OFFICE OF INSPECTOR GENERAL

 

Catalyst for Improving the Environment

 March 2003

 EPA-350-R-03-002

 Multi-Year Plan

 Fiscal 2003 -2005

 
For additional copies of this document, or to provide input, feedback, or ask

questions about the OIG, please contact:

Eileen McMahon, Assistant Inspector General for Congressional and Public Liaison 

(202) 566-2546 

Mcmahon.Eileen@epa.gov

Elissa Karpf, Assistant Inspector General for Planning, Analysis and Results 

(202) 566-2615

Karpf.Elissa@epa.gov

U. S. Environmental Protection Agency

Office of Inspector General 2450T

1200 Pennsylvania Ave. NW

Washington, D.C. 20460

Cover Photo by Stephen Delaney, EPA
 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

 WASHINGTON, DC 20460

 THE INSPECTOR GENERAL

March 25, 2003

FOREWORD

I am pleased to present the first Multi-Year Plan for the Environmental Protection Agency (EPA) Office of

Inspector General (OIG). This plan covers fiscal 2003 through 2005, and is the connecting link between

EPA’s Strategic Goals and OIG’s Strategic Goals and Annual Work Plans. It demonstrates how the

concepts, direction, and priorities established in the OIG Strategic Plan will be cohesively implemented and

arrayed to answer a logical sequence of questions, while addressing important management issues critical to

the successful fulfilment of EPA’s Statutory Mission and Goals. The questions that we will seek to answer

include those of greatest interest to our clients, stakeholders, partners, and EPA management as they have

been expressed to us. 

This Multi-Year Plan is designed to increase the depth of our reviews by performing technical and scientific

analysis of complex environmental issues, while examining the supporting management, resource, and

accountability issues. We have restructured our organization into a “Matrix” of Product Line Directors

responsible for the development of OIG products and services, and Resource Center Directors responsible for

the development and application of staff competencies and technologies. The Matrix organization is designed

to deploy multi-discipline resources across program and geographic boundaries, recognizing that

environmental and management issues are generally national in scope and part of a larger, complex system.

We recognize that the responsibility for fulfilment of national environmental objectives is spread among

about 29 Federal departments and agencies and cannot be realized without cross-agency collaboration, both

Federal and State. Similarly, the audit, evaluation, and investigative products and services of these

departments and agencies cannot attain their potential value without collaboration.

It is our expectation that this plan will not only serve as a blueprint for realizing the EPA OIG vision of being

“A Catalyst for Environmental Improvement,” but will encourage self review within EPA and promote

opportunities for collaborative review across agencies. It is also our expectation that by building on our

knowledge and experience, and with greater involvement of other stakeholders, we will refine the questions

and methodology needed to recommend actions for the greatest impact on public benefit. 

The success of this plan is dependent on its flexibility to reflect new information, priorities, challenges, and

opportunities as presented by our clients, stakeholders, and partners. For this reason, we continuously seek

input, feedback, comments, questions, or suggestions about how the OIG can be more effective.

Nikki L. Tinsley

EXECUTIVE SUMMARY

EPA Office of Inspector General Multi-Year Plan Fiscal 2003-2005

The EPA Office of Inspector General (OIG) provides independent audit, evaluation, investigative

and advisory services that promote economy, efficiency, and effectiveness, and prevent and detect

fraud waste and abuse in EPA programs and operations. We have further interpreted this statutory

mission through our vision of being Catalysts for Improving the Environment, by contributing

to environmental quality, human health and good government through problem prevention and

cooperative solutions. The work of the Environmental Protection Agency affects the well being of

all humans, flora, fauna and aquatic species in the United States through natural ecosystems that

support life. Just as the natural environment is a complex system, so are the problems, solutions,

activities, processes, authorities and resources to protect it. 

This Multi-Year Plan, as the connecting link between EPA’s Strategic Goals, OIG’s Strategic Plan

and Annual Work Plan, was constructed, with the input of EPA and OIG clients and stakeholders,

to logically evaluate the linkage and relationships of the inputs, processes, and actions that

influence environmental and operational results. The EPA OIG, will apply a variety of professional

disciplines, through a progression of assignments in Product Line Tracks between fiscal 2003 and

2005, linked to EPA’s Goals. These assignments will incrementally answer key questions, as

described in this Plan, about the interrelationships of systems vital to EPA efficiently and

effectively protecting the nation’s environment. 

Below are the OIG Strategic and cumulative Annual Goals for fiscal 2003-2005, and the

architecture linking them, through the Multi-Year Plan Product Line Tracks, to EPA’s

Strategic Goals.

OIG GOAL 1: We will contribute to improved environmental quality and human health by:

< Identifying 270 recommendations, best practices, or risks to be implemented or resolved.

< Influencing 210 environmental or health actions, changes, or improvements.

< Reducing or eliminating 75 environmental risks.

OIG GOAL 2: We will contribute to improved management, program operations and

integrity by:

< Identifying 480 recommendations or best practices or challenges to be implemented or resolved.

< Reducing and preventing risk of resource loss from 150 criminal, civil or administrative actions. 

< Returning 200 percent of the dollar investment in the OIG from potential savings and recoveries. 

< Influencing 240 management actions, changes or improvements. 

On the following page is a cross-walk table linking the EPA Goals with the Multi-Year Plan media chapters,

tracks, and key questions that will direct the assignments, projects and application of supporting OIG

resources. Within each media chapter, these questions are described and further broken-down into component

questions that will be answered sequentially over the 3-year span.
Cross-Walk Between EPA Goals, OIG Goals and EPA OIG Multi-Year Plan 

EPA Goals 

 Multi-Year 

 Plan

Chapter

OIG Multi-Year Plan Product Line Tracks and Key Questions

Cleaner Air

 

 Air

 Chapter 2

< Particulate Matter: How can EPA maximize the effectiveness of its fine particulate matter (PM

2.5) ambient monitoring and emissions control strategies?

< Ozone: How can EPA better execute its ozone reduction strategies?

< Air Toxics: How can EPA improve the effectiveness of its efforts to assess, monitor, control,

and reduce the risks from toxics air pollutants to human health & environment?

< Challenges to Progress: How can EPA maximize the contributions of state and local entities in

continuing progress toward meeting clean air goals?

Purer Water

 

 Water

 Chapter 3

< Safe Drinking Water: How can EPA effectively implement the Safe Drinking Water

Amendments of 1996?

< Watershed Protection: How can EPA effectively control, protect and monitor watersheds and

water quality?

< Reducing Pollutant Loadings: How can EPA effectively use and improve policy tools to reduce

water pollutant loadings?

Safer Land

 

 Land

 Chapter 4

< Superfund: Is EPA making progress toward effective risk reduction and waste cleanup?

< Brownfields: Is EPA making progress toward effective risk reduction, cleanup, and restoring

previously polluted sites to appropriate uses?

< Resource Conservation & Recovery Act (RCRA): Is EPA making progress toward effective

waste management, hazardous material management, and risk reduction?

Ecosystems &

Communities

Compliance &

Environmental

Stewardship

 

 Cross Media

 Chapter 5

< Homeland Security: How can EPA better execute its Strategic Plan to prevent, prepare for, and

respond to a terrorist attack to minimize adverse impacts on human health and the environment?

< Environmental Stewardship: Do the States and tribes use high performance concepts to deliver

environmental and human health protection?

< Environmental Justice: How well are environmental justice concerns incorporated into EPA

decisionmaking; Do EPA policies and practices disproportionately contribute adverse impacts on

human health and the environment in communities of concern?

< Compliance Assistance & Enforcement: Is the employment of traditional and nontraditional

enforcement approaches optimized to ensure compliance with environmental rules and

regulations that are designed to protect human health and the environment?

EPA

Management

Support

Infrastructure

 

 Good 

 Government

 Chapter 6

< Financial Management: Does EPA have the people, processes, and systems needed to

efficiently provide timely accurate, complete and useful financial information for decisionmaking

and accountability?

< Information Resources Management: Does EPA have systems, processes, and controls in

place to ensure timely, reliable, and complete information is available to manage EPA’s

programs and report on environmental results?

< Program Management: Does EPA have the system and processes in place to plan, budget for,

and manage its programs, and human capital needed to carry out its mission?

< Assistance Agreements: Is EPA using assistance agreements to efficiently and effectively

accomplish its mission?

< Contracts: Is EPA using contracts to efficiently & effectively accomplish its mission?

< Energy Conservation- Green Power: Will EPA’s strategies enable it to reduce overall energy

usage by 20 percent from fiscal 1990 to 2005 and by 25 percent by fiscal 2010?
Table of Contents 

EPA Office of Inspector General Multi-Year Plan, Fiscal 2003-2005

Chapter 1: Introduction

 OIG Performance Planning Process ............................ 1 

 Linking EPA’s and OIG’s Strategic Goals to the Multi-Year Plan ..... 3 

 Exhibits:

 Draft EPA Strategic Plan Architecture Fiscal 2004 - 2008 ...... 4 

 OIG Strategic Plan Architecture Fiscal 2001 - 2005 .......... 5 

 OIG Logic Model .................................... 6 

 OIG Annual Performance Goals through Fiscal 2005 ......... 7 

 

Chapter 2: Air

 Description of Tracks and Questions .......................... 8 

 Schedule of Planned Assignments/Projects .................... 11 

Chapter 3: Water

 Description of Tracks and Questions ......................... 13 

 Schedule of Planned Assignments/Projects .................... 17 

Chapter 4: Land

 Description of Tracks and Questions .......................... 18 

 Schedule of Planned Assignments/Projects ..................... 23 

Chapter 5: Cross-Media

 Description of Tracks and Questions .......................... 24 

 Schedule of Planned Assignments/Projects ..................... 26 

Chapter 6: Good Government

 Description of Tracks and Questions .......................... 30 

 Schedule of Planned Assignments/Projects ..................... 38 

Appendix 1: Historical Perspective of EPA’s Top Management Challenges ....... 40 

Appendix 2: Schedule of OMB PART Assessment Fiscal 2003 - 2005 .......... 41 

Appendix 3: Integration of Human Capital Means and Strategy ................ 42 

Page 1

CHAPTER 1: Introduction 

OIG Performance Planning Process

The OIG planning process is continuously carried out at three levels, starting with the 5-year

Strategic Plan, implemented through the 3-year Multi-Year Plan, and specifically updated in each

Annual Work Plan. This section briefly describes the relationship between each stage in the planning

process, while the next section provides exhibits that demonstrate the linkages between EPA’s

Strategic Goals, OIG’s Strategic and Annual Goals, and this Multi-Year Plan.

Strategic Planning - Strategic planning, involves establishing the long-term goals, objectives, measures,

priorities, and direction to guide the activities described in the Multi-Year Plan. OIG’s Strategic Plan covers a

5-year period and is updated every 3 years, as required by the Government Performance and Results Act

(GPRA). The strategic plan is developed based upon the OIG vision, mission, and values. Research and input

from stakeholders and partners on current and emerging areas of strengths, weaknesses, opportunities, and

threats within EPA and OIG help determine priorities and direction in terms of what strategic areas of

emphasis and types of products and services will lead to the highest level of performance in fulfilling OIG’s

and EPA’s mission.

Multi-Year Action Plan for Goal Areas - The Multi-Year Plan is developed to demonstrate how the OIG

Strategic Plan will be implemented to achieve the OIG strategic goals. Product Line Directors develop

3-year action plans describing how the identification of problems and opportunities for improvement within

each strategic area of emphasis support the achievement of EPA’s Strategic Goals. This Multi-Year Plan

translates EPA’s Strategic Goals into component media areas, or “tracks” (Air, Water, Land, Cross-Media,

and Good Government), which are presented in Chapters 2 through 6, respectively. These chapters present

subject matter background, issues, and key interrelated questions whose answers are critical to the success of

EPA’s mission and goals. A progression of linked questions about EPA programs and operations are

sequentially aligned in tables of prospective assignments and projects designed to cumulatively answer those

questions.

Questions OIG Will Seek to Answer in Providing Professional Services to EPA, Fiscal 2003-2005

T How can EPA programs, operations, grants, and contracts be managed with greater

economy, efficiency, effectiveness, and accountability? Is EPA using the best available

practices, fulfilling its legal obligations, and getting its money’s worth?

T How are EPA programs and operations contributing to intended environmental results?

T Do EPA programs, operations, grants, and contracts have financial, scientific, legal, 

performance, and informational integrity to detect or prevent risk and loss of resources,

public confidence, and human health? 

T Is EPA addressing its “major management challenges,” GPRA, and the President’s

Management Agenda?

T Is EPA coordinating its plans and operations with its partners, customers, and stakeholders?

 

Consolidated Annual Work Planning - At the start of each fiscal year, the Inspector General issues a

consolidated annual plan that includes the annual planning perspectives for the performance of multi-discipline

products and services. Each year’s plan considers how the latest input from stakeholders and partners about

risks, needs, and opportunities translates into priorities or adjustment in implementing the OIG Multi-Year

Plan to best meet OIG Annual Goals. 
Page 2

Criteria for Selection of Strategic Areas, and Specific Assignments/Projects

Criteria for evaluating and selecting strategic areas of emphasis, and specific products, services, and

assignments, are consistently applied throughout all of the OIG planning processes. These include risk and

potential environmental benefits. Information about these factors comes from the results of past work in the

area, employee and customer surveys, feedback from stakeholders and partners, and Agency goals and

investments. OIG plans, performs, and evaluates its work dynamically and continuously based upon the

following principles of higher performance: 

< Customer Focused and Driven - Knowing the market, demand, and opportunities.

< Starting With the End in Mind - Results orientation.

< Developing Partnerships - Leveraging resources and interest for greater change and results.

< What Gets Measured Gets Done - How do you know and according to whom?

< Seeking the Best Return on Investment - Greatest public benefit with available resources.

OIG performs Strategic Customer Value Analysis as the preliminary step to incorporate each of the principles

listed above by determining current and potential customers, stakeholders, and partners. The process then

determines what are the most current issues, the emerging long-term issues, the problems associated with these

issues, the opportunities these issues present, questions that need to be answered to help EPA achieve its goals,

and how we can address them. We also identify opportunities for collaboration that can increase efficiency,

leverage resources, and expand the value of results. Customer input helps us focus on expectations and value

of our work that can be measured to evaluate our own progress, performance, and results for accountability. 

We continuously prioritize our work to obtain the greatest return in public benefit with the available staff and

financial resources.

