Office of Inspector General

Audit Report

Water

Region 10's National Pollutant

 Discharge Elimination System Permit Program

E1HWF7-10-0012-8100076

March 13, 1998

Lake Coeur d’Alene, Idaho
Inspector General Division

 Conducting the Audit

Western Audit Division

 Seattle Branch Office

Region covered Region 10

Program Office Involved Office of Water

Cover Photograph Lake Coeur d’Alene, Idaho
March 13, 1998

MEMORANDUM

SUBJECT: Region 10's National Pollutant Discharge Elimination System Permit Program

Audit Report No. E1HWF7-10-0012-8100076

FROM: Truman R. Beeler

Divisional Inspector General for Audits

Western Audit Division

TO: Chuck Clarke

Regional Administrator

EPA Region 10

Attached is our final report titled Region 10's National Pollutant Discharge Elimination

System Permit Program. The purpose of this audit was to determine whether the Region

effectively regulated point sources discharging pollutants into the waters of the United States.

This audit report contains findings that describe problems the Office of Inspector General

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

opinion of the OIG and the findings contained in this audit report do not necessarily represent the

final EPA position. Final determinations on matters in this audit report will be made by EPA

managers in accordance with established EPA audit resolution procedures. 

In accordance with EPA Order 2750, we have designated the Regional Administrator as

the Action Official for this report. The Action Official is required to provide our office with a

written response to the audit report within 90 days of the report date. The response should

address all recommendations. For corrective actions planned but not completed by the response

date, reference to specific milestone dates will assist us in deciding whether to close this report. 

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

We appreciate the cooperation from your staff during this review. Should you or your

staff have any questions about this report, please call Truman Beeler, Western Divisional
Inspector General for Audit, at (415) 744-2445, or Janet Tursich of our Seattle Office at (206)

553-2998.

Attachment

Distribution: Appendix D
i Report No. E1HWF7-10-0012-8100076

EXECUTIVE SUMMARY

PURPOSE

The purpose of the audit was to determine whether Region 10 (the Region) effectively regulated

point sources discharging pollutants into the waters of the United States. The Federal Water

Pollution Control Act of 1972 initiated a broad Federal effort to restore and maintain the Nation’s

waterways, including the creation of a permit program to regulate and reduce point source

pollution. The Region is responsible for operating the National Pollution Discharge Elimination

System (NPDES) Permit Program in nondelegated States and for Federal and Tribal dischargers

in delegated States. The audit focused principally on dischargers in the nondelegated States of

Alaska and Idaho.

The objectives were to determine whether the Region: 

• Issued required NPDES permits for all municipal and industrial dischargers.

• Regulated dischargers to comply with permit conditions through effective compliance

monitoring activities.

• Took appropriate and timely enforcement actions against permittees in Significant

Noncompliance (SNC) in the States of Alaska and Idaho, and Federal facilities in the State

of Washington.

• Maintained a management reporting system that was current and complete for dischargers

in the States of Alaska and Idaho.

RESULTS IN BRIEF

The Region could make improvements in several areas of its NPDES Permit Program to more

effectively regulate and reduce point source water pollution. It needs to improve: (i) the process

for issuing and renewing permits; (ii) compliance monitoring of dischargers; (iii) enforcement of

compliance for dischargers that violated permit conditions; and (iv) reporting on new permit limits

and conditions. Our findings are summarized below and discussed in detail in CHAPTERS 2

through 5 of this report.
ii Report No. E1HWF7-10-0012-8100076

Permits Not Issued or Renewed

The Region did not issue or renew most of the required NPDES permits for municipal and

industrial dischargers in the States of Alaska and Idaho. While it issued 33 permits in the past 21⁄2

years, there were 1,000 applications from dischargers waiting to be processed. Seventy percent

of these applications were received over 4 years ago. Dischargers without permits were not

subject to regulation. Dischargers operating under administratively extended permits that were

written prior to the Water Quality Act of 1987 were not subject to these more stringent

requirements. Regional information for three watersheds in the States of Alaska and Idaho

identified dischargers without current permits that were contributing to water quality problems. 

We attribute the large backlog of applications principally to a Regional decision, made with EPA

Headquarters, Office of Water’s knowledge, to focus management attention and resources on a

few selected permits and watershed permitting.

Also, for fiscal 1997, the Regional Administrator (RA) did not report the significant permit

backlog in the annual Federal Manager’s Financial Integrity Act (FMFIA) assurance letter to the

EPA Administrator. In our opinion, the backlog should be reported as a deficiency because it is

adversely affecting the Region’s ability to meet the Office of Water’s program goals, and is

resulting in large numbers of dischargers in the States of Alaska and Idaho violating the Clean

Water Act (CWA). 

To address the permit backlog, the Region issued a Comprehensive Plan (the Plan) in April 1997

that sets out a 3-year plan (fiscals 1997-1999) “that prioritizes the permits, implements innovative

policies, relies on partnerships, and lays the foundation for issuing permits for the period after

completion of this plan (year 2000 +).” While the Plan is a positive step toward addressing the

problem, the Region acknowledges that the Plan will not substantially reduce the backlog by fiscal

1999 and “with current resources, will result in NPDES Permit Unit (NPU) addressing only 6% of

the total universe of permits and 39 % of all major facilities in Idaho and Alaska.” Also, our

review disclosed that during the first year (fiscal 1997) several tasks critical to the success of the

Plan had not been performed.

Compliance Monitoring Could Be Improved

The Region could improve its compliance monitoring to help ensure that dischargers comply with

permit conditions and NPDES regulations:

Compliance Inspections. The Region did not perform some of the NPDES compliance

inspections of major dischargers that it committed to in its Memorandum of Agreement

(MOA) with EPA Headquarters. Without compliance inspections, there is an increased

opportunity for permit violations to go undetected. In addition, many inspection reports

were not timely and actions were not taken on reported problems. As a result, instances

of noncompliance were not corrected or not corrected timely.
iii Report No. E1HWF7-10-0012-8100076

Citizen Complaints. The Region did not have adequate procedures to track citizen

complaints, document actions taken on such complaints, and notify citizens of actions

taken. Actions were not taken on some complaints related to permit and other NPDES

violations which appeared to warrant followup, resulting in potential adverse

environmental impact.

Some Dischargers Not Adequately Regulated. The Region did not have procedures to

ensure that dischargers under storm water and seafood general permits, and minor

dischargers were in compliance with permit conditions. Some dischargers violated permit

conditions and NPDES regulations, and adversely affected water quality.

Enforcement Against Significant Violators Can Be Improved

The Region did not respond in an appropriate or timely manner to violations by dischargers that

were in SNC with NPDES permit conditions. The Region did not take formal enforcement action

as required against 19 of the 25 dischargers in SNC for 1 or more quarters during the period

October 1994 through December 1996. In addition, we reviewed files for all 10 dischargers that

were in SNC for 2 or more consecutive quarters and concluded that the Region did not have

written justification for not taking formal enforcement action against 9 dischargers. EPA’s

enforcement guidance requires that formal enforcement actions be taken against dischargers in

SNC. At a minimum, the guidance requires a written justification in those rare instances when

formal enforcement action is not taken. These conditions occurred because the Region did not

have effective management controls to ensure that either appropriate and timely enforcement

actions were taken or that decisions to take no action were justified and documented. Failure to

take appropriate enforcement action against violators weakens the effectiveness of the NPDES

Program to protect public health and the environment.

The Region took formal enforcement action consistent with EPA guidance against 6 of the 25

dischargers in SNC during the period of our audit. However, actions against three of the

dischargers did not meet EPA’s timeliness guidelines of 2 months after identifying the violation. 

For the three dischargers, formal enforcement action was not taken for 5 to 8 months after the

violations became known to the Region. More timely enforcement action could lead to quicker

return to compliance with permit requirements.

Management Reporting System Could Be More Current and Complete

The Region’s management reporting system for NPDES permit information is the Permit

Compliance System (PCS). The PCS was generally current and complete, except for new or

renewed permits. The Region did not input some permit effluent limits and reporting

requirements into the PCS timely and completely for dischargers receiving new or renewed

permits. For four major dischargers, permit effluent limits were not input for an average of 4

months after the permits were issued. Also, for six of the eight new permits, reporting

requirements were not input to PCS. Without current and complete permit information in PCS,

Quarterly Noncompliance Reports (QNCRs) generated from the PCS were not an effective tool
iv Report No. E1HWF7-10-0012-8100076

for identifying violations for dischargers with new or renewed permits. The PCS was not updated

timely for new or renewed permits because the Region had not given high enough priority to this

effort.

RECOMMENDATIONS 

Specific recommendations follow the findings in CHAPTERS 2 through 5. Overall, we

recommend that the Regional Administrator strengthen the NPDES Permit Program by:

1. Reporting the permit backlog as a deficiency in the annual assurance letter to the

Administrator and fully implementing the NPU’s Comprehensive Plan.

2. Monitoring dischargers’ compliance with permit conditions and NPDES

regulations.

3. Taking appropriate and timely enforcement actions for SNC dischargers.

4. Updating the management reporting system to input priority data for new permits. 

REGION COMMENTS AND OIG EVALUATION

A draft report was provided to the Region on November 25, 1997 for its comments. The Region

responded to the draft report on January 23, 1998 and its response is included as APPENDIX C

to this report. Except for recommendation 2-1, the Region concurred with the recommendations

and described corrective actions that have been taken or will be taken.

The Region did not concur with recommendation 2-1 in Chapter 2 that the Region report the

backlog of NPDES permit applications as a material weakness in the next annual FMFIA

assurance letter to the EPA Administrator. The Region acknowledged the backlog and stated that

a strategic plan has been developed and is being implemented to address the backlog.

We have changed the recommendation to state that the Region report the backlog of NPDES

permit applications as a management control deficiency instead of a material weakness in the next

annual FMFIA assurance letter to the Administrator for EPA’s Integrity Act Report. We believe

that the large backlog of permit applications is an indicator that the NPDES Permit Program is

not achieving its intended results and should be reported as a management control deficiency. 

