m easuring the right things to achieve the watershed objectives and have the right emphasis. EPA also

51suggested that we consider instead that EPA m a y want a backlog goal focused on 10 years for non-priority perm its and retain the priority perm it goal for environm ental significance and evaluate if it is working. Finally, EPA suggested that we m i ght also want to include if EPA should consider areas needing a TMDL or standards to be m o re clearly excluded from the backlog so as to not create a disincentive for m o re holistic approaches. W e revised the recom m e ndation to reflect that prioritizing perm its for reissuance should support EPA’s watershed initiative. This is important because of a continued need for additional overall integration of program s such as water quality standards and perm its and allocation of associated resources according to water quality im pacts and not based solely on the backlog m easure. W e did not further revise the recom m e ndation although we generally agree that EPA m a y want to consider different approaches for non-priority perm its, such as a process for stream lined renewal, but recognize that the possibility of changes within a 10-year period m a y require adjustm e nts of perm its to reflect new environm ental requirem e nts; the ability to reopen a 10-year perm it could be critical. EPA m a y want to evaluate supporting program s before considering a 10-year perm it period. Finally, EPA recom m e nded that draft recom m e ndation 5-11 include the statem ent "or include loadings in perm it prioritization." W e generally agreed with EPA’s recom m e ndation, but added it as a separate action and not as an alternative. W e also clarified the wording of the recom m e ndation. EPA’s current loadings m e thodologies allow for an estim ate of the am ount of loadings reductions delayed that are associated with backlogged perm its. This inform ation m a y be useful to the Agency and States in prioritizing perm it m odif i cations and reissuance ef f

o rts.

52Appendix A 

## Details on Scope and Methodology
Survey s and Field Visits Separate survey instrum e nts were developed to obtain inform ation regarding the NDPES perm it backlog. A total of no m o re than nine States received each set of questions. Inform ation on selection criteria and participation is presented below for collection of causes of the June 2003 backlog and backlog m a nagem e nt by States and EPA:

• C auses of Backlog - State and EPA: W e collected this data to obtain inform ation on the causes affecting the largest percentage of the national backlog, and it was not generated to represent an individual State’s or EPA region’ s high backlog percentages. All EPA regions with backlogged perm its in the status report as of June 2003 received this question as well as nine States (Illinois, Louisiana, Mississi ppi, Missouri, Nebraska, New Jersey, Ohio, Pennsylvania, and W e st Virginia). State selection was based on individual perm it backlog statistics on a State basis (regardless of the percentage of current perm its in the State); several States were excluded because they are not authorized for the program

. Seven States responded (Illinois and Louisiana did not subm it a response), and comp leted surveys were aggregated and analyzed.

• EPA and State Management of Backlog: A separate backlog m a nagem e nt survey was sent to eight states (Colorado, Indiana, Ke ntucky, Michigan, New York, North Carolina, W a shington, and W e st Virginia), and a versi on specific to EPA sent to all EPA regions. Originally, we selected nine States using cr iteria designed to identify States representing a range of experiences (successes or challenges) in m a naging the backlog. However, Oregon was rem oved from the selection based on ongoing studies in the State. The selection was m a de based on backlog changes shown in the status reports between April 2001 and 2003. Several States were not considered for selecti on because the State was not authorized for the program or because of the size of the perm it universe. Comp leted surveys were aggregated and analyzed. W e also conducted on-site intervie ws during field visits to five of the States (Colorado, Michigan, New York, North Carolina, and W a shington) identified for the m a nagem e nt questionnaire and five of the regions (Regions 1, 3, 6, 8, and 10). 

### Data Analy s is in PCS and Other EPA Sy stems
W e also used PCS data to analyze the perm it backlog based on the perm it’s backlog status as of June 2003, with som e updates as of March 2004. W e consulted the Governm e nt Accountability Offi ce report Assessing the Reliability of Computer-Processed Data (GAO-03-273G, October 2002, external version 1). W e used the sam e definition and data set used and reported on by EPA in the backlog status reports. However, in analyzing perm it lim it changes, we used the original perm it backlog delay allowance of 45 days to generate data for the June 2003 backlog analysis. Perm it lim it data and discharge m onitoring report data were downloaded at a later date

53and analyzed in IDEA software. The last m odified perm it lim it in the prior perm it was comp ared to the original lim its in the new current perm it. Lim it analysis did not include flow data or records with changes in unit codes. Records in the prior and current perm it were m a tched using a key m a de of elem ents from PCS: Permit Number + Pipe Discharge Number + Report Designator + Limit + Parameter + Monitoring Code + Season Number In a final step, we comp ared available data for these lim its showing the tim e fram e for the lim it (e.g., m onthly, weekly, or daily lim its). Because this data is not required, we can only provide inform ation where these were not identical if provided. This m a y contribute to som e additional uncertainty in identif ying lim it changes in reissued perm its.
W e also analyzed current perm it records with final lim its that did not m a tch against a ghost perm it record following the sam e data screening process. These records were not analyzed for lim it changes but were analyzed to identif y why the record did not m a tch: no prior perm it; a new param e ter was being lim ited; or the m onitoring location, pipe discharge num ber, or season code did not m a tch.
PCS is an official EPA database used for en forcem ent and reporting purposes. However, based on data concerns raised in prior OIG, EPA, and Governm e nt Accountability Office reports on PCS, we perform e d targeted data reliability testing. Although som e errors were identified, they did not appear to significantly affect the overall analysis, particularly when other existing data sources and questionnaire inform ation were also used. The data we considered to be m o st unreliable for a particular analysis has been elim inated throughout the analysis. PCS data in this analysis was generally lim ited to perm it expiration dates and f a cility data, and f o r m a jors lim its and a sm all set of discharge m onitoring report data. W e also reviewed W a ter Enforcem ent National Data Base (W ENDB) elem ents (EPA identif ies as core inf o rm ation necessary to use PCS to conduct oversight of the effectiveness of the NPDES program ). W e believe that, overall, the reliability of screened data in conjunction with other data is suf f i cient f o r the level of conclusions drawn. A review of perm it quality (calculation of perm it lim its) or comp liance and enforcem ent inform ation was outside the scope of this study. W e also did not perform data quality reviews on discharge m onitoring report data. Because prior perm it tracking dates are overwritten in PCS when perm its are reissued, we used the perm it lim it start and end dates of “ghost” perm its (also known as “prior” perm its) in PCS for this analysis. W h en mu ltiple perm it lim it start and lim it end dates were identif ied in a single perm it’s data due to interim lim its and m odifications, we placed the perm it in the lowest age category (newest) identified. However, we used the data for each record as presented in PCS and the associated age category without any adjustm e nt as described above to identify perm its in the lowest age category. This m a y contribute som e additional uncertainty to identification of perm it lim it changes for the backlog (perm its not reissued for over 45 days).
W e obtained discharge m onitoring report data f o r quantity m a ximu m and average lim its that decreased when they were reissued f o r the tim e period of the lim it start and end date f o r the lim it in the prior perm it. Any lim its where data were available in PCS for both the prior and current

