Validation of Air Enforcement Data Reported to EPA by Pennsylvania

CHAPTER 2 

PADEP NOT REPORTING SIGNIFICANT VIOLATORS TO EPA

EPA set priorities for its air program and awarded grants to PADEP for more than $5 million a year to carry 

them out. However, PADEP conducted its air program following an agenda different from EPA's. Specifically, 

the State did not: 

• Report all significant violators to EPA.

• Take aggressive enforcement action to bring all violating facilities into compliance.

While EPA required information about violators, the State wanted to keep Region 3 uninformed and did not 

report significant violators to EPA. The reason EPA needed this information was to take action if the State did 

not enforce federal law. Moreover, while EPA wanted PADEP to take aggressive enforcement action to bring 

violating facilities into compliance, the State wanted to avoid what it perceived as federal meddling. PADEP 

believed that it could work with the facility to achieve compliance without labeling the facility as a significant 

violator. 

When PADEP did not notify EPA that violations occurred, Region 3 was unable to ensure the violator achieved 

compliance timely. In effect, PADEP hindered EPA's ability to oversee the State's enforcement program. These 

differences contributed to allowing facilities that were serious contributors of air pollution to continue harming 

the environment -- sometimes for many years. 

At the time of our review, there were 2,053 major facilities in Pennsylvania and PADEP inspects most major 

facilities each year. For example, PADEP performed 2,000 inspections during Fiscal Year 1995, and reported 

only six significant violators to EPA Region 3. 

To identify significant violators, we first reviewed the 556 NOVs that the six PADEP offices submitted to 

Region 3 during Fiscal Year 1995. We determined that 331 of these NOVs were either issued to minor facilities 

ineligible for placement on EPA's list of significant violators, or for violations that were not federally 

enforceable. The remaining 225 NOVs were issued to major facilities that violated state or federal regulations. 

These were analyzed further to identify any that met EPA's definition of a significant violator. 

We also reviewed a sample of 45 PADEP enforcement files and associated inspection reports. These were for 

facilities that PADEP inspected, and did not submit an NOV to EPA during Fiscal Year 1995, or report the 

facility as a significant violator. This sample was used to review facilities for which the State did not provide 

information indicating that the facility was a violator. 

In total, we reviewed NOVs or enforcement files for 270 major facilities (225+45). This represents 13 percent 

of the 2,053 major facilities in Pennsylvania. From these 270 facilities, we identified 64 significant violators 

that the State did not report to EPA. One of these was a Continuous Emissions Monitoring (CEM) facility, for 

which the State submitted monitoring data to EPA that indicated the facility was a "potential" significant 

violator. This is discussed in Chapter 4 under Other Matters. 

It is noteworthy that both our review of NOVs and our sample of enforcement files and associated inspections 

disclosed similar percentages of significant violators. Our review of 225 NOVs, and PADEP files when 

additional information was necessary, showed that 56, or 25 percent were significant violators that the State did 

not report. Further, our analysis of the 45 enforcement files disclosed 8 violators or 18 percent, which the State 
did not report. This second percentage is important because it indicates a review of all 2,053 facilities would 

have likely yielded more violators over and above the 64 we identified. 

We understand that the NOVs PADEP provided EPA contained some information about violators. However, it 

was a laborious task to review all 556 NOVs to sort out minor facilities not eligible for significant violator 

status, major facilities with minor violations, and finally the significant violators. Moreover, for a number of the 

NOVs, we could not determine if the facility was a significant violator from the NOV alone. In many of these 

cases, we reviewed PADEP's enforcement files including the State's Fiscal Year 1995 inspection reports. For 

these reasons, we did not consider the NOVs submitted by the State as an adequate alternative to the reporting 

requirements for significant violators mandated in the 105 grant. Specifically, the State should tell EPA who the 

significant violators are, and not expect EPA to review almost 600 NOVs that contain a relatively small number 

of significant violators. The significant violators reported by PADEP offices in Fiscal Year 1995 and those 

identified by our audit are shown next. 