While the strategic plan is a positive step toward correcting the problem, the Region

acknowledged that the Plan will not substantially reduce the backlog by fiscal 1999.
Report No. E1HWF7-10-0012-8100076

TABLE OF CONTENTS

Page

EXECUTIVE SUMMARY ................................................................. i

CHAPTERS

1 - INTRODUCTION ..................................................................... 1

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

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

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

2 - PERMITS NOT ISSUED OR RENEWED ................................................... 5

BACKGROUND .................................................................. 6

SOME PERMITS ISSUED .......................................................... 7

PERMITS NOT ISSUED OR RENEWED ............................................... 8

UNPERMITTED DISCHARGERS ADVERSELY AFFECT WATER QUALITY ................. 9

PRIOR METHODS WERE INSUFFICIENT ............................................ 10

REGIONAL ACTION TO ADDRESS THE PERMIT BACKLOG ............................ 11

RECOMMENDATIONS ........................................................... 14

REGION COMMENTS ............................................................ 14

OIG EVALUATION .............................................................. 14

3 - COMPLIANCE MONITORING COULD BE IMPROVED ..................................... 17

COMPLIANCE INSPECTION ACTIVITIES COULD BE IMPROVED ....................... 18

CITIZEN COMPLAINTS NEED TO BE ADDRESSED ................................... 20

SOME DISCHARGERS NOT ADEQUATELY REGULATED .............................. 21

SUMMARY ..................................................................... 27

RECOMMENDATIONS ........................................................... 27

REGION COMMENTS AND OIG EVALUATION ....................................... 28

4 - ENFORCEMENT AGAINST SIGNIFICANT VIOLATORS COULD BE IMPROVED ................ 29

BACKGROUND ................................................................. 29

NO FORMAL ENFORCEMENT ACTION ............................................. 31

ENFORCEMENT ACTION NOT TIMELY ............................................ 36

INEFFECTIVE MANAGEMENT CONTROLS ......................................... 37

RECOMMENDATIONS ........................................................... 38

REGION COMMENTS AND OIG EVALUATION ....................................... 38

5 - MANAGEMENT REPORTING SYSTEM COULD BE MORE CURRENT AND COMPLETE ......... 39

BACKGROUND ................................................................. 39

INFORMATION ON NEW PERMITS WAS NOT INPUT TIMELY OR COMPLETELY ........ 40

QNCRs ARE INEFFECTIVE AS AN ENFORCEMENT TOOL ............................. 41

REGIONAL GUIDANCE NEEDS IMPROVEMENT ..................................... 42
Report No. E1HWF7-10-0012-8100076

RECOMMENDATIONS ........................................................... 43

REGION COMMENTS AND OIG EVALUATION ....................................... 43

APPENDICES

A - AUDIT SCOPE AND METHODOLOGY .................................................. 45

B - ACRONYMS ....................................................................... 47

C - REGION RESPONSE TO DRAFT REPORT ................................................ 49

D - REPORT DISTRIBUTION ............................................................. 59
1 Report No. E1HWF7-10-0012-8100076

CHAPTER 1

INTRODUCTION

PURPOSE The purpose of the audit was to determine whether the Region

effectively regulated point sources discharging pollutants into the

water of the United States. The audit focused primarily on those

dischargers in the nondelegated States of Alaska and Idaho.

The specific objectives were to determine whether the Region: 

• Issued required NPDES permits for all municipal and

industrial dischargers.

• Regulated dischargers to comply with permit conditions

through effective compliance monitoring activities.

• Took appropriate and timely enforcement actions against 

permittees in SNC in the States of Alaska and Idaho, and

Federal facilities in the State of Washington.

• Maintained a management reporting system that was current

and complete for dischargers in the States of Alaska and

Idaho.

BACKGROUND The Federal Water Pollution Control Act of 1972 initiated a broad

Federal effort to restore and maintain the Nation’s waterways,

including the creation of a permit program to regulate and reduce

point source pollution. (See graphic on the next page for types of 

point source dischargers.) Congress reauthorized and renamed the

Act in 1977 to the Clean Water Act and amended it in 1987.

The NPDES Permit Program provides the first major Federal direct

enforcement authority against polluters. It is illegal for point

sources to discharge pollutants into the nation’s navigable waters

without a permit. The purpose of the permit is to control and

eliminate water pollution, and to focus on the pollutants determined

to be harmful to receiving waters and on the sources of such

pollutants.
2 Report No. E1HWF7-10-0012-8100076

 

A point source is defined at 40 CFR 122.2 as “any discernible,

confined, and discrete conveyance, including but not limited to, any

pipe, ditch, channel, tunnel, conduit, well, discrete fissure,

container, rolling stock, concentrated animal feeding operation,

landfill leachate collection system, vessel or other floating craft

from which pollutants are or may be discharged.”

Compliance Monitoring

and Enforcement

Section 309 of the CWA authorizes EPA to bring civil or criminal

actions against those who violate their NPDES permit conditions. 

EPA promotes a systematic approach to compliance monitoring and

enforcement with the objective of achieving consistent national

implementation of the NPDES Permit Program established by the

CWA. EPA uses the Enforcement Management System (EMS) as

a framework for the management of the enforcement program. The

EMS constitutes a system for collecting, evaluating, and translating

compliance information into timely and appropriate enforcement

actions.

Management Reporting Reporting requirements for the NPDES were implemented in

August 1985 with the publication of 40 CFR 123. The reporting

requirements included the QNCR as the tracking mechanism for

major facilities that violate their permit limits, schedules, reporting

requirements, or formal enforcement actions.
3 Report No. E1HWF7-10-0012-8100076

In October 1985, the PCS Policy Statement established the PCS as

the data base for NPDES reporting. The PCS was established to

provide an overall inventory for the NPDES Permit Program. The

data gathered in the PCS is to be used to: (i) respond to Congress

and the public; (ii) encourage a proper EPA/State oversight role by

identifying major permit violators; and (iii) serve as an operational

and management tool for tracking permit issuance, compliance, and

enforcement actions. Beginning in fiscal 1990, QNCRs were

generated by the PCS.

Water Quality Standards

Required

Congress amended the CWA with the Water Quality Act of 1987. 

The amendments outlined a strategy to accomplish the goal of

meeting water quality standards set by the States. EPA’s guidance

document states “A water quality standard consists of three

elements: (i) the designated beneficial use or uses of a waterbody

or segment of a waterbody; (ii) the water quality criteria necessary

to protect the use or uses of that particular waterbody; and (iii) an

antidegradation policy.”

States are required to adopt additional controls (water quality based

limitations) on point source discharges that are stricter than

technology-based limits (minimum level of pollutant controls)

where water quality standards are not met. Under the CWA, this is

done through a waste load allocation calculated from a total

maximum daily load (TMDL) of pollutants for a waterbody.

The Region’s NPDES

Responsibilities

The NPDES Permit Program in the Region is performed by the

NPU and the NPDES Compliance Unit in the Office of Water. The

two units oversee the delegated States’ (Oregon and Washington)

NPDES Permit Program. The two units have permitting and

compliance responsibility for: (i) the nondelegated States of Alaska

and Idaho; (ii) Federal facilities in the State of Washington; and (iii)

Tribal lands in the States of Oregon and Washington.

The NPU is responsible for receiving and reviewing permit

applications, drafting and issuing permits, renewing permits, 

tracking permit data in PCS, managing the municipal sludge and

pretreatment programs, and reporting on program accomplishments

to the Office of Water in EPA Headquarters.

The NPDES Compliance Unit is responsible for tracking permit

conditions in PCS, monitoring discharger compliance, scheduling

compliance inspections, enforcing compliance and reporting

noncompliance, and reporting on program accomplishments to the
4 Report No. E1HWF7-10-0012-8100076

Office of Enforcement and Compliance Assurance in EPA

Headquarters.

PRIOR AUDIT

COVERAGE

There have been no audits performed on the Region’s NPDES

Permit Program. A special review was conducted and a report

(No. E2AWP2-10-0002-2400024) was issued on March 12, 1992

regarding an improperly issued NPDES permit to a discharger in

Alaska.
5 Report No. E1HWF7-10-0012-8100076

CHAPTER 2

PERMITS NOT ISSUED OR RENEWED

The Region did not issue or renew most of the required NPDES

permits for municipal and industrial dischargers in the States of

Alaska and Idaho. While it issued 33 permits in the past 21⁄2 years,

there were 1,000 applications from dischargers waiting to be

processed. Seventy percent of these applications were received

over 4 years ago. Dischargers without permits were not subject to

regulation. Dischargers operating under administratively extended

permits that were written prior to the Water Quality Act of 1987

were not subject to these more stringent requirements. Regional

information for three watersheds in the States of Alaska and Idaho

identified dischargers without current permits that were

contributing to water quality problems. We attribute the large

backlog of applications principally to a Regional decision, made

with EPA Headquarters, Office of Water’s knowledge, to focus

management attention and resources on a few selected permits and

watershed permitting. 

To address the permit backlog, the Region issued a Comprehensive

Plan in April 1997 that sets out a 3-year plan (fiscals 1997-1999) 

“that prioritizes the permits, implements innovative policies, relies

on partnerships, and lays the foundation for issuing permits for the

period after the completion of this plan (year 2000 +).” While the

Plan is a positive step toward addressing the problem, the Region

acknowledges that the Plan will not substantially reduce the

backlog in the next 3 years and “with current resources, will result

in NPU addressing only 6% of the total universe of permits and

39% of all major dischargers in Idaho and Alaska.” Also, our

review disclosed that during the first year (fiscal 1997) several tasks

critical to the success had not been performed. Accordingly, we

believe that the RA needs to: (i) report the permit issuance backlog

as a deficiency in the next Federal Manager’s Financial Integrity

Act assurance letter to the Administrator; and (ii) aggressively

monitor all tasks to help assure that the Region meets its targets for

permit issuances through fiscal 1999.
6 Report No. E1HWF7-10-0012-8100076

BACKGROUND The CWA established the NPDES Permit Program to regulate and

reduce point source pollution. It is illegal for point sources to

discharge pollutants into the nation’s navigable waters without an

NPDES permit. The purpose of the permit is to control and

eliminate water pollution, and to focus on the pollutants determined

to be harmful to receiving waters. Regulated pollutants are

conventional pollutants, such as suspended solids; nonconventional

pollutants, such as ammonia; and toxic pollutants, such as

individual heavy metals and toxic organic compounds.

40 CFR Subpart B, Section 122.21 states any person who

discharges or proposes to discharge pollutants ... shall submit a

complete application:

C for a new discharge, at least 180 days before the

date on which the discharge is to commence.