The Planning Process should always consider: (1) availability of staff and resources; (2) the need for

effective followup to ensure Agency accountability for agreed-to actions and to identify or validate

subsequent results and impacts from OIG advice and recommendations; and (3) contingencies for

emerging issues of extreme importance requiring immediate attention. Details on each follow:

Human Capital, Integrated Information Systems, and Resources - Tools for Success: Fulfillment of the

Multi-Year Plan is dependent upon the availability and application of specific staff skills, information systems,

and financial resources. Therefore, we continuously research efficient means and alternatives for developing

and acquiring the technology and competencies that support this Plan. 

Followup - The Key to a Results-Oriented Culture: Implicit in the OIG “results oriented” culture, and as

demonstrated through the Logic Model, is the expectation that we will perform followup to determine and

account for the subsequent chain of actions leading to environmental improvements and impacts influenced by

our work. Followup is also required by the Government Auditing Standards for both financial and

performance audits, which note that “Much of the benefit from audit work is not in the findings reported or the

recommendations, but in their effective resolution,” and continued attention is needed to ensure that benefits

are realized. Therefore, as part of our Multi-Year Plan, we will regularly follow up and report on previous

work to determine the extent of Agency action taken and all subsequent results and impacts. This

acknowledges that significant results may require a lengthy time lag until they come to fruition and can be

reported.

Flexibility and Contingency Planning - Anticipating a Changing Environment: This Multi-Year Plan

represents a progression of prospective assignments designed to answer a series of questions for improved

systemic effectiveness and efficiency of EPA’s most critical or vulnerable program operations. As these

assignments progress, and the Agency is subject to new requirements, threats, risks, and public concerns, this

plan will also change. This Multi-Year Plan is designed as a flexible document recognizing the probability of

rapidly changing conditions and the need for contingency actions that make the best public use of available

resources. By anticipating change, we will adjust instead of just react.
Page 3

Linking EPA’s and OIG’s Strategic Goals to the Multi-Year Plan

This section describes several exhibits that demonstrate how the OIG Multi-Year Plan is linked to,

and supports, EPA’s Strategic Goals, OIG’s Strategic Goals, and OIG’s Annual Performance Goals,

as reported to Congress and the Office of Management and Budget (OMB) under GPRA. This

section also describes additional exhibits, displayed in appendices, that address OMB’s specific

evaluation concerns, EPA’s Major Management Challenges, and OIG’s plan for integrating Human

Capital initiatives into the planning process. 

Draft EPA Strategic Plan Architecture Fiscal 2004-2008: Exhibit

We have provided a prospective architecture of EPA’s Draft Strategic Plan for fiscal 2004-2008. This Plan

provides five goals that closely link to the Media Tracks presented in Chapters 2-6 of our Multi-Year Plan.

OIG Strategic Plan Architecture: Exhibit

Since the Multi-Year Plan is a description of how we will implement the OIG Strategic Plan incrementally

between fiscal 2003 and 2005, we have included a “map” of the OIG Strategic Plan Architecture showing the

relationship between OIG goals, objectives, and strategic areas that direct link to the media tracks in this

Multi-Year Plan. 

Logic Model: Exhibit

Included is a general Logic Model incorporating the OIG Strategic Goals, to demonstrate the progression and

linkage of inputs, outputs, and actions as catalysts, leading to expected outcomes and impacts. This Logic

Model is the general systems approach that our work will follow within each of the media tracks to determine

the efficiency and effectiveness of EPA program areas as well as the linkages and gaps between the

application of resources and intended program results.

Annual Performance Goals thru Fiscal 2005: Exhibit

This chart shows how the OIG Business Line Strategic Goals are translated into specific annual performance

goal projections, cumulatively and incrementally for fiscal 2003-2005. This also demonstrates the measures

we will use to define achievement of our goals, and how we account for planned performance and progress in

our Annual Performance Budgets and Annual Performance Reports.

Historical Perspective of EPA Management Challenges Reported by OIG: Appendix 1 

As required by the Reports Consolidation Act of 2000, OIG reports on the Major Management Challenges

that can significantly prevent the successful implementation or integrity of EPA programs or operations. Many

of these challenges, along with management weaknesses identified from the Federal Managers’ Financial

Integrity Act reviews, OMB assessments, and Major Management Challenges and Program Risks identified by

the General Accounting Office, have been long standing in EPA and need to be continually addressed though

the work of the Multi-Year Plan. We have included a Historical Perspective of the OIG-reported Management

Challenges in Appendix 1.

OMB Evaluation Interests of EPA: Appendix 2

OMB is using a new approach to integrating performance with budgeting by conducting evaluations of all

Federal programs, including EPA’s using a Program Assessment Review Tool (PART). A description of the

PART and EPA’s program review schedule is presented in Appendix 2.

Integration of Human Capital into the OIG Planning Process: Appendix 3 

OIG is implementing a number Human Capital actions as part of its strategy to integrate the staff skills,

competencies, and accountability needed to support this Multi-Year Plan, as described in Appendix 3.
Page 4

DRAFT EPA Strategic Plan Architecture Fiscal 2004 - 2008

EPA Goal Program Activity/Office

Air • Ozone, particulates, and other criteria air

pollutants/NAAQS

• Air toxics/hazardous air pollutants

• Air program assistance grants

• Atmospheric change (with transportation & other programs)

• Indoor Air

• Acid rain program implementation (CASTNet) (CAA)

• Research for air programs

• Radiation programs (emergency response, assessing risks,

monitoring, and providing guidance and training)(not

including drinking water) (CAA)

• Visibility

Water • Drinking water protection

• Source water/ground water protection

• State Revolving Funds (drinking and clean water)

• Drinking water program grants (PWS, UIC)

• Surface water program grants

• Surface water protection

Coastal/marine waters (CWA, MPRSA)

Water infrastructure for Alaska native villages

Drinking water and clean water research 

Air deposition to water

Pesticide contamination of water (FIFRA)

 Beach Act Grants & Fish/shellfish consumption

Land • Waste management

• Superfund (SF)

• Underground Storage Tanks/LUST

• Waste management grants

• RCRA enforcement grants

• Oil spill prevention & response (Oil Pollution Act)

Superfund enforcement

Waste program research

Waste minimization and recycling

Land application of sewage-treatment sludge 

Removal aspects of Homeland Security

Communities &

Ecosystems

Smart Growth

National chemicals (e.g., lead, PBTs) (TSCA)

New and existing chemical testing/screening

• Lead-abatement grants

Chemical facility planning/preparedness (EPCRA)

Pesticides endangered species protection (FIFRA/ESA)

Pesticides certification & training/worker protection 

Community Right-to-Know/Toxics Release Inventory

Children and other sensitive populations

Environmental justice

Pesticides management (registration/re-registration,

integrated pesticide management, pesticide environmental

stewardship program, strategic agriculture initiative)

Pesticide program implementation grants (FIFRA)

Brownfields

Pesticides program research (FIFRA/FDCA)

Global climate research (ORD)

“Core” research on human health, ecosystems,

anticipating and understanding emerging problems, etc.

(e.g., new “computational toxicology” approaches, ecosystem indicator

development and monitoring)

Endocrine disruptor screening program (OPPTS)

Minority academic institutions (ORD)

International capacity building (OIA)

Homeland Security (except OSWER removal aspects)

Watershed Initiatives

National Estuary Program

Chesapeake Bay

Great Lakes

Gulf of Mexico

Wetlands

Mexico Border

Caribbean Basin

Gulf of Mexico

South Florida/Everglades

Compliance &

Environmental

Stewardship

Civil enforcement

Compliance incentives

Compliance assistance

Compliance monitoring

Criminal enforcement

Enforcement training

Multi-media enforcement grants

Pesticides enforcement grants

Toxics substance compliance monitoring grants (TSCA)

Pollution prevention (including Design for the

Environment, green chemistry/engineering, but excluding

waste minimization and recycling)

• Pollution prevention incentive grants

Pollution prevention research & development (Environ.

Technology Verification and risk management research)

Sector program

Innovation programs (e.g., performance track,

environmental management systems)

National Center for Environmental Economics (OPEI)

Social science and economics research (ORD) 

General tribal capacity-building for environmental

protection (non-media specific), including AIEO

NEPA implementation

Environmental education

Supporting

Infrastructure

Information Technology/Data Management/Data

Standards; information exchange network; system

modernization

Administrative & financial management (OARM,OCFO)

Buildings and facilities

Judicial functions (administrative law judges,

Environmental Appeals Board)

• Regulatory review and development (including

SBREFA compliance)

• Legal services

• Office of Inspector General

• Small business ombudsman; small, minority business

assistance

• Program management

Regional management

Congressional, intergovernmental/external relations

Immediate Office of the Administrator

Civil Rights/Title VI compliance

Science Advisory Board

Science Coordination, Communication (e.g., State of the

Environment Report)

Regional science & technology (laboratory) support
 OIG Strategic Plan Architecture Fiscal 2001 - 2005

 EPA OIG Vision 

 

 

 

 

 Mission

 

 Business Line Goals Corporate Goals

 Objectives 

Strategic Areas of Emphasis

Air

Water

Waste Management (Land)

 Safe Food

 International Issues

 Environmental Data

 Scientific Research

 Enforcement & 

 Compliance Assistance

Financial Management 

 & Cost Accounting

Assistance Agreements

Contracts

Computer Security

Human Capital

Systems

Homeland Security

Customer Focus 

 Partnering

 Business Planning

 Integrated Measurements 

 Outcome Orientation

 Activity Based Costing

Human Capital 

Communications 

Organizational 

Realignment 

Integration of High 

 Performance Culture

 Integrated Knowledge 

 Information System

We are catalysts for improving the Environment. 

We contribute to environmental quality, human health, and good

government through problem prevention and cooperative solutions.

Promote economy, effectiveness and efficiency within the Agency 

Prevent and detect fraud, waste, and abuse in Agency programs and operations

1. Contribute to

improved

environmental quality

and human health

2. Improve EPA’s

management and

program operations

3. Produce timely,

quality and cost

effective products

and services that

meet customer needs

4. Enhance

diversity,

innovation,

teamwork and

competencies

 Influence significant

programmatic changes to

legislation, regulations, policy,

processes and practices that

have a positive impact on the

environment and human health

 Identify and recommend

solutions reducing the highest

environmental risks

Identify best practices in

EPA, states and other Federal

agencies that have directly

contributed to improved

environmental quality and

 Identify opportunities for

improving economy,

efficiency and

accountability in EPA

programs and operations

Improve the integrity of

EPA programs and

operations by identifying

actual and potential

vulnerabilities for fraud

and risk reduction

 Help EPA resolve its

major management

challenges

 Provide the right

products, at the right

time, to the right

customers, at the right

cost

Build infrastructure,

relationships and

partnerships to leverage

change

 Increase professional

image and demand for

products and services

 Improve organizational

systems and business

processes

Increase recognition

for creativity, innovation,

and teamwork 

 Promote continuous

learning and

demonstrated

competencies in EPA

programs, professional

skills, technical skills and

leadership skills 
Environmental Protection Agency - Office of Inspector General - Linking & Measuring the Office of Inspector General ‘s Performance

 

 

Measures that link goals

-Environ Risks identified

-Environ Recommendations

-Environ Best practices 

identified

- Environmental

Recommendations, risks & best

practices acted upon

-Legislative changes

-Regulatory changes

-EPA policy/directive 

changes

-Best practices transferred/ 

implemented 

-# and% EPA performance 

measures affected

-Certifications/validations

-Examples of

environmental

improvements

-Examples of risks

reduced or

eliminated

-Examples of

environmental

improvements

-Examples of risks

reduced or eliminated

-Recommendations/advice

-Questioned costs

-Recommended efficiencies

-Civil, criminal, admin.

actions

-Best practices identified

-FMFIA/Mgt chalg identified

-Business recommendations, risks,

best practices acted upon

-Fines, recoveries, and restitutions

-FMFIA/Mgt Challenges resolved

-Civil, criminal, admin. actions

-Costs recovered, saved or

avoided

 -Examples of Business

process/practice changes

- % satisfaction with EPA

service quality

-Business risks avoided

-Certifications/validations

-Time/cost per 

assignment

-# of Collaborative efforts

with states and federal

agencies

-Contacts with 

Congress/OMB staff

-% of Work Plan Met

-% of cases/ recommendations

accepted

-% of OIG work requested

-% customer satisfaction

-% professional image rating

-% of Engagement Letter 

expectations met

-# requests to testify

 OIG 

 LOGIC 

 MODEL

-% staff parity with

civilian workforce

- # of awards for

creativity, innovation

teamwork

-% staff meeting

professional stds

-% technical ,FTE,

training plan met

-% Work by multidisciplinary teams

-% Work done 

electronically

-% direct time of total

-Products available

electronically

- # of Innovative techniques 

 implemented

-Employee satisfaction

-Staff KSAs

GOAL 1: Contribute to improved

environmental quality and human health

GOAL 3: Produce timely, quality and cost

effective products and services that meet

customer needs

GOAL 4: Enhance diversity, innovation,

teamwork and competencies

GOAL 2: Improve EPA’s management and

program operations

Resources Activities/Program Outputs Customers Short-term

Behavioral

Outcomes

Intermediate

Organizational and

Behavioral

Outcomes

Environmental

Outcomes

Ecosystem and

Human Health

Outcomes

Impacts

Improved

human health

and natural

environment

Environmental

and Human

Health

Improvements

• Behavioral

Changes

• Deterred Crimes

• Better Systems

and Processes

• Money/Time

Saved or Better

Used 

• Employees

• Contracts

• Technology

• Travel

• Training

• Audits

• Evaluations

• Investigations

• Special Studies

• Consulting

Services

• Legislative/

Regulatory

Reviews

• Reports

• Briefings

• Civil Actions

• Criminal Actions

• Administrative

Actions

• Congress

• EPA

• OMB

• Other

Federal,

State, Local

Agencies

• Private

Sector

• Public

• Increased

Knowledge

• Changes in

Attitude

• Improved Skills

• Aspirations to

Improve EPA/

Environment
Page 7

OIG Annual Performance Goals (APG) through Fiscal 2005 (with targets Fiscal 03 - 05)

 Crosswalk between OIG Strategic Plan Objectives/Measures & OIG’s EPA Annual Budget and Performance Goals

OIG STRATEGIC GOALS / EPA OIG APG 2003 2004 2005

OIG GOAL 1: EPA APG 71: Improve environmental quality and human health by identifying 270

recommendations, risks or best practices; contributing to reduction or elimination of 75 environmental

risks; and 210 changes or actions influencing positive environmental or health impacts. (Cumulative Totals)

Objective Measures and Targets:

< 1. Environmental Improvements/Changes/Actions 

 (Legislative, regulatory, policy, directives, best 

 practices, Environmental /health improvements)

 Intermediate Outcome & Outcome Measures

< 2. Environmental Risks Reduced /Eliminated;

 Certifications, Verifications, Validations;

 Outcome Measures

< 3. Recommendations, Risks, or Best Practices Identified; 

 Output Measures

60

20

80

70

25

90

80

30

100

OIG GOAL 2: EPA APG 71: Improve EPA’s business and program operations by identifying 480

recommendations/best practices and 150 criminal, civil, or admin. actions reducing risk of loss/integrity

resulting in potential savings & recoveries totaling 200% of the annual investment in the OIG, and 240

EPA actions for better business operations. (Cumulative Totals)

Objective Measures and Targets: 

< 4. Potential Dollar Return on Savings, Questioned Costs, 

 Improved Business Practices, Recoveries, Fines, 

 Settlements Outcome Measures

< 5. Criminal, Civil Administrative Actions Reducing or 

 Eliminating Risk of Loss & Operational/Data Integrity 

 Intermediate Outcome Measures

< 6. Improvements in Business/Systems/Efficiency (Actions 

 Taken on Mgt Challenges, Certifications, Best Practices, 

 Policies, Regulations/Legislation) Outcome Measures

< 7. Recommendations Made on Weaknesses, Best Practices 

 Identified Output Measures

150% ROI

50

75

155

150% ROI

50

80

160

200% ROI

50

85

165
Page 8

Chapter 2: Air

The average person breathes over 3,000 gallons of air a day, with little control over the quality of that air

consumed. EPA’s Clean Air goal is that the air in every community in America will be safe and healthy to

breathe. However, EPA’s most recent data shows that over 121 million Americans, or over 43 percent of the

U.S. population, continue to live in areas with unhealthy air. Additionally, air pollution causes billions of

dollars in damage annually to agriculture; forests; and buildings, monuments, and other structures.

