Office of Inspector General 

Audit Report 

WATER 

Kansas National Pollutant Discharge

Elimination System Program

Report No. E1HWF7-07-0022-8100089

March 31, 1998
Inspector General Division Central Audit Division

 Conducting the Audit: Kansas City, Kansas

Region Covered: Region 7

Program Office Involved: Water, Wetlands, and Pesticides Division
March 31, 1998

MEMORANDUM

SUBJECT: Kansas National Pollutant Discharge Elimination System Program 

Audit Report E1HWF7-07-0022-8100089

FROM: Bennie S. Salem

Divisional Inspector General

TO: Dennis Grams

Regional Administrator

Region 7

We have completed our audit of Kansas’ National Pollutant Discharge Elimination System

Program. This report includes recommendations that Region 7 direct Kansas to establish and

implement an action plan for eliminating the backlog of expired National Pollutant Discharge

Elimination System permits. Region 7 recently notified Kansas of the Region’s approval (and

disapproval of specific provisions) of the Kansas 1994 water quality standards and began

discussions with Kansas to address the recommendations within the fiscal 1999 program grant

process. 

Action Required

In accordance with Environmental Protection Agency (EPA) Order 2750, you, as the

action official, are required to provide this office a written response to the audit report within 90

days of the final audit report date. For corrective actions planned, but not completed by the

response date, reference to specific milestone dates will assist in deciding whether to close this

report. 

We appreciate the cooperation your staff provided throughout the audit. We especially

appreciate the program staff's assistance and timely response during the audit. The staff exhibited

a genuine interest in working with us to improve the water quality program. The staff recognized

from the beginning that this audit would provide the basis for similar audits of other states, and

worked closely with us to ensure we had a comprehensive understanding of Region 7's water

quality program. The staff's efforts helped add value to this audit and to our planned national

program audits.
This audit report contains findings that the Office of Inspector General (OIG) has

identified and corrective actions OIG recommends. This audit report represents the opinion of

OIG, and the findings in this audit report do not necessarily represent the final EPA position. 

Final determinations on matters in this audit report will be made by EPA managers in accordance

with established EPA audit resolution procedures. 

We have no objections to the release of this report to the public.

If you have any questions, please call me at 551-7831 or Connie Walton, Audit Manager,

at 551-7007. Please refer to report number E1HWF7-07-0022-8100089 on any correspondence.
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TABLE OF CONTENTS

 PURPOSE ........................................................ 1 

BACKGROUND .................................................. 1 

SCOPE AND METHODOLOGY ...................................... 3 

PRIOR AUDIT COVERAGE ......................................... 4 

RESULTS IN BRIEF ............................................... 4 

TIMELY ISSUANCE OF PERMITS ................................... 4 

OVERSIGHT OF KANSAS PERMITS PROGRAM ....................... 8 

OPPORTUNITY FOR ADDITIONAL ENVIRONMENTAL DATA ........... 9 

RECOMMENDATIONS ............................................ 9 

EXHIBIT

1 - SCOPE AND METHODOLOGY ............................. 11 

APPENDICES

I - EPA RESPONSE .......................................... 14 

II - KANSAS RESPONSE ..................................... 17 

III - DISTRIBUTION ......................................... 22 
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PURPOSE The Clean Water Act required the Environmental Protection

Agency (EPA) to control point sources of water pollution

through the National Pollution Discharge Elimination

System, hereafter referred to as the “permits” program. The

permits program is EPA’s primary regulatory tool for

controlling pollutant discharges into surface waters. We

selected the Kansas permits program for audit because

Office of Water personnel suggested several states,

including Kansas, where audits could identify best practices

and needed improvements in states’ permits programs. Our

specific objectives were to determine if:

• Kansas implemented procedures to ensure

complete and timely permits were issued for

dischargers;

• Kansas restricted waste dischargers based on

effluent limitations and established

monitoring requirements for each pollutant; 

• Kansas monitored permit conditions,

including effluent limitations and compliance

schedules;

• Kansas permitted stormwater, combined

sewer, sludge, and pretreatment program

activities; and

• Region 7 monitored Kansas’ implementation

of the permits program and established

controls to ensure that water quality goals

are met.