54perm it and which indicated a change in the tim efram e of the lim it (e.g., daily, weekly, or m onthly) were rem oved from the analysis. Each value obtained was comp ared to the prior lim it as well as the current lim it. At this detailed level of analysis, we also adjusted the backlog definition date from 45 days to 180 days for those perm its issued after January 2002 to m a tch EPA’s definition changes for the backlog.
To estim ate the num ber of impaired waters associated with a backlogged or expired permit, we used different data sets of expired perm its identified on impaired waters. The prelim inary Office of W a ter data analysis identified backlogged perm its as of March 2004 (expired in Septem ber 2003). The Office of Enforcem ent and Comp liance Assurance analysis used expired perm its data extracted in February 2004. Due to the different focus on expired and backlogged perm its in the two data sets, the tim e fram es are slightly different. W e analyzed both sets of data to develop a range of estim ates. First, we estim ated the num ber of waters associated by point sources according to available estim ates using the April 2004 303(d) listing of 26,209 im paired waters (60 percent of these is approxim a tely 15,725 water segm ents). W e divided the num ber of waters estim ated by EPA to be affected by point sources by the total num ber of expired perm its identified on impaired waters in the different data sets. This provided a range of estim ates of impaired waters that could be associated with expired or backlogged permits. W e also calculated a higher num ber of waters per backlogged perm it because the data sets showed less than 15,725 perm its (current or expired) as being on impaired waters. Therefore, we calculated a higher estim ate of impacted impaired waters by dividing the estim ated num ber of waters impaired by point sources by all known individual perm its and mu ltiplying the resulting ratio with the num ber of backlogged perm its. W e recognize that this range m a y be an over- or under

estim ate because general perm itted facilities are not included in EPA’s analysis, som e waters m a y not be affected by point sources, and not all perm its have been georeferenced. If the backlogged perm it already incorporates a TMDL W L A, or if there is no approved TMDL W L A for that perm it, the backlog status of the perm it is not likely to be a contributing factor for the impairm e nt because resolution of the impairm e nt is dependent on the TMDL. EPA com m e nts indicate that TMDL W L As are not needed before a perm it lim it m a y be developed. If they are available, they are to be considered. 

### Prior Reports The OIG has issued several reports addressing issues related to the NPDES perm it program , including:

• Congressional Request Regarding EPA Clean Water Enforcement Actions, Report No. 2005-S-00001, October 18, 2004.

• EPA Needs to Reinforce Its National Pretreatment Program, Report No. 2004-P-00030, Septem ber 28, 2004.

• Effluent Guidelines Program for Reducing Pollutant Discharges Uncertain, Report No. 2004-P-00025, August 24, 2004.

• EPA Should Take Further Steps to Address Funding Shortfalls and Time Slippages in Permit Compliance System Modernization Effort, Report No. 2003-M-00014, May 20, 2003.

55The OIG also issued two reports in 1998 that specifically addressed the backlog issue by identifying a num ber of NPDES perm its that had not been issued or reissued in a tim ely m a nner:

• Kansas National Pollutant Discharge Elimination System Program, Report No. E1HW F7-07-0022-8100089, March 31, 1998.

• R egion 10's National Pollutant Discharge Elimination System Permit Program, Report No. E1HW F7-10-0012-8100076, March 13, 1998. Further, since 1998, the OIG has reported the NPDES perm it backlog as a Managem e nt Challenge for the Agency.
W e also identif ied a num ber of State-specif i c reports addressing NDPES perm itting and backlog issues. Examples follow.

• A Minnesota report, Progress Report, Wastewater Point Source Permitting, Compliance and Enforcement, February 2003.

• A New York State Auditor’s report, Clean Water Permit Process, Report 2001-S-18, March 13, 2003.

• A National State Auditors Association Joint Perf orm a nce Audit, Water Quality, August 2001.

56Appendix B 

## Definitions and Examples of Alternatives to General Permitting

Pe rmitting byRule

“Cookie Cutter” Permits Provides for automatic coverage of facilit ies, but is time-consuming to complete (used mainly for stormw ater permitting but is being considered for other discharge ty pes in several States). Use basically the same permit format w i th small variations. Reau th o r ized Permits Require identification by ranking of pe rmits that w ill have no substantive changes upon reissuance (no changes to previous permit except for submittal dates, and new cover page w i th new signature and effective and expiration dates). Reduced Effort Permits W i sconsin has been w o rking on guidance for permits that can be reissued w i thout an in-depth review because the discharge is not causing or does not have the potential to cause a significant env ironmental problem based on determining factors (e.g., low environmental concer n, strong compliance history , and no significant changes in facility operations). EPA Region 5 identified this practice as a particularly successful State activity for addressing the backlog. Ex pe dite d Pe rmits Require identification of permits w i th simple or no changes that can be addressed by

less experienced staff. Batch Permits Minnesota identified and “batc hed” similar ty pes of permits in the backlog, w h ich streamlined the process by using co mmon boilerplate language and application of law s , rules, and standards. Region 5 also identified processing certain permits in Indiana in batches as a particularly successful practice. Roll-ov er Permits An identification by cert ification of no change could allow permit issuance w i thout pre-permit inspection.

57Appendix C 

## Changes in Permit Limits

Permits (% of total), Based o n 2,235 Permits, Excep t Based o n 2,681 W h ere Ne w Pa ra me te rs A l s o Counte d Re c o rds Facilities/records w i th a current (major) permit and a previous backlogged permit in matching analy s is (only in exceptions analy s is) 2,476 plus 205 (only in exceptions analy s is equals 2,681) 51,569* (plus exceptions analy s is records for new parameters equals 59,381) Facilities/records w i th a limit change or new parameter Facilities/records w i th a limit change Facilities/records w i th a decreased limit Facilities/records w i th a new parameter Facilities/records w i th a limit increase 2,166
1,748 1,080 1,384 1 ,079 17,717
9,905 3,631 7,812 3,959 Facilities/records w i th additional new limits for previously controlled pollutant 1,110 3,936

Facilities w i th no new limit or new parameter and records w i th no limit changes (not corresponding to the more limited permits) 515 39,870 records w i th no limit changes

Could not be matched and w e re not a new parameter (not included in the total number of analy z ed records) 1,353 permits (permits may have records in matching or exceptions analy s is) 12,926 records (not included in 52,634 total above)

* T o tal number of records in analy s is except for records w i th deleted limit s (after removing likely errors and flow parameters.
Note: Permits and records may overlap. Included in the table are 9,061 record s in 1,113 permits that had changes in parameter units betw een the prior and cu rrent permit that w e re analy z ed using standard limit data. About 8 percent of analy z ed records (including up to 5 limits per record) indicat ed a change in the unit of time for reporting, w h ich should be considered as an uncertainty in c onclusions draw n from this data.
L i mit Ch an g es Id en tified : Decrease: A negative value is obtained if the prior lim it is subtracted from the current limit. In crease: A positive value is obtained if the pr ior limit is subtracted from the curr ent limit. An increase may be a more stringent discharge limit in the case of select parameters such as di ssolved oxy gen, temperature, and pH. Stayth e same: T here w a s no change in the permit limit betw een the prior and current permit limits. A dditiona l ne w limit: A permit limit record consists of up to five limits per record (row )

. A new additional limit w a s identified w here a controlled po llutant also had a different limit ty pe that w a s blank (or a monitoring limit), w h ich became a final limit in the current permit. New parameter w i th a final limit: T hese are final limits in a current permi t for a parameter that did not have a final numeric limit in the prior permit. D eletion of limit: T he deletion of a limit w a s not considered a change

.

58Appendix D 

## Factors That Indicate a Permit Likely to Have New Limits or Conditions When Reissued

Ge ne ra l c a t e gorie s of fa c t ors in a ddition to thos e id en tified in EPA ’s d r aft ch ecklist th at reg i o n s n o t e as lik e l yto c a u s e a pe rmit to ha v e a ne w limit or c ondition w h e n re is s u e d
.