Substantial progress has been made in cleaning up some air pollutants, but tremendous challenges confront

EPA in reducing air toxics, particulate matter, and ozone. These air pollution problems are among the most

pervasive, difficult, and costly to remedy. Further, the progress that has been made in reducing other air

pollutants is challenged by growth in the economy; population increases; escalating highway vehicle use;

fiscal pressures on State, local, and tribal agencies; and other factors. For example, the Environmental

Council of the States predicted that, collectively, State agency environmental programs would be cut almost

$217 million in 2003. In addition to fiscal constraints, State/local/tribal agencies face many other challenges,

such as limited training, high turnover, poor skills mix, and insufficient technologies.

Industry is also encountering challenges. Many industry sectors are faced with ever increasing costs of

compliance as easier, less costly, measures have been exhausted, leaving increasingly expensive efforts to

achieve incremental gains. In recognition of this, as well as political and other pressures, EPA has initiated

various market-based economic incentive programs designed to provide sources with greater flexibility in

meeting clean air requirements. However, unless properly designed, implemented, and overseen, such

programs have the potential to exacerbate accountability and enforceability issues and further strain

regulatory agency resources. In undertaking our work, OIG will help EPA move closer to its goal of

ensuring that the air in every community in America is safe and healthy to breathe. 

Proposed Areas of Work

Four areas of work are pivotal to achieving EPA’s long-term goal of making the air in every community safe

and healthy to breathe. These areas comprise over 91 percent of EPA’s air program resources in fiscal

2003. These four tracks are:

TRACK DESCRIPTION 

1. Progress in establishing the baseline data needed to monitor and control particulate matter.

2. Effectiveness of EPA’s ozone reduction strategy.

3. Effectiveness of efforts to assess, monitor, control, and reduce the risks from air toxics.

4. Efforts to ensure continued further progress in reducing other harmful air pollutants. 

Each of the above tracks is in a different phase of evolution, development, and implementation. For example,

in Track 1, while some scientific questions remain about particulate matter, it is relatively more important

that an effective set of measures and data be developed for use as a long-term outcome benchmark. 

Conversely, in Track 3, the science to make air toxics decisions is still evolving. Within each track, we plan

to identify the barriers or obstacles to achieving EPA’s clean air goals.
Page 9

Track 1: Particulate Matter

Fine particulate matter (PM-2.5) is a complex mixture of harmful particles from a variety of stationary and

mobile sources. With particles about 1/30th the thickness of a human hair, PM-2.5 is very difficult to

monitor and control. As many as 500,000 deaths a year may be attributable to particulate matter PM

exposure, according to the World Health Organization. Over 75 million Americans live in areas believed to

exceed the PM-2.5 standard.

Bringing all areas of the United States into compliance with the PM-2.5 standard is expected to cost industry

in excess of $37 billion annually by 2008. If so, this will be the air program’s most expensive regulatory

effort ever. It is critically important that the PM-2.5 program have accurate ambient air monitoring data

before compliance funds are spent, as well as the ability to locate and control the sources of fine particles. 

About one-fourth of all PM-2.5 mobile source emissions come from diesel trucks and buses, but immense

uncertainty surrounds this and other PM-2.5 emissions estimates. About $195 million, or 33 percent of

EPA’s air program budget, is devoted to PM-2.5 issues in 2003.

OIG will evaluate EPA’s progress in establishing the baseline data needed to monitor and control particulate

matter by concentrating on: (1) EPA’s PM-2.5 ambient air monitoring program; (2) the design of EPA’s

speciation monitoring network; (3) the adequacy of State/local/tribal agency PM-2.5 emissions inventories,

including emissions calculation tools such as emissions factors; and (4) the opportunities, limitations, and

challenges associated with less costly compliance alternatives.

Overarching Question for Particulate Matter: How can EPA maximize the effectiveness of its PM-2.5

ambient monitoring and emissions control strategies?

Track 2: Ozone Attainment Strategies

Ozone is EPA’s most formidable air pollution problem. Over 116 million Americans still live in ozone

nonattainment areas, more than any other single air pollutant. While many areas are making improvements,

others are getting worse. Although the Clean Air Act’s mandate is that all areas be in ozone compliance no

later than 2010, EPA’s latest GPRA goal is for ozone attainment to take at least until 2012. Additionally, a

more stringent ozone standard approved in 2002 could mean millions more people living in nonattainment

areas, and significant increases in compliance costs. As many as 700 of 3,142 counties in the United States

could be in ozone nonattainment, and compliance with the new standard is estimated to cost industry in

excess of $9.6 billion annually by 2010.

The key components of EPA’s strategy for ozone attainment involve reducing nitrogen oxide emissions from

power plants and industrial combustion sources, improving vehicle inspection programs, introducing new

low-emission cars and trucks into the on-road fleet, and requiring use of cleaner gasolines. EPA requested

about $79 million for ozone activities in 2003, or about 14 percent of its air program budget.

OIG will evaluate the effectiveness of EPA’s ozone reduction strategy by concentrating on EPA’s policies

and practices, as implemented and enforced by State/local/tribal agencies and overseen by EPA regions, for:

(1) successfully reducing nitros oxide (NOx) emissions from power plants and industrial combustion sources;

(2) improving vehicle inspection and maintenance programs to ensure identification and repair of poorly

performing vehicles; (3) causing consumers and businesses to purchase and drive low-emission cars and

trucks at expected turnover rates; and (4) achieving emissions reductions envisioned by cleaner gasolines.

 

Overarching Question for Ozone: How can EPA better execute its ozone reduction strategies?
Page 10

Track 3: Air Toxics

Toxic air pollution is one of the most significant health and environmental problems in the United States,

causing cancer, neurological, immunological, and other serious health problems. Despite the impact of air

toxics on human health and the environment, a comprehensive, national air toxics program has not been fully

implemented. Accurate and reliable measurement and health assessment data is lacking for many air toxics. 

EPA is 2 years behind in fulfilling its statutory responsibilities for issuing Phase I air toxics standards,

known as Maximum Achievable Control Technology (MACT) standards. This delay has been identified as

a material weakness in the air program. Phase II residual risk standards may also be delayed. As such, the

air toxics program was identified as a major management challenge by OIG in fiscal 2003.

EPA is behind in gathering emission, monitoring, human health, and ecological effects information on air

toxics. The Agency relies heavily on industry for its air toxics emissions data, much of which is generated

using inferior emission estimation techniques. A comprehensive national ambient air toxic monitoring

network does not exist, and exposure and health risk data, as well as health effects data, is limited and

uncertain. Measurement and assessment data are also lacking. Additionally, there is little health data on the

synergistic impacts of exposure to multiple air toxics, such as exposures routinely occurring in urban

environments. Also, improvement is needed in the accuracy of air toxics emissions data for mobile and area

sources, especially as it relates to non-road contributions to pollution. Our air toxics (and particulate matter)

work will also address the Agency’s efforts to identify and overcome barriers to the effective control of diesel

emissions, especially off-road diesel emissions. We plan to address the obstacles that have caused and

contributed to these problems as well as the problems themselves.

EPA requested $118 million for all air toxics activities for fiscal 2003, or about 20 percent of its air program

budget. About one-third of EPA’s air toxics budget goes to State and local agencies for implementing

existing air toxics regulations. OIG will evaluate EPA’s efforts to assess, monitor, control, and reduce the

risks from air toxics by concentrating on: (1) emissions data (accuracy, reliability, source characterization);

(2) ambient monitoring (needs, capabilities, deficiencies); (3) State and local implementation issues (people,

processes, technology, data systems, infrastructure, compliance, permitting, fees, incentive structures); and

(4) exposure assessments (cancer and non-cancer risks, synergistic effects).

Overarching Question for Air Toxics: How can EPA improve its efforts to assess, monitor, control, and

reduce the risks of toxic air pollutants to human health and the environment?

Track 4: Challenges to Continued Further Progress

More than 23 million people still live in nonattainment areas for carbon monoxide, sulfur dioxide, and lead. 

External factors such as growth in the economy; population increases; escalating highway vehicle use; urban

sprawl; and fiscal pressures on State, local, and tribal agencies challenge regulators in their efforts to make

progress in reducing these pollutants. According to the Environmental Council of the States, 42 State

environmental programs face bleak budgets for 2002-2003. State/local/tribal agencies face other challenges,

such as limited training, high turnover, poor skills mix, and insufficient technologies.

Industry is faced with ever-increasing costs of compliance for these other pollutants, in part because the

easier, less costly measures have been exhausted, leaving largely expensive efforts for incremental gains. 

EPA has initiated various market-based economic incentive programs, such as Open Market Trading and

Project XL, designed to provide greater flexibility in meeting clean air requirements. The design,

implementation, and oversight of such programs is critical to EPA’s ability to prevent backsliding in these

programs, where such flexible approaches have the potential to exacerbate accountability and enforceability

issues and further strain regulatory agency resources.
Page 11

OIG will assess the effectiveness of EPA’s strategy for ensuring continued progress in reducing air pollution

by concentrating on: (1) the design and implementation of economic incentive programs, such as Open

Market Trading; (2) the design, limitations, and advantages of alternative compliance approaches, such as

Project XL; (3) the adequacy of major stationary-source Title V permits; (4) the adequacy of fee

assessments, collections, and use for achieving clean air goals; and (5) the opportunities, limitations, and

challenges associated with less costly compliance alternatives.

 

Overarching Question for Continued Progress Issues: How can EPA maximize the contributions of State,

local, and tribal agencies in continuing the progress toward meeting clean air goals?

Issue Planned Air Evaluation/Audit Projects

Fiscal Year Start

2003 2004 2005

Track 1:

Particulate

Matter

How can EPA

maximize the

effectiveness of its

PM-2.5 ambient

monitoring and

emissions control

strategies?

1. Assessment of PM-2.5 Federal Reference Method: What are the limitations and

alternatives, if any, to EPA’s filter-based PM-2.5 ambient air monitoring program?

X

2. PM-2.5 Network Design: Is EPA’s speciation monitoring network adequate for identifying

PM-2.5 emission sources and developing State implementation plans to control such sources?

X

3. Adequacy and Reliability of PM-2.5 Emissions Measures: Are stationary and mobile source

emissions measures and emissions calculation tools, such as emissions factors, adequate to

construct State/local/tribal agency PM-2.5 emissions inventories?

 X

4. Assessment of Compliance Alternatives: What are the opportunities, limitations, and

challenges associated with less costly compliance alternatives for achieving compliance with

PM-2.5 standards?

X 

5. Incentive-Based Efforts to Reduce PM-2.5 Risks: Considering that industry PM-2.5

compliance is not required until 2008, what incentive-based programs has EPA established to

reduce risks/achieve early reductions in the levels of PM-2.5?

X

Track 2:

Ozone

Attainment

How can EPA

better execute its

ozone reduction

strategies?

1. Effectiveness of EPA - State/local agency partnerships: Are EPA regions and State/local

agencies successfully reducing ozone precursors (nitrogen oxide/volatile organic compound

emissions from power plants/combustion sources), including effectively conducting New

Source Review determinations for utilities and industries making major modifications and

other capital improvements to plants and equipment?

X

2. Effectiveness of Vehicle Inspection and Maintenance Programs in Reducing Ozone:

How well does EPA’s vehicle inspection and maintenance program ensure that poorly

performing vehicles are not only identified but effectively repaired?

X 

3. Assessment of EPA and State/Local/Tribal Agency Ozone Permits: Are EPA regions and

State/local/tribal agencies ensuring that volatile organic compound and nitrogen oxide permits

(Title V, FESOP, Area, and other permits) incorporate the best emissions estimation

techniques when written, and are they using the resultant information to ensure State

Implementation Plan (SIP) progress deadlines are met for Ozone?

 X

4. Effectiveness of Non-Road Emissions Reduction Strategies: How effective have EPA’s

efforts to reduce non-road mobile source emissions been, and what are the challenges and

opportunities for additional reductions in such emissions?

X

5. Cleaner Fuels Initiatives: Have EPA’s expected emissions reductions for cleaner fuels been

realized in actual on-road applications, including Tier I and Tier II fleets?

X
Page 12

Track 3:

Air Toxics

How can EPA

improve the

effectiveness of its

efforts to assess,

monitor, control,

and reduce the

risks of toxic air

pollutants to human

health and the

environment?

1. Air Toxics Emissions (accuracy, reliability): How do EPA, State, and local agencies ensure

the accuracy and reliability of stationary and mobile source emissions?

X

2. Ambient Air Toxics Monitoring (needs, capabilities, deficiencies): Has EPA established an

adequate ambient air monitoring system for toxic air pollutants, taking into consideration

short- and long-term needs for ambient air toxics data? 

