OFFICE OF INSPECTOR GENERAL 1 JANUARY 1 THROUGH MARCH 31, 2000

U.S. Environmental Protection Agency

OFFICE OF INSPECTOR GENERAL

This Quarterly Report of Selected Activities is produced by the EPA OIG, Nikki L. Tinsley, Inspector General.

Questions concerning this update or requests for copies of OIG audit reports, reviews, or other documents should be

directed to James O. Rauch, U. S. Environmental Protection Agency, Ariel Rios Building (2441), 1200 Pennsylvania

Avenue, NW, Washington, DC 20460. Telephone (202) 260-4942. 

If you are aware of or suspect any fraud, waste, or abuse in any EPA programs or operations, please call the Inspector

General Hotline or the nearest Divisional Office of Inspector General. OIG Hotline (202) 260-4977 or (888) 546-

8740.

Visit the OIG Internet Site at http://www.epa.gov/oigearth

 Selected OIG Accomplishments

January-March 2000

Audit Activities

Report Issued Report Number/Program Office

EPA Does Not Have an Effective Biosolids Program for

Ensuring Safe Land Application

2000-P-10

Office of Water

Office of Enforcement and

Compliance Assurance 

Oversight of Hanford’s Tank Waste Remediation System

Program Needs Significant Improvement 

2000-P-00012

Office of Solid Waste and Emergency

Response 

EPA Receives a Qualified Opinion on Fiscal Year 1999

Financial Statements

00100231

Agency-wide

Significant Report Summaries

EPA Does Not Have an Effective Biosolids

Program for Ensuring Safe Land

Application

Although EPA promotes land application of

biosolids (treated sewage sludge) rather than

landfilling or incineration, the Agency cannot 

assure the public that current land application

practices are protective of human health and

the environment. EPA performs few biosolids

related inspections of publicly owned

treatment works (POTWs) operations, virtually

no inspections of land application sites, and

few records inspections at POTWs or land

appliers. EPA regions do not maintain data
OFFICE OF INSPECTOR GENERAL 2 JANUARY 1 THROUGH MARCH 31, 2000

on the cumulative amounts of pollutants at land

application sites despite its own requirement to

do so. The biosolids program has been

delegated to only three states, and there is

virtually no federal oversight in nondelegated

states. Therefore, EPA does not have sufficient

information to determine compliance levels with

its own regulatory requirements. This almost

complete absence of a Federal presence results

from the low priority given by EPA, and the

decision not to commit enforcement resources to

biosolids. We recommended that EPA provide

an analysis of whether its proposed actions

provide a sufficient basis for assessing

compliance with its requirements and assuring

the public of the protectiveness of biosolids land

application practices, and whether the actions

correct the deficiencies we identified.

Oversight of Hanford’s Tank Waste

Remediation System (TWRS) Program Needs

Significant Improvement

Washington State’s Hanford tanks which contain

about 54 million gallons of highly toxic and

radioactive waste have leaked at least one

million gallons, some of which has reached the

groundwater. Washington’s Department of

Ecology (Ecology), the lead regulatory agency

for all Hanford tanks, has been unsuccessful in

obtaining the Department of Energy’s (DOE)

compliance with the milestones established in a

1989 agreement for treating waste, and

stabilizing and closing tanks. DOE’s continued

delays in interim stabilization and in treatment

and retrieval of the tank wastes could

significantly increase the risks of releases into

the environment and threaten human health. 

DOE established the TWRS program for Hanford

to ensure that the tank waste is stored, treated,

and immobilized in a safe, environmentally

sound, and cost-effective manner. EPA Region

10 and Ecology have not developed an effective

oversight and enforcement strategy. Ecology did

not perform a sufficient number of inspections

even though seven of the eight inspections

conducted during the prior seven year period

identified serious compliance issues. We

recommended that EPA negotiate with Ecology

to address oversight and enforcement

responsibilities regarding DOE compliance, and

consult with EPA National Program Managers to

determine what action can be taken to 

encourage DOE to assign a higher priority to

cleanup the Hanford tanks. 

EPA Receives A Qualified Opinion On

Fiscal Year 1999 Financial Statements

We issued a qualified opinion on EPA’s fiscal

year 1999 financial statements. Our qualified

opinion resulted from multiple and untimely

submissions, significant errors, and lack of

accounting support. EPA’s financial systems

and methodologies to account for costs by

strategic goals cannot be relied on. 