Significant Violators Identified 

Regional 

Office

PADEP OIG

Conshohocken 0 14

Wilkes-Barre 0 13

Harrisburg 2 22

Williamsport 0 12

Pittsburgh 1 1

Meadville 3 2

Total 6 64

Clean Air Act Was Violated in Numerous Ways

While the severity of these violations varied, many were threats to the quality of our air. Furthermore, some of 

these facilities violated the Clean Air Act for years without the State reporting them to EPA. The violations 

included: 

• 34 facilities that emitted excessive pollution;

• 22 facilities that violated their construction permit; and

• 8 facilities that installed machinery without receiving a construction permit from PADEP. These permits 

were critical because the new machinery produced pollution.

According to EPA's Timely and Appropriate Enforcement Policy, and the grant agreement between EPA and 

the State, PADEP should have reported to EPA the 64 significant violators we identified. However, PADEP did 

not believe the violations warranted reporting these facilities to EPA. This practice allowed the State to function 

without EPA oversight, and to deal with violators as the State saw fit -- not how EPA required. This condition 

was one reason why many violations persisted for long periods. 

PADEP Not Informing EPA Allows Violations to Persist

For example, PADEP inspections at a facility that manufactures concrete 

structures identified seven violations during the sixteen months starting May One facility had seven 

violations in sixteen months.
1993 through September 1994. All of the violations were for fugitive emissions, which are excessive dust 

particles released into the air. These fugitive emissions were from the following three sources: 

• loading trucks with concrete,

• traffic in and out of the plant, and

• a broken fabric collector that was supposed to capture the fugitive emissions.

These violations took a long time to resolve. The first violation occurred in May 1993 and the final violation 

occurred in September 1994. Although the facility took corrective action on individual violations, it was not 

until October 1995, almost two and one half years later, that a PADEP inspection verified that the last violation 

was resolved. Based on the number of violations and their severity, this was a situation where PADEP should 

have reported the facility as a significant violator. 

Another facility that manufactured automotive carpet and interior trim had a 

history of opacity violations during the past four years. Opacity violations 

occur when the plume of smoke from a stack exceeds an allowable density, 

indicating that the facility is emitting excess pollution. Here, the source was a 

boiler. 

In August 1995, PADEP assessed this manufacturer a civil penalty of $4,000, but decided not to place the 

facility on EPA's list of significant violators. Despite the penalty, PADEP allowed the facility to continue 

operating the faulty boiler and pay a penalty of $500 per month. According to PADEP officials, they allowed 

this "pay to pollute" arrangement to persist for 14 months, from June 1995 until August 1996, when the facility 

installed a new boiler. 

This example shows there are occasions when PADEP recognizes that a facility is a violator and has taken 

enforcement action against the facility. However, despite assessing a penalty, PADEP did not consider these 

violations severe enough to report the facility to EPA as a significant violator. 

Since the early 1980's, a facility that manufactured adhesive tape constructed 

and operated three coating lines without obtaining a permit from PADEP. 

These coating lines applied VOC solvents that were hot air dried to evaporate 

excess solvents. Both the coating and drying processes emit VOCs that contribute to ground level ozone, a 

harmful pollutant. 

Operating without a permit was not this facility's only violation qualifying it as a significant violator. One 

coating line exceeded PADEP's limit for VOC content and had been operating in violation for 13 years, since 

1983. A PADEP inspection performed four years ago discussed this violation. However, at the time of our 

review in April 1996, the violations were not resolved, and the State did not put the facility on the list of 

significant violators. 

Not Reporting Significant Violators Hinders EPA Oversight

The sprayer at a facility that manufactures metal containers was releasing 

harmful VOCs. These VOCs were released because the facility's incinerator 

was broken. Operating the sprayer, without the incinerator to remove the 

VOCs, was a significant violation that the State should have reported to EPA. This situation occurred twice and 

the State did not notify EPA either time. 

PADEP first became aware of the violation in August of 1995, when a citizen complained about offensive odors 

coming from the facility. PADEP's inspection that month revealed that the facility vented excess pollution 

directly into the atmosphere. At that time, the owner indicated that the incinerator was malfunctioning for a 

PADEP allowed a facility to 

"pay to pollute" for over one 

year.

Others allowed to pollute 

without penalties.

Facility "too busy" to correct 

violation.
couple of months and had been turned off. He also indicated the facility did not stop operation because the 

production line was "too busy." 