Receiv i n g w a ters (e.g., dilution, changes in flow s, w a tershed planning) Wa te r qua litys t a nda rds (e.g., dow nstream State consi derations and new designed uses) Studyda ta (e.g., mixing zones and effluent monitoring results) Reaso n a b l e p o t en tial an aly s is Sa nita rySe w e r Ov e r flow c onditions after EPA actions Implementing Tox ic ityIde n tific a t ion Ev a l ua tion/Tox ic ityRe duc tion Ev a l ua tion re s u lts after W hole Effluent T o xicity (W ET ) testing failures Ne w re gula t ions implementing Clean W a ter Act section (e .g., 316(b), addressing cooling w a ter intake structures for new facilities) Low e r de te c t ion limits due to new , EPA-approved analy t ical methods Oldest backlogged permits that are usually delay ed due to old issues

59Appendix E 

## Universe of Permits Counted in Backlog and Number of Current Permits (Selected Dates, 1998-2004)

No v e mb er 1998 (excep t as o t h e rw ise n o t ed ) J u n e 2003 March 2004 Cha nge in Curre nt a n d Un iv erse o f Permits fro m No v e mb er 1998 to : Ju n e 2003 March 2004

MA JORS: C urrent 5,017 5,555 5,606 + 538 + 589 Un iv erse 6,808 6,675 6,700 -133 -108 INDIVIDUA L MINORS: Current 33,714 36,033 34,167 + 2 ,319 + 453 Un iv erse 64,702 45,419 42,179 -19,283 -22,523 A LL MINOR FA CILITIES: Current 87,790 * 80,108 81,195 -3,682 -2,595 Un iv erse 103,711 * 96,006 93, 561 -7,705 -10,150

* “All Minor Facilities” data generated October 2000, not November 1998.

60Appendix F 

## Agency Comment

Memorandum
SUBJECT: Draft Evaluation Report: "Efforts to Manage Backlog of W a ter Discharge Perm its Need to Be Accomp anied by Greater Program Integration."
FROM: Benjam in H. Grum bles Assistant Adm i nistrator
TO: Dan Engelberg Director of Program Evaluation, W a ter Issues Office of Program Evaluation Office of Inspector General Thank you for your m e m o randum dated January 25, 2005, transm itting the draft report on the subject evaluation, No. 2002-000221. The draf t report provides a useful overview of the substantial efforts by EPA and the States during the last seven years to respond to the backlog of NPDES perm its that developed during the 1990' s. W e have a num ber of recom m e ndations for changes to the draft report that we believe would improve its clarity and accuracy. The Office of W a ter' s key recom m e ndations are sum m arized here, while m o re detailed suggestions are provided in the attachm e nt. 1) Implementation of Permitting for Environmental Results (PER) Strategy - Beginning at the outset of 2004, the PER Strategy establishes a new vision for m a naging the NPDES program

. It is the PER Strategy' s elem ents of integrity, ef f i ciency, and environm ental results will guide our m a nagem e nt into the future. In order to convey to the reader a m o re comp lete picture of the NPDES program , the report should emphasize the role of implem entation of the PER Strategy in addressing overall perm it program ef f

ectiveness, particularly with respect to water quality improvem e nts. The implem entation of the Strategy is likely to have impacts in the area of perm it issuance efficiency and the environm ental importance of those perm its that are renewed. This discussion should be m oved up front and included in the "At a Glance" section and Chapter 1. 2) Impact on Water Quality from Permit Renew a l, and Balance in the Permitting Program and betw een Related Water Quality Programs -- The conclusion in the "At a Glance" section and discussed at som e length in Chapter 3 that the backlog reduction has had a lim ited impact on water quality is one that we believe needs to be reexam ined. To reach this conclusion, the report relies on an analysis of DMR results on existing lim its from a sm all subset (12% of the samp le) of reissued perm its The discussion in this area should be augm ented to reflect the variety of ways in which perm it renewal has an ef f

ect on water quality (f or example, m o re 61stringent technology-based lim its for existing perm its, lim its on new param e ters, water quality-based lim its, whole ef f l uent toxicity lim its, best m a nagem e nt practices, improved m onitoring requirem e nts). Overall, we agree th at backlog alone m a y not provide an effective strategy to improve water quality as is stated later in the report. The NPDES program is one part of the implem entation of the Clean W a ter Act architecture. W e acknowledge from the outset that perm its in and of them selves do not protect water quality, but are a key elem ent in the structure and the agency' s implem entation of the Clean W a ter Act. Further, the draf t report raises the question of the proper balance f o r water quality program s in several places. One dim e nsion is the proper balance between the continuing effort to reduce the backlog as a program m a nagem e nt goal and the need to ensure that the m o st environm entally significant perm its are issued in a tim ely fashion. The perm it prioritization effort initiated in 2004, under the PER Strategy is intended to help the NPDES program strike the proper balance, and discussion of the prioritization effort would help clarify this issue. The draft report also raises questions about the right balance between the various water quality program s (principally TMDL and water quality standards). State and regional authorities are given f l exibility in tim ing of perm it re-issuances while TMDLs, new standards, or new approaches (f or example, watershed-based perm itting) are being comp leted. From the perspective of the Of f i ce of W a ter, sustaining an ef f

ective perm itting program as the TMDL and standards program s continue to evolve is essential to the protection of water quality.
W e believe the analysis of potential impacts to water quality would be better f r am ed using the chart in Appendix C. The analysis exam ines perm it lim its and changes to lim its over tim e, but om its very important parts of the perm it program universe, such as control of storm water and control of indirect discharges through the pretreatm e nt program

. The overall discussion should address the lim itations of the analyses in m o re detail. 3) Impact from Implementation of Effluent Guidelines - The report should give greater recognition to the impact that implem entation of effluent guidelines promulgated in the last decade or m o re will have on water quality as we continue to implem ent the NPDES program

. Perm its that were last updated 6, 8 or 10 years ago will not reflect the im proved technology-based lim its that are contained in the guidelines promulgated during the 1990' s and earlier in this decade. Two prom inent examples of guidelines that are expected to have a substantial impact are the 316(b) rule and the CAFO regulations. 4) Backlog, Permit Universe and FMFIA Reports - Several adjustm e nts should be m a de to reflect inform ation that was contained in B acklog and FMFIA reports concerning the m a nner in which the backlog was being reported. An integral part of the backlog reduction strategy was to determ ine the true nature of the backlog and workload through the clean up of PCS data and inclusion of all f acilities being perm itted (addition of general perm its inf o rm ation). Due to the nature of available databases and inform ation collected, it was not practical to retroactively update the perm it universe baseline because this changes m onth-to-m onth. Adding general perm ittees as part of the backlog changed the m easure by expanding the universe of perm its. This better represents the actual universe, and EPA acknowledges these changes in FMFIA, but

62it does not recalculate the baseline. Each of the refinem e nts in the baseline was docum ented through FMFIA reporting.
The m o st recent FMFIA update recom m e nds that the backlog no longer be an agency weakness since m echanism s /processes are in place to assure tim ely water quality improvem e nts through the NPDES program

. These include the shift to emphasis on issuing priority perm its (95% goal) along with the m a intenance of the overall 90% current perm its goal and the developm ent of NPDES program profiles under the PER strategy to ensure the overall integrity/quality of the NPDES program

. It is also important to note the ongoing efforts led by OECA to im plem ent ICIS-NPDES (the replacem ent for PCS) that will help all aspects of perm it program m a nagem e nt including perm it issuance, comp liance and enf o rcem ent. This will f u rther enhance our ability to improve the accuracy for GPRA reporting.
W e recom m e nd that the report recognize that overall program integrity (issuing perm its as required by statutes) and pursuit of environm ental improvem e nts are both important. 5) Recommendations Section - Regarding the recom m e ndations, we will be able to address the intent of the recom m e ndations via our prospective approach to m a naging the NPDES program as em bodied in the PER Strategy and the Office of W a ter Strategic Plan. A num ber of the steps suggested in Chapter 5 have already been initiated. In the case of the New York State Departm e nt of Environm ental Conservation ( NYSDEC) system , we are able to report that Region 2 and NYSDEC are addressing the issue as a result of the PER review. After discussing the issue with NYSDEC, the Region sent a letter stating that NYSDEC needs to m odif y their system to address the issue. Finally, we believe a num ber of the rem a ining recom m e ndations should be consolidated.
The attachm e nt provides specific com m e nts on each of the chapters of your draft report for your consideration. If you have questions about any of our com m e nts, please contact Linda Boornazian, Director, W a ter Perm its Divi sion, at (202) 564-0221 or Tom Laverty, Chief, State/Regional Branch at (202) 564-7974.