C for permittees with current effective permits, 180

days before the existing permit expires.

If the Region does not issue a permit to a new discharger before the

discharge commences, the discharger is in violation of the CWA. 

Also, if a discharger does not submit an application prior to the

expiration date of the existing permit, it is in violation of the CWA.

If a current discharger submits an application 180 days before its

permits expires, the current permit is automatically

“administratively” extended until the Region acts on the permit

application. Administratively extended permits require the

discharger to continue to meet its current permit effluent limits,

monitoring and reporting requirements. However, if the permit was

written prior to the Water Quality Act of 1987, the limits derived

from additional or more stringent State water quality standards are

not imposed.

Until recently, for purposes of prioritizing permit issuance and

oversight, municipal and industrial dischargers were divided into

“major” and “minor” sources. Major municipal dischargers were

those which have a design or actual flow of one million gallons per

day or greater, a service population of 10,000 or greater, or a

significant impact on water quality. Industrial dischargers were

classified as “majors” through a rating system which allocates

points in various categories, such as flow, pollutant loadings,
7 Report No. E1HWF7-10-0012-8100076

potential public health impacts, and water quality factors. The

watershed approach focuses the Region on all the dischargers in a

designated watershed, regardless of the major or minor

classification. 

NPDES Watershed

Approach

In a March 1996 memorandum, EPA Headquarters, Office of

Water provided guidance on issuing permits focusing on the

“watershed” approach. It describes a holistic approach where

decisions about point source controls are based on an overall

assessment of environmental priorities and concerns within a

watershed. This is accomplished by developing a watershed

management plan and issuing permits in accordance with the

priorities and management strategies described in the plan. This

strategy emphasizes permit development for both major and minor

dischargers that pose a significant environmental threat to a basin. 

While major dischargers often remain high priorities for permit

issuance, minor dischargers can take on increased importance.

The March 1996 memorandum also recognizes that there will be

some initial backlog in issuing permits while setting up and

implementing watershed plans and schedules. However, the

guidance indicates that the permit backlog should be eliminated

within a reasonable period of time.

Permit Complexity Today’s permits are more complex than those in years past. In

addition to technology-based limits (minimum level of pollutant

controls) applicable to all sources, permits must address limits

derived from additional or more stringent State water quality

standards. These pollutant-specific standards are established

pursuant to the CWA to achieve or maintain the beneficial uses of a

particular waterway as determined by the State. Therefore, water

quality based limitations are used when it has been determined that

more stringent limits than technology based effluent limits must be

applied to a discharge in order to protect “designated use” of the

receiving waters.

SOME PERMITS ISSUED The Region issued 33 permits to municipal and industrial

dischargers for Alaska and Idaho during the period October 1994

through March 1997. We examined 18 of the 33 issued permits to

determine if the permit conditions were appropriate. We concluded

that for the permits reviewed, the Region developed permit

conditions and issued permits in accordance with national
8 Report No. E1HWF7-10-0012-8100076

regulations (40 CFR Part 122), including States’ water quality

standards.

PERMITS NOT ISSUED

OR RENEWED

A large backlog of unprocessed permit applications had built up

over the years and 70 percent were more than 4 years old. As of

March 31, 1997, the age of these applications was as follows: 

Applications Dates Received by the Region Age

 25 October 1996 through March 1997 less than 6 months

 126 October 1994 through September 1996 1 to 2 years

 150 October 1992 through September 1994 3 to 4 years

 699 Before October 1992 over 4 years 

1,000

As summarized below, the backlog included applications for: 

(i) applications received, no permit issued (i.e. new dischargers);

(ii) dischargers with expired permits; and (iii) dischargers whose

permits were administratively extended.

AK ID Total

Applications received,

no permit issued 287 170 457

Permits expired and not

administratively

 extended 184 91 275

Permits administratively

extended 108 160 268

TOTAL APPLICATIONS THAT

NEED NEW OR REISSUED 

PERMITS 579 421 1,000

While EPA’s latest guidance on issuing permits provides for less

emphasis on major dischargers, majors generally have the greatest

point source impact on water quality. For applications received

since October 1992, we reviewed a judgment sample of 52 to

obtain a perspective on the mix of major and minor dischargers. 

We found that 15 of 48, or 31 percent, of the valid applications

were from major dischargers (4 of the sampled applications were

for dischargers no longer in business as of March 31, 1997). 

Further, 3 of these 15 major dischargers were operating without a 

current permit in violation of the CWA and 12 had administratively

extended permits that expired between 1989 and 1997.
9 Report No. E1HWF7-10-0012-8100076

UNPERMITTED

DISCHARGERS

ADVERSELY AFFECT

WATER QUALITY

To obtain a perspective on the environmental significance of not

issuing or renewing permits, we reviewed Regional information on

water pollution problems in six of the eight watersheds in the States

of Alaska and Idaho. The Region prepared summaries for these

watersheds that identified point source dischargers that caused

water impairments. Regional information on three watersheds

identified dischargers without current permits that were

contributing to water quality problems. 

Unalaska Bay, Alaska The Unalaska Bay watershed has been designated as “impaired

waters” by the Alaska Department of Environmental Conservation. 

The Bay has approximately 2 square miles that are heavily

degraded, 12 square miles that are moderately degraded, and 25

square miles that are slightly degraded. The watershed summary

identified 10 point source dischargers (5 majors and 5 minors) as

pollution sources. All of these point source dischargers were

required to have a permit. We determined that four minor

dischargers were operating without permits. In addition, two

dischargers (one major and one minor) were operating with

administratively extended permits. The administratively extended

permits were extended prior to the State’s current water quality

standards being issued; and it is likely they do not address current

effluent limits necessary to protect or improve this impaired

watershed. Timely Regional action on permits for 6 of the 10 point

source dischargers in this impaired watershed is necessary. 

Boise River Watershed, Idaho The watershed summary indicates that fisheries and riparian habitat

are at risk along the entire length of the Boise River due to

development pressures and flooding concerns. The summary

reported that the River from the City of Boise downstream is more

degraded and the severity of the problem is rated high. The major

point source dischargers are: (i) wastewater treatment plants for

the Cities of Boise, Nampa and Caldwell; (ii) Armour Meats, an

industrial discharger; and (iii) the City of Boise’s storm water. 

Since the five administratively extended permits for these

dischargers were issued prior to the Water Quality Act of 1987, it is

likely they do not meet the State’s current water quality standards. 

Therefore, timely Regional action on these permits is necessary to

protect or improve water quality.

Coeur d’Alene Basin

Watershed, Idaho

The South Fork Coeur d’Alene River is identified as the most

contaminated river in the Region. The River is currently listed as

“water quality limited” as a result of point and nonpoint source
10 Report No. E1HWF7-10-0012-8100076

loads of heavy metals. There are 9 major and 11 minor point

source dischargers in the river drainage. Of the nine major permits,

two were current, six were administratively extended, and one was

expired. The discharger with the expired permit has been operating

without a permit for 17 years. Since the six administratively

extended permits were issued prior to the Water Quality Act of

1987, it is likely they do not meet the State’s current water quality

standards. 

Mining Operation in the Coeur d’Alene Watershed

PRIOR METHODS WERE

INSUFFICIENT

We concluded that the large backlog of applications developed

primarily because the Region had not focused management

attention and the necessary resources over the last several years to

issue the required permits. The Region advised it did not issue

more than 33 permits in the last 2 1⁄2 years because it focused its

resources on a few complex and controversial permits where

dischargers challenged the permit conditions. These dischargers

were primarily major permittees contributing to significant

environmental problems. We are aware that the Region’s focus on

a few selected permits during a period of increasing unprocessed
11 Report No. E1HWF7-10-0012-8100076

applications was done with EPA Headquarters, Office of Water’s

knowledge.

While the Region’s explanation is acknowledged, we noted that

there were 26 employees working on permits for some period of

time during the 2 1⁄2 years but only 12 of them issued permits. A

dramatic increase in permit writer productivity and/or innovative

methods will be needed to reduce or eliminate the backlog.

REGIONAL ACTION TO

ADDRESS THE PERMIT

BACKLOG

To the Region’s credit, it recently addressed the permit backlog

problem as part of a comprehensive review of the activities of its

NPU. As a result of this review, in April 1997 it issued a

Comprehensive Plan (the Plan) for addressing the permit backlog

during fiscal 1997 through 1999. The Plan identified the significant

backlog of expired permits and new source applicants as illustrated

by the following statement from the Plan:

NPU recognizes this significant workload and has

responded with a three year plan that prioritizes the

permits, implements innovative policies, relies on

partnerships, and lays the foundation for issuing

permits for the period after the completion of this

plan (year 2000 +). Over the next three years we

plan to issue permits for sources selected largely by

their environmental significance and their location in

high priority watersheds.

The plan sets an aggressive permit writing target for

the next three years which, with current resources,

will result in the NPU addressing only 6% of the

total universe of permits and 39% of all major

dischargers in Idaho and Alaska.

One positive aspect of the Plan, if implemented, is that it will result

in current permits for the most environmentally significant

dischargers. Also, the Region had issued two general permits

(GPs) and expects to issue two more in the near future. GPs cover

many dischargers who have applied individually for a permit. 

Therefore, one GP will eliminate many applications from the

backlog. Also, the Region is currently working on the data base to

identify dischargers that are no longer in business and need to be

deleted from the data base. However, as reported by the NPU,
12 Report No. E1HWF7-10-0012-8100076

even if the Region completes all the tasks as identified in the Plan, it

will not eliminate the backlog in the foreseeable future.

Federal Manager’s

Financial Integrity Act

Since the significant permit backlog will not be eliminated in the

foreseeable future, we believe that the FMFIA process requires that

the RA report the backlog to the EPA Administrator as a deficiency

in management controls. FMFIA requires the RA to annually make

a systemic assessment of management controls in the Region that

protect programs and resources from fraud, waste and

mismanagement, and help control programs to achieve intended

outcomes. After the assessment is made, the RA is required to

provide personal assurance that management controls are

reasonable to ensure the protection of programs, operations, and

functions and to notify the Administrator of any deficiencies in

management controls. 