The State's file indicated that in October 1995, the incinerator was repaired and operating. However, test results 

showed that its performance was "questionable." In May 1996, a fire damaged the incinerator, and the facility 

again operated the spray booth without the incinerator for one week. Again, the State should have placed this 

facility on EPA's significant violator list. 

Facilities Constructed Without Permits and Not Reported to EPA

Before a facility installs or modifies equipment, the owner must obtain a construction permit from PADEP. At 

facilities regulated by the Clean Air Act, two types of equipment require permits. The first and most important 

permit is for equipment that is a source of air pollution. The second type is for equipment designed to control air 

pollution. 

Eight of the 64 violators we identified, were significant violators because they installed or modified "pollutioncreating" equipment without a permit, a more serious offense. These were violations of both state and federal 

laws that PADEP believed should not be reported to EPA. For example, one facility installed and operated a 

large boiler without a permit. The boiler emitted nitrogen dioxide that when combined with VOCs, creates 

harmful ground level ozone. However, PADEP officials said they did not report this facility as a significant 

violator because they did not believe boilers were environmentally hazardous. State personnel also indicated 

that as a rule they did not report situations such as these to EPA. 

PADEP's Reasons for Not Reporting

In most cases, PADEP personnel did not agree that the facilities we identified were significant violators. State 

personnel contend: 

• Having EPA remove violators from its list of significant violators is difficult. The facilities remain on 

EPA's list for an excessive amount of time, until the facility has taken corrective action and paid all 

penalties.

• EPA places too much emphasis on the number of significant violators and PADEP considers this 

"unnecessary bean counting."

• They can bring the facility into compliance timely, without EPA's involvement. The State personnel also 

contend they will request EPA's assistance whenever it is necessary.

• EPA's involvement results in interference, and delays resolution of the violation.

• PADEP and EPA differ on what is considered a significant violator, and the length of time that a 

violation must exist before it should appear on EPA's list. For example, if a facility tells PADEP it 

intends to rectify a violation in the future, the State will avoid listing the facility.

These reasons have one recurring theme -- a difference of approach between EPA and PADEP on how to 

enforce the CAA. EPA's Timely and Appropriate Policy requires PADEP to be much more aggressive regarding 

issues such as: what is considered a significant violator, when the facility should be put on the list, and how 

long the facility should remain on the list. 

We disagree with PADEP that it does not need to report significant violators to EPA. We found that EPA 

involvement can be beneficial because the State does not always resolve the violations timely. Moreover, EPA 

personnel believe they can be more objective because they are further removed from the pressures of industry. 

In any event, the State agreed to report significant violators when it accepted the 105 grant. 

EPA Was Generally Aware of PADEP Not Reporting
EPA Region 3 officials stated that in the past, they used NOVs to help identify the more serious violators not 

reported by PADEP. However, to verify the violation, EPA said they often needed to review PADEP's 

enforcement file. EPA personnel found this was not always an efficient use of their resources, because these 

reviews took too much time. Therefore, the Agency has recently focused its enforcement resources on doing 

inspections to emphasize a "federal presence in the field." 

EPA officials said that whenever a state is obviously not reporting significant violators, the Agency still reviews 

NOVs in selected cases. For example, EPA recognized that PADEP only reported six significant violators in 

Fiscal Year 1995, although the State performed 2,000 inspections of major facilities. As a result, EPA did a 

limited review of PADEP's NOVs during the fall of 1995, and found several significant violators that the State 

did not report. 

For example, one NOV reviewed by EPA was for a facility that manufactures 

packaging materials. Part of the manufacturing process involved printing 

labels on the package. This is done by printing presses that are a source of 

VOC contamination. To control the pollution from these presses, PADEP required the facility to install 

incinerators designed to capture and destroy the pollutants. The State also required that the incinerators operate 

above a predetermined temperature to be effective. PADEP is supposed to enforce these requirements that are in 

the facility's permit. 

From early 1993 to mid 1994, the facility operated an incinerator below the required temperature on many 

occasions. This caused the facility to emit excess pollution into the atmosphere. It is also noteworthy that the 

facility saved money by operating the incinerator at lower temperatures. According to the inspection report that 

we reviewed, PADEP planned to issue an NOV for this violation. However, we did not find an NOV in the file 

for operating the incinerator below the specified temperature. 