63Attachm e nt - Chapter-by-Chapter General and Specific Com m e nts on the

- Draft Evaluation Report: "Efforts to Manage Backlog of Water Discharge Permits Need to Be Accompanied by Greater Program Integration." Assignment No. 2002-000221 January 25, 2005

At a Glance
General Issues
This section m akes m a ny very broad statem ents that seem generally connected to the idea of integration and looking holistically at water quality m a nagem e nt. Given this broad discussion, we recom m e nd including the fact that we have undertaken a very holistic approach to dealing with m a nagem e nt of the NPDES program

. As discussed in the m e m o transm itting these com m e nts, we f eel the Perm itting f o r Environm ental results (PER) strategy is the correct approach for dealing with backlog as part of a mu ch larger program m a nagem e nt approach that focuses on perform a nce. This holistic approach has included looking at the water quality standards program , technology standards program , water quality assessm ent program , perm its program , and enforcem ent program together. This has provided a mu ch better data set from which to m ake decisions about appropriate approaches to water quality m a nagem e nt. Specific Issues In the 3rd paragraph of this section, the statem ent is m a de that "the backlog could grow in importance if supporting program s are strengthened." Given the focus of this report, and the data collected and analysis perform e d, it is not clear that this very broad generalization can be supported. In the 4th paragraph, the report indicates th at GPRA reporting has provided a m i sleading view. W e do not think this is accurate. W h en definitions were changed we always provided explanation for the changes. Baselines were changing due to cleanup, m i gration to general perm its, and new perm ittees com i ng on line. Year-to-year m easures reported in our Annual Report are covered in m o re detail later in our com m e nts.
Chapter 1 - Introduction
General Issues The first sentence does not accurately reflect current work within the NPDES program

. Specifically, it can be read to comp letely ignore the large am ount of work being done as part of the Perm itting for Environm ental Results (PER) program

. W e recom m e nd the Introduction be

64changed to reflect the fact the analysis done for this report "focused" on the issue of backlog, and therefore, did not fully consider the impact of ongoing work being done as part of the PER program
. Specific Issues In the section devoted to Background, the first sentence is inaccurate; the Federal W a ter Pollution Control Act was "originally" established in 1956. W e suggest changing the sentence to read, "Congress established the NPDES program through the 1972 am endm ents to the Federal W a ter Pollution Control Act. In the section devoted to "Backlog of Expired Perm its Identified," the first paragraph needs to explain the re-issuance process. The explanation should include requirem e nts in 40 CFR 122.21 related to applying and re-applying for a perm it, as well as section 122.6 that deals with continuation of perm its and the link to re-applying.
In this sam e section, in the next to last paragraph, m e ntion is m a de to the changes to the definition of backlog. This issue also com e s up later in the report. W e recom m e nd noting that each tim e a definition changes was m a de, the change was noted in the FMFIA report and in the report we recognized the need to clean-up the data and process for tracking backlog. It should also be noted that we reached a consensus with perm itting authorities only as backlog m a nagem e nt evolved that facilities covered by non-storm water general perm its should be included in the backlog accounting inventory. W ith the implem entation of PER, the def i nition of backlog now includes facilities covered by individual (m ajors and m i nors) and non-storm water general perm its. The report should state that capturing these perm ittees in the backlog accounting provides a better m easure of the perm it issuance realities faced by a perm itting authority. Because our tracking effort has unde rstandably evolved over the years, the report should further note that it is not practical to go back in tim e and m ake adjustm e nts to the baseline rather we should continue to improve explanations in the annual reports and m ake adjustm e nts to the GPRA m easures where feasible It should al so state that Regions and States started using m o re general perm its so a m o re accurate picture of facilities without current perm its would not be accurate if only individual perm its were counted.
EPA' s intent was to give a m o re accurate picture of the universe of perm its. This report should recognize this or one could say that the backlog estim ate wasn' taccurate because we knew of other universes that weren' t included. The level of backlog has two perspectives: good program m a nagem e nt and quality of perm it. Perm ittees have comp lained to us (m ost recently in a m eeting for perform a nce track facilities in Septem ber, 2004) when their perm its are not issued in a tim ely m a nner because it prom otes the notion that the perm itting authority is not responsive or sends a negative m e ssage to their com munity or their stockholders or board of directors. Perm it quality reflects the appropriate level of control has been included in the perm it to m a intain or improve water quality, including necessary water quality controls or t echnology-based controls (effluent guidelines). The second point is discussed fairly well, but the first is not recognized.

65Chapter 2 - Management of Backlog Improving But Challenges Continue
General Issues
EPA concurs that resource constraints hamp er a perm itting authority' s ability to m eet perm itting goals. Declining State resources are one of the m o st problem atic issues f a cing perm itting authorities and, as noted in the OIG report, m a ny perm itting authorities have stepped up to the challenge using various approaches to increase efficiencies. EPA is working to help States improve efficiencies and integrity through the use of perm itting tools and working as f acilitator, developer, and collaborator on electronic applications to assist perm itting authorities improve the quality of perm its while improving ef f i ciencies. W e are increasing our outreach efforts regarding el ectronic tools in 2005. EPA established a Clean W a ter Act 104(b)(3) cooperative agreem ent with the Association of State and Interstate W a ter Pollution Control Adm i nistrators (ASIW P CA) to collect and share good strategies and practices am ong states as well as participate in the PER process. Regarding com munications, EPA uses several channels:



### ! ASIW PCA Monthly Calls 

### ! Perm it Wr iters Courses (Five per year in different locations based on consultation with states and regions to determ ine locations with greatest need) 

### ! Perm it Wr iter Practitioner Meetings (every two years) 

### ! Perm ittee Training Courses with W a ter Environm ent Federation (3 to 4 per year) 

### ! Comp rehensive web site ( www.epa.gov/npdes ) with additional training in specific program areas 

### ! Periodic m eetings between states and EPA regions, including state program reviews by the regions 

### ! Participation in m eetings with States through ASIW PCA 

### ! National Meeting with States and Regional NPDES m a nagers is planned for Septem ber
As an outcom e of the PER process, EPA will be able to identify opportunities to further assist perm itting authorities to improve their perm itting program s. In particular, the priority perm its program addresses som e of the concerns of the OIG, where perm its are linked to environm ental or other adm i nistrative criteria.
Based on this inform ation, we believe that Recom m e ndations 5 and 6 in Chapter 5 should be rem oved because these actions are underway and already m e ntioned as important in an earlier chapter. Specific Issues In the first 2 paragraphs under the Resource Constraints section, there is reference to survey results. In the first paragraph, the results were from 6 of the 7 states and in the second paragraph the results were from 6 of 8 states. W e assum e this is based on respondents as