BACKGROUND The Federal Water Pollution Control Act amendments of

1972 included the permits program as the centerpiece of the

national water pollution control efforts. Congress

reauthorized and renamed the Act the Clean Water Act in

1977 and amended it in 1987. Permits limit the pollutants
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that a facility may discharge into United States waters

through a specific point, such as a pipe. The Code of

Federal Regulations (CFR) Title 40, Parts 122 to 133 and

Parts 401 to 503 contain EPA regulations for implementing

and administering the permits program.

EPA classifies permitted facilities primarily as municipal and

non-municipal. Municipal facilities typically treat municipal

sewage or industrial wastes to acceptable limits and

discharge the treated wastes into United States waters. 

Non-municipal facilities include industrial facilities and all

other facilities that discharge pollutants directly into United

States waters rather than through municipal facilities. 

EPA also classifies facilities as either major or minor. EPA

regulations define major municipal facilities as those having

a design or actual flow of one million gallons or greater per

day. Major non-municipal facilities are determined based on

specific ratings criteria developed by EPA and states. 

Kansas had 56 major and 776 minor facilities in August

1997. Of the 56 major facilities, 40 were municipal and 16

were non-municipal. 

The permits program originally focused on the municipal

and non-municipal facilities. As the program matured and

municipal and non-municipal facilities’ discharges were

permitted, the focus of the permits program expanded to

regulate other pollution sources. These newer programs

include pretreatment, stormwater, combined sewer, and

sludge programs. 

The pretreatment program regulates wastewater from

industrial facilities that discharge to municipal facilities and

is primarily implemented directly by the municipal facility

receiving industrial wastes. The stormwater program

regulates large volumes of water that can result from

surface runoff, street washing, rain, and snowmelt that drain

to receiving waters. The combined sewer program was

designed to regulate untreated overflows into receiving
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waters from municipalities with combined sewer systems. 

The sludge program regulates the use and disposal of the

semisolid residue from municipal facilities. 

In addition to pollutant discharge limits, permits contain

requirements to monitor and report on pollutant discharges. 

States enter major facilities’ discharge monitoring data into

the Permit Compliance System. The Permit Compliance

System is a centralized repository of information used to

determine reductions in pollutants discharged to the United

States waters. 

Region 7 delegated its authority to administer the Kansas

permits program to the Kansas Department of Health and

Environment. The Kansas Department of Health and

Environment is responsible for protecting and maintaining

Kansas’ water quality. The Division of Environment within

the Kansas Department of Health and Environment is

responsible for implementing Kansas’ permits program. In

fiscal 1998, EPA provided $850,000 in grants to the Kansas

Department of Health and Environment for Kansas’ water

quality program which includes the permits program. 

SCOPE AND

METHODOLOGY

We performed our audit in accordance with Government

Auditing Standards (1994 revision) issued by the

Comptroller General of the United States as they apply to

program audits. Our review included tests of the program

records and other auditing procedures we considered

necessary. We conducted our fieldwork from June 1997

through January 1998. We performed our fieldwork at

Region 7 in Kansas City, Kansas, and at Kansas Department

of Health and Environment in Topeka, Kansas. 

See Exhibit 1 for scope and methodology details. 
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PRIOR AUDIT

COVERAGE

The Office of Inspector General issued an audit report

entitled Region 7's Efforts to Address Water Pollution

From Livestock Waste (E1HWF6-07-0017-6100312),dated

September 30, 1996, and reported that a more structured

approach was needed to address livestock waste. The

United States General Accounting Office has not issued

recent reports directly related to the Kansas permits

program. 

RESULTS IN BRIEF When Kansas issued permits, it established permit limits and

monitoring requirements, and inspected permittee

operations in accordance with EPA regulations. Further,

Kansas permitted stormwater, combined sewer, and

pretreatment program activities in accordance with EPA

regulations. However, Kansas did not reissue expired

permits timely. Kansas’ failure to submit expired permits

for Region 7 review limited the Region’s options to ensure

Kansas’ permits program controlled pollutant discharges

into Kansas’ waters. As a result, the permittees were

allowed to discharge pollutants at levels that could

adversely affect aquatic life and human health. 

TIMELY ISSUANCE

 OF PERMITS

Kansas did not reissue 22 percent of its expired permits in

the required timeframe. Federal regulations require the

periodic review of permits to ensure that changed

conditions and advancements in science are considered in

establishing permit limits. As of August 1997, Kansas had

832 permits, of which 182 were expired for periods up to 6

years. Kansas officials said they had not reissued these

permits due to their change in permitting approach, state

legislative mandates, and Region 7's failure to approve

Kansas’ 1994 water quality standards. As these facilities

continue to operate under their expired permits, they may

discharge pollutants at levels that could adversely affect

aquatic life and human health.
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CFR part 122.46, Duration of permits, requires that the

duration of permits not exceed 5 years. CFR part 122.6,

Continuation of expiring permit, allows an expired permit

to remain in effect until a new permit is issued.