In the summer of 1994, the incinerator exploded, and the facility requested permission from PADEP to operate 

the printing press without the incinerator. PADEP denied the request and warned the facility of possible 

penalties associated with this type of violation. In July 1995, PADEP again inspected the facility, and found that 

the company had been operating the press without the incinerator since November 1994. 

The facility's permit allowed a maximum of 4.3 tons of VOCs per year. PADEP reviewed the company's 

records and found that the facility emitted 33.8 tons of VOC emissions during 1995,more than seven times their 

allowable amount. In August 1995, PADEP issued an NOV for giving off excess VOCs, and operating the press 

without the incinerator. Despite receiving the NOV, the facility continued operations without the incinerator 

until January 1996 when the company moved its plant operations. 

This facility violated many permit requirements between 1993 and 1996, which made it apparent that PADEP 

should have reported this significant violator to EPA. However, PADEP did not report this facility to EPA, even 

though VOC emissions were seven times the allowable amount. 

EPA is Changing to Performance Partnership Grants

Because the Section 105 grants awarded to the states in the past were administered categorically, EPA could 

hold states accountable for specific performance measures. That is, EPA targeted grant dollars to some of the 

individual activities recipients agreed to complete. When activities were not completed, EPA could penalize 

recipients. However, an audit we issued in September 1995 (Audit Report Number E1KAE5-24-0015-5100510) 

reported that recipients often did not complete required activities under the 105 grants. The audit also showed 

that EPA rarely withheld grant dollars when activities were not performed. The conditions shown in the prior 

audit were again illustrated in this report by PADEP's refusal to report significant violators, and EPA's failure to 

apply sanctions such as withholding grant funds. 

EPA discovers blatant violator 

not reported by PADEP.
In place of categorical grants, EPA plans to award Performance Partnership Grants (PPGs) to the states. These 

grants will use results-oriented performance measures to avoid excessive "bean counting." EPA will hold states 

less accountable for specific accomplishments. Instead, the Agency plans to evaluate the grantee on the "bottom 

line results" of their air program. More emphasis will be placed on environmental outcomes such as how much 

air quality improved, instead of measuring accomplishments through the number of inspections completed or 

significant violators reported. 

PPGs are intended to develop a partnership between EPA and the states where both parties share the same 

environmental and program goals. This new working relationship between EPA and the states is intended to 

focus state and federal efforts on working cooperatively. PPGs are also designed to give states the flexibility to 

address their most pressing environmental priorities. 

PPGs May Not Be Effective

In comparison to EPA, the State placed less emphasis on reporting significant violators. Philosophical 

differences such as identifying and reporting significant violators show that PADEP and EPA may not be 

willing partners. They need to mutually resolve differences such as these before PPGs can be effective. The 

absence of this willing partnership could undermine the effectiveness of PPGs. 

EPA considers reporting significant violators important and PADEP needs to fulfill its grant commitment to 

report them. For these reasons, both parties should consider negotiating to resolve their philosophical 

differences concerning the reporting of significant violators. This is especially critical if PADEP and EPA are to 

develop a working relationship and become "performance partners." Until the State and EPA develop the 

working partnership intended by PPGs, one of the most important performance measures of the air enforcement 

program should be whether the State is identifying and reporting significant violators. 

CONCLUSION

While PADEP identified six significant violators, we identified 64 other facilities that should have been on 

EPA's list of significant violators during Fiscal Year 1995. This is a considerable difference because we 

conducted our review at only half of PADEP's regional offices, and reviewed documentation for only 270 of the 

more than 2,000 major facilities in Pennsylvania. 

It appears certain that a more thorough review by us, would have likely identified many more significant 

violators that the State should have reported. Even the results of our limited review left no doubt that PADEP 

did not report many significant violators. Moreover, State personnel expressed their intentions not to report 

significant violators to EPA. 