66opposed to actual population surveyed. W e suggestexplaining why different num bers of states were surveyed given the m e thods section indicated that 15 states were surveyed.
In the section: W o rkload Managem e nt Approaches, under "Alternatives to Traditional Individual Perm itting," the fourth bullet can be read to discourage using statewide general perm its when a rotating basins approach is used. W hy do you feel this is inappropriate? The State of Michigan has indicated they are experi encing a lot of success with this hybrid approach. In the section: States and EPA Must Address Increasing Com p lexities, in the f i rst bullet there is som e discussion of variances. Variances by definition are short-term m odifications of water quality standards. Theref ore, the variance does not "rem ove" the issue; the variance provides tim e to m o re fully study particular issues. In the section: States and EPA Must Address Increasing Comp lexities, in the second bullet we suggest you look into North Carolina' s rotating basins program

. It has been in existence for a long tim e and has m a de good use of linkages. In the section: Difficulty in Addressing Major External Backlog Causes, the last sentence of the fourth paragraph needs m o re explanation. The last paragraph has a discussion of e ffluent lim itations guidelines that should be m odified. More specificity would be helpful in explaining why there is a link between effluent lim itations guidelines and backlog. W e believe the existing discussion is inaccurate in cases where a perm it has not yet incorporated an effluent guideline. Given the backlog m a y include perm its of varying age, the discussion m a y include all the effluent guidelines promulgated in the last 15 years and would still be relevant today f o r any perm its that have been expired because a new effluent guideline was issued. This is why we consider it a priority. Further, in another section of this report, the issue of guidelines is significantly downplayed because the num ber of guidelines being revised or developed related to point sources is very sm all. This can be m i sleading because som e of the recent guidelines have potential for significant im pact, for example powerplant intake structures, CAFOs, centra lized waste treatm ent, etc. If a perm it has been backlogged for a significant num ber of years, these new guidelines m a y not yet be reflected in the perm it. Finally, the last sentence of this paragraph does not seem to m ake sense. W e are unsure about the point you are m aking here because effluent lim itation guidelines are technology-based not water quality-based. It shoul d also be m e ntioned that effluent guidelines are one of the factors EPA is using for priority perm its. Also, there are two places (p. 14 and p. 22) where the report speaks of the effect of "delayed" water quality standards. Does this m ean the tim e lapse between the adoption of new or revised W Q S and the implem entation of new W Q BELs in the perm its or does it m ean the backlog of standards subm issions without EPA ac tion (i.e., the W Q S backlog)? W e think it m a y be the latter based on the sentence on p. 14 ("EPA has stated that it will be working to reduce the water quality standards backlog that has delayed som e new water quality standards"). If so, please edit the sentence on p. 22 as follows: "W hile we could not determ ine the current effect of the water quality standards backlog on the NPDES backlog..."

67The section devoted to "Other Issues Also aff ect Backlog" seem ed to restate a lot of issues already covered, so m a y not be necessary. However, under this section it should be noted that prim arily states and authorized tribes issu e W Q S, and EPA approves (or disapproves) those, therefore the words "approval of" should be inserted into the following sentence as shown in bold: "Issues noted by State officials include d ...awaiting approval of water quality standards..."
W e recom m e nd the section for EPA Increasing Focus on Environm ental Outcom es for Perm it Issuance and Program Managem e nt be expanded and m oved forward. It seem s to be significantly downplayed at the end of this section. Chapter 3 - Current Impact of Backlog on Water Quality Appears Limited, but Can Grow in Importance
W e recom m e nd changing the title of Chapter 3 to "Current Impact of Backlog on W a ter Quality May Be Lim ited, But Can Grow in Importance." Another option f o r a title m a y be, "Many Changes in Renewed Perm its, For More Stringent Lim its However Impact May Not Be Significant." In the situation where lim its were tightened, the environm ental impact m a y not be significant because dischargers were already m eeting these lim its. This is due to the fact as States adopt new water quality standards, TMDL s address m o re point sources, and effluent guidelines are incorporated, and the issue of current and appropriate controls based on these other factors increases in significance. Focusing on priority perm it issuance along with a base of overall perm it issuance rate addresses results while m a intaining a check on program responsibilities. States are asking for a five year extension to perm its if they are not priority perm its which would require a change to the statute. The longer perm it term would alleviate the backlog som e what, however, the workload is m o re involved for the m o re comp lex perm its.
OIG' s f i nding that f acilities are discharging well below their perm its is the intended result of

the Ef f l uent Guidelines and the W a ter Quality-Based Perm itting program s. Perm it lim its to m eet technology standards are set based on proven technologies that are generally affordable, so they are installed. W a ter quality-based lim its are set to protect water quality standards. The water quality-based lim its are m eant to provide a saf e ty range to prevent environm ental harm ; because discharges can vary throughout a day or m onth; and samp les are not taken continuously. In m o st cases, the water quality-based lim its are set based on data provided by the perm ittee f o r the effluent along with other data from the perm ittee or other sources for the receiving water. These data sets are usually very incomp lete (do not include data for every day of discharge). The process f o r setting the lim its considers the uncertainty due to the incomp lete data sets and the variability of the discharge, and establishes a lim it that will ensure water quality standards will be protected. Also, in the case of ef f l uent guidelines, the process f o r issuing the guidelines is often lengthy. The extended am ount of tim e provides industries with significant advance notice that new lim itations will be put in place and industries often respond by installing technology in anticipation of the guideline.
As num eric criteria are further reduced (e.g., for m e rcury and nutrients); however, it is likely that users will have to install additional treatm e nt to reduce discharges. This will have a beneficial impact and lead to observable loadings reductions.

68This section also looks heavily at perm it lim its and changes to lim its over tim e, but m i sses som e very important parts of the perm it program universe, such as control of storm water and control of indirect discharges through the pretreatm e nt program

. Storm water is currently addressed through best m a nagem e nt practices (BMPs), and the pretreatm e nt program is adm i nistered at the local level and not reflected in PCS and discharge m onitoring (DMR) data. The fact these are not included should be recognized in the discussion. Further, we feel that refram ing the existing section m a y be helpful in m aking it easier to understand, and the refram ing should use the chart in Appendix C. Overall it looks like a significant num ber of perm its (86%) had som e form of change. Over half added new param e ters which could also be significant. According to the report, for records "that could be m a tched", 20 % of the perm its included adjustm e nts to existing lim its. For decreases (57%), these changes m a y not have resulted in improved water quality because new levels were already being achieved. Increased levels would be considered significant to perm ittees because it reduces the potential liability (61%). This could be followed by factors addr essing environm ental significance. A discussion of the percentage of perm its that m a y have in cluded effluent guidelines could also be included. This overall discussion would also need to address the lim itations of the analyses in m o re detail. The current report does not include som e key points, for example it does not recognize that changes to m onitoring requirem e nts can have signif i cant water quality impacts. Currently the analysis assum e s that if the lim its have not changed, there has been no change to the perm it, and this m a y not be true. Specific Issues In the section, Impact of Delay in Reissuing Backlogged Perm its Doubtful, the issue of "new" pollutants not previously lim ited seem s to be given little attention. As one example of why "new" pollutants are important we can consider nutrients. Nutrients and the impact of nutrients on attainm e nt of water quality standards is clear because large num bers of listed waters are impacted by nutrients. W e suggest m oving the paragraph that starts with "Our conclusions are lim ited to those lim its we could m a tch from a prior to current perm it" to the beginning of the section to highlight the scope of the analysis that was undertaken here. There are 3 places (p. 17, p. 21, p. 22) where the report speaks of the increase in productivity of the W Q S program or the increasing num ber of water quality standards. W e are not sure what this really m eans. However, on page 22 there is a discussion of an increase in the num ber of standards subm issions from 1996 to 2000 and revisions in hum an health criteria that would likely lead to new or revised W Q S as well as discussion of "EPA' s planned activities also indicate the potential f o r m o re water quality standards changes" and then it lists several item s from the FY2005 Congressional Justification (i.e., focusing on reducing backlog of W Q S, establishing highest attainable uses, and strengthening the scientific foundation). If this is what is m eant by the discussions on p. 17 and p. 21, it would be helpful to m ove the discussion on page 22 forward in the docum ent to provide context prior to the statem ents on pp.17 and 21.
Com m e nts/questions on "Delay in Reissuing Perm its Had Uncertain Effect on Discharges" subsection - The narrative m e ntions in passing num bers of perm its with new lim its (either additional lim its on previously included param e ters or for entirely ne w param e ters) but does not at any point discuss