States are required to develop water quality standards that

serve as the regulatory basis for pollutant discharge limits in

the permits program. Section 303 of the Clean Water Act,

Water Quality Standards and Implementation Plans,

requires states to review their water quality standards once

every 3 years and obtain EPA approval for the standards. 

EPA is required to promulgate water quality standards for

the state if EPA disapproves a state’s water quality

standards. CFR part 131.21, EPA review and approval of

water quality standards, provides that a state’s water

quality standards remain in effect unless EPA promulgates

standards for the state. 

The status of Kansas permits, as of August 1997, by major

and minor facilities are shown in Table 1.

Table 1: Expired Permits

Type of

 Facility 

Number of 

 Permits 

Number of

 Expired 

 Permits 

 Percent

 Expired 

 Major 56 26 46

 Minor 776 156 20

 TOTAL 832 182 22

We analyzed the backlog of the 26 expired major permits

and found 2 were subsequently issued. Of the remaining 24

permits, 6 were attributed to Kansas’ change in permitting

approach, 17 to changes in the ammonia water quality

standard, and 1 to changes in the arsenic water quality

standard.
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Change in Permitting

Approach

In 1994, Kansas changed its permitting approach to issue all

permits in a geographical location, or basin, at the same

time. This approach allows Kansas to more effectively

develop permit limits for all dischargers in the same basin,

using water quality data from the same point in time. Six of

the major expired permits were located in the Kansas Lower

Republican Basin. This basin is Kansas’ current priority for

implementing the new permitting approach. Thus, we

believe it is reasonable that the permits were temporarily

allowed to expire to switch all permits in the Kansas Lower

Republican Basin to the same permit cycle.

Change in Ammonia Water

Quality Standard

Kansas did not issue 17 major permits pending resolution of

differences between Kansas and Region 7 over ammonia

water quality standards. Kansas adopted more restrictive

ammonia water quality criteria in 1994. However, Kansas

officials said they could not issue the permits using the more

restrictive 1994 ammonia limits because Region 7 had not

approved Kansas’ 1994 water quality standards. In 1994,

Kansas adopted an ammonia water quality standard that was

compatible with EPA’s 1985 ammonia guidance. Region 7

was supportive of Kansas’ 1994 ammonia standard and

complimented the State on its revision. However, Region 7

did not formally approve Kansas’ 1994 water quality

standards due to concerns with pollutants other than

ammonia. 

Permittee complaints and EPA’s lack of formal response to

the 1994 Kansas water quality standards led to Kansas

House Bill 2368, dated May 1, 1997. The House Bill

provided permittees their choice of ammonia permit limits

based on Kansas’ 1994 standard or interim limits based on

the less restrictive 1987 standard, pending a special

commission review of Kansas surface water quality

standards. The House Bill cited uncertainty over the science

used to develop Kansas’ 1994 ammonia standard and the

social and economic costs to meet the 1994 standard. 
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The uncertainty over the science rose from the types of

aquatic life used in EPA’s testing. EPA acknowledged that

the science that supported its 1985 ammonia guidance was

based on aquatic life that may not be indigenous to all

states. However, Kansas developed its 1994 ammonia

standards based on its own studies using aquatic life

indigenous to the State. 

The House Bill also cited Kansas’ concern over the social

and economic cost to meet the 1994 ammonia standard. 

Kansas officials identified 5 of the 17 facilities that would

need plant upgrades to meet the 1994 ammonia standard. 

Kansas officials thought the remaining 12 major facilities

would not require upgrades; however, they believed the

permittees would not agree to ammonia permit limits. As a

result, Kansas did not issue the 17 permits and stopped the

permits issuance process prior to submitting the permits for

public comment and Region 7 review. These permittees

continue to operate under their less restrictive expired

permits. 

Kansas did issue several major facility permits that limited

ammonia based on the 1994 ammonia water quality

standard. During 1997, Kansas issued permits containing

ammonia limits based on its 1994 ammonia water quality

standard to two major municipal wastewater treatment

plants. Kansas officials said that the facilities needed to

upgrade the treatment plants for reasons other than

ammonia; however, Kansas developed the permits limits

using the 1994 ammonia standard as the basis of design for

the new treatment plant. 