The present arrangement for identifying and reporting significant violators needs improvement. Under the 

current conditions, EPA cannot help PADEP bring significant violators into compliance, since EPA is often 

unaware of the violations. Also, EPA cannot adequately perform its oversight role of evaluating the 

effectiveness of PADEP's enforcement program. Under PPGs, EPA will need to rely more heavily on the 

completeness and accuracy of the significant violator information provided by PADEP. For PPGs to be 

effective, PADEP must report significant violators to EPA. 

RECOMMENDATIONS

We recommend that the Region 3 Administrator take action to ensure PADEP reports significant violators as 

required by their Section 105 grant and by EPA's Timely and Appropriate Enforcement Policy. Region 3 could 

accomplish this by: 
1. Using a performance measure in future PPGs that evaluates whether the State is identifying and 

reporting significant violators. This practice will require EPA Region 3 to verify the accuracy of 

information submitted by the State.

2. Withholding some of Pennsylvania's grant funds in order to achieve the desired results.

3. Negotiating with PADEP to resolve philosophical differences concerning the reporting of significant 

violators.

4. Requiring PADEP to certify it has reported all significant violators to EPA, as defined by EPA's Timely 

and Appropriate Enforcement Policy.

PADEP RESPONSE

While we believe your draft to be generally misleading and inaccurate, we want to be very clear about one 

thing. It did not take an audit to determine that PADEP and EPA disagreed on the manner of identifying 

significant violators (SVs). A review of Region 3's midyear reviews would show this was an issue for the last 

decade. Although the report criticizes PADEP, it did not criticize EPA for essentially agreeing to PADEP's 

handling of significant violators for the last decade. At our most recent midyear grant review, in May 1996, 

EPA Region 3 officials stated that they thought that our enforcement program was very good. They stated that 

they had no problem with the actions taken or penalties collected. 

While EPA does provide a $5 million grant, the amount needs to be put in perspective. It is a small part of the 

$30 million that Pennsylvania spends on its air program. It is misleading to suggest that the entire $5 million 

grant is in any material way related to the identification of SVs. 

We acknowledge that PADEP does not activate the "SV flag" on the AIRS system. However, that does not 

mean the data was not entered, or that it could not be used to easily identify SVs. Our personnel can readily 

identify major sources having violations (the essence of an SV)[emphasis added by OIG] by a search of the 

EPA database. We assume EPA could do so as well if it chose to. PADEP has not deliberately concealed 

violations from EPA, but routinely reports more information about violations in paper copy and electronic form 

than any other state in Region 3. In contrast, EPA has so far withheld the names of the cases involved in this 

report so that PADEP could not properly evaluate this report. 

Selective use of the facts from case files gives readers a distorted, almost preordained view of enforcement 

actions leading to the conclusion that the report was either done by staff completely unfamiliar with the federal 

air quality program, or that the report was motivated by something other than a sincere desire to improve the 

enforcement system. With respect to individual case examples we can identify, the report contains numerous 

errors, which misidentify major sources that are really minor sources, criticizes PADEP for putting sources on 

compliance schedules after recommending them, identifies violations where none existed, and stated there were 

inspection problems with at least one facility that PADEP inspectors actually observed every day. AIRS data 

also shows that one facility, the report labeled an SV, was inspected by EPA in August 1995 and found to be in 

compliance. Allegations that PADEP should have reported SVs by telephone are also incorrect. The grant 

documents seek reporting via AIRS and no other way [emphasis added by OIG]. 

The disagreement between EPA and PADEP is a dispute over which "flag" is activated in a computer program, 

not a public health issue. The reason for this decade old disagreement regarding SVs is also obvious without an 

audit. The reason is EPA's unrealistic definition of an SV and the rigid procedures mandated upon reporting. 

We do not apologize for disagreeing with a policy, which defines SVs in a manner that defies any common 

sense understanding of the word "significant." 

The definition of a significant violator and the procedures for EPA involvement in SV cases are not derived 

from the statute or regulations, but rather from EPA guidance. Using its grant money, EPA then seeks to impose 

its guidance on Pennsylvania. If one followed EPA's guidance, any violation at a major source would make it a 
significant violator, regardless of its real significance. Once reported to EPA, an SV becomes subject to 

extensive EPA micro-management. 