69the potential significance of these new lim its for water quality. Given that over half (up to as m a ny as 90%, depending on the overlap between the 803 with additional lim its and the 1,384 with new param e ters) of the 2,456 perm its had such new lim its, it would appear that this aspect is quite significant. By discussing only cases in which f acilities were m eeting revised perm it lim its prior to reissuance and cases in which f acilities were violating both prior and revised lim its, the narrative suggests that the cases in which discharges m e t the prior lim its but not the revised lim its, thus requiring a discharge reduction, were entirely insignificant. In fact, such cases are an important reason for reissuing perm its on a regular basis.
The term "record" is not clearly defined. It would be helpful to include a general description of the perm it-pipe schedule-param e ter-num erical lim it hierarchy in the chapter itself. Additional explanation is needed for the first sentence of the last paragraph on p. 18, which parenthetically m e ntions num bers of m a ximu m and average records, implying that there are records that are distinctly m a ximu m and records that are distinctly average. The beginning of the DMR analysis discussion m e ntions 488 "identified" perm its, but does not explain the criteria for selecting these 488 from the 2,456 discussed above. W h at were these criteria? The analysis looking at DMR data included 307 perm its of the original 2,456 perm it samp le. W h ile there is a tacit implication in the narrative that the observations f r om this samp le apply to all backlogged perm its, is there any inform ation you could provide to apply the findings to rem a ining perm its. The last paragraph of the subsection states, "W e were unable to conduct a sim ilar analysis for those 1,384 facilities where the new perm it controlled a new pollutant." First, this seem s to imply that each perm it controls only one pollutant. Because this is not the case, and the perm its for those 1,384 facilities alm o st certainly also contained lim its for pollutants that had previously been controlled, why were the f acilities rejected f r om the analysis, rather than analyzing the set of lim its/discharges that were com m on between the backlogged and reissued perm its?
Can the inform ation in Table 3.1 be broken into mu tually exclusive categories as follows for Quantitative Maximu m Lim it Decreases (and, therefore, sim ilarly for Quantitative Average Decreases)? Of the 797 lim its analyzed,

• 56 had discharges that would violate the revised lim it, all of which were also violations of

the prior lim it

• 797-178 = 619 had no discharges that would violate the revised limit

• 178-56 = 122 had som e discharges that m e t the prior lim it but would violate the revised lim it If not, what are the problem s with this type of break-out?

70Comments/Questions on Appendix C (given the link to this part of Chapter 3 we decided to include our com m e nts on the appendix here) W e feel the order in which the categories are listed could be changed to better group related categories; a better order m a y be:

• F acilities/records with a current (m ajor) perm its and a previous backlogged perm it in m a tching analysis

• F acilities/records with a lim it change or new param e ters

• F acilities with no new lim it or new param e ter and records with no lim it changes

• F acilities/records with a lim it change o F acilities/records with a decreased lim it o F acilities/records with a lim it increase o F acilities/records with additional new lim its f o r previously controlled pollutant [assum i ng this is a subset of records with a lim it change]

• F acilities/records with a new param e ter

• C ould not be m a tched and were not a new param e ter
W h at is the overlap between the 1,384 facilities with new param e ters and the 803 facilities with additional new lim its for previously controlled pollutants? (Alternatively, how m a ny f

acilities had any type of new lim it?)
W hy do the 8,643 records with lim it changes and the 7,812 records for new param e ters not add up to the 14,146 records with a lim it change or new param e ter? At the record level, these categories would seem to be mu tually exclusive because a lim it is either new or changed not both.
How m a ny records have both a decreased lim it and a lim it increase? (since 4,549 + 5468 > 8,643, there are apparently som e ) Presum ably, these are cases with a decreased concentration and increased quantity (due to increased total f l ow), or vice versa (due to decreased total f l ow). How m a ny are in each of these two categories? Are the 34,930 records listed as having no lim it change identical in the prior and reissued perm its, or does this num ber include the 12,926 records that were not m a tched and not a new param e ter and/or the 9,061 records with changes in units? (How m a ny records in reissued perm its were identical to the corresponding records in prior perm its? ) In the section, Backlogged Perm its Have Not Been a Major Cause of Impairm e nt, the first paragraph seem s to have som e contradictory ideas. In one sentence, it is noted that "based on our review, the backlog has played only a m i nor role in preventing impaired waters from m eeting their designated uses." Then in a later sentence, it is noted, "overall, we cannot precisely quantify the relationship of backlogged perm its to impaired waters due to several m e thodological issues including." W e suggest that the two sentences be com b ined to say that directly linking backlogged perm its to impairm e nts is not possible for the following reasons:

71Please list m e thodological issues in Page 20 of report and also add:
Impairm e nts m a y be caused by a com b ination of sources and the relative loadings from these sources. These include permutations involving a single point source discharger, mu ltiple point source dischargers, and non-point sources. To add to this, each type of source m a y contribute different loadings for each im pairm e nt scenario. In addition, the comp lexities of the assim ilative capacity of the water body, pollutant synergies, and other factors m ake it very difficult to m ake direct linkages to the backlog. Therefore, keeping backlog rates as low as possible is desirable even when direct and comp elling evidence is not available.
Later in this sam e section, point sources are deem ed to not be responsible for the m a jority of

waters identif ied as impaired. This is not a f actual statem ent that can be m a de until the TMDLs are comp lete for those that have a point source in them

. It is true that a direct cause effect relationship cannot be established; ten percent are designated as "imp aired solely due to point sources," and 50 percent are impaired "due to a com b ination of point and nonpoint sources." Thus the data indicate point sources contribute to 60 percent of the im paired waters. Further, a citation for these data needs to be provided and we recomm e nd noting that the values presented are rough estim ates (given the rough estim ate we also recom m e nd rounding the values in parentheses). The next paragraph in this section states that the results are heavily impacted by the "approach used and the assump tion employed," but does not provide any m e thodology that describes approaches or assump tions. Therefore, it is not possible to determ ine the basis for these results. Also, the paragraph ends by stating, "Moreover, an existing approved W L A is also necessary for reissuance of the backlogged perm it to directly address the impaired waters." Perm its are often issued prior to the developm ent of a TMDL; please see 40 CFR 122.44(d) that deals with water quality -based perm its and developm ent of perm it lim its. Also, the 1991 Technical Support Docum e nt for W a ter Quality-based Toxics Control for detailed discussion of process for developing lim itations. W e provide sim ilar com m e nts on this issue in our com m e nts on chapter 4. For table 3.2, it would be helpful to have an explanation why OWdata and OECA data are comp ared for different periods of tim e. Under the section dealing with Environm en tal Signif i cance, specif ically dealing with W a tershed-based Perm itting and Trading, we feel m o re explanation is needed for the sentence, "Delay in incorporating these new lim its m a y result in delay in seeing environm ental benefits from these program s." Also, in this sam e paragr aph, we believe clarification of the last sentence is necessary, perhaps to read "not being addressed in a particular rotating basin perm itting cycle"?