For fiscal 1997, the RA did not report the significant permit

backlog in his assurance letter to the EPA Administrator. In our

opinion, the backlog is adversely affecting the Region’s ability to

meet Office of Water program goals, and is resulting in large

numbers of dischargers in the States of Alaska and Idaho violating

the CWA. As such, it should have been reported to the EPA

Administrator as a deficiency in management controls. 

Comprehensive Plan

Needs to be

Aggressively Monitored

In order to make progress in permitting the most environmentally

significant dischargers, the Region must complete key tasks in the

Plan. Since the Plan covers a 3-year period beginning fiscal 1997,

we evaluated the status of key tasks identified by the Region to be

accomplished in fiscal 1997 related to its goal “To issue permits to

facilities that have been strategically targeted for their

environmental significance and their location in high priority

watersheds.” Based on this evaluation, the Region did accomplish

some tasks, but did not accomplish other key tasks as of

September 30, 1997 as described below. 
13 Report No. E1HWF7-10-0012-8100076

TASK DUE DATE AND STATUS

1. Identify permits for issuance and

modification for the next 3 fiscal

years.

Fiscal 1996. Completed.

2. Assign the workload to permit

writers.

Fiscal 1997. Completed.

3. Permit writers develop individual

schedules for permit development

and issuance.

June 30, 1997 and update annually. 

Not done as of September 30, 1997.

4. Issue identified permits over the

next 3 fiscal years in accordance

with the schedule that is developed.

Not subject to evaluation since task

3 was not done. 

5. Reevaluate the list of permits and

new applications to be issued. 

Reevaluation is a continuous

process, however, a formal

reevaluation shall be done mid-fiscal

year to determine if workload is still

appropriate. Adjust workload and

reassign permits accordingly.

June 30, 1997 and update annually. 

Not done.

The lack of timely completion of some key tasks raises serious

questions whether the Region will achieve its desired results by the

end of fiscal 1999. In our opinion, accomplishment of tasks 3, 4,

and 5 listed in Objective 1 is critical to the Region’s success of

issuing permits for the most environmentally significant dischargers. 

By not performing these tasks in fiscal 1997, Regional management

lacks the information necessary to assess progress toward meeting

its goal, and to make necessary workload adjustments in the

remaining years of the Plan.

Also, the Region has not completed tasks for Objective 3 which is

to develop and utilize innovative strategies and improve processes

in order to increase the Region’s ability to issue NPDES permits. 

Task 1 provides that the “NPU will convene a team to evaluate

alternative and innovative means of issuing NPDES permits (i.e.

improving processes and approaches to getting the job done).” 

This task was to be completed with a report by June 30, 1997. As

of September 30, 1997, the report had not been prepared. Another

task under the Objective is to work with Office of Regional Counsel

(ORC) to investigate and develop strategies to streamline the

responses to legal challenges where possible. The NPU had a

meeting with ORC and identified some problems and possible
14 Report No. E1HWF7-10-0012-8100076

solutions, but has not finalized any strategies. We believe that

Regional management needs to monitor all tasks in the Plan

associated with addressing the permit backlog.

RECOMMENDATIONS We recommend that the Regional Administrator:

2-1. Report the backlog of NPDES permit applications

as a deficiency in the next annual FMFIA assurance

letter to the EPA Administrator.

2-2. Aggressively monitor Objective 1, tasks 3, 4, and 5

in the Plan to help assure issuance of permits to

strategically targeted dischargers by September 30,

1999.

2-3. Monitor the accomplishment of all the tasks

identified in the Plan relating to eliminating the

permit backlog.

REGION COMMENTS In its response to the draft report, the Region did not concur with

recommendation 2-1 that the Region report the backlog of NPDES

permit applications as a material weakness in the next annual

FMFIA assurance letter to the EPA Administrator. The Region

acknowledged the backlog and stated that a strategic plan has been

developed and is being implemented to address the backlog. The

Region concurred with recommendations 2-2 and 2-3.

OIG EVALUATION We have changed the recommendation to state that the Region

report the backlog of NPDES permit applications as a management

control deficiency instead of a material weakness in the next annual

FMFIA assurance letter to the Administrator for EPA’s Integrity

Act Report. We believe that the large backlog of permit

applications is an indicator that the NPDES Permit Program is not

achieving its intended results and should be reported as a

management control deficiency to the Administrator. While the

strategic plan is a positive step toward correcting the problem, the

Region acknowledges that the Plan will not substantially reduce the

backlog by fiscal 1999. 
15 Report No. E1HWF7-10-0012-8100076

Agency guidance for preparing assurance letters to the

Administrator states that “Offices should continuously review the 

effectiveness of their program strategies and guidance 

-- management controls -- in achieving program goals ... .” It also

states that “The AA/RA transmittal memo to the Administrator

documents their personal assurance that their Offices’ management

controls reasonably ensure the protection of program, operation,

and functions under their control from waste, fraud, abuse, and

mismanagement.” The memo discusses “the basis for the AA/RA’s

assessment, and formally advises the Administrator of significant

management control problems that impede achievement of major

program goals ... .”

OMB Circular No. A-123 “provides guidance to Federal managers

on improving the accountability and effectiveness of Federal

programs and operations by establishing, assessing, correcting, and

reporting on management controls. The Circular is issued under

the authority of the Federal Managers’ Financial Integrity Act of

1982 ... .” It states that “Agency managers and employees should

identify deficiencies in management controls ... . Agency managers

and staff should be encouraged to identify and report deficiencies,

as this reflects positively on the agency’s commitment to

recognizing and addressing management problems. Failing to

report a known deficiency would reflect adversely on the agency.” 

The Circular also states that “Management accountability is the

expectation that managers are responsible for the quality and

timeliness of program performance, increasing productivity,

controlling costs and mitigating adverse aspects of agency

operations, and assuring that programs are managed with integrity

and in compliance with applicable law.”

Our audit identified significant deficiencies related to NPDES

permitting in the following areas which should be reported to the

Administrator. 

C Timeliness of program performance. The Region

received 70 percent of the unprocessed applications

more than 4 years ago. The strategic plan provided

for addressing only 6 percent of the total universe of

permits through fiscal 1999. While the plan

indicates this will result in current permits for the

most environmentally significant dischargers, it is

silent on how the Region will address the rest of the
16 Report No. E1HWF7-10-0012-8100076

dischargers that need permits according to the Act. 

Further, as disclosed in our audit report, the Region

has not met all important milestones in the Plan. 

C Increasing productivity. In the last 21⁄2 years,

12 permit writers issued only 33 permits (21 major,

10 minor, and 2 general). A significant increase in

productivity will be needed to achieve a meaningful

reduction in the backlog.

 

C Mitigating adverse affects. The Region did not

effectively regulate dischargers and many

contributed to water quality problems.

C Management of programs in compliance with

applicable laws. There were 732 dischargers in

violation of the law because the Region failed to

issue or renew their permits. In addition, most of

the 268 dischargers, whose permits were

administratively extended, were not held to

requirements of the Water Quality Act of 1987

because the permits were issued prior to the Act. 

We believe that the backlog and related deficiencies described

above impede achievement of major goals of the NPDES Permit

Program and should be reported to the Administrator.
17 Report No. E1HWF7-10-0012-8100076

CHAPTER 3

COMPLIANCE MONITORING COULD BE IMPROVED

The Region could improve its compliance monitoring to help ensure

that dischargers comply with permit conditions and NPDES

regulations:

Compliance Inspections. The Region did not perform some

of the NPDES compliance inspections of major dischargers

that it committed to in its MOA with EPA Headquarters. 

Without compliance inspections, there is an increased

opportunity for permit violations to go undetected. In

addition, many inspection reports were not timely and

actions were not taken on reported problems. As a result,

instances of noncompliance were not corrected or not

corrected timely.

Citizen Complaints. The Region did not have adequate

procedures to track citizen complaints, document actions

taken on such complaints, and notify citizens of actions

taken. Actions were not taken on some complaints related

to permit and other NPDES violations which appeared to

warrant followup, resulting in potential adverse

environmental impact.

Some Dischargers Not Adequately Regulated. The Region

did not have procedures to ensure that dischargers under

storm water and seafood general permits, and minor

dischargers were in compliance with permit conditions. 

Some dischargers violated permit conditions and NPDES

regulations, and adversely affected water quality.

The Region did perform successfully in some other areas of its

compliance monitoring program. It met its pretreatment inspection

and audit commitments in inspection years 1995 and 1996, and also

met its NPDES compliance inspection commitment in 1996 for

Idaho. The Region's targeting of NPDES inspections generally

appeared to be consistent with EPA guidance, and the mix of

NPDES inspection types provided adequate coverage. Also,
18 Report No. E1HWF7-10-0012-8100076

compliance inspections were generally performed in accordance

with EPA’s NPDES compliance inspection manual. In addition, the

Region assured that the Whole Effluent Toxicity reports submitted

by permittees were reviewed and corrective action was initiated, as

necessary.

COMPLIANCE

INSPECTION ACTIVITIES

COULD BE IMPROVED

The Region could improve its compliance inspection activities to

help assure discharger adherence to permit conditions. In

inspection years 1995 and 1996 the Region did not perform some

of the inspections of major dischargers that it committed to in its

MOAs with EPA Headquarters. In addition, for those inspections

performed, many reports were not completed timely and violations

identified were not followed up by the Region.

Commitments Were Not

Met

The Region did not meet its compliance inspection commitments in

1995 for major dischargers in Alaska and Idaho, and in 1996 for

dischargers in Alaska:

Year/

State

Commitment

(#)

Actual

(#)

Fell

Short

By (%)

1995

Alaska

86 65 24%

1995

Idaho

65 56 14%

1996

Alaska

81 57 30%

Although the regulations (40 CFR 123.26) and national EPA

guidance (NPDES Inspection Strategy) require all major

dischargers to be inspected at least once a year, the Region

committed to a lesser number with EPA Headquarters. The Region

committed to inspect from 84 to 94 percent (depending on the

State and the year) of the major dischargers (excluding placer mine

dischargers, whom Headquarters granted the Region a waiver from

inspecting due to their remote locations).

The Region stated it did not meet its commitments for compliance

inspections of major dischargers in 1995 and 1996 because: (i) it

used some of its available resources to perform inspections of minor
19 Report No. E1HWF7-10-0012-8100076

dischargers that were not planned; and (ii) some dischargers

planned for inspection were no longer in business or the discharger

was not operating (seasonal operations) when the inspections were

planned.