We do not object to oversight or criticism if warranted. We do object to the second guessing and interference 

that inevitably follow SV designation. Based on information available to us, it appears that most other states do 

not identify any more SVs than Pennsylvania. Perhaps this suggests that the place to look for the problems is 

with the EPA policy, not with the states' reporting. 

We find it distressing that the report attempts to undermine the PPG process. PADEP sees PPGs as an 

opportunity for both agencies to discuss the SV issue openly and constructively. PPGs represent a chance to 

construct a sensible way of dealing with SVs that will give EPA necessary oversight yet allow the states 

flexibility. 

EPA RESPONSE

We concur with the findings and recommendations expressed in this chapter. 

Without consistent, timely, and reliable information on violators, and open communication between state and 

federal officials regarding appropriate enforcement action, determinations cannot be made on the best course of 

action to bring violators into compliance. EPA must rely on Pennsylvania for most of our information 

concerning the compliance status of the State's regulated community. This is the reason for specifying in the 

Clean Air Act (CAA) Section 105 grant agreement that the State report and identify SVs in accordance with the 

Timely and Appropriate Enforcement Policy negotiated between the states and EPA. 

Despite disagreement over terminology during the past 10 years, the information, when provided was in an 

easily accessible and plainly identifiable form which promoted prompt review and discussion of the appropriate 

action to take. Once the State began withholding this information, EPA had no reliable and easily accessible 

source of data to determine which facilities were significantly violating clean air regulations. State reports to the 

EPA database -- the Aerometric Information Retrieval System (AIRS) -- did not distinguish between simple 

violations, with little or no impact on public health, and more egregious violations with serious impacts. CAA 

Section 105 grant funds specifically require SVs to be identified up front, not buried in a mountain of computer 

data that would have to be analyzed and verified, resulting in wasted time and taxpayer money. The State 

agreed to those terms in the contract for receipt of clean air grant funds. 

EPA provided a list of the 64 identified violators to the State in an effort to engage officials in a discussion of 

the status of transactions and future actions. While we have had productive discussions with the State on better 

data sharing, open communication, and improved understanding of each other's interests in compliance and 

enforcement policies, the listing of violators and future actions has not been resolved in our discussions. 

However, as we have stated repeatedly, State NOVs themselves contain insufficient information to place a 

facility on the list of national violators. More importantly, they cannot replace the dialogue required and 

necessary under the Timely and Appropriate Policy and the Section 105 air grant commitments to determine

what action to take, and which agency should take the lead. 

Regarding Recommendation Number 1, the Office of Enforcement and Compliance Assurance is currently 

developing national guidance to confirm that even after we have successfully negotiated a PPG agreement, EPA 

will continue to have a strong need for complete and accurate state supplied compliance data. Region 3 will 

withhold a portion of Fiscal Year 1997 CAA grant funds until EPA is convinced that Pennsylvania is reporting 

all known SVs in accordance with the Timely and Appropriate Policy. 

Concerning Recommendation Number 3, the fundamental principles of shared responsibilities for enforcement 

of the CAA are clearly defined in the Agency's Timely and Appropriate Enforcement Policy. This policy is a
product of recommendations by a state/federal workgroup. An important aspect of the policy is to ensure that 

there is consistency among the states and expeditious compliance. We believe that to renegotiate these 

fundamental principles would create serious discrepancies among the state enforcement programs and 

undermine the goal of nationwide consistency and protection of the public health and environment. Lastly, we 

are prepared to work with Pennsylvania to ensure that the implementation of the policy brings definite benefits 

to the Pennsylvania enforcement program. 

OIG EVALUATION

We do not agree with the comments provided by PADEP, and will clarify two portions of EPA's response. 

PADEP's comments are contrary to documentation we reviewed and discussions we conducted with State 

personnel. For example, we did not withhold the names of the facilities we reviewed to hinder PADEP's 

evaluation of the report. Because EPA Region 3 is responsible to make final determinations concerning the 

issues in this report, we did not include the names of the facilities reviewed. This was done to protect the 

privacy of facilities until they were listed by Region 3 as an SV. Moreover, we discussed many of these cases 

with PADEP personnel during the audit, and they were provided a complete list of violators one working day 

after we issued the draft report. In any event, PADEP could have obtained this information by calling the 

contact person provided in the draft report. 