72Chapter 4 - GPRA Backlog Reporting Provide s Inadequate Measure of Environmental Results
W e suggest changing the above title to "GPRA Backlog Reporting Needs to Be Supplem ented with Environm ental Results Measures." Progress Shown by EPA' s Backlog Measure Unreliable
W e suggest that this title be changed to "EPA' s Backlog Measure Considered in the Context of Backlog Definition Changes"
W e have always explained the reasons for the changes (adm inistrative) in our Annual Reports. W e will, however, m ake adjustm e nts to perf orm a nce m easures and improve explanations for changes. Because the backlog m easure is an important m easure of program activity, m a ny perm itting authorities had varying opinions on possible def i nitions when tracking f i rst began. EPA has m a de som e changes to the definitions after considering factors that were not evident when tracking first began. Data cleanup, factoring in perm it applications, and other elem ents have steadily improved the reliability of the backlog m easure. Also, we suggest that the report consider that backlog reduction for a perm itting authority has entailed:

• I ssuing new perm its (including ones in new program areas) • I ssuing perm its that are expiring and adding new requirem e nts • I ssuing perm its that are backlogged and integrating new requirem e nts Thus, backlog reduction involves the com b ination of keeping up with the existing perm it issuance workload, new universes (e.g., CAFOs, Storm W a ter), while issuing backlogged perm its. The f act that m a ny perm itting authorities have been able to improve their record in the face of declining resources should not be characterized as being overstated. Accordingly, we suggest that the "m easure initially overstated the actual m a gnitude of the original backlog and now overstates the m a gnitude of improvem e nts" should be revised to include thoughts concerning the fact that issuance continued as the universe of permits expanded and work was underway to significantly clean up the database. W h ile the m e asure has expanded the universe of perm its to better represent the actual universe and EPA acknowledges these changes in FMFIA, it did not recalculate the base. It should also be recognized that m a ny perm itting authorities have improved perm it issuance in the face of declining resources, additional program s com i ng online, and other comp eting interests."
W e also request the following sentence "However, a significant portion of the backlog reduction from m i nors and som e portions for m a jors reported by EPA cam e from adm i nistrative changes rather than dram atically increased efficiency" be replaced with..."Backlog improvem e nts have resulted from a com b ination of adm i nistrative changes (e.g., data cleanup,

73changes to definitions) and increased perm it issuance rates. The cleanup of databases and definitions that reflect the perm it issuance work load are important considerations when evaluating backlog improvem e nts." W e should recognize program integrity as well as environm ental significance as goals. Significant Portion of Improvem e nt Due to Definition Changes
The m o st significant improvem e nt involves the change in the definition of backlog to include facilities covered by individual and non-storm water perm its. Other factors cited cannot be considered significant. W e suggest including the discussion of this section within the context of the section above. In anticipation of the implem entation of ICIS -NPDES, EPA is in the process of revising the existing PCS Policy, which establishes m a ndatory data elem ents. The revised Policy will require perm it event data to be recorded f o r all f acilities.
The GPRA and OW M baselines m a y not be consistent because they are from different tim e fram es. Also, we now use a baseline (FY 2005 Annual Report) based on the 2002 data, which includes both individual and general perm ittees. W e will also improve the explanations for the FY 2006 Annual Report and refine the baselines.
W e request that the report delete the analysis and the Table 4.2 from the report. In FY 1998, the OIG first identified the NPDES perm it backlog as a significant m a nagem e nt problem in its Audit Report "Region 10s National Pollutant Discharge Elimination System Perm it Program ."
At that tim e, the NPDES inventory and the perm it backlog were not system atically tracked nor was there consensus regarding definitions for backlog. Further, there was no clear guidance or existing benchm arks to determ ine an "acceptable" rate of backlog. Initially, the Perm it Comp liance System indicated that there were about 71,000 facilities with individual perm its. EPA recognized that perm itting authorities m a y have also failed to update PCS, leaving m a ny facilities that were inactive or out-of-business to appear as active entities. At that tim e, there was no way of knowing which facilities am ong the 71,000 were inactive (they appeared as legitim ate f acilities). Also, please note that PCS has anom alies where inactivated facilities are only temporarily in a non-discharge status and other facilities becom e covered by general perm its. ICIS will allow f o r linkages to be drawn to improve our ability to report
W h en the backlog tracking began, EPA counted all facilities covered by individual perm its showing up as active in PCS as part of the backlog because there was no other alternative. This definition has not changed; however, this is a program m a nagem e nt issue that needs to be addressed by the perm itting authorities. W e believe there are still som e perm anently inactive facilities that have not been updated in PCS.

74Raising awareness of the implication of "bad inventories" will prevent reoccurrence of the 1998 situation when it was impossible to obtain reliable inventories. W e continue to allocate funds to encourage perm itting authorities to clean up data in PCS.
As an example, an excerpt from a PCS data entry agreem ent for the State of Pennsylvania and EPA Region 3 now includes the following:

" Cooperate in updating and maintaining permit tracking for all active facilities that have been identified by EPA as part of the current permit backlog and making facilities that no longer discharge inactive."
W e believe that our approach has been reasonable for m a naging the backlog data process. W e suggest incorporating our observations into this section. Change in the backlog data-entry time lag from 45-days to 180 days As noted above, there was no consensual definition for the backlog when the project first began. Initially, EPA contemplated considering a perm it as backlogged if the perm it expiration date was expired at the tim e of the PCS end-of-m onth download. EPA understood that there is an acceptable data entry delay following the physical issuance of the perm it. In general, PCS data entry arrangem e nts between Regions and States allow between 5 and 30 days for data entry depending on data elem ent type. Thus, the original 45-day assump tion addressed data entry lag considerations. In January of 2002, EPA chose to increase the lag-tim e to 180-days. EPA believed that this lag-tim e allowed for consideration of factors beyond the data-entry lag-tim e to include:

• A llowance f o r incomp lete applications that extended perm it issuance tim e f r am es; • D raft perm its requiring revisions as a result of public com m e nts; • O ther reasons that extend the perm it issuance process. The rationale for this increase is presented in a m e m o randum from Michael Cook, OW M Director. The m e m o randum focused on targeting perm its languishing in backlog as opposed to those that have been delayed a few weeks or m onths due to adm i nistrative hurdles. The allowance for the six-m onth backlog accomp lished this. W e suggest you include this inf o rm ation in the report.
At the sam e tim e of this m e m o randum , OW M was already beginning to steer towards an approach that identified high-and low-priority perm its. OW M recognized early on that inventories of the backlog, while im portant, m a y not necessarily correlate with environm ental improvem e nts. This effort has led to the priority perm it approach now in place as part of PER.