X

3. State/Local/Tribal Agency Air Toxics Implementation (people, processes, technology, data

systems, infrastructure, permitting, fees, incentive structures): How well are EPA and State/

local/tribal agencies carrying out their roles of assessing the risks of air toxics exposure;

monitoring for air toxics on a national, regional, and local basis; and mitigating risks?

X

4. Evaluation of EPA’s Air Toxics Source Characterization and Control Strategies

Development: What progress have EPA and State/local/tribal agencies made in characterizing

air toxics sources and developing effective control strategies? 

X

5. Quality of State/Local/Tribal Agency Inspections for Air Toxics (people, processes,

technology, incentives): How well are State/local/tribal agencies ensuring stationary, mobile,

and area source compliance with air toxics standards and permit conditions, including ensuring

that facilities report accurate, reliable emissions information?

X

6. Air Toxics Exposure Assessments/Risk Reduction Activities (cancer and non-cancer risks,

synergistic effects): How well is EPA carrying out its responsibilities to assess the health and

ecological impacts of toxic air pollutants and minimize health risks?

X

Track 4:

Challenges to

Continued

Further

Progress

How can EPA

maximize the

contributions of

State, local, and

tribal agencies in

continuing the

progress toward

meeting clean air

goals?

1. Alternative Compliance Under Economic Incentive Programs: What are the design,

implementation, accountability, and enforcement issues associated with ensuring that EPA’s

Open Market Trading program meets clean air program goals?

X

2. Regulatory flexibility under Project XL: What are the design, methodology, assumptions,

and limitations, if any, associated with EPA’s proposal to approve a precedent-setting asbestos

demolition and renovation project under the Project XL Program? 

X

3. Title V Permit Quality: How well do issued Title V permits meet clean air goals, and what

is the impact, if any, of emissions waivers and variances for start-up, shut-down, and

malfunctions?

X

4. Air Program Fee Collections: Are State/local/tribal agency fee assessments, collections, and

use sufficient to ensure program success, and what alternatives and best practices are available

to alleviate funding shortfalls?

X

5. Effectiveness of Alternatives: What are the opportunities, limitations, and challenges

associated with allowing State/local/tribal agencies to pursue less costly compliance

alternatives?

X

6. Laboratory Assessment: How well are EPA and State/local/tribal agencies ensuring that

laboratories used by regulators and the regulated community meet EPA’s quality assurance/

quality control standards and data quality objectives?

 X
Page 13

Chapter 3: Water

Ensuring that the water that comes out of the tap is safe to drink, and that our nation’s surface and

groundwater resources are protected, are among the Federal government’s most important functions. 

EPA leads this effort, although other Federal agencies (notably U.S. Department of Agriculture’s Natural

Resources Conservation Service and Department of the Interior’s U.S. Geological Survey) also are actively

involved. EPA’s budget for conducting its share of this work is approximately $4 billion, of which more than

80 percent goes for grants to States and tribes. This constitutes 41 percent of EPA’s overall budget.

The two principal laws passed by Congress to protect water resources and ensure safe drinking water are

showing signs of wear. The Clean Water Act turned 30 this year, and the Safe Drinking Water Act will turn

27. In these laws, Congress provided EPA with a set of tools to move the nation toward goals of an assured

supply of safe drinking and surface water. Although additional programs have been added to these laws

through amendments, the basic structure created three decades ago remains intact. To some, the issues seem

more complex, the relationships between Federal and State levels of government more inefficient, and

governmental resources increasingly strained.

EPA’s clean water program is facing challenges in several areas. One is in performance measurement and

assessment. There are many unanswered questions about the environmental and health status of the nation’s

water resources, as well as the performance of EPA’s programs and activities. In addition, many mature

programs (such as water quality standards, the National Pollutant Discharge Elimination System (NPDES),

and effluent guidelines) are suffering from inattention or inadequate funding, while newer programs (such as

Total Maximum Daily Load (TMDL), watershed permitting, and drinking water capacity development) have

uncertain futures. Moreover, recent projections of needed spending for drinking water and wastewater

infrastructure is in the hundreds of billions of dollars.

Proposed Areas of Work

The three key tracks we will be following in regard to water are:

TRACK DESCRIPTION

1. Evaluating EPA’s implementation of the Safe Drinking Water Amendments of 1996.

2. Evaluating EPA’s progress toward implementing watershed protection approaches and the

adequacy of information to support water quality decisions.

3. Evaluating progress toward reducing pollutant loadings into the nation’s waters. 

Each track will be comprised of a progression of studies designed to answer questions such as:

• What are the Agency’s plans for addressing clean and safe water needs? 

• To what extent do EPA and States have reliable and cost-effective information for running the program

and evaluating results?

• What environmental and institutional factors influence the effectiveness of the program? How effective

and efficient has the program been in meeting program goals?

• What changes are necessary to increase the program’s effectiveness and efficiency? 
Page 14

Track 1: EPA’s Implementation of the Safe Drinking Water Amendments of 1996

The nation’s public water systems are facing a number of threats from unregulated contaminants and

unfunded infrastructure needs. The problem is especially serious for small water systems -- those serving

fewer than 10,000 people. Congress enacted major changes to the Safe Drinking Water Act (SDWA) in

1996 to address these threats. New programs were created to broaden Federal protection against

contaminants, improve communication of risks to consumers, and increase the future viability of public water

systems. These programs have not yet been evaluated, and a comprehensive and holistic review of the

implementation of the SDWA will provide valuable information to EPA and the public.

One area of emphasis is the Drinking Water State Revolving Fund (DWSRF). The DWSRF provides

Federal financial assistance to States, localities, and tribal governments for the construction of drinking water

treatment facilities. Since 1996, EPA has provided $4.4 billion in DWSRF capitalization grants. OIG is

responsible for auditing DWSRFs for seven States, and our strategy is to review these States once every

3 years. For the other States, OIG reviews audit reports that States submit. At EPA's request, the OIG also

provides consulting services to States. We will conduct financial audits and effectiveness evaluations of this

program.

Within Track 1, we plan to evaluate and provide information on the following questions:

• To what extent are estimates of performance of public water supplies accurate and reliable?

• How effectively are EPA and States assisting utilities to develop capacity to address future challenges?

• How fully are States and EPA implementing SDWA tools?

• To what extent are operator certification programs successful in increasing the proficiency of public

water supply operators?

• How effectively are States assessing and protecting source waters?

• Are recipients achieving the goals of their assistance agreements?

• Are the results of assistance agreements contributing to the attainment of EPA goals?

• How effective is EPA’s measurement of the results of assistance agreements?

• How well are EPA and State/local/tribal agencies ensuring that laboratories used by regulators and the

regulated community meet EPA quality assurance/control standards and data quality objectives?

• How complete and thorough is EPA’s process for identifying new contaminants for regulatory

consideration (Contaminant Candidate List under the SDWA amendments)?

• What has been the impact of recent drinking water standards?

• What is the impact of drinking water regulations and requirements on small communities?

• Do EPA and other States have systems and processes in place to ensure DWSRF financial integrity?
Page 15

Track 2: Watershed Protection, and Effective Water Quality Monitoring

Currently, point sources of pollution (basically publicly owned treatment works and industries) are controlled

individually, and non-point sources of pollution (e.g., runoff from cities and agricultural areas) are

uncontrolled. This source-by-source approach has been criticized for being inefficient and incomplete. The

Office of Water announced a new approach whereby the right to discharge pollutants will be traded among

sources within a watershed. Watershed planning and permitting require additional information, analytical

resources, communication, and coordination with States and localities. We will monitor and evaluate the

Office of Water's proposed watershed initiative to assist design and implementation.

The system for acquiring and analyzing water quality information for basing EPA’s management decisions is

flawed. The Clean Water Act invests primary responsibility on the States for gathering and reporting data,

and in past years we issued a number of reports detailing deficiencies in this information. In addition, there

are currently several management challenges relating to these activities, and Office of Water is developing

new guidance and policy for State monitoring programs. We plan to assess State responses to these

initiatives and consider options for these programs.

Within Track 2, we plan to evaluate and provide information on the following questions:

• What are the informational and analytical needs for managing pollution sources by watershed?

• What are the capabilities and needs of States, local communities, and other stakeholders to implement a

watershed approach?

• How successfully have effluent trading programs resulted in environmental gains at reduced cost?

• What information does Congress, EPA, and the public need to run the clean water program?

• To what extent does EPA have the information it needs to manage the clean water program in an

effective and efficient manner?

• How adequate is EPA's measurement of TMDL progress, and to what extent do TMDLs improve water

quality? How will the TMDL program’s progress impact the effluent trading program?

Track 3: Reducing Pollutant Loadings

The core of EPA’s clean water program is directed toward reducing pollutant loadings. In 2002, we began

a comprehensive review of the core water programs, starting with water quality criteria and effluent

guidelines. We will continue with NPDES, water quality standards, and State revolving grants, followed

by non-point source issues and coordination issues in later years. One of our objectives is to assess the

effectiveness and efficiency of different policy tools for reducing loadings and thereby meeting water

quality goals. Findings and conclusions from these studies will help the Office of Water determine future

directions for these programs, and will be provided to Congress for legislative deliberations. 

One area of emphasis is the Clean Water State Revolving Fund (CWSRF). The CWSRF provides Federal

financial assistance to States, localities, and tribal governments to protect the Nation’s water resources by

providing funds for the construction of wastewater treatment facilities. These funds are significant

financial tools for achieving clean water and helping to meet the significant needs for wastewater

infrastructure over the next 20 years. Since 1987, EPA has provided $18.5 billion of capitalization grants

through the CWSRF, which has resulted in 8,759 projects. We will conduct financial audits and

effectiveness evaluations of this program. OIG is responsible for auditing CWSRFs for seven States, and 
Page 16

our strategy is to review these States once every 3 years. For the other States, OIG reviews the audit reports

the States submit. At EPA’s request, OIG also provides consulting services to States.

Within Track 3, we plan to evaluate and provide information on the following questions:

• What is the impact of the NPDES permit backlog on water quality and the effectiveness of water quality

programs?

• How adequate is EPA’s measurement of TMDL progress and to what extent do TMDLs result in water

quality improvements?

• How adequate is EPA’s measurement of the results of assistance agreements?

• Are recipients achieving the goals of their assistance agreements?

• Are the results of the assistance agreements contributing to the attainment of EPA goals?

• What approach is EPA using to reduce non-point source loadings? How effective is it?

• What, if any, is the relationship between grants to address non-point sources and improvements in 

water quality?

• How has the NPDES program been implemented to address high-priority point source contributors?

• What interstate and inter-regional variations exist in setting priorities for resource allocations in permit

programs?

• How does the major/minor designation of a permittee impact on the effectiveness of the NPDES program

in reducing loadings?

• Do EPA and the States have systems and processes in place to ensure the financial integrity of the

CWSRF?

• What is the effect of EPA’s compliance program on EPA’s goal to achieve reduced loadings?

• What is the relative effectiveness of different approaches toward reducing pollutant loadings?
Page 17

Issue Planned Water Evaluation/Audit Projects

Fiscal Year Start

2003 2004 2005

Track 1:

Drinking Water

How can EPA

effectively implement

the Safe Drinking Water

Amendments of 1996?

 1. Capacity Development X

 2. Safe Drinking Water Information System as a GPRA Measure X 

 3. Operator Certification X

 4. Implementation of SDWA Tools by EPA and States X X

 5. Implementation of the Contaminant Candidate List process X

 6. DWSRF Results X

 7. Financial Audit of DWSRF X X X

 8. Erroneous DWSRF Payments X X X

 9. Impacts of Regulations on Small Community Systems X

10. Source Water Assessment X

11. Costs and Benefits of Drinking Water Regulations X

12. Laboratory Assessments X

Track 2:

Watershed

Protection

How can EPA

effectively control,

protect and monitor

watersheds and water

quality?

 1. Watershed Capacity X

 2. Monitoring and Assessment X

 3. TMDLs X

 4. Effluent Trading X

Track 3:

Reduced

Loadings

How can EPA

effectively use and

improve policy tools to

reduce water pollutant

loadings?

 1. Effluent Guidelines X

 2. Permit Compliance System X

 3. Pretreatment X

 4. Permit Backlog X

 5. Grants and Other Tools for Controlling Non-Point Sources of Pollution X

 6. Non-Point Source Grant Effectiveness X

 7. NPDES Effectiveness X

 8. CWSRF Results X

 9. Financial Audit of CWSRF X X X

10. Erroneous CWSRF Payments X X X

11. Clean Water Compliance Issues X

12. Relative Effectiveness of Policy Tools X
Page 18

Chapter 4: Land

EPA addresses vast and complex environmental issues in its waste management and cleanup programs. There

are approximately 1,234 national priority hazardous waste sites throughout the United States and an estimated

60 million Americans live within 4 miles of one. Some of the most common contaminants at hazardous waste

sites are also the most difficult to clean up, and cleanup may take up to 30 years. There are an estimated

450,000-650,000 Brownfields properties across the nation, where property use is complicated by the presence

or potential presence of a hazardous substance. In addition, uncertainty about environmental contamination

contributes to abandoned or underutilized properties that can create major obstacles to social or economic

vitality and growth in communities. In 2000, U.S. residents, businesses, and institutions produced nearly

232 million tons of municipal solid waste, or approximately 4.5 pounds per person per day. Part of this waste

is stored in one of approximately 3,500 municipal landfills in the United States. Further, industrial facilities

generate about 7.6 billion tons of non-hazardous industrial waste. 

EPA addresses these broad challenges and issues through its major Better Waste Management programs. These

programs include Superfund, Brownfields, and the Resource Conversation and Recovery Act (RCRA). In fiscal

2002, these programs absorbed almost 25 percent of EPA’s total budget and workforce, and together accounted

for over 70 percent of EPA’s waste management program dollars. Over the years, these programs have made

progress toward their goals. The Superfund program continues to make progress in implementing cleanup

actions and contaminant removal, and deleting waste sites from the National Priorities List (NPL). In its pilot

stage, Brownfields achieved success in conducting site assessments and leveraging community redevelopment

dollars to help revitalize underutilized or abandoned properties. RCRA has achieved success in controlling

human exposure to contaminants and in migration of contaminated groundwater from RCRA facilities, and in

ensuring that facilities are better managed. However, despite this progress, as these programs have matured,

challenges and questions have emerged.