Completion of fewer major discharger inspections than required and

committed to means less: (i) independent verification of permittee

compliance; (ii) development of enforcement information;

(iii) improvement of permittee performance; (iv) improvement of

data quality assurance; (v) support of permit development; and

(vi) maintenance of a regulatory presence for these major

dischargers. Considering the value of inspections, and considering

that the regulations and guidance require annual inspections of all

major dischargers, we believe that the Region should implement

controls to assure that, at a minimum, MOA commitments for

inspections are met.

Reports Were Not Timely The reports of inspections were not provided to the Region’s

Compliance Unit timely. From the inspection reports submitted for

inspection years 1995, 1996, and 1997, we sampled 22 to assess the

timeliness of the reports. Nine inspection reports out of our sample

of 22 were not submitted to the Region’s Compliance Unit timely. 

For these nine reports, it took from 64 to 364 days from the

inspection to the date the report was received by the Compliance

Unit. The average for these nine reports was 123 days.

The NPDES Inspection Strategy states that sampling inspection

reports should be forwarded to the Compliance Unit within 45 days

of the inspection date. For nonsampling inspections, the report

should be forwarded within 30 days.

When inspection reports are not submitted timely, the Region loses

the opportunity to take timely enforcement or followup action on

inspections that identify permit noncompliance. To illustrate, one

inspection report in our sample that identified permit

noncompliance was not forwarded to the Compliance Unit until a

year after the inspection. Thus, there was a significant delay in the

Unit’s ability to initiate corrective action.

The reports were not timely because the inspectors were not aware

of the specific criterion for report timeliness. The Region advised

that its procedures would be modified to incorporate the timeliness

guidelines for submitting inspection reports, and that these

guidelines would be emphasized to the inspectors.
20 Report No. E1HWF7-10-0012-8100076

No Followup On

Noncompliance

For the 7 of 22 inspections that were submitted to the Compliance

Unit with identified permit noncompliance, the compliance files did

not contain any evidence indicating that the inspection results were

followed up by the Unit. Because compliance inspections are one

of the primary mechanisms used by the Region to monitor

discharger compliance, followup on results is important.

The lack of followup on inspection reports was due partly to

Compliance Officers considering such followup a lower priority for

their time. However, during June 1997, the Region implemented a

procedure requiring Compliance Officers to transmit inspection

reports to the discharger with a letter pointing out permit

noncompliance issues reported by the inspector and directing the

discharger to correct the problems or face enforcement action. In

our opinion, this action, if routinely followed, will correct the

problem of not following up on inspection report results.

CITIZEN COMPLAINTS

NEED TO BE

ADDRESSED

The Region’s procedures for documenting and taking action on

citizen complaints relating to potential permit and other NPDES

violations needed improvement. While Compliance Officers

sometimes took action on citizen complaints relating to such

violations, we noted other instances where followup was not taken. 

Also, the Region did not always provide written responses to

citizen complaints as required by the regulations.

A valuable source of information for identifying permit violators

and unpermitted dischargers (NPDES violators) is citizen

complaints. Headquarter’s Enforcement Management System

(EMS) Manual recognizes that reports and complaints from citizens

are potential sources of information for use in an enforcement

system. Regulations specify requirements for investigation and

response. 40 CFR Part 123.26 states that there should be

procedures for receiving and ensuring proper consideration of

information submitted by the public about violations. 40 CFR Part

123.27 stipulates that EPA should investigate and provide written

responses to all citizen complaints about NPDES violations.

We attribute the lack of followup on citizen complaints, in part, to

the lack of a system to record the complaint and track its

resolution. Accordingly, we believe that the Region needs to

maintain a log or establish other procedures to ensure citizen

complaints are documented and followup actions are taken and
21 Report No. E1HWF7-10-0012-8100076

tracked. Also, the Region needs to implement procedures to notify

the complainants regarding actions taken.

Citizen Complaints Are A

Good Source Of

Information

There were instances where the Region investigated citizen

complaints and effectively followed up with an enforcement action. 

One involved a construction company working on an Alaska

Department of Transportation (DOT) project. There was a citizen

complaint in October 1996 which alleged storm water violations on

the project. After investigation, the Region issued an

Administrative Penalty Complaint to the contractor and DOT.

Some Complaints Did

Not Get Adequate

Attention

However, we identified citizen complaints related to NPDES

violations that were not followed up by the Region. The following

two examples illustrate the Region’s lack of adequate attention to

some citizen complaints:

Coquille Indian Development There was a citizen complaint about the Coquille Indian

Development in Coos Bay, Oregon that was referred by the State to

the Region in December 1995. The complaint stated that storm

water runoff from the Development had caused a creek and lake to

have turbidity problems and become very muddy. The complainant

provided pictures to illustrate the problem. Based on our review,

we concluded that no followup action had been taken by the Region

on this complaint.

City of Tacoma The Puyallup Indian Tribe complained to the Region in June 1996

about an unpermitted discharge by the City of Tacoma on Tribal

lands. Historically, the discharge had been a source of sediment

loading to Tribal lands. While the Region advised that it was

working on an MOA that would address this issue, staff working on

the MOA advised they were not aware of the Tribe’s specific

complaint, and there was no indication of Regional followup on the

complaint.

SOME DISCHARGERS

NOT ADEQUATELY

REGULATED

The Region did not effectively regulate: (i) general storm water

permit dischargers; (ii) general seafood permit dischargers; and

(iii) minor dischargers. The Region had inadequate and inconsistent

procedures for compliance monitoring of dischargers under the two

types of general permits. In addition, the Region did not monitor

compliance of most minor dischargers, and therefore could not

report on compliance of those dischargers as required by regulation.

Background EPA classifies dischargers as “major” or “minor” sources. Major
22 Report No. E1HWF7-10-0012-8100076

municipal facilities are those which have a flow of at least one

million gallons per day, a service population of at least 10,000, or a

significant impact on water quality. EPA classifies industrial

facilities through a separate rating system. The Region is moving

toward the Watershed approach, in which minor dischargers can be

just as important as major dischargers.

The term “storm water” represents large volumes of water that can

result from rain, snow melt, surface runoff, street washing, and

other drainage. For over a decade, EPA has attempted to develop a

workable program to control storm water discharges. Storm water

from municipal separate storm water sewers and storm water

associated with industrial point sources are considered point source

discharges under the CWA, and are addressed under the NPDES

Permit Program.

Generally, storm water discharges from industrial sources are

regulated by general permits. General permits are a management

tool designed to enable EPA to issue one permit covering a

specified class of dischargers within a defined geographic area. 

General permits apply the same set of limitations to a group of

dischargers as would be imposed through individual permits. 

Besides storm water, the Region also issued general permits

covering Alaska seafood dischargers, oil and gas operators, and

placer miners. The Region indicated it will probably use more

general permits in the future, as opposed to individual permits, in

order to help streamline the permitting process.

Requirements Regulations (40 CFR 123.26) state that programs shall have

procedures for receipt, evaluation, retention and investigation for

possible enforcement of all notices and reports required of

permittees (and for investigation for possible enforcement of failure

to submit these notices and reports), and that programs shall

maintain a schedule of reports required to be submitted by

permittees.

The EPA EMS Guide states that regions should have documented,

in-place pre-enforcement screening procedures that should require

the forecast of reports due within a specified period of time, and

also specific guidelines for determining obvious compliance from

noncompliance. The guidelines should at least establish criteria to

be used to determine receipt vs. nonreceipt. In addition, there

should be an identifiable process for determining which dischargers
23 Report No. E1HWF7-10-0012-8100076

have not applied for permits after being required to do so and for

following through in these cases.

Regulations (40 CFR Part 122.28) for general permits state that

dischargers shall submit a written notice of intent (NOI) to be

covered by the general permit. The NOI includes a certification

that the discharger has read the permit and will comply with all

permit requirements. The Region’s general permits for storm water

and seafood include the requirement for submittal of an NOI, as

well as various other reporting requirements.

Regulations (40 CFR Part 123.45) and national EPA guidance

(Final QNCR Guidance) require the Region to annually submit

statistical noncompliance reports on nonmajor NPDES permittees

indicating the total number reviewed, the number of noncomplying

nonmajor permittees, the number of enforcement actions, and

number of permit modifications extending compliance deadlines.

General Storm Water

Permits Not Monitored

For general storm water permits (covering both major and minor

dischargers), the Region had no system to track discharger

compliance. The Region did not track whether the dischargers

required to be covered under the general permits had submitted the

required NOIs. Also, it did not track other reporting requirements

of general dischargers, such as the preparation or submission of

Storm Water Pollution Prevention Plans (SWPPP).

There are two reasons for the inadequate monitoring of dischargers

under general storm water permits. First, the Region disinvested in

the storm water program because it viewed it as a low priority

among competing programs. This resulted in the allocation of

minimal resources to deal with storm water compliance monitoring

and enforcement issues. Second, since many general permits were

for minor dischargers, the Region did not input reporting

requirements for dischargers under general permits into Permit

Compliance System (PCS). Instead, the Compliance Officers were

responsible for maintaining a tracking system for the general permit

separate from PCS. As a result, we found varying degrees of

effectiveness in the different tracking systems used for dischargers

under general permits.

Storm Water Affects

Water Quality

There is a disparity between the importance placed on storm water

issues by EPA Headquarters and the Region. Headquarters has

emphasized the importance of and placed high priority on storm

water issues, yet the Region has disinvested in this program. 
24 Report No. E1HWF7-10-0012-8100076

Various studies estimate that about 60 percent of dischargers

required to have storm water permit coverage are not covered (they

have not submitted the required NOI certifying that they have read

the permit and will comply with the requirements). The magnitude

of the environmental impact from point source storm water

discharges indicates that the Region has placed too low of a priority

on the storm water program, and needs to reconsider its decision to

disinvest in storm water compliance issues:

C In EPA’s Strategic Plan submitted to Congress in

September 1997, EPA stated that urban runoff is a leading

cause of water quality problems. Urban runoff causes beach

closures and shellfish bed closures in coastal areas. 

Discharges from storm drains, sanitary sewers, and

combined sewers are point source discharges. Controlling

these sources of pollution will be a major priority for EPA’s

point source control programs in the coming 5 to 10 years.

C In a report to the Congress dated March 1995, EPA stated

that storm water discharges have been linked to one-third of

all assessed surface water quality impairments nationwide. 