75Oversight Improvements Prompted Changes in Reported Backlog Over the course of backlog tracking, we have adjusted inventories for two States (e.g., New Jersey, Minnesota). These adjustm e nts were possible through our consistent reporting of the backlog data that we believe encourage States and Regions to refine the num bers. Backlog Measure Does Not Reflect Environmental Outcome
EPA has now implem ented a prioritization schem e designed to link perm its with environm ental outcom e
. Specific Issues In the first section, under the second bullet, it states "by March 2004 there were only about 450 m o re individual m i nors than in 1998, while the individual m i nors universe decreased by about 22,500." Looking at the data in appendix E, it seem s that the word "current" was left out of the first clause, which should read, "by March 2004 there were only about 450 m o re current individual m i nors than in 1998." The approach used by New York DEC is highlighted. Please note that this is being resolved through discussions between the state and EPA Region 2. W e have attached a letter from Region 2 to the State that describes what is being done. W e believe this section should be rem oved and replaced with EPA cannot recalculate the backlog because these permits are no longer expired but should work with New York to assure appropriate m odifications are m a de and state clearly when discussing the backlog that New York has these m odifications to accomp lish. Under the section devoted to "Inconsistencies Make Backlog Measure Unclear," the first bullet deals with m odifications. It is not clear what is m eant by "had records with between 1 and 7 m odifications." Does this m ean the perm it was m odified?
The section for "Lim its not updated in a ' c urrent' perm it" includes the sam e m i stake m a de earlier concerning TMDLs and NPDES perm it lim its. TMDL W L As are not needed before a perm it lim it m a y be developed. If they are available, they are to be considered. (See 122.44(d) and 1991 Technical Support Docum e nt for W a ter Quality-based Toxics Control). In the section for "Backlog Measure Problem s Affect Other W a ter Program Measures"

- the NPDES perm it backlog doesn' thave a direct impact on the W Q S program , but it can have an impact on the implem entation of the W Q S program

. Therefore, we would edit the following sentences as shown in bold: "Outcom e -related m easures for these program s assum e or require implem entation through a NPDES perm it and comp liance with the lim its. Therefore, problem s with the NPDES perm it program , including the backlog, can have an adverse effect on the implem entation of those other program s."

76Recommendations: In general, we feel m a ny of these can be com b ined and som e dropped because they refer to things that the program is currently doing.
5-1 Evaluate the ef f

ect that "f eeder" program s - such as water quality standards, ef f l uent guidelines, and TMDLs - have on NPDES perm it lim its and discharges, and take whatever steps f

easible to better integrate the various program s in prioritizing perm its f o r reissuance to ultim ately achieve surface water quality improvem e nt. This should be deleted. W e are addressing this as part of the Priority Perm its Strategy. W e state that short-term delays in issuance are allowed and will not be counted in the backlog in connection with a watershed approach
5-2 Determ ine whether recently developed m a nagem e nt reports provide adequate oversight inform ation through the m easures by determ ining which m a nagem e nt questions are answered for the NPDES program to better f acilitate m a nagem e nt decisions in relation to the program and surface water quality in general. This was the intent with PER, therefore, we suggest com b ining with the evaluation in #10.
5-3 Determ ine where EPA data system s (such as PCS) do not support the m easures needed to evaluate NPDES program perform a nce and develop a corrective actions plan to address the m easures or data availability.
Because we have revised ICIS and Ask W A TERS to address our needs, the issue that rem a ins is data quality and data input. W e suggest this be reworded to focus on this. If you need confirm a tion of specific item s please let us know.
5-4 Manage and report GPRA inform ation on progress addressing the NPDES backlog and issuing perm its from baselines consistent with the current backlog m easure baselines (and data), as well as internal m a nagem e nt baselines. In addition, clarify in reporting where m e asures have changed across reported years, and what the m easure describes in term s of program perform a nce and goals. EPA should also provide departm e nt-i nitiated m odification rates inform ation instead of, or in addition to, the traditional backlog m easures used to track New York State' s perm it backlog.
W e recom m e nd that the IG state that the GPRA baseline needs to reflect a PCS retrieval correction for a Region 6 Oil and Gas Perm it that inadvertently counted pipes, inflating the num ber of perm its. W ith the correction, the baseline is expected to decline by about 20,000 perm its. For the issues related to New York, we suggest this be reworded to capture that the perm it m odification in New York that should have been m a de to perm it be added to the priority perm it list f o r New York.

775-5 Develop and implem ent a plan to improve com munication with States and regions on NPDES perm itting issues; options include a periodic national NPDES conf erence and a password-protected web site for States and regi ons to discuss issues and have responses from EPA headquarters.
Please delete. W e agree and are already doing this. As discussed in our com m e nts on Chapter 2, we are holding a conference in Septem ber and have had m onthly conference calls all year. W e also have specific calls on draft policy and guidance or issues with states only.
5-6 Offer NPDES perm it writer training based on a determ ination of State needs, potentially at a national m eeting.
Please delete. States request training and help determ ine location and frequency and we provide several types of training for perm it writers.
5-8 W o rk with Region 2 officials to comp lete review of whether New York' s adm i nistrative renewal process for NPDES perm its satisfies Federal requirem e nts, especially as to use of the short form . If the Region does not reach a decision by June 30, 2005, Office of W a ter should conduct its own review and reach a decision, providing m ilestone dates for comp letion of review.
Please delete. See response to 5-4. New York has agreed and is revising their program after Region 2 sent them a letter stating the need to revise the program

. 5-9 Provide a description of what m a nagem e nt inform ation is provided by the backlog m easure and the supporting data, addressing State use of adm i nistrative renewals and other expedited reissuances, PCS data lim itations, m odif i cations, and perm its that will need TMDLs to address water quality.
Please delete or com b ine with 5-10.
5-10 Prepare criteria for a study to evaluate the effectiveness of the prioritization approach for NPDES perm its and the 95-percent goal of reissuance of priority perm its. This study should also include data collection to evaluate the 5-year perm it period and the appropriateness of distinguishing between m a jor and m i nor perm its for reissuance purposes. In addition, it should also provide feedback on the overall backlog m easure in term s of what levels will be acceptable to EPA if there is an overall increase in backlog num bers nationally or on a State basis.
W e com b ined our GPRA goal of m a jors and m i nors for 2005 so this part should be deleted. The recom m e ndation for an evaluation should be com b ined to capture whether we are m easuring the right things to achieve the watershed objectives and do we have the right emphasis. This backlog m easure captures program integrity rather than environm ental significance. Because your report just looked atenvironm ental significance, do we really need to look at it again? You m a y want to consider instead that we m a y want a backlog goal focused on 10 years for non-priority perm its and retain the priority perm it goal for environm ental significance and evaluate if it is working. You m a y also want to include if we should consider

78areas needing a TMDL or standards to be m o re clearly excluded from the backlog so as to not create a disincentive for m o re holistic approaches.
5-11 Determ ine whether perm it-related loadings m easures should have a counterpart m easure for backlogged perm its reporting estim ated delayed loadings reductions, and review loadings reduction m odels to ensure inclusion of actual perm it results, including revised perm it lim its that rem a in the sam e or allow increased discharges over previous levels.
W e suggest adding to the end of this recom m e ndation the idea "or include loadings in perm it prioritization."

79Appendix G 

## Distribution

Office of the Adm i nistrator Assistant Adm i nistrator, Office of W a ter Director, Office of W a stewater Managem e nt Audit Liaison, Office of W a ter Assistant Adm i nistrator, Office of Enforcem ent and Comp liance Assurance Agency Followup Official (the CFO) Agency Followup Coordinator General Counsel Associate Adm i nistrator for Congressional and Intergovernm e ntal Relations Associate Adm i nistrator f o r Public Af f

a irs Inspector General

80