Proposed Areas of Work

The three key tracks we will be following in regard to land are:

TRACK DESCRIPTION 

1. Superfund progress toward effective risk reduction and waste cleanup.

2. Brownfields progress toward effective risk reduction, cleanup, & restoring previously polluted sites.

3. RCRA progress toward effective waste and hazardous material management, and risk reduction.

For Superfund, EPA may face significant challenges in paying for cleanups, based on current Trust Fund

balances and expected cleanup needs. An EPA Superfund official acknowledged at a National Advisory

Committee meeting that, in 2002, EPA had seen a Superfund budget shortfall for the first time which,

according to media accounts of the official’s statement, totaled $200 million. Concern about Superfund’s

financial situation has generated suggestions for running the program more efficiently, as well as legislation to

reauthorize taxes on industry, which forms the basis of the Superfund. The challenges facing Superfund have

also prompted EPA to establish a national committee of experts to study and provide recommendations on the

future structure and direction of the program. The committee has been asked to look at the role and purpose of

the NPL, how to address potentially complex and expensive contaminated sediment and mining sites (megasites), and how to measure Superfund program progress.

Key challenges in the Brownfields program are largely related to EPA’s ability to implement the newly

authorized nationwide Brownfields program. The Small Business Liability Relief and Brownfields

Revitalization Act was signed in January 2002. Although the Office of Brownfields Cleanup and

Redevelopment has since taken important steps to develop guidelines and made progress in developing new

performance measures, challenges remain. 
Page 19

Regarding RCRA, it is anticipated that RCRA will need to change in order to meet the environmental

challenges of the coming decades. Changes would be necessary to accommodate and respond to continuing

trends in the use of more chemicals and new chemical risks; improved methods for measuring and managing

chemical risks; a more global and integrated world economy; and new technologies and industries affecting how

resources are used and disposed of, among others. For example, consumers now acquire and dispose of large

quantities of computers that were not widely available almost 27 years ago, when RCRA was enacted. 

Track 1: Superfund

Overall Objective: Produce results toward ensuring that EPA can, and is, making progress toward effective 

risk reduction and waste cleanup.

Scope and Questions

In fiscal 2002, the Superfund program budget was approximately $827 million, more than half (54 percent) of

EPA’s waste management dollars. In addition to planning criteria discussed in Chapter 1, the scope of our

efforts in this area are influenced by EPA’s ongoing efforts in formulating potential new policies related to

specific Superfund components, including the role of the NPL and the nature of potential Superfund 

mega-sites. Consistent with OIG evaluation principles focused on assessing program/organization systems, we

will also address human capital issues in the Superfund program. 

Role of the Superfund NPL

We will evaluate the capacity and effectiveness of State hazardous waste cleanup programs. Unlike other

major environmental programs (e.g., Clean Air, RCRA, Clean Water), the Superfund program is not delegated

to States. However, some States serve as the lead agency on Superfund cleanups, and States have a

responsibility to oversee and complete Superfund cleanups that require long-term response actions. Also,

because of the current Superfund financial problems, EPA may place fewer sites on the NPL, thus placing

more cleanup responsibility on the States. We anticipate that our work will produce results that indicate the

potential viability of such an approach. We also anticipate that this work will also allow us to provide

information related to Superfund reauthorization discussions. Questions we anticipate addressing are:

• How effective have States been at hazardous waste cleanup, and what is their capacity (financial, human

capital, technical) to accommodate future actions? 

• Are there key performance factors, characteristics, or best State hazardous waste cleanup programs that

distinguish some programs from others?

Our mega-sites work will initially focus on collecting information to determine the potential nature of the megasite problem, including types of mega-sites (e.g., contaminated sediment sites), potential cleanup costs, and

potential human health and environmental risks. We will report on costs and risks associated with known sites,

as well as estimated costs and risk associated with potential EPA-funded sites. This work contributes to EPA’s

need for program management information in this area. This is particularly important since EPA currently has

a need to better understand the nature of the mega-site problem and evaluate policy options in light of this. In

addition, we have developed a methodology for collecting information on potential and existing hardrock mining

mega-sites, which we are currently using. Questions we anticipate addressing are: 

• What types or categories of mega-sites have been identified to date and what types or categories do we

expect to address in the future?

• What is the known or estimated financial impact (to States and EPA) and environmental impact of these

mega-sites?

Continued or increased reliance on obtaining cleanup services from the U.S. Army Corps of Engineers

(USACE), through the use of Interagency Agreements, is anticipated given the expected costs associated with

mega-site cleanups (i.e., greater than $50 million) and the level of USACE involvement in Superfund 
Page 20

cleanups. USACE services are used on any cleanup action in excess of $15 million. Earlier OIG work found

that EPA was not always aware of the qualifications of servicing agencies or their contractors and that, in one

case, contractors obtained through the Interagency Agreement process could not deliver services they said they

could. A question related to cleanup of mega-sites we plan to address is:

• Given the generally expected higher costs and complexities of mega-site cleanups, and expected use of

Interagency Agreements and USACE involvement, what is the increased risk of fraud, waste, or abuse in

mega-site cleanup activities and management of contracts? 

Awarding and managing contracts are major activities in the cleanup of Superfund NPL sites. We also plan to

address the following global questions regarding Superfund contracts and costs: 

• How does the Agency decide what to buy and when to buy products or services involved in Superfund

cleanup activities? (procurement planning)

 

• How does the Agency decide how and from whom to buy products or services involved in Superfund

cleanup activities? (preaward management)

 

 • Does the Agency ensure delivery of goods and services purchased for Superfund cleanup activities? (post

award management)

 

• Does the Agency ensure that it is paying reasonable prices for products or services involved in Superfund

cleanup activities? (post award management)

 

• Does the Agency use lessons learned in subsequent acquisitions for products or services involved in

Superfund cleanup activities? (post award management)

 

• What actions does the Agency need to take so managers have an appropriate level of cost data to make

sound decisions that can ultimately improve the effectiveness and efficiency of Superfund cleanup

operations? (managerial cost accounting issues)

Superfund Human Capital

In its July 2001 report on the costs of Superfund, Resources for the Future (a non-profit organization that

conducts independent research on economic issues related to the environment) raised questions about the costs

to manage the Superfund program. However, the report was unable to include evaluation of the level of

Superfund program resources going to program management, policy, and administrative support functions. The

Agency suggested that we address these issues. In fiscal 1999, staffing activities accounted for just over a third

of all EPA’s Superfund expenditures. Decisionmakers need information on Superfund staffing costs and

deployment in evaluating the program’s structure. We anticipate that this work will also allow us to provide

information related to Superfund reauthorization discussions, and will support EPA’s program management

capabilities by providing key information on a major expenditure area. In addition, OIG has designated EPA’s

human capital management as an Agency-level weakness for fiscal 2002. Within the Superfund program, we

plan to assess and provide information on:

• What is the makeup of the Superfund program workforce at headquarters and regions (i.e., number and

type of Full-Time Equivalents (FTEs))?

 

• How is this workforce deployed throughout the organization to achieve the Agency’s goals for the

Superfund program?

 

• What are the trends in FTEs, skills, and organizational deployment of the Superfund workforce?

 

• What changes have occurred in the skill mix or deployment of Superfund staff to reflect major

programmatic changes or budgetary changes?
Page 21

Track 2: Brownfields

Overall Objective: Respond to Congressional mandate and produce results toward ensuring that EPA can, and

is, making progress toward effective risk reduction, cleanup, and restoring of previously polluted sites to

appropriate uses.

Scope and Questions

A primary goal of Brownfields is the assessment, cleanup, and reuse of properties with perceived or actual

environmental contamination. In fiscal 2002, the Brownfields program budget was $97.6 million, accounting

for approximately 6 percent of EPA’s waste management program dollars. But the 2002 Brownfields Act

authorized $200 million, or more than twice the fiscal 2002 appropriated amount. Under this Act, OIG has a

mandate to report on the management of the Brownfields program no later than 2005. In addition, the law

allows OIG to conduct audits of Brownfields grants. We plan to conduct work over the next several years that

will allow us to be responsive to the mandate and address our overall objective. We anticipate that we will

focus and tailor our work to specific sections of the new law, given that Brownfields is comprised of several

subprograms focusing on different program activities (i.e., assessment grants, cleanup grants, and enhancing

State response programs). We expect that our work will identify and discuss results of the Brownfields

program, factors that facilitate and present obstacles to results, and relevant options to address limitations.

Our review will incorporate key components of environmental management reviews, including use of

organizational systems theories to evaluate program performance. This work will provide us with the

framework and plan for carrying out our mandated review. Questions we anticipate addressing include:

• What are the program’s environmental objectives, performance measures, and performance data?

• What are the program’s costs?

• Have there been identified regulatory noncompliance, violations, and/or enforcement actions?

• What are the expectations/concerns associated with Brownfields activities or support expressed by internal

or external stakeholders?

• What are the trends in performance, cycle time, cost, and customer satisfaction?

• What are the implications of performance results and trend analysis, and how are they factored into the

systems (leadership, strategic planning, budget, information analysis, human capital, and process

management)?

• What data systems does the Brownfields office use to collect and control performance data?

• What is the quality of the data used to manage the Brownfields program? 

• Who collects the data and how is it aggregated to the organizational level?

• Has a Brownfields program workforce planning strategy been developed?

• What types of education, training, and developmental opportunities does the program office provide to help

build the employee competencies needed to achieve the office’s shared vision?

• Are best practices used in delivering products and obtaining the desired results?

• Has the office changed its skill mix and structure to reflect increased emphasis on e-government and

competitive sourcing? 
Page 22

EPA plans to use grants and revolving loan funds as primary vehicles for Brownfields assessments and

cleanups. As a result, we plan to perform grant audits to answer questions such as:

• Is EPA efficiently managing and overseeing the grants and revolving loan funds?

• Were grants awarded to eligible entities that had the highest rankings?

• Is EPA adequately monitoring grantee performance?

• Is EPA effectively using grants and revolving loan funds for assessment, cleanup, and reuse of properties

with perceived or actual environmental contamination?

• Are recipients achieving the goals of their assistance grants?

• Are the results of the grants contributing to attainment of EPA goals?

• Is EPA measuring results of grants?

Track 3: Resource Conservation and Recovery Act

Overall Objective: Produce results toward ensuring that EPA can, and is, making progress toward effective

waste management, hazardous material management, and risk reduction in relation to RCRA.

Scope and Questions

In fiscal 2002, RCRA program budgets were $159 million, accounting for approximately 10 percent of EPA’s

waste management program dollars. According to EPA, there are over 6,500 sites that are subject to RCRA

waste management laws and regulations. We are proposing work to evaluate EPA’s progress and information

on the need for planned changes to RCRA regulations based on future challenges and opportunities concerning

waste and materials management. 

In a recent paper on the future of the RCRA program, the EPA-State RCRA Vision Workgroup indicated that

the current system for waste management in the United States (i.e., RCRA) will need to change in order to meet

the environmental challenges of the coming decades. For example, they suggest changes would be necessary to

accommodate and respond to continuing trends in the use of more chemicals and new chemical risks; improved

methods for measuring and managing chemical risks; a more global and integrated world economy; and new

technologies and industries affecting how resources are used and disposed of. Recent initiatives by the White

House Environmental Executive to address the growing problem of computer waste (not a major issue when

RCRA was enacted almost 27 years ago) is evidence of the need to consider future challenges and priorities in

waste and materials management and EPA’s capacity to identify and address these issues.

We believe our work will produce information that contributes to helping EPA improve human health and

sustain environmental quality in the future through potentially more effective, relevant RCRA program

components and management information. Specifically, we plan to evaluate and provide information on: 

• What are the future challenges and opportunities that will require changes, modifications, or innovations in

our current waste management programs and regulations?

• What type of management information and data is needed to evaluate and track the adequacy of current

RCRA regulations as they pertain to addressing future waste management challenges and opportunities?

• Are EPA or other Federal agencies monitoring or collecting the type of program management information

needed to make possible adjustments to the RCRA program?

 
Page 23

 Issue Planned Land Evaluation/Audit Projects

Fiscal Year Start

2003 2004 2005

Track 1

SUPERFUND

-Role of the NPL

-Human capital

Is EPA making progress

toward effective risk

reduction and waste

cleanup?

1. State Capacity Assessments X X

2. Effectiveness of State Programs/Best Practices X X X

3. Contracting Issues/Interagency Agreements X X

4. Information Collection and Analysis X X

Track 2

BROWNFIELDS

Is EPA making progress

toward effective risk

reduction, cleanup, and

restoring previously

polluted sites to appropriate

uses?

1. Program Implementation–Workgroup Activities X

2. Development of Management Review Framework X

3. Management Review X X X

4. Assistance Agreement Audits X

Track 3

RCRA

Is EPA making progress

toward effective waste

management, hazardous

material management, and

risk reduction?

1. Waste Management Trends and Future Challenges X X

2. Management Information Needs and Federal Government 

 Tracking Capacity

X X
Page 24

Chapter 5: Cross-Media

EPA is responsible for acting on numerous environmental threats to our communities and ecosystems that

transcend air, water, and land. The significance and complexity of these cross-media challenges was

tragically demonstrated by the events of September 11 and subsequent anthrax attacks in 2001. The National

Strategy for Homeland Security designates EPA as the lead agency for 2 of the nation’s 14 critical

infrastructure sectors: the water sector, and the chemical industry and hazardous materials sector. In 2002,

additional funds were allocated to assist those assessing infrastructure vulnerabilities, and to enhance the

Agency’s response capabilities (i.e., research and development of new technologies to detect, monitor, and

neutralize environmental threats). EPA is also applying its knowledge and experience to support other

Federal agencies’ efforts to secure the nation’s food, transportation, and energy infrastructure. Funding for

these lead and support activities is projected to dramatically increase in the near term, and the outcomes of

these new EPA initiatives will have material impacts on human health and the environment in the event of a

terrorist attack. OIG will oversee the efficiency and effectiveness of the Agency’s external grants and

internal enhancements to address cyber, chemical, biological, and radiological threats. Moreover, OIG is

responsible for assessing cyber threat information that specifically targets EPA’s computer infrastructure.

OIG will also assess and report on several additional Agency programs that have important cross-media

implications for human health and the environment. We selected several key areas to evaluate based on

several criteria, including congressional concern and EPA priorities. Specifically, we will evaluate:

• Environmental justice, which is a continuing Agency priority and community concern that has

implications for air, water, and land programs. Measuring and monitoring environmental justice is a

heightened concern when environmental enhancement tools incorporate market-based incentives (e.g., air

emission credit trading, water discharge credit trading) to promote regulatory compliance and

environmental quality.