We do not agree that our draft report misled the reader by suggesting that the $5 million grant was only for the 

identification of SVs. In our opinion, the report was clear, the $5 million grant was for the total air program. 

Our draft report stated that: 

Region 3 awards Section 105 grant money so that states can operate their air programs in accordance with 

their grant agreements. 

This issue [reporting SVs] is of such importance that Region 3 allotted part of the Section 105 grant funds for 

identifying significant violators and reporting them timely. 

PADEP's interpretation of EPA's May 1996 midyear grant review was incorrect. Discussions with EPA 

personnel disclosed that their verbal comments were intended to provide PADEP with some "positives" 

concerning the enforcement actions taken and penalties collected. However, the PADEP response did not 

mention the voluminous negative comments and concerns that EPA documented in this midyear review about 

the State's air enforcement program. EPA's chief concerns were: 

. . . over the last couple of years, there has been a decrease in the number of NOVs and penalty actions taken. 

. . . Pennsylvania has one of the lowest significant violator reporting rates in Region 3. In fact, during this Fiscal 

Year PADEP has only voluntarily reported one significant violator. 

We also disagree that we did not criticize EPA for inaction when states did not complete grant commitments. In 

this current report and in the past, we have criticized EPA for not withholding grant funds from PADEP and 

other state agencies that did not fulfill grant commitments. We believed then and still believe now that grant 

funds should be withheld when a grantee -- be it a state, non-profit entity, or an educational institution -- does 

not complete commitments contained in a grant agreement. Page 20 of our report discusses one such past audit 

that recently criticized EPA for not withholding funds. Additionally, OIG audits have evaluated other aspects of 

both EPA and state air enforcement programs. Several of these are discussed in the Prior Audit Coverage

section of this report.

The grant agreement is in effect a contract. Once the contract is negotiated and executed, the parties are bound 

contractually, and the contract terms must be fulfilled. When contract terms are not fulfilled, the party that is 

remiss should be penalized. Grant recipients cannot be allowed to disregard requirements in an executed 
agreement because they believe portions of the grant to be "rigid," "unrealistic," or "defies any common sense 

understanding." Reporting SVs in accordance with EPA's Timely and Appropriate Enforcement Policy was a 

grant or "contract" requirement that the State agreed to perform when it accepted the grant. If the grant 

requirements were objectionable, PADEP should have refused the grant. Furthermore, EPA paid the State to 

complete commitments, and should have withheld funds when these were not completed. In our opinion, EPA 

has been too patient and cooperative. 

We disagree with PADEP's contention that this audit was not needed to find out that SV reporting was an issue. 

Even though past Region 3 reviews discussed the need to report SVs, this audit was necessary to provide 

conclusive proof that SVs were not being reported, and to learn the extent of the State's non-reporting. 

Moreover, past EPA practices have been to work cooperatively with the states and to apply sanctions to solve 

only ". . . persistent, significant performance problems." This provides some reasoning for Region 3's inaction, 

but does not justify it. 

We acknowledge PADEP's affirmation that they do not report SVs as required by the grant. The disagreement 

between EPA and the PADEP is not about activating a "flag" in a computer program. Region 3 cannot identify 

SVs from the paper NOVs, electronic information submitted by PADEP, and Quick Look reports. In addition to 

the reasons already discussed in the report, EPA also could not identify SVs because of inaccuracies in the 

AIRS. We are not saying this to assess the reasons for the inaccuracies, but only to indicate an additional reason 

why we disagree with PADEP's contention that EPA can easily identify SVs from AIRS. Additionally, it is 

unreasonable for EPA personnel -- with other oversight responsibilities -- to continually review the status and 

inspection results for thousands of facilities in Pennsylvania and the other four states in Region 3. This is 

especially unreasonable since the grant agreement between EPA and PADEP requires the State to report SVs 

via AIRS and telephone. 

It is also noteworthy that PADEP's response explains that EPA can obtain the essence of an SV. EPA's policy 

requires more than the essence of an SV. It requires the reporting of an SV. 