Significant sources of contaminated storm water include

urban runoff, industrial activities, construction, mining,

other types of resource extraction, and different commercial

activities.

C Storm water runoff from a number of diffuse sources,

including municipal separate storm sewers and urban runoff,

are the leading cause of surface water quality impairment

cited by States. States report that urban runoff/storm

sewers is the second leading source of water quality

impairment in lakes and estuaries, and the third leading

source of water quality impairment in rivers.

C Alaska reported that urban runoff is the major source of

impaired rivers and streams, and urban development is also

the major source of pollution in 26 impaired lakes. The

State attributes impairments at 34 estuaries partly to urban

development.

C The Region reported that besides two sewage treatment

plants, major pollution sources in the Boise River watershed

include the many area storm drains. Storm sewers are

suspected to be a significant contributor to the water quality
25 Report No. E1HWF7-10-0012-8100076

problems in the Boise River, and several sand and gravel

operations along the river might also contribute to the

degradation of the watershed.

Our audit identified several instances where there appeared to be an

adverse environmental effect as a result of unregulated point source

storm water dischargers in the States of Alaska and Idaho.

S&S Sand & Gravel

Extraction Operations

The Region received many citizen complaints about a sand & gravel

operation in both Juneau and Sitka, Alaska. Both sand & gravel

pits were owned by the same operator, S&S. In Juneau, S&S had

been discharging without a permit into impaired waters for 10

years. For the Sitka operation, S&S first applied for the wrong

type of permit, then sent in an inadequate SWPPP, and recently sent

in an incomplete application for the correct type of permit. 

Meanwhile, S&S continued to discharge contaminated storm water. 

S&S was considered to be uncooperative and has had ongoing

complaints about two of its quarries in Alaska. This is an

important, high-visibility issue in Sitka. However, the Region did

not take any action against these unregulated discharges.

Wal-Mart Construction Site There were many complaints that excavated soil from a Wal-Mart

construction site in Idaho was being dumped along the edge of

Sand Creek and other low lying areas, possibly wetlands. The State

sent some letters to Wal-Mart and its contractor attempting to get

corrective action, but had problems getting them to comply with the

regulations. This matter was referred to the Region in February

1996, but the Region did not followup.

Bark Mill Expansion Site There were complaints made by a citizen in late 1996 about a bark

mill in Idaho, alleging violations of air quality regulations and CWA

Section 404, wetlands regulations. The citizen alleged that the bark

mill’s proposed expansion site was surrounded by wetlands and

runoff from stored raw bark material would flow directly into a

creek and into the wetland area, as well as the old creek bed. The

bark mill did not have the required storm water permit, nor had the

Region addressed the apparent storm water violations at the mill.

Kenai River Water Study

Findings

A publication in early 1997 discussed a water-quality study by State

of Alaska researchers in 1994 which raised serious concerns about

the health of the Kenai River in Alaska. The study indicated that

new roads, shopping centers, and storm sewers might be affecting

the Kenai River’s health. The study noted that efforts to deal with

one of the main concerns, untreated storm sewer drains, were slow
26 Report No. E1HWF7-10-0012-8100076

in development. The Region had not done any followup on this

potential storm water-related problem.

Moscow, Idaho Construction

Site

Citizens and the city of Moscow notified the Region about

unpermitted storm water discharges at a construction site. The site

developer apparently had applied for a permit but it was not granted

because of missing information on the NOI. The Region sent the

developer a letter describing the missing information on the NOI. 

However, the information was not received and the Region did not

take followup action; responsibility for the problem fell to the city

of Moscow to enforce compliance. The Lewiston Tribune reported

on this issue in December 1995.

Sandpoint, Idaho Highway

Construction Project

In November and December 1994, the State of Idaho informed the

Region of severe erosion and slope failure on a State highway

construction project which was covered by EPA’s NPDES General

Storm Water Permit. The erosion contributed a significant amount

of sediment to tributaries of Sand Creek and associated wetlands,

and the State informed the Region that the SWPPP for the project

did not meet Federal requirements. The State sent a video to the

Region which graphically showed this erosion. The Region did not

take any action as a result of the State’s referral.

General Seafood Permits

Not Monitored

For seafood general permits, the Region did not adequately track

compliance of dischargers covered by those permits and did not

take action when noncompliance was identified. Although the

Region had established a new system for tracking these dischargers,

the portion of the system to track reporting requirements had not

yet been implemented. The system, however, did identify that

almost 10 percent of dischargers required to submit an NOI had not

done so, yet no followup action had been taken.

Tracking compliance of dischargers under general permits was

given a low priority by the Region. When reporting requirements

were not tracked, the Region was not alerted to instances of

noncompliance with those requirements, and therefore could not

initiate enforcement action. In addition, when followup actions

were not taken on identified instances of noncompliance, those

dischargers were not effectively regulated. Because the Region

anticipates issuing more general permits as opposed to individual

permits in the future, compliance monitoring of general dischargers

will only become more important.
27 Report No. E1HWF7-10-0012-8100076

Minor Dischargers Not

Monitored

Compliance of minor dischargers was another area that was not

adequately monitored by the Region. The Region had not

implemented a system for tracking minor discharger compliance. It

generally did not review or track Discharge Monitoring Reports

(DMRs) for minor dischargers in PCS. As a result, it could not

report on the compliance status of these permittees as required by

regulation. Also, without tracking and reporting on noncompliance

of minor dischargers, the Region was not alerted to instances of

noncompliance, and therefore could not initiate enforcement action. 

The Region did not monitor compliance of most minor dischargers

because it considered those dischargers to be a low priority. In the

past, EPA generally considered minor dischargers to be a low

priority nationwide. However, because the Region is going toward

the Watershed approach, compliance monitoring of minor

dischargers will become more important.

SUMMARY The Region needs to improve its compliance monitoring of

dischargers in several areas. The Region should meet its inspection

commitments and ensure that reports are submitted timely and

followup actions are taken on reported problems. The Region

should ensure that appropriate actions are taken on violations

reported by citizen complaints. Finally, the Region should establish

adequate and consistent procedures to ensure that dischargers

under all general permits and minor dischargers are required to

comply with permit conditions and NPDES regulations. These

improvements are needed to ensure that the Region consistently

identifies violators and takes corrective actions.

RECOMMENDATIONS We recommend that the Regional Administrator:

3-1. Establish controls to assure that the Region meets its

compliance inspection commitments.

3-2. Establish procedures for inspectors to issue timely

reports.

3-3. Assure that the Compliance Officers notify

dischargers of the results of inspections.

3-4. Establish a log or other procedures to ensure that

citizen complaints relating to potential permit and

other NPDES violations are documented, resolution
28 Report No. E1HWF7-10-0012-8100076

of complaints are tracked, and the complainant is

notified of the resolution.

3-5. Commit resources to compliance monitoring

activities for the general storm water permits. 

Specifically, resources should be committed to

perform the following activities: (i) reconcile those

dischargers required to submit an NOI and those

dischargers who have submitted an NOI; (ii) send

letters to those dischargers violating the NOI

requirements; (iii) initiate appropriate enforcement

actions; and (iv) track reporting requirements

stipulated by the general permits.

3-6. Establish and implement procedures to ensure

adequate and consistent compliance monitoring of

dischargers under all general permits (particularly

general permits for storm water and seafood) and

minor dischargers. At a minimum, the procedures

should include adequate tracking of: (i) dischargers

required to be covered by permits; and

(ii) discharger submittals of required reports. 

Procedures should also include appropriate

enforcement on instances of identified

noncompliance.

REGION COMMENTS

AND OIG EVALUATION

The Region concurred with the recommendations and stated that it

has implemented corrective action. We consider the corrective

action to be satisfactory.
29 Report No. E1HWF7-10-0012-8100076

CHAPTER 4

ENFORCEMENT AGAINST SIGNIFICANT VIOLATORS

COULD BE IMPROVED

The Region did not respond in an appropriate or timely manner to

violations by dischargers that were in Significant Noncompliance

(SNC) with NPDES permit conditions. The Region did not take

formal enforcement action against 19 of the 25 dischargers in SNC

for 1 or more quarters during the period October 1994 through

December 1996. In addition, we reviewed files for 10 of those

dischargers that were in SNC for 2 or more consecutive quarters

and concluded that the Region did not have written justification for

not taking formal enforcement action against 9 dischargers. EPA’s

enforcement guidance requires that formal enforcement actions be

taken against dischargers in SNC. At a minimum, the guidance

requires a written justification in those rare instances when formal

enforcement action is not taken. These conditions occurred

because the Region did not have effective management controls to

ensure that either appropriate and timely enforcement actions were

taken or that decisions to take no action were justified and

documented. Failure to take appropriate enforcement action

against violators weakens the effectiveness of the NPDES Program

to protect public health and the environment.

The Region took formal enforcement action consistent with EPA

guidance against 6 of the 25 dischargers in SNC during the period

of our audit. However, actions against three of the dischargers did

not meet EPA’s timeliness guidelines of 2 months after identifying

the violation. For the three dischargers, formal enforcement action

was not taken for 5 to 8 months after the violations became known

to the Region. More timely enforcement action could lead to

quicker return to compliance with permit requirements.

BACKGROUND The ultimate goal of the enforcement program is to improve

environmental quality through compliance with environmental laws. 

EPA guidance states that the NPDES Permit Program will be

effective only to the extent that EPA is able to systematically take

timely and appropriate enforcement action against violators to
30 Report No. E1HWF7-10-0012-8100076

achieve full compliance with the CWA. EPA’s enforcement

program is designed to accomplish four major objectives:

C identify instances of noncompliance;

C return the violator to compliance;

C recover any economic advantage obtained by the

violator’s noncompliance; and

C deter other regulated dischargers from

noncompliance.

Enforcement Actions Enforcement ranges from simple informal actions, such as phone

calls and Letters of Violation, to formal Administrative Orders, and

civil and/or criminal judicial actions. EPA can also seek substantial

monetary penalties which promote environmental compliance and

help protect public health by deterring future violations by the same

discharger and by other members of the regulated community.

Because there are powerful disincentives to compliance, such as

costly pollution control measures and inconvenient compliance

measures, enforcement evens the scale by adding a powerful

incentive in favor of compliance. Penalties promote a national level

playing field by ensuring that violators do not obtain an unfair

economic advantage over competitors who have done whatever

was necessary to comply on time.