Change in Arsenic Water

Quality Standard

Kansas did not issue one major permit pending resolution of

differences between Kansas and Region 7 over the arsenic

water quality standards. EPA promulgated water quality

standards for Kansas in 1991 which included standards for

arsenic. Kansas did not agree with the national promulgated

arsenic standards, and adopted a less restrictive standard in

1994. Region 7 had concerns whether Kansas’ 1994 arsenic

standard was protective of human health and did not 
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approve the standard. Kansas and Region 7 are still in

negotiations over this water quality standard. As the new

permit had not been issued, the permittee is operating under

the expired permit, which includes arsenic limits that are not

as strict as current EPA science. As a result, this permittee

may be discharging arsenic at levels unsafe for human

health. 

OVERSIGHT OF

KANSAS PERMITS

PROGRAM

Kansas’ failure to submit expired permits for Region 7

review limited the Region’s oversight options to ensure that

the Kansas permits program appropriately controlled

pollutant discharges in Kansas waters. As Kansas did not

submit the revised permits to Region 7, the Region could

not review and approve or comment on the permits. 

CFR part 123.43 Transmission of information to EPA,

requires that states submit draft permits to EPA for review

at the same time the permit is submitted for public notice. 

The regulations provide that EPA may only issue a permit in

a delegated state if objections are raised and not resolved. 

Region 7's failure to approve the Kansas 1994 water quality

standards contributed to the Kansas permits backlog. The

Region recognized its need to approve state standards as a

fiscal 1997 Federal Managers’ Financial Integrity Act area

of concern, and committed in its fiscal 1998/1999 regional

management agreement with Office of Water to complete

timely approval actions. 

Region 7 and Kansas also recognized Kansas’ permits

backlog as a concern in 1996, and established the issuance

of expired permits as a high priority in Kansas’ fiscal 1997

annual work plan. The annual work plan identifies mutual

expectations as well as the State’s responsibilities and

priorities for the upcoming year. However, the Region did

not exercise its option of withholding grant funds for

Kansas’ failure to issue expired permits. 
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OPPORTUNITY FOR

ADDITIONAL

ENVIRONMENTAL

DATA

Region 7 developed a software program for Kansas that

may be used to improve the quality of environmental data

used to measure the success of the permits program. EPA

does not require states to record minor permittee discharge

monitoring data in the Permit Compliance System as the

process is time-consuming and expensive; however, CFR

part 123.45 Noncompliance and program reporting by the

Director, does require states to report on their reviews,

compliance issues, and enforcement actions for minor

permits. Region 7 developed a software program that

electronically transfers discharge monitoring data from

Kansas’ 56 major facilities to the Permit Compliance

System. Kansas could use the program to record discharge

monitoring data for its 776 minor facilities, as the program

eliminates the time and expense barriers to recording minor

permittee monitoring data.

EPA uses the discharge monitoring data as a surrogate

environmental indicator of the success of the permits

program. This environmental indicator may be significantly

misstated in Kansas as 93 percent of the permitted facilities

in Kansas are minors. 

RECOMMENDATIONS We recommend the Regional Administrator direct the

Water, Wetlands, and Pesticides Division to:

1. Encourage Kansas to submit all expired

permits for major facilities for public

comment and Region 7 review. 

2. Direct Kansas to establish an action plan for

eliminating the backlog of expired permits. 

3. Work with Kansas to assess the effect of its

permits backlog in developing its water

quality monitoring plan. 
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4. Develop an action plan for the timely review

of and prompt action on state water quality

standards. 

5. Negotiate with Kansas to provide data on

minor dischargers in the Permit Compliance

System using the newly developed software.

AUDITEE COMMENTS

AND OIG EVALUATION

Region 7 generally agreed with the findings and

recommendations. Kansas Department of Health and

Environment agreed that the report was substantially

accurate and factual. Both Region 7 and Kansas provided

comments to clarify portions of the report, and we have

incorporated these comments and modified the report as

appropriate. 

Both Region 7 and Kansas indicated that they had begun

taking corrective actions through discussion in the fiscal

1999 program grant process. Further, Region 7 notified

Kansas of the Region’s approval (and disapproval of

specific provisions) of Kansas’ water quality standards.