• Environmental stewardship by States and tribes, which is crucial for EPA to achieve its goals and

objectives because these governments execute significant portions of EPA’s regulatory mandate. How

well States and tribes use EPA funds and implement EPA guidance may strongly impact human health

and environmental quality both locally and nationally. 

• Compliance assurance and enforcement practices and procedures, which have seen considerable

innovation in recent years, and exhibit considerable variation among locations and commercial sectors. 

There are potential benefits for human health and the environment through enhanced compliance

consensus on the most effective techniques. 

 

This body of work will enable OIG to determine the effectiveness, accountability, and equity of selected key

environmental programs. OIG’s planned work in these areas will substantially enhance the Agency’s

understanding of the quality of EPA partnerships, the effectiveness of regulatory compliance alternatives, and

the equity implications, if any, of selected Agency programs and policies.

Proposed Areas of Work

The four key tracks we will be following in regard to cross-media issues are:

TRACK DESCRIPTION 

1. Homeland Security

2. Environmental Stewardship

3. Environmental Justice

4. Compliance Assurance and Enforcement
Page 25

Track 1: Homeland Security

Key Question: How can EPA better execute its Strategic Plan to prevent, prepare for, and

respond to a terrorist attack to minimize adverse impacts on human health and the

environment?

In support of the Administration’s Homeland Security strategy, EPA has developed a strategic plan to

execute its primary mission of protecting human health and safeguarding the environment. EPA is the key

agency for crisis and consequence management responsibilities under various Federal preparedness and

response plans, and must be ready to deploy this expertise and capability to help to detect, prevent, protect

against, respond to, and recover from a terrorist attack. The goals of EPA’s strategic plan are comprised of

four mission-critical areas: Critical Infrastructure Protection; Preparedness, Response, and Recovery;

Communication and Information; and Protection of EPA Personnel and Infrastructure. The Public Health

Security and Bio-terrorism Response Act of 2002 reinforces the Agency’s role in assessing and responding to

water system vulnerabilities. OIG will help ensure that additional EPA appropriations supporting homeland

security are spent efficiently and effectively. 

Moreover, OIG is responsible for assessing cyber threat information that affects EPA’s computer

infrastructure, and will initiate appropriate investigative responses as needed. OIG will be prepared to work

with EPA to help detect, prevent, protect against, and respond to and recover from a terrorist attack.

OIG will organize its assessment of EPA homeland security along topical responsibilities: water and

wastewater security, chemical facility security, food safety, and safe buildings. EPA is already engaged in

water and wastewater security, and received supplemental funds in fiscal 2002 to fund water utility

vulnerability assessments for the nation’s largest drinking water systems. The Agency will develop and

provide guidance, training, and technical and financial assistance to aid water systems. The Agency has

established a goal of significantly reducing unacceptable security risks at water utilities by 2005. This is to

be achieved through the completion of vulnerability assessments, the design of security enhancements, the

development of emergency response plans, and the implementation of security enhancements.

Many of the concerns that apply to water security will be applicable to the other Agency priorities as well. 

Therefore, OIG will construct an assessment template in its review of the water program that can be applied

to chemicals, food, and buildings. The template will encompass assessments of threat, capabilities and

deficiencies, readiness, management, and effectiveness. The mix of questions can include – but is not limited

to – the following:

• Threats, Risks, and Vulnerabilities: How are threats and risks identified and validated? How are threat

assessments to be conducted? What criteria and process will be used to determine whether vulnerability

assessments are satisfactory? How are assessments disseminated, accessed, and stored?

• Preparedness: Do emergency response plans reflect the findings of the vulnerability assessments? What

is the emergency response concept of operations and how are the roles, responsibilities, and activities of

the respective stakeholders identified, coordinated, and exercised?

• Capabilities: What capabilities are required by each stakeholder to implement the emergency response

plans? What is EPA’s role in identifying and addressing challenges that may impede implementation of

emergency response plans? How will stakeholders compensate for challenges (in the short term) and

resolve them (in the long term)?

• Research and Technology Assessment: How will EPA identify and prioritize goals in its homeland

security research plan? How will the Agency’s research and development complement work in other

agencies and the private sector? How will the Agency select the technologies to initiate its technology

verification program?

• Financial Assistance: Are current and planned security grants sufficient to achieve the Agency’s security

goals? Are the grants effective in achieving the Agency’s goals? Are grants awarded directly to utilities

more or less efficient that those administered through the States?
Page 26

• Oversight and Effectiveness: Are management and financial controls in place to prevent waste, fraud, and

abuse by contractors? Are agreements and understandings in place to ensure coordination of functional

activities contracted by operators and government agencies? Are measurable goals and objectives

established? To what extent will vulnerability assessments and emergency response plans minimize the

potential adverse effects of terrorist actions on human health and the environment?

Track 2: Environmental Stewardship

Key Question: Do the States and tribes use high performance concepts to deliver environmental

and human health protection?

The extensive delegation of authority and responsibilities for the implementation of environmental laws and

regulations is unique within the Federal Government. EPA’s ability to enhance human health and the

environment is directly dependent upon the success of individual State and tribal environmental programs. 

The same factors that impact EPA’s ability to be successful (resources, practices, expertise, etc.) impact the

States as well. The application of High Performance Organization (HPO) principles and the President’s

Management Scorecard (e.g., for “getting to green”) can provide us with an opportunity to influence the

States to correct management problems that prevent EPA from accomplishing its mission.

OIG will assess composite State capacities, capabilities, and effectiveness in environmental stewardship

across media and EPA goals. This work will complement the human capital work focusing on EPA outlined

in Chapter 6 of this plan. State assessments will encompass systems theories questions and address:

• Personnel: Does the State employ sufficient numbers of staff, with the appropriate skills and necessary

authority, to plan, implement, manage, and evaluate the work? 

• Oversight: Does the State have a system to deter, detect, and eliminate waste, fraud, abuse, and conflicts

of interest? 

• Efficiency: What is the efficiency of permitting? How do timeliness and outputs compare with similar

States? Are reports to EPA comprehensive, timely, and accurate?

• Planning: Does the State have a system to collect, assess, and track data on environmental needs and

trends? Has the State developed innovative means to improve processes or outputs? 

• Effectiveness: Are State and tribal goals compatible with EPA’s goals? How have environmental

indicators changed under State management?

• Funding: Is the plan sufficiently funded? What is the value-added to EPA of not implementing the

program itself?

The issue will be addressed in three phases. First, we will assess the use of HPO principles in State

environmental programs as a pilot to determine the feasibility of collecting HPO data on planning,

management, and data systems. Second, we will determine the indicators of environmental stewardship,

again using a pilot that will develop and apply measures of stewardship. If the pilot proves successful, the

OIG will develop a “report card” of environmental stewardship by linking HPO conditions with stewardship

indicators to identify correlations and develop best practices. The ultimate goal would be to report to the

Agency and Congress the pros and cons, cost and benefits, and lessons learned with this decentralized model

– as it is practiced in the execution of environmental legislation.

This line of effort will incorporate ongoing OIG work assessing the effectiveness of assistance agreements –

specifically addressing State self-assessments, General Assistance Grants to Indian tribes, and the Louisiana

Department of Environmental Quality – to establish benchmarks for State and tribal practices and to guide

evaluation priorities. 
Page 27

Track 3: Environmental Justice

Key Questions: How well are environmental justice concerns incorporated into EPA decision

making? Do EPA policies and practices disproportionately contribute to adverse impacts on

human health and the environment in communities of concern?

Administrator Whitman has affirmed EPA's commitment to environmental justice. Environmental justice

means the fair treatment of people of all races, cultures, and incomes with respect to the development,

implementation, and enforcement of all environmental laws and policies and their meaningful involvement in

the government’s decisionmaking processes. The Administrator recommended that EPA ensure greater

public participation in EPA's development and implementation of environmental regulations and policies. 

In December 2001, the National Academy of Public Administration issued a report, “Environmental Justice

in EPA Permitting: Reducing Pollution in High-Risk Communities Is Integral to the Agency’s Mission,” that

found that the EPA’s environmental justice efforts need to be better integrated into its programs and

implemented as part of the Agency’s core mission. The Academy recommended that EPA establish clear

accountability for results and use appropriate public administration techniques to ensure managers and staff

are willing to execute their responsibilities for achieving environmental justice.

OIG will answer whether: (1) environmental justice concerns are appropriately incorporated in EPA decision

making policies and practices, and (2) Agency policies and practices enhance or exacerbate environmental

impacts in communities of concern. To answer these overarching questions, OIG will answer a series of

programmatic questions:

• Descriptive questions will address: How is it operationally measured? Are measures consistent across

program offices, regions, and Federal agencies? Are measurement data reliable and valid?

• We will then assess the impact of selected media programs on environmental justice: Does air emission

credit trading create or exacerbate environmental justice? Does water emission credit trading result in

disproportionate concentrations of adverse impacts? Are communities of concern disproportionally

targeted for new hazardous waste disposal facilities?

• Finally, OIG will assess EPA procedures and practices to ensure that public participation in Agency

decision making by community representatives is informed, timely, and effective.

Track 4: Compliance Assurance and Enforcement

Key Question: Is the employment of traditional and nontraditional enforcement approaches

optimized to ensure compliance with environmental rules and regulations that are designed to

protect human health and the environment?

The enforcement of environmental regulations has become a source of both controversy and innovation in

recent years. Stakeholders share divergent views on the most cost-effective means to ensure that

environmental regulations are adhered to and result in improvements in the environment and human health. A

study by the National Academy of Public Administration in 2000, “Transforming Environmental Protection

for the 21st Century,” was critical of the Agency’s ability to develop and apply innovative compliance

assurance and enforcement techniques. For the last few years the Administration and some members of

Congress have debated the effectiveness of appropriations for Agency versus State-level enforcement

personnel. Nevertheless, the Agency is conducting a multi-year grants program to foster enforcement

innovation by the States.

The goals of EPA’s traditional enforcement approach include a credible deterrence to pollution and greater

compliance with the law. A debate exists between EPA and the States over deterrence versus cooperation as

the optimal means for achieving compliance with environmental laws. In recent years, EPA has started to

include compliance assurance and alternative enforcement as complements to the Agency’s existing

traditional enforcement approach of penalty assessments and legal action. The question remains as to

whether nontraditional enforcement approaches are as effective and efficient as traditional ones. 
Page 28

This work will be conducted in four phases. First, OIG will conduct a descriptive study characterizing the

nature and extent of the regulated universe. Second, OIG will assess whether the Office of Enforcement and

Compliance Assurance (OECA) and its partners (EPA program offices, regions, States, and tribes) have

established a well-coordinated process to identify and fund compliance assurance and enforcement priorities. 

Next, work will focus on whether OECA and its partners have effectively developed and implemented

integrated strategies (compliance assistance, compliance incentives, inspections, and enforcement actions) to

address priority non-compliance problems. Finally, the OIG will assess whether EPA’s performance

measurement and reporting approach provides the information necessary to effectively manage and improve

the national enforcement and compliance assurance program. This approach will be piloted in a single sector

to ensure that the design is feasible and will answer whether employment of traditional and nontraditional

enforcement approaches are optimized to ensure compliance with environmental rules and regulations that are

designed to protect human health and the environment.

 

Issue Planned Cross-Media Evaluation/Audit Projects

Fiscal Year Start

2003 2004 2005

Track 1

Homeland 

Security

How can the Agency

better execute its

Strategic Plan?

1. Water Security: How well is EPA carrying out its responsibilities to protect drinking

water and wastewater infrastructures?

 X

1a. Water Security Grants: Is EPA adequately monitoring grantee performance? Are

the grants resulting in improvements in security of large drinking water systems?

 X

2. Chemical Facility Security: How well is EPA carrying out its responsibilities as the

lead for the chemical sector in terms of infrastructure protection and hazardous materials

preparedness and response?

 X

3. Food Supply Safety: How well is EPA carrying out its responsibilities assisting other

Federal agencies in protecting the nation’s food supply?

 X

4. Safe Buildings: How well is EPA carrying out its responsibilities to protect indoor air

from chemical and biological threats as well as toxic industrial materials and chemicals?

 X

4a. Equipment Purchases for Counter Terrorism Preparedness: Should EPA stockpile

normal response equipment and supplies? How did EPA determine needed quantities?

Does EPA know that contractors do not have or cannot get needed quantities quickly? 

Have other ways to address the quantity concerns, such as setting up purchase

agreements, been pursued? Will contractors receive Government-furnished equipment

instead of buying equipment themselves? How will EPA track this equipment?

 X

Track 2

State

Environmental

Stewardship

Do the States use high

performance concepts

to deliver

environmental and

human health

protection?

1. Use of HPO Principles in State Environmental Programs: Pilot the ability to collect

HPO data on planning, management, and data systems.

 X

1a. State Self-Assessments: Are EPA and States successfully using self assessments to

promote achievement of environmental goals?

 X

1b. Oversight of Environmental Quality: Is the region’s oversight of State environmental

programs effective?

 X

1c. General Assistance Program Grants to Indian Tribes: Have these grants resulted in

core tribal environmental protection programs that are protecting human health and the

environment on tribal lands?

 X

2. Indicators of Environmental Stewardship: Pilot the ability to develop and apply

measures of stewardship to State environmental programs.

X

3. Report Card of Environmental Stewardship: Link HPO conditions with stewardship

indicators to identify correlations and develop best practice.

 X
Page 29

Track 3

Environmental

Justice

How well are

environmental justice

concerns incorporated

into EPA

decisionmaking? Do

EPA policies and

practices

disproportionately

contribute to adverse

impacts on human

health and the

environment in

communities of

concern?

1. Operation of Environmental Justice: How is Environmental Justice defined and

measured across media, regions, and States?

X

2. Air Emissions Trading and Environmental Justice: Does air emissions trading have

disproportionate implications for communities of concern?

X

3. Water Emissions Trading and Environmental Justice: Does water emissions trading

have disproportionate implications for communities of concern?

 X

4. Hazardous Waste Facility Siting and Environmental Justice: Does the siting of

hazardous waste facilities have disproportionate implications for communities of

concern?

X

5. Effectiveness of Environmental Justice Tools in Agency Decision making: 

Are Agency policies to facilitate Environmental Justice community participation in

environmental decisionmaking effective?

 X

Track 4

Compliance

Assurance and

Enforcement

Is the employment of

traditional and

nontraditional

enforcement

approaches optimized

to ensure compliance?