EPA uses the EMS to translate compliance information into timely

and appropriate enforcement actions. The EMS stipulates

minimum requirements for each of the seven basic principles

included in an effective enforcement program, such as the preenforcement screening process and the formal enforcement

evaluation. The EMS also includes a response guide that matches

types of violations to a narrow range of appropriate enforcement

responses.

40 CFR 123.45 provides requirements for listing discharger

violations and resulting regulatory enforcement action on Quarterly

Noncompliance Reports (QNCR). This regulation includes

reporting requirements for violations that meet specific, quantifiable

reporting criteria, as well as for violations that are more difficult to

quantify but are of sufficient concern to be considered reportable. 

A subset of QNCR violations are identified as SNC. A discharger

reported in SNC indicates a violation of sufficient magnitude and/or

duration to be considered a high enforcement response priority. If

the discharger is still considered in SNC after 2 quarters and no
31 Report No. E1HWF7-10-0012-8100076

formal enforcement action has been taken, the discharger is placed

on the Exceptions List (EL).

Enforcement

Requirements

Headquarter’s EMS Manual requires an enforcement response to

all SNC violations in a timely and appropriate manner. Unless there

is supportable justification, the response must be a formal

enforcement action or a return to compliance by the permittee

generally within one quarter from the date that the SNC violation is

first reported on the QNCR. The EMS intends that a formal

enforcement action be initiated before the violation appears on the

next QNCR, generally within 60 days of the first QNCR. QNCRs

are not available until 60 to 90 days after the end of quarter;

enforcement action is not expected to be initiated until the QNCR is

available. In the rare circumstances when formal enforcement

action is not taken, the Region is expected to have a written record

that clearly justifies why the alternative action (informal

enforcement action or permit modification) was more appropriate. 

The EMS Manual does not provide an option for taking no action

against SNC violators.

According to the NPDES Permit Writer Training Manual, although

there are some legitimate justifications for dischargers appearing on

the EL, the EL generally indicates dischargers for which the Region

failed to handle enforcement in a timely and appropriate manner.

NO FORMAL

ENFORCEMENT ACTION

The Region did not take formal enforcement action against 19 of

the 25 dischargers in SNC for 1 or more quarters during the period

October 1994 through December 1996. EPA’s guidance states that

only in rare circumstances should EPA not take formal enforcement

action against dischargers in SNC. In our opinion, not taking

formal enforcement action on over 75 percent of the dischargers in

SNC does not meet the intent of this guidance. Of the 19

dischargers without formal enforcement actions, 10 dischargers

remained in SNC for 2 or more consecutive quarters, placing them

on the EL. Also, for 9 of these 10 dischargers, the Compliance

Officer did not document the decision not to take formal action in

the compliance file, nor was there any indication of formal

concurrence in this decision by the Region’s Compliance Unit

Chief.

If appropriate and timely enforcement action is not taken against

dischargers in SNC, there is increased risk that dischargers will not

return to compliance timely and the deterrent effect of enforcement
32 Report No. E1HWF7-10-0012-8100076

is lessened, increasing the risk to public health and the environment. 

Without documentation justifying decisions not to take formal

action, Regional management lacks a clear decision-making trail

necessary to provide assurance that Compliance Officers are

making enforcement decisions consistent with enforcement

guidance, leaving it open to scrutiny and, in our opinion, loss of

credibility.

The following are five examples of conditions that we found with

respect to the absence of formal enforcement actions and the lack

of documentation justifying decisions to take no such actions. The

Region did not take any action, formal or informal, against these

dischargers. These examples are from the ten dischargers

remaining in SNC for 2 or more consecutive quarters without

formal enforcement action, resulting in the dischargers being

reported on the EL. Our conclusions are based on a review of the

compliance files and discussions with the responsible Compliance

Officers.

DOD Army - Fort Lewis,

WA

This discharger was in SNC for the third and fourth quarters of

fiscal 1995, and continued to violate permit conditions through

April 1997. However, no enforcement action was taken against the

discharger nor was there documentation in the file justifying the

lack of action.

As early as June 1995, the Army notified the Region that it was

going to continue to exceed its permit limit for Chlorine (Cl). The

Army justified its violation on the basis that it was necessary to

control bacterial contamination. In January and February 1996,

citizen lawsuits against Fort Lewis lead the Army to send a letter to

the Compliance Officer requesting EPA’s views on its compliance

posture. In response, the Compliance Officer advised the Army

that it had violated its NPDES permit over the past several years,

and that the violations collectively were cause for concern. The

DMRs through April 1997 show continued permit limit violations

for Cl. According to the Compliance Officer, the Army assured the

Region it would construct a new dechlorination facility.

EPA’s enforcement guidance requires a formal enforcement action

against a discharger in SNC. In the rare circumstances when formal

enforcement action is not taken, the guidance requires

documentation justifying this decision. In our opinion, at the very

least an informal enforcement action was required when the Army

informed the Region of its intent to violate the Cl permit limit. It
33 Report No. E1HWF7-10-0012-8100076

would also have been reasonable to negotiate a Compliance

Agreement stipulating enforceable milestones for completion of the

new dechlorination facility.

International Seafoods,

AK

This discharger was in SNC from the second quarter of fiscal 1996

through the first quarter of fiscal 1997 for violating its permit limits

for its seafood processing waste discharge. In addition, the

discharger continued to appear as a violator on the QNCR for the

quarter ended March 1997. However, no enforcement action was

taken against the discharger nor was there any documentation in the

file justifying the lack of action.

The permit violations were the result of the discharger installing a

new fish powder processing unit that increased Total Suspended

Solids and Oil and Grease. The Compliance Officer believed that

the current permit limits were inappropriate and needed to be

revised since the discharger had changed its processing method. 

The discharger did not submit an application for permit reissuance

until after the new unit went on line (permit expired in January

1997).

EPA’s enforcement guidance requires formal enforcement action in

the above circumstances to assure that the regulated community

complies with permitting requirements. In the rare circumstances

when formal enforcement action is not taken, the guidance requires

documentation justifying this decision. In our opinion, it was

reasonable to expect the new process to cause the discharger to

violate its permit effluent limits; however, the discharger should

have submitted the application 6 months before the new process

went on line. Therefore, it would have been appropriate for the

Region to pursue an enforcement action.
34 Report No. E1HWF7-10-0012-8100076

City of Twin Falls, ID

Cook Inlet Processing, AK

International Seafoods Processing Plant

This discharger was in SNC from the third quarter of fiscal 1996

through the first quarter of fiscal 1997 for violating its permit

effluent limits for nitrogen and ammonia. The discharger returned

to compliance for the quarter ended March 1997. During the

period of SNC, no enforcement action was taken against the

discharger nor was there any documentation in the file justifying the

lack of action.

The Compliance Officer was considering an enforcement action,

and had been waiting to see if the discharger would be on the SNC

list for the second quarter of fiscal 1997. While EPA’s enforcement

guidance provides some latitude for violators that return to

compliance, the guidance also requires documentation justifying a

decision to take no action. In our opinion, a discharger in SNC for

3 consecutive quarters requires at the very least an informal

enforcement action, such as a Letter of Violation.

This discharger was in SNC from the second quarter of fiscal 1995

through the first quarter of fiscal 1996 for violating its permit

effluent limits for both its seafood processing waste discharge and

its sanitary wastewater discharge. In addition, the discharger

continued to appear as a violator on the QNCR for the quarter
35 Report No. E1HWF7-10-0012-8100076

Faros Seafoods, Inc, AK

ended March 1997. However, no enforcement action was taken

against the discharger nor was there any documentation in the file

justifying the lack of action.

Concerning the sanitary wastewater discharge, the Compliance

Officer believes that the discharge has no impact on the

environment and has been just trying to get the discharger to get its

treatment system to work so it could meet its permit limits. 

Apparently the permittee was working on the problem, but had

been working on it for 7 years. Although the EL stated that this

violation was under enforcement review, the Compliance Officer

does not intend to take any informal or formal enforcement action

regarding this sanitary discharge.

EPA’s enforcement guidance requires a formal enforcement action

against a discharger in SNC. In the rare circumstances when formal

enforcement action is not taken, the guidance requires

documentation justifying this decision. In our opinion, the guidance

requires the Region to go on record concerning the violations for

the sanitary wastewater discharge, by at least taking an informal

enforcement action, such as a Letter of Violation.

This discharger was in SNC for the first and second quarters of

fiscal 1995 for failure to submit DMRs. During this period, no

enforcement action was taken against the discharger nor was there

any documentation in the file justifying the lack of action.

The Compliance Officer believed that since the discharger was very

small, it would not have the resources to pay a penalty without

going into default. The Compliance Officer evidently knew the

discharger was on the verge of shutting down, and the discharger

did eventually cease operations.

EPA’s enforcement guidance does not indicate that enforcement

can be waived for economic reasons. The guidance directs that in

the rare circumstances when formal enforcement action is not

taken, documentation is required justifying this decision. In our

opinion, even though it was a small discharger by comparison, it

was classified as a “major” discharger by EPA, and having a nonquantified discharge for several months and not being cited by the

Region is questionable. The Region should have at least taken an

informal enforcement action, such as a Letter of Violation.
36 Report No. E1HWF7-10-0012-8100076

Faros Seafoods Unloading Area

ENFORCEMENT ACTION

NOT TIMELY

Formal enforcement action was taken against 6 of the 25

dischargers in SNC for 1 or more quarters during the period

October 1994 through December 1996. The enforcement

mechanisms used were consistent with Agency guidance. 

However, actions against three of the dischargers did not meet

EPA’s timeliness guidelines of action within 2 months after

identifying the violation. For the three dischargers, formal

enforcement action was not taken for 5 to 8 months after being

reported in SNC. More timely enforcement action could lead to

quicker return to compliance with permit requirements.

The delays in formal enforcement action against the three

dischargers are discussed below:

C Hecla Mining (ID) was reported in SNC for the

fourth quarter of fiscal 1995 through the first

quarter of fiscal 1996. While the Region met with

the discharger in March 1996 to discuss its

violations, an enforcement action (a penalty) was

not proposed until August 1996, or 8 months after

the violations were known to the Region.
37 Report No. E1HWF7-10-0012-8100076

C Sunshine Precious Metals (ID) was reported in

SNC for the fourth quarter of fiscal 1996 through

the first quarter of fiscal 1997. An enforcement

action (a penalty) was not proposed until May

1997, or 5 months after the violations were known

to the Region.