Both Region 7 and Kansas emphasized that the Results in

Brief conclusion, “. . . permittees were allowed to discharge

pollutants at levels that could adversely affect aquatic life

and human health” acknowledges the uncertain results of

the expired permits. However, neither Region 7 nor Kansas

was aware of any evidence of actual impacts to aquatic life

or human health from expired permits. Kansas noted that

they would act swiftly to minimize such risk if they were

aware of factual instances where human life was at imminent

risk.

Kansas felt that it would not be cost beneficial to provide

data on minor dischargers in the Permit Compliance System

using the Region 7 developed software. As EPA uses the

discharge monitoring data as a surrogate environmental
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indicator of the success of the permits program, we

recommend that Kansas consider prioritizing the minor

dischargers and use the software program as they have

resources. 
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Exhibit 1

SCOPE AND METHODOLOGY

We reviewed Kansas’ internal controls over the permits program. We analyzed internal controls

to assure compliance with federal statutory and regulatory criteria and with the State’s policies

and procedures. We determined whether Region 7's Federal Managers’ Financial Integrity Act

reports disclosed any material weaknesses applicable to the audit. Our audit disclosed several

areas needing improvement that are discussed in the report.

We focused on the 832 permits Kansas issued to municipal and non-municipal facilities to limit

pollution discharges. The review did not include permits for confined animal feeding operations,

as these are zero discharging permits and were addressed in a prior audit. Further, the review did

not include Kansas supplement permits are not part of the National Pollution Discharge

Elimination System. 

To determine whether Kansas procedures ensured complete and timely permits were issued and

whether permit limits were appropriately calculated and monitored, we interviewed Kansas and

Region 7 officials to obtain an understanding of their procedures for administering the permits

program. We compared permit procedures to applicable laws, regulations, and documentation

provided by Region 7 and Kansas.

We selected a judgmental sample of 10 of Kansas’ 832 permits to determine if Kansas

implemented procedures to ensure complete permits were issued. The 10 permits were for major

and minor facilities located in areas of impaired water. We compared the permit information to

the requirements in CFR parts 122 to 133, and the Permit Writers Manual (EPA-833-B-96-003),

dated December 1996. We analyzed Kansas’ automated permit data to evaluate the timeliness of

permits issued. 

To determine whether Kansas monitored permit conditions, including effluent limitations and

compliance schedules, we reviewed Kansas’ inventory of inspections and reviewed the contents of

inspection reports. We obtained Kansas’ procedures for monitoring discharges and compared

monthly discharge monitoring report data with permit limits to determine if permittees complied

with effluent limits.

To determine whether Kansas effectively permitted stormwater, combined sewers, sludge, and

pretreatment, we interviewed Kansas and Region 7 personnel to determine how they ensured

programs operated in compliance with EPA regulations. For stormwater, we reviewed the basic

permit to determine if the required elements were included and if stormwater permits were issued
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for construction sites. We reviewed the three Kansas combined sewer permits to determine if the

permits included the required controls and long range plans. To evaluate the Kansas sludge

program, we reviewed three annual reports and sludge procedures for compliance with sludge

regulations. Also, we reviewed controls over the 15 approved pretreatment programs and

determined if municipal facilities’ permits included pretreatment requirements. 

To evaluate Region 7 monitoring of Kansas implementation of the permits program, we

interviewed Region 7 personnel to determine how they evaluated the Kansas permits program.

We reviewed management agreements to determine required performance. We reviewed Kansas

work plans to evaluate activities and performance reporting. We also reviewed correspondence

between Region 7 and Kansas to identify issues or areas of interest. 
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Appendix I

AUDITEE RESPONSE

TO BE ADDED.
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Appendix III

DISTRIBUTION

Office of Inspector General

Inspector General (2410)

Deputy Assistant Inspector General for Internal Audits (2421)

Headquarters Audit Liaison (2421)

Divisional Inspectors General for Audit

EPA Headquarters Office

Assistant Administrator for Water (4101)

Agency Followup Official (2710)

Agency Followup Coordinator (3304)

Associate Administrator for Congressional and Legislative Affairs (1301)

Associate Administrator for Communications, Education, and Public Affairs (1701)

Associate Administrator for Regional Operations and State/Local Relations (1501)

Headquarters Library (3401)

EPA Region 7

Director, Water, Wetlands, and Pesticides Division

Director, Office of External Programs

Audit Followup Coordinator

Regional Offices

Regional Administrators

Kansas Division of Environment

Director

Director, Bureau of Water

Chief, Water Technical Services Section