1. Characterization of Regulated Universe: What is the nature and extent of the

regulated universe and the compliance status of the priority categories (e.g., programs or

sources), and what strategies have OECA and its partners (EPA program offices, regions,

States, and tribes) applied to each priority category (e.g., program or source) in the

universe?

X

2. Coordination and Prioritization: Have OECA and its partners (EPA program offices,

regions, States, and tribes) established a well-coordinated process to identify and fund

compliance assurance and enforcement priorities?

X

3. Coordination of Strategies: Have OECA and its partners (EPA program offices,

regions, States, and tribes) effectively developed and implemented integrated strategies

(compliance assurance, compliance incentives, inspections, and enforcement actions) to

address priority non-compliance problems?

 X

4. Effectiveness Measurement and Data Quality: Does EPA’s performance

measurement and reporting approach provide the information necessary to effectively

manage and improve the national enforcement and compliance assurance program?

 X

5. Compliance Assurance and Enforcement Pilot: The four questions described above

will first be applied to a single sector to validate the design and confirm that sufficient

reliable and valid data are available to evaluate the effectiveness of compliance

assurance and enforcement strategies.

X
Page 30

Chapter 6: Good Government

EPA delivers its environmental programs through a number of interrelated organizational systems. Having the

right people, processes, systems, and information in place is essential to the Agency efficiently and effectively

carrying out its mission. Having effective management systems in place also provides a strong deterrent to fraud,

waste, and abuse.

For years, we have reported management challenges in a number of key management areas, such as: Information

Resources Management and Data Quality, Employee Competencies, Assistance Agreements, Critical

Infrastructure Protection, and Information Systems Security. Many of these management challenges mirror the

President’s Management Agenda items of Human Capital, Competitive Sourcing, Financial Performance, EGovernment, and Budget/Performance Integration.

The Agency has made substantial progress in addressing some of its management challenges, such as integration

of budget and performance information. In other areas, such as human capital, the Agency has only recently

begun to address the issues. When we conduct each audit and evaluation, we will include assessing the

organizational systems in place for Leadership, Strategic Planning, Customer/Stakeholder and Market Focus,

Information and Analysis, Human Capital, Process Management, and Performance Results. We plan to help the

Agency continue to strengthen its management infrastructure by performing projects that will answer these key

questions:

• Do EPA’s business systems and processes support efficient and effective accomplishment of environmental

goals and help prevent and detect the existence of fraud, waste, and abuse?

• Does EPA manage its assistance agreements and contracts in a manner that supports efficient and effective

accomplishment of environmental goals and helps detect and prevent the existence of fraud, waste, and

abuse?

Proposed Areas of Work

The five key tracks we will follow to answer those two key questions are:

TRACK DESCRIPTION

1. Financial Management - efforts to improve financial information available to manage

programs and strengthen accountability.

2. Information Resources Management - completeness, accuracy, timeliness, and usefulness

of information for decisionmaking and accountability.

3. Program Management - capability to plan, budget for, manage, and evaluate programs,

including the human capital needed to support the Agency’s mission.

4. Assistance Agreements - use of assistance agreements to efficiently and effectively

accomplish EPA’s mission.

5. Contracts - use of contracts to efficiently and effectively accomplish EPA’s mission.

Some of the planned work will be performed to provide timely feedback to anticipated OMB and Congressional

inquiries, and to address congressional mandates (financial statements, security program). All of our “Good

Government” work is designed to strengthen the Agency’s management systems and improve accountability for

results.
Page 31

Track 1: Financial Management

The Chief Financial Officers Act and Government Management Reform Act, as well as the President’s

Management Agenda, recognize the significant role good financial management plays in managing programs and

ensuring accountability to the American people. The following work is designed to support the Agency’s

activities to improve financial management of its $8 billion budget and $18 billion in assets. In doing this work,

we will answer the following overarching question: 

Does EPA have the people, processes, and systems needed to efficiently provide timely, accurate, complete,

and useful financial information for decisionmaking and accountability?

Financial Statement Audits

Our annual financial statement audits, carried out in accordance with the Government Management Reform Act,

are intended to help bring about improvements in financial management practices, systems, and controls, so that

timely, reliable information is available for managing Federal programs. We are required to answer the following

questions:

• Are the financial statements fairly presented?

• Has EPA implemented adequate controls (including controls over computer operations) to ensure the integrity

and reliability of financial data?

• Does management comply with applicable laws and regulations?

• Do Agency financial management systems comply with Federal accounting standards, the Standard General

Ledger at the transaction level, and system requirements specified under the Federal Financial Management

Improvement Act?

Efficiency and Effectiveness of Financial Management Functions

To maximize environmental results with EPA’s limited resources, it is critical for Agency financial managers to

have the skills and systems to provide accurate and timely financial information and analyses to the Agency’s

program managers in an efficient manner. EPA has a decentralized financial management function, with financial

management activities performed at EPA’s 10 regions, Headquarters, and several other locations.

Decentralization increases the risk of inefficiencies and inconsistencies. While EPA has consolidated several of

its functions, opportunities exist to further streamline and integrate financial processes and systems, thereby

driving down costs. Questions we will answer are:

• Is EPA using a human capital strategy that ensures financial management staff across the Agency have the

skills needed to provide meaningful financial information and analyses to EPA program managers?

• Is EPA using e-business solutions (such as financial data warehousing and enterprise resource planning

applications) whenever possible to provide more efficient, lower-cost operations?

• Are there opportunities for EPA to use best practices, both from within EPA as well as from other agencies,

to improve its financial management processes?

• Has EPA taken or planned actions to expedite the issuance of its financial statements and to provide timely,

useful financial information to program managers?

Managerial Cost Accounting

The Administration and Congress have emphasized improving cost information to increase accountability and

help ensure programs are carried out cost effectively. Program managers need cost information to compare the

cost and benefits of various strategies, and to compare the cost of performing services in-house versus

contracting out. Lack of detailed cost information can adversely impact every facet of operations, from budget
Page 32

formulation and planning to program execution and the recovery of the costs of providing services to others.

EPA recently selected an approach to enable program and regional offices to aggregate relevant cost

information. We will evaluate the success of this approach and opportunities for improvement by examining

cost accounting for key areas in EPA’s achievement of its strategic goals. In particular, we will determine:

• Does EPA’s cost accounting approach provide managers with timely, accurate, and relevant information

on the cost of carrying out programs, enabling sound decisions that can ultimately improve program

operations? 

Track 2: Information Resources Management

The reliability of information systems and data is key to successfully executing EPA’s mission, business

processes, and ongoing initiatives. Data is a fundamental link between metrics used to gauge progress in

business systems, processes, and results, and the formulation of new strategic plans to better define and

accomplish mission goals. We will address the following overarching question and key areas: 

Does EPA have systems, processes, and controls in place to ensure timely, reliable, and complete

information is available to manage EPA’s programs and report on environmental results?

Information Technology Capital Planning and Investment Management

EPA still has much to accomplish in planning for and developing an Information Technology (IT) infrastructure

to manage an integrated investment portfolio of environmental information. EPA reported investments totaling

more than $449 million for the fiscal 2002 budget, and weaknesses could result in millions being invested in IT

projects that do not advance EPA’s target enterprise architecture. To assess the Agency’s progress in this area,

we will reassess the following questions: 

• Is EPA’s IT Capital Planning and Investment Control process well structured and effectively applied to

ensure the Agency can produce and manage an integrated and balanced investment portfolio of

environmental and business information that supports the Agency’s mission and goals?

• Do managers use a consistent set of tools to produce reliable and comparable data for monitoring and

managing system development and enhancement projects, thereby ensuring timely and cost-effective delivery

of systems that will meet defined needs and anticipated results?

Data Quality and Gaps

Data reliability and data gaps are two major aspects of data management that need further attention. Recent

audits indicate systems used by EPA’s Enforcement, Superfund, and Water programs have inconsistent,

incomplete, and obsolete data. While the Agency has been tackling data accuracy, it has not finalized a strategic

plan to address the fact that managers may not have the right environmental data to make sound decisions. 

Environmental data of questionable authenticity can lead to concerns about the soundness of EPA decisions on

protecting the environment and public health. In particular, the quality of laboratory data supplied to the EPA

for regulatory compliance purposes continues to be a pressing issue. Data integrity issues lead to additional

costs and unnecessary delays when EPA has to identify and assess the impact of the fraudulent data and

undertake additional sampling. Lab fraud investigations indicate that despite Agency efforts to ensure data

quality, manipulated data continues to be supplied to the Agency. 

Problems also exist in EPA’s administrative systems. For example, the systems used for contract management

are known to contain and report inaccurate and incomplete data. EPA estimates that contracts account for 25

percent of its total budget. However, no single system, or combination of systems, reliably captures and reports

all contract activity. 
Page 33

Due to the various issues involving data quality and gaps, we will address the following questions in EPA’s key

program and, as applicable, administrative areas:

• Has EPA developed and implemented a plan for improving data quality in its systems and in the data it

provides to Congress and the public?

• Has EPA formulated a comprehensive methodology for addressing environmental data gaps?

• Does EPA ensure providers of environmental data use comparable scientific methods to collect critical data

elements, thereby ensuring that both management and the public have the necessary foundation to monitor

and compare progress across the nation?

Data Integration and Standards

Data standards establish common definitions for essential elements of data, and provide the fundamental means

for integrating systems, enabling data sharing, and ensuring appropriate use across environmental programs.

Such standards will provide the underlying framework for implementing EPA’s National Environmental

Information Exchange Network to exchange information between EPA and the States, and for implementing

other e-government initiatives. Although EPA has developed approaches to increase sharing of environmental

data, less emphasis has been placed on standardization of administrative systems data. Projects will be

conducted to determine: 

• Is EPA effectively using data registries to ensure the implementation of approved environmental data

standards in its programs and with State partners?

• Does EPA have an efficient strategy for standardizing data in administrative systems?

Computer Security

The success of environmental programs and initiatives depends on the integrity of EPA’s IT infrastructure.

Consequently, it is essential that the Agency prevent intrusion, protect the integrity of its data, and provide

incident response capability. The dynamic nature of security requires continued emphasis and vigilance. As

such, computer security has been and continues to be a top management challenge and Integrity Act weakness

for the Agency. The Federal Information Security Management Act requires us to perform an annual

evaluation of EPA’s security program and practices.

We must answer several questions to determine whether the level of security applied to EPA’s information

resources and mission-essential data is commensurate with the risk of disclosure, manipulation, or loss:

• Is EPA’s Computer Security Program comprehensive and actively implemented throughout the Agency to

balance risk and mission requirements and provide reasonable protection against security threats?

• Are major aspects of EPA’s networks implemented in a manner that limits risk to an acceptable level and

allows prompt detection and response to threats?

• Is EPA able to respond by investigating possible attacks on its network from external sources, including

cyber-terrorists and nation-states, and protect the network from attack or misuse from within?

Answers to these questions, especially those concerning network security, also will impact the reliability of

EPA’s e-government and homeland security activities, as well as data integrity and quality. 

Complementing planned audit work, investigations will focus on computer incidents that have a potential,

significant adverse impact on EPA operations. OIG will work in a consultative role with Agency computer

security personnel and all interested parties to improve Agency security and computer incident awareness. In

addition, we will maintain liaison and close working relationships with other law enforcement agencies and

participate in efforts of mutual interest and national security.
Page 34

E-Government

The Federal Government is committed to accelerating the use of e-commerce in business practices, a campaign

reinforced by the fact that “Expanding E-Government” is an integral part of the President’s Management

Agenda. EPA and other agencies will be evaluated and ranked as to how well they are using digital technologies

to transform essential business operations and make them more citizen-centered. 

Numerous Government-wide initiatives are underway to integrate agencies’ operations and IT investments.

These initiatives will impact EPA’s on-going and planned activities. The initiative on One-Stop Geospatial

Information, for example, will impact EPA’s core business processes and be particularly important to its

planned Exchange Network. EPA’s success will be measured on its ability to reconcile and unify its internal

geospatial activities while simultaneously supporting the new Government-wide standards. 

EPA must also find ways to simplify, integrate, and electronically expedite its dealings with the public, its

partners, and private industry, including how it provides environmental data. EPA should be accountable for

ensuring the public can easily access information and reach conclusions regarding environmental threats or

progress in their respective communities. 

E-government work will address these questions:

• Has EPA planned and implemented appropriate, timely actions to reduce geospatial redundancies in its

systems and respond to new, Government-wide standards?

• Does EPA use reasonable methods to ensure the integrity, reliability, and authenticity of data exchanged

through electronic means (e.g., use of certificate authorities and public key infrastructure technology)?

• Have EPA’s internal e-government processes reduced the burden on reporting entities, improved data quality

through public involvement, and been used to set strategic goals?

Track 3: Program Management

To successfully implement programs, EPA needs to have systems and processes in place to link its planning,

budgeting, and accountability systems. Two areas vital to ensuring successful program management are: (1)

the integration of cost and performance information, and (2) having EPA employees with the necessary

competencies to successfully carry out its programs. Our overarching question is:

Does EPA have the systems and processes in place to plan, budget for, and manage programs, including

the human capital needed to carry out its mission?

Budget to Performance

The availability and reliability of information play a pivotal role in how EPA sets it goals and annual

performance measures under the GPRA, and how well it can budget for and target its resources to maximize

environmental results. EPA continues to have difficulty developing and obtaining the information necessary for

measuring, evaluating, and reporting on its programs. The majority of EPA’s information is collected by States,

and the incompatibility and inconsistency of this data makes measurement difficult. Currently, EPA is in the

process of redefining its strategic goals. Among other things, we will evaluate EPA’s key media goals,

objectives, and measures to determine:

• Does EPA have accurate, timely, and relevant performance information to manage its programs?

• Does EPA have processes and systems for analyzing cost and performance information? Is this information

being used to plan, budget, manage, and evaluate EPA’s programs?

• Do EPA’s performance indicators clearly identify how EPA and its State, local, and tribal partners are

achieving their goals, and how activities and measures link or translate to environmental outcomes?
Page 35

Human Capital

To achieve its environmental goals and objectives, EPA must communicate its vision, mission, and goals to all

employees, so that they understand how their work contributes to EPA’s mission. EPA’s workforce must be

competent, well-trained, and motivated, with the right mix of skills and experience. Finally, EPA employees

must be held accountable for results that are aligned with the Agency’s mission and goals. 