We disagree with PADEP's response that our report contains many errors and distorted facts. Contrary to the 

PADEP response, our auditors were knowledgeable about the air program, and our report was not " . . . 

motivated by something other than a sincere desire to improve the enforcement system." For example, the 

PADEP response explains that one of our examples was a minor source, not eligible for SV status, that we 

misidentified as a major source. During our review, we found two inspection reports for this facility -- signed by 

the PADEP inspector and his supervisor -- that contained the following heading, Semi-annual Inspection 

Verification Report for Major Facilities. Additionally, PADEP is responsible for determining if a facility is a 

major or minor source, and had labeled this facility as a major in the AIRS. Also, our determinations concerning 

when a facility should be labeled an SV were scrutinized by the EPA personnel who make these same 

determinations in EPA Regions 3 and 5. 

Another facility we reviewed had been coded in AIRS by PADEP as a major source during Fiscal Year 1995. 

Similar to the example above, the inspection report indicated it was a major. During Fiscal Year 1996, the State 

changed the designation for this facility to a minor. If justified, this change is acceptable, but shows that codings 

can be changed after the period of our review. In any event, PADEP was responsible for reporting this facility 

as an SV in Fiscal Year 1995, when it was coded as a major. 

We also disagree with PADEP's contention that we reported violations where none existed. We compared the 

circumstances reported in PADEP inspection reports to EPA's Timely and Appropriate Enforcement Policy and 

EPA's definition of an SV. PADEP's disagreement with this Policy and the definition of an SV, does not negate 

the fact that violations occurred. For example, the EPA Policy considers facilities that install equipment without 

a permit as an SV. Our report disclosed that PADEP does not believe installing boilers without a permit is a 

reportable violation. 
We also do not agree that it is an error to report problems at a facility even though PADEP inspectors observed 

it every day. Observing a facility without performing an on-site visit is not considered an acceptable compliance 

assurance method. EPA defines this type of inspection as a Level 0. Additionally, we did not criticize PADEP 

for putting a facility on a compliance schedule. We reported that PADEP placed the facility on a compliance 

schedule and assessed penalties for violations, yet did not report these violations to EPA. Additionally, we do 

not agree that an August 1995 EPA inspection, at a facility we labeled as an SV, found the facility to be in 

compliance. EPA personnel disclosed that they initiated an unannounced inspection at this facility in August 

1995. However, they aborted this inspection because the facility was not in operation, and in the process of 

moving. 

We must also disagree with the PADEP response where it alleges that we erred by indicating that SVs should be 

reported by telephone. The PADEP response states, "the grant documents seek reporting [of SVs] via AIRS and 

no other way." This statement is inaccurate because the EPA grant awarded to PADEP required the reporting of 

SVs in two ways. First, PADEP was required to identify significant violators to EPA via the AIRS. Second, the 

grant required PADEP to comply with EPA's Timely and Appropriate Enforcement Policy which provides that: 

EPA and States should conduct frequent (at least monthly)* informal consultations to discuss 

compliance efforts. During these discussions, information exchange relative to obtaining compliance 

and penalties should occur. This exchange should include at least the following items: 

1. The State and EPA would each identify any newly-found violators subject to this guidance. . . 

. 

* subsequent grants changed this requirement to quarterly. 

What we find most confusing in PADEP's response is its description of EPA's oversight. The response asserts 

that: 

• EPA's definition of an SV is unrealistic and defies common sense;

• The Agency employs rigid reporting procedures;

• SVs are subject to extensive micro-management by EPA; and

• Second guessing and interference follow SV designation.

Despite these comments, the response criticizes our report for undermining the PPG process, which relies on 

cooperative working relationships between EPA and the states. The PADEP response raises some questions as 

to whether Pennsylvania is going to be a cooperative partner with EPA under the new Performance Partnership 

Grants. 

Two portions of EPA's response need clarification. EPA's Timely and Appropriate Enforcement Policy and the 

procedures for identifying SVs were a product of negotiations between the states and EPA. Secondly, we 

generally agree that NOVs should not be used alone to identify SVs. We agree because there were a number of 

NOVs we reviewed that indicated the facility was a potential SV. However, because of time constraints we did 

not review the PADEP files for all of these facilities. Had this been done, it appears likely that we would have 

identified additional SVs. In any event, regardless of the number of SVs we identified, PADEP should have 

reported SVs in accordance with the grant agreement. 

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