Additionally, EPA’s security plans for its core

financial systems continued to contain

significant deficiencies. To correct the

financial statement deficiencies, we

recommended EPA implement

recommendations made in our fiscal year

1998 financial audit. To correct the security

deficiencies, we recommended EPA

incorporate planned fiscal year 2000 security

plan actions for financial systems into a formal

remediation plan. We also recommended that

EPA establish procedures to identify actual

costs by goal, and develop timely, reliable,

and accurate cost reports. 
OFFICE OF INSPECTOR GENERAL 3 JANUARY 1 THROUGH MARCH 31, 2000

Investigative Activities

Action Type/Case Number

Engineering Firm Entered into $35 Million Settlement;

EPA Awarded $669,674 in Damages

Civil Settlement

98-5003

Colorado Company Fined $1 Million; Owner to Pay

$347,000 in Restitution and to Serve 90 Days in County

Jail

Sentencing

97-8005

City of Cleveland Agrees to Pay $643,737 to Settle

Claims of Misuse of Grant Funds

Civil Settlement

98-3016

Refrigerant Company and President to Pay $90,995

Fine and $68,089 in Restitution; President Also

Receives Prison Term

Sentencing

98-2002

Selected Prosecutive, Civil, and

Administrative Actions

Engineering Firm Entered into $35 Million

Settlement; EPA Awarded $669,674 in

Damages

On March 8, 2000, Jacobs Engineering Group,

Inc. (Jacobs), agreed to pay the United States

$35 million to settle a civil lawsuit arising from a

qui tam complaint filed under the False Claims

Act. The suit alleged that Jacobs, one of the

largest global engineering, architecture,

technology, and construction firms, charged

excessive lease costs to EPA; the Departments

of the Air Force, Army, Navy, and Energy; and 

NASA in its government contracts. According to

the complaint, Jacobs sold its corporate

headquarters in 1982 and then entered into a

15 year lease-back agreement that charged its

government contracts rental rates exceeding its

prior ownership costs in violation of federal

acquisition regulations. EPA, for whom Jacobs

performed work under the construction grants

program, was awarded $669,674 in damages. 

This investigation was conducted jointly by the

EPA OIG, the Air Force Office of Special

Investigations, the Naval Criminal Investigative

Service, the Army Criminal Investigative Division

Command, the Department of Energy OIG, with

the Defense Contract Audit Agency providing

audit support.

Colorado Company Fined $1 Million; Owner

to Pay $347,000 in Restitution and to Serve

90 Days in County Jail

On January 7, 2000, Enviro 25 Environmental

Services, Inc. (Enviro 25), and it’s owner,

Susan Summers, were sentenced in District

Court, City and County of Denver, Colorado. 

Enviro 25 was ordered to pay a $1 million fine. 

Summers received a sentence of 12 years

incarceration and 5 years mandatory parole,

which was suspended upon completion of 90

days incarceration in the Denver County jail, 2

years in a community corrections facility, and

10 years active probation. Additionally,

Summers was ordered to pay $347,000

restitution and $5,395 in court costs. The

sentencing follows guilty pleas by Summers

and Envir25 to one count of criminal attempt to

violate the Colorado Organized Crime Control

Act (Act) and one count of violating the Act,

respectively. Enviro25 provided environmental

consulting services, including the cleanup of

contaminated or suspected contaminated sites. 

In December 1998, Enviro25 and Summers

had been indicted on 16 counts of forgery and

17 counts of attempting to influence a public

servant. Summers was also charged with

violating the Act. She and her company were

accused of withholding truthful information and

falsifying documents submitted to the Colorado
OFFICE OF INSPECTOR GENERAL 4 JANUARY 1 THROUGH MARCH 31, 2000

Departments of Health and of Labor and

Employment regarding oil contamination

cleanups at eight Colorado sites from March

1992 to July 1996. This investigation was

conducted jointly by the EPA OIG, the EPA

Criminal Division, and the Colorado Secretary of

State’s Office of Investigations.

City of Cleveland Agrees to Pay $643,737 to

Settle Claims of Misuse of Grant Funds

On January 7, 2000, the City of Cleveland

agreed to pay the United States $643,737 to

settle a civil lawsuit arising from a qui tam

complaint filed under the False Claims Act. The

suit alleged that the city’s Air Pollution Control

Program improperly spent $429,158 in EPA air

pollution prevention grant funds for fiscal years

1995 to 1998. Timekeeping and financial

records of the city’s Department of Public

Health, Bureau of Air Pollution Control (BAPC)

could not show that funds were expended

appropriately. According to the government’s

case, a number of BAPC employees paid from

EPA grant funds spent only a part or none of

their time on air pollution prevention activities.

Refrigerant Company and President to Pay

$90,995 Fine and $68,089 in Restitution;

President Also Receives Prison Term

On March 23, 2000, Industrial Training and

Support Services (ITSS), and its president,

Omar Gonzales, were sentenced in U.S. District

Court, Eastern District of Virginia. Gonzales

was sentenced to 27 months imprisonment and

2 years supervised release and ordered to pay

$68,089 in restitution to the Internal Revenue

Service. ITSS was sentenced to one year

probation. Additionally, Gonzales and ITSS

were jointly ordered to pay a $90,995 fine. The

sentencing follows guilty pleas by Gonzales and

ITSS to charges of making false statements to

the government and income tax evasion

resulting from selling fraudulent asbestos

training certificates. From January 1994 to

December 1995, Gonzales received $90,995

from sales of fraudulent asbestos training

certificates to people, including undocumented

aliens, who had not properly completed required

training courses for removing, handling, and

disposing of asbestos materials. He also owed

back taxes for these years. This investigation

was conducted jointly by the EPA OIG, the

EPA Criminal Investigations Division, the

Federal Bureau of Investigation, the Naval

Criminal Investigative Service, the General

Services Administration OIG, and the IRS

Criminal Investigation Division.