We have identified employee competencies as one of EPA’s top management challenges. Human Capital is also

a major reform issue in the President’s Management Agenda. EPA will face challenges in the near future

because a large proportion of its workforce will be eligible to retire and replacements will be needed for

experienced personnel. To meet these challenges and ensure it has the capabilities necessary to carry out its

environmental mission, EPA needs to devote sufficient resources to strategic workforce planning, strategy

implementation, and measuring the results of these efforts. To tell a complete story about EPA’s human capital

management, we will conduct a number of separate reviews in key media areas over the span of several years.

Reviews will address the following questions:

• Has EPA’s leadership developed and communicated its vision and mission to all employees?

• Have EPA’s key media offices identified current and future competency needs, defined reasonable action

plans to fill skill gaps, and created measures to evaluate actions taken?

• Do EPA’s program offices have human capital strategic plans that support mission, vision, core values,

goals, and objectives, and are these plans being effectively implemented?

• Does EPA have a plan for implementing its workforce plan across program areas and monitoring program

implementation and effectiveness?

• Does EPA have systems and processes in place to hold employees accountable for results that are aligned

with the Agency’s mission and goals?

Track 4 - Assistance Agreements

When EPA transfers funds for a public purpose, it uses a legal instrument called an assistance agreement. These

agreements are the primary vehicles through which EPA delivers environmental and human health protection,

generally accounting for more than half of the Agency’s budget. Consequently, this is a key area of interest to

Congress and OMB. OIG work will be directed at answering the overarching question:

Is EPA using assistance agreements to efficiently and effectively accomplish its mission?

We will concentrate work in three areas: management of assistance agreements, financial integrity, and results

from assistance agreements. The first two areas will address the “efficiency” part of the overall question. Work

relating to results of assistance agreements, which addresses the “effectiveness” part of the overall question, is

included in preceding media-specific chapters. In addition, we will continue our investigative work to uncover

criminal and administrative misconduct in the assistance agreement area.

Management of Assistance Agreements

EPA has identified management of assistance agreements as either a material or Agency-level weakness since

1996. Our work has repeatedly found problems in this area, including assistance agreement recipients having

inadequate controls and EPA not competitively awarding grants. Therefore, we will answer these questions:

• Is EPA successfully managing its assistance agreement programs?

• Are EPA processes funding the projects that will best meet EPA’s mission at the best price?

• Is EPA providing sufficient oversight to ensure successful projects?
Page 36

• Is EPA streamlining its assistance agreement process to: (1) meet the requirements of the Federal Financial

Assistance Management Improvement Act of 1999 and the President’s Management Agenda for egovernment, and (2) improve efficiency and effectiveness of its internal operations?

Financial Integrity

With EPA providing more than $4 billion per year in assistance agreements, it is important that EPA ensure that

the funds are used in accordance with laws and regulations, and are safeguarded from fraud, waste, and misuse.

We will continue our audits of grantees’ costs and our investigative work to uncover criminal and administrative

misconduct in the assistance agreement area. Financial integrity reviews will determine:

• Are funds used for authorized purposes?

• Are systems and controls sufficient to account for funds?

• Are controls sufficient to prevent loss from fraud and misuse?

Track 5 - Contracts

EPA spends about one fourth of its budget on contractor support. Our contract work will evaluate whether

EPA’s contracts are being awarded and administered in a manner that supports cost-effective accomplishment

of EPA’s mission. In addition, we will continue our audits of contractor costs and our investigative work to

uncover criminal and administrative misconduct in the award and delivery of contract services. OIG work will

be directed at answering the question:

Is EPA using contracts to efficiently and effectively accomplish its mission?

Questions pertaining to specific EPA goals are described in other chapters. Cross-cutting areas that are not

goal-specific are described below:

Managed Service Sourcing

EPA is moving to “Managed Service Sourcing,” an IT outsourcing alternative for distributed computing

services. Under this scenario, a contractor will own, manage, and operate EPA’s IT infrastructure, including

hardware, software, and related services. Our audit work will answer these questions:

• Has EPA defined appropriate performance-based contract measures to ensure the managed service sourcing

contractor is accountable for providing required services, including security for EPA data?

• Is there a system in place to monitor contractor performance, and is the system used?

Managing System Development Contracts

At the Agency’s request, in fiscal 2004, we plan to conduct an audit of EPA’s system development contracts.

The value of this audit would be substantial to EPA, as the amount spent on systems exceeds $100 million per

year. The potential objectives of the audit would be to determine whether: (1) EPA has qualified staff planning

and guiding projects, and (2) contracts are being awarded based on sound criteria (i.e., best value, price,

technical skills).

Competitive Sourcing

Competitive sourcing is a major initiative highlighted under the President’s Management Agenda, and OMB

believes that the Inspector General community should play an essential role in determining the effectiveness of

agencies’ efforts. EPA must meet competitive sourcing standards under the Federal Activities Inventory Reform

Act. OMB expects Inspectors General to examine how cost comparisons were performed and whether in-house

performance work statements were comparable to outside contracts. How EPA develops accurate cost

comparisons may be an issue of major concern, because it is just beginning to implement activity-based cost

accounting that allows the aggregation of costs for specific products and services. We will determine:
Page 37

• Has EPA used a structured, rational approach for identifying activities for potential competitive sourcing,

do cost comparisons accurately reflect the full cost of performing the commercial activity, and has the

Agency met its own and OMB’s goals for competitive sourcing?

Financial Contract Audits

We are responsible for financial audits of two EPA contractors. In addition, we monitor audits of EPA

contracts performed by the Defense Contract Audit Agency. Financial audits address whether:

• Contractor systems (e.g., accounting, purchasing, billing) and internal controls reasonably ensure reliable

financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and

regulations.

• Contractor incurred and proposed costs are allowable under generally accepted accounting principles and

the terms of the contract.

Other Area

Energy Conservation - Green Power

EPA is required to implement energy efficiency and conservation measures under the National Energy

Conservation Policy Act, the Energy Policy Act, and three implementing Executive Orders. The Executive Order

entitled Greening the Government Through Efficient Energy Management lays out specific reduction goals for

EPA’s 19 laboratory facilities. While EPA has made limited progress toward these goals, EPA officials are

confident they have established the framework necessary to reach the fiscal 2005 reduction target. Our work will

address the question: 

• Will EPA’s strategies enable it to reduce its overall energy usage by 20 percent from fiscal 1990 to 2005, and

by 25 percent by fiscal 2010?
Page 38

Issue Planned Good Government Evaluation/Audit Projects

Fiscal Year Start

2003 2004 2005

Track 1

Financial

Management

Does EPA have the people,

processes, and systems needed

to efficiently provide timely,

accurate, complete, and useful

financial information for

decisionmaking and

accountability?

 1. Financial Statement Audits, Including Related Systems Work X X X

 2. EPA’s Implementation of Cost Accounting X

 3. Efficiency and Effectiveness of Financial Management Functions X

Track 2

Information

Resources

Management

Does EPA have systems,

processes, and controls in

place to ensure timely,

reliable, and complete

information is available to

manage EPA’s programs and

report on environmental

results?

 1. Federal Information Security Management Act X X X

 2. EPA’s System Security Self-Assessment Process X

 3. General Security Controls at Las Vegas Financial Mgmt. Center X

 4. EPA’s Implementation of Network Firewalls X

 5. Internal Router Security and Configuration Management X

 6. EPA’s Implementation of Intrusion Detection Systems X

 7. Remote Access Servers Configuration Management X

 8. Controls over Local Area Networks X

 9. IT Capital Planning and Investment Management (followup) X

10. EPA’s Data Quality Strategic Plan X

11. Results-Based IT Project Management (followup) X

12. Data Integration and Standards X

13. Technologies for Authenticating Electronically Submitted Data X

14. EPA’s Implementation of Geospatial Activities & E-Gov. Standards X

15. EPA’s Electronic Records System for Electronically Submitted Data X

16. Assessing Results of One-Stop Reporting & Public Access Strategies X

Track 3

Program

Management

Does EPA have the systems

and processes in place to plan,

budget for, and manage

programs, including the

human capital needed to carry

out its mission?

 1. EPA’s Human Capital Strategic Planning and Analysis X

 2. EPA’s Managing for Results X

 3. Implementation of Human Capital Strategies X
Issue Planned Good Government Evaluation/Audit Projects

Fiscal Year Start

2003 2004 2005

Page 39

Track 4

Assistance

Agreements

Is EPA using assistance

agreements to efficiently and

effectively accomplish its

mission?

 1. Awarding of Assistance Agreements X

 2. Region 6 Oversight of Louisiana Department of Environmental 

 Quality

X

 3. Followup on Previous Assistance Agreement Reports X X

 4. Streamlining of Grants Process X

 5. General Assistance Program Grants to Indian Tribes X

 6. Effectiveness of Environmental Exchange Network Grant Program X

 7. Single Audit and Financial Audits of Grantees X X X

Track 5

Contracts

Is EPA using contracts to

efficiently and effectively

accomplish its mission?

 1. Performance Based Service Contracting X

 2. EPA’s Use of Alternative Contracting Vehicles X

 3. Performance Measures for Desktop Outsourcing X

 4. EPA’s Implementation of Competitive Sourcing X

 5. Review of Water Contracts X

 6. Managing Systems Development Contracts X

 7. Review of Air Contracts X

 8. IT Contract Audits X X

 9. Defense Contract Audit Agency Monitoring X X X

10. ICF Financial Audits X X X

11. Ecology & Environment Inc. Financial Audits X X X

Other Area 1. EPA’s Energy Efficiency and Conservation Accomplishments

 (Green Power)

X
Page 40

 Appendix 1

EPA’s Top Management Challenges as Reported by OIG (Historical Perspective)

While EPA is making progress in resolving its Major Management Challenges, several have been

longstanding problems. The following table shows which challenges have been listed from 2002 through

2002 and their relationship the President’s Management Agenda (as numbered). 

Management Challenge

20002001

2002

Environmental Data Quality (2) ** ** **

Managerial Cost Accounting (1 & 4) * *

Automated Information System Security Plans/Security (2)

Oversight/Use of Assistance Agreements (4) 

Environmental Data Information Systems ** ** **

Accountability (1) * *

Backlog; National Pollutant Discharge Elimination System Permits 

Enhance Employee Competencies/Human Capital (3) 

Quality of Laboratory Data **

Information Resources Management (2)   ** 

Working Relationships with States and Other Partners (1)

Results-Based Information Technology Project Management

Protecting Critical Infrastructure from Nontraditional Attacks

Biosolids

Air Toxics Program

 

 President’s Management Agenda 

 1. Budget and Performance Integration

 * Combined for 2001 and 2002 as “Linking Mission with Management” 2. Expanded Electronic Government

 ** Combined for 2001 and 2002 as 3. Strategic Management of Human Capital

 “Information Resources Management & Data Quality” 4. Improving Financial Performance
Page 41

 Appendix 2

Schedule of OMB PART Assessments for the FY Budgets of 2005

To help integrate budgeting with performance management, OMB has instituted a process known as the

Program Assessment Rating Tool (PART) model, used to evaluate the effectiveness of Federal programs.

Each PART, which is a structured questionnaire completed by each Agency program under review and

then by OMB Budget Examiners, has four sections: 

1) Purpose/ Relevance/Federal Role; 

2) Strategic Planning; 

3) Program Management; 

4) Program Results. 

For fiscal 2004 the EPA Programs of Air Toxics, Civil Enforcement, Drinking Water State Revolving

Fund, Existing Chemicals, Leaking Underground Storage Tanks, Nonpoint Source Grants, Pesticide

Registration, Pesticide Reregistration, Superfund Removal, and Tribal General Assistance were rated as

Not Demonstrating Results, with an average score of 26.5 out of 100. 

The originator or the PART has stated that the OIGs have an important role in assisting their respective

agencies accurately assess their programs and to help OMB ensure the quality of data. For this reason,

EPA’s schedule of PART reviews should be included in OIG Multi-Year Plans.

The EPA programs scheduled for PART review during fiscal 2003 through Fiscal 2005 are as follows:

In FY 03 for FY 05 Budget In FY 04 for FY 06 Budget In FY 05 for FY 07 Budget

RCRA Corrective Action and State Grants;

Clean Water and Drinking Water

Assistance Grants for Mexican

Boarder/Alaskan Native Villages/Puerto

Rico; Clean Water State Revolving Fund

Indian Set Aside Program; Water

Research; Climate Change Programs;

Indoor Air; PM Implementation and

Research; Brownfields; Pollution

Prevention Research; High Production

Volume Chemicals; Challenge Program.

Superfund Research and

Development; Superfund

Remedial Action and other

Superfund; Clean Water State

Revolving Fund; Great Water

Bodies/Ecosystems (including

Great Lakes, Chesapeake Bay,

Gulf of Mexico, National Estuary

Program, South Florida);

Stratospheric Ozone Programs;

Compliance Assistance Programs;

Air State Grants for NAASQS.

Superfund Enforcement; Clean

Water and Surface Water Program

(including section 106 state

pollution control grants and EPM

funded program); Environmental

Information; Human Health

Research.
Page 42

 Appendix 3

Integration of Human Capital Results Into the OIG Strategic Operations

360 Feedback for Employees and Personal Accountability

The OIG began implementing 360 Degree Feedback survey instrument accessible through the Internet

and hosted remotely to solicit feedback from work associates at all levels. Responses to a series of

questions relating to OIG-wide standard performance agreement areas of Assignment Accomplishment,

Customer Service, Personal Behavior, and Continuous Learning are aggregated to produce a report for

each participant. The process used is designed to ensure anonymity of respondents and protection of

confidential information. The OIG will expand the use of 360 feedback to provide personal

accountability for high performance and assess specific professional and technical skills and

competencies needed to successfully implement this Multi-Year Plan. Individual 360 performance

measurement is used to:

• Assess an individuals strengths and weaknesses

• Foster communication between the employee and supervisor

• Identify special talents and skills

• Identify employee development needs

• Benchmark performance and track improvement.

Knowledge and Skills Inventory System

To assess the competency and proficiency of staff and better plan for needed skills, required to fully implement the

Multi-Year Plan, the OIG acquired, modified, and implemented a Knowledge and Skills Inventory System. This

system produced an inventory of available skills compared to those prospectively needed, to identify skill gaps

within each business line strategic areas and by each of the following professional series specialties. This gap

analysis is for prospective planning purpose. 

Skill Speciality/Series Title Needed Available Gap

Environmental Scientist 22 11 11

Social Scientist 24 14 10

Operations Research Analyst 7 0 7

Program Analyst 95 45 50

Financial Auditor 75 127 (52)

IT Auditor 22 16 6

Computer Specialist 9 6 3

Criminal Investigator 69 51 18

 Total 323 270 53