C The City of Hailey (ID) was reported in SNC for

the first and second quarters of fiscal 1996. An

enforcement action (an Administrative Order) was

not issued until August 1996, or 5 months after the

violations were known to the Region.

INEFFECTIVE

MANAGEMENT

CONTROLS

We attribute the underlying causes of inadequate enforcement and

documentation for dischargers in SNC to: (i) the Region not

having sufficient controls to ensure that appropriate and timely

enforcement actions were taken; and (ii) Regional management not

emphasizing the importance of Agency guidance requiring formal

enforcement action against dischargers in SNC. We believe a

good starting point for corrective action would be for the Region

to update its written EMS to be consistent with the Headquarter’s

EMS and the Agency’s enforcement policy for SNC violators. In

addition, the Region should implement procedures to document

decisions in those rare circumstances when formal enforcement

action is not taken. These documentation procedures should

require written concurrence by Regional management.

Although EPA Headquarters requires all regions to have a written

EMS that is consistent with the Headquarter’s EMS, Regional

management informed us that its EMS Manual was outdated. 

Consequently, it had not required Compliance Officers to follow it. 

Since the EMS is a process to collect, evaluate, and translate

compliance information into appropriate and timely enforcement

actions, without a current EMS in place and implemented, the

Region was not efficiently and effectively performing these

functions. The Region advised during the audit that it has already

assigned staff to update its EMS Manual.

Inadequate documentation occurred because Compliance Officers

were not required to document in the compliance files decisions

not to take formal enforcement action against dischargers in SNC. 

Compliance Officers may not be aware of the requirement to
38 Report No. E1HWF7-10-0012-8100076

document decisions to take no formal enforcement action, or they

may not consider it a priority for their time. In addition, decisions

were not subject to formal written concurrence by the Region’s

Compliance Unit Chief. The Region advised that in the past it

used a Violation Notification Form to record enforcement

decisions, but use of that form was discontinued several years ago. 

Review of compliance files revealed that the Region also

sometimes used a Record of Decision form to record enforcement

decisions in the past.

RECOMMENDATIONS We recommend that the Regional Administrator:

4-1. Implement controls to ensure that: (i) appropriate

and timely enforcement actions are taken against

dischargers in SNC; and (ii) the importance of

Agency guidance requiring formal enforcement

action against dischargers in SNC is emphasized to

the Compliance Unit staff. As a first step, the

Region should update and implement its EMS

Manual, ensuring its consistency with the

Headquarter’s EMS and the Agency’s enforcement

policy for SNC violators.

4-2. Ensure that all decisions not to take formal

enforcement action against SNC violators are

justified and adequately documented in the

compliance file. This could be accomplished

through a standard Record of Decision form

completed by the Compliance Officer and signed by

the Compliance Unit Chief.

4-3. Implement procedures that require the Compliance

Unit Chief to provide written concurrence in all

decisions to take no formal action against violators

in SNC.

REGION COMMENTS

AND OIG EVALUATION

The Region concurred with the recommendations and stated that it

has either implemented or is in the process of implementing

corrective actions. We consider the corrective actions

implemented or proposed to be satisfactory.
39 Report No. E1HWF7-10-0012-8100076

CHAPTER 5

MANAGEMENT REPORTING SYSTEM COULD BE MORE

CURRENT AND COMPLETE

The Region’s management reporting system for NPDES permit

information is the PCS. The PCS was generally current and

complete, except for new or renewed permits. The Region did not

input permit effluent limits and reporting requirements into the PCS

timely and completely for dischargers receiving new or renewed

permits. For four major dischargers, permit effluent limits were not

input for an average of 4 months after the permit was issued. Also,

for six of the eight new permits, reporting requirements were not

input to PCS. Without current and complete permit information,

QNCRs generated from the PCS were not an effective tool for

identifying violations for dischargers with new or renewed permits. 

The PCS was not updated timely for new or renewed permits

because the Region had not given high enough priority to this

effort.

BACKGROUND The PCS is EPA’s national data base for NPDES data. EPA

established the PCS to provide an overall inventory for the NPDES

Permit Program. PCS is also used by the Region as an operational

and management tool for tracking permit issuance, compliance, and

enforcement. 

Information on a discharger’s permit effluent limits and reporting

requirements are intended to be current and complete in PCS. 

Regional staff are responsible for inputting effluent limits and

reporting requirements for permits into PCS. Regional practice

provides that input is to be documented by the staff initialing and

dating the new or renewed permits at the time of entry into PCS.

The PCS generates DMRs to assist dischargers in reporting their

effluent data to the Region for input to PCS. PCS also includes

provisions for inputting data on compliance with reporting

requirements such as, due dates for plans, reports, inspections, and

construction milestones. 
40 Report No. E1HWF7-10-0012-8100076

PCS generates the QNCR to assist the Region in monitoring

compliance with permit effluent limitations and reporting

requirements. EPA regulation 40 CFR 123.45 established QNCRs

as a tracking mechanism for dischargers that violate their permit

effluent limits and/or reporting requirements. The QNCR is only

useful as a tool to identify permit violations if the underlying PCS

information on the discharger is current and complete.

INFORMATION ON NEW

PERMITS WAS NOT

INPUT TIMELY OR

COMPLETELY 

The information in PCS for dischargers in the States of Alaska and

Idaho was generally current and complete, except for new or

renewed permits. The Region did not input permit effluent limits

and reporting requirements into the PCS timely and completely for

dischargers receiving new or renewed permits. Effluent limits were

not input timely and reporting requirements were not always input

to PCS.

New Permit Effluent

Limits Were Not Input

Timely

The Region issued new permits to nine major dischargers during

our audit period. We compared the date of the permit for these

major dischargers with the date the permit effluent limits were input

to PCS. For five of the permits, we could not determine the date of

input because the permit had not been annotated with the PCS entry

date. For the other four permits, the average time between permit

issuance and PCS input was almost 4 months as shown below:

Date of Date of Delay in

Permit No. Permit PCS Input Input 

AK0022942 12-23-94 03-01-95 68 days

AK0028657 04-29-96 09-06-96 130

ID0027090 05-02-95 08-02-95 92

ID0000019 10-01-96 03-31-97 181

 Average 118 days

Reporting Requirements

Were Not Always Input

to PCS

Reporting requirements for new and renewed permits were not

always being input to PCS. We judgmentally selected eight new

permits with various plans and reports required to be submitted to

the Region. These eight permits had requirements for 35

plan/report due dates. We compared these permit reporting

requirements with information in PCS. The PCS had not been

updated for six of the permits, and due dates for 23 of the

plans/reports were not in PCS. Examples of this condition are

detailed below:
41 Report No. E1HWF7-10-0012-8100076

C Permit No. AK0022543 Anchorage-Eagle River. The

permit was issued on April 12, 1995 with due dates for

five plans/reports. As of May 16, 1997, due dates for

three of the plans/reports had not been input to PCS.

C Permit No. AK0037303 Trident Seafoods-Akutan. The

permit was issued on April 29, 1996 with due dates for

six plans/reports. As of May 16, 1997, due dates for six

of the plans/reports had not been input to PCS.

C Permit No. ID0000019 Potlatch Corp.-St. Maries. The

permit was issued on October 1, 1996 with due dates

for three plans/reports. As of May 16, 1996, due dates

for three of the plans/reports had not been input to PCS.

QNCRs ARE

INEFFECTIVE AS AN

ENFORCEMENT TOOL 

For those dischargers whose new permit effluent limits and

reporting requirements were not input timely or not input at all, the

PCS was not an effective tool to detect noncompliance with the

permit conditions; and violations were not reflected in the 

generated QNCRs. This QNCR weakness reduced the Region’s

ability to identify and take timely enforcement action against

violators.

We identified several instances where permit violations should have

been reflected in a QNCR, but were not. These violations involved

non-reporting of effluent data as well as non-submittal of 

plans/reports as required. Examples of the violations that we noted

include:

Non-reporting of effluent data limits:

C Permit No. AK0022543 Anchorage - Eagle River. This

discharger did not submit DMRs for new effluent limits

for 4 months after the effective date of its permit. 

C Permit No. ID0000019 Potlatch - St. Maries. This

discharger did not submit DMRs for new effluent limits

for 6 months after the effective date of its permit. 

Non-submittal of plans/reports as required:

C Permit No. AK0022543 Anchorage-Eagle River. This

permit required that a progress report on the preparation
42 Report No. E1HWF7-10-0012-8100076

of a Sludge Disposal Contingency Plan and a Sludge

Sampling Report be submitted to the Region in May

1996. The Contingency Plan was not submitted until

November 1996 (6 months late) and the Sampling

Report was not submitted until August 1996 (3 months

late).

C Permit No. AK0028657 Unisea-Dutch Harbor. This

permit required that a Seafloor Monitoring Plan be

submitted to the Region 60 days before the survey

occurred (December 2, 1996) and a Visual Monitoring

Plan be submitted by May 31, 1997. The Seafloor

Monitoring Plan was not provided to the Region until

August 12, 1997 (over 10 months late). The Visual

Monitoring Plan was not provided until August 12,

1997 (over 2 months late). 

All of the above violations were subject to enforcement actions by

the Region. However, the Region advised that it would not

normally initiate enforcement action for such violations; particularly

for the failure to submit DMRs on new effluent limits. The Region

advised that it was partly at fault because it had not provided the

dischargers preprinted DMRs with the new effluent limits. We

believe that the Region’s perspective increases the importance of

assuring that new permit effluent limits and reporting requirements

are input timely to PCS. 

REGIONAL GUIDANCE

NEEDS IMPROVEMENT

The new or renewed permit effluent limits and reporting

requirements had not been input timely to PCS because the Region

had not established priorities for PCS input. Input of new permit

effluent limits and reporting requirements receive low priority

compared to DMR data input. We believe that the Regional

management should set written priorities for the timely input of new

and renewed permit requirements into the PCS. Procedures should

also ensure that staff follow the Region’s practice of documenting

the input of new permit requirements into the PCS with initials and

dates of input written on the permits.
43 Report No. E1HWF7-10-0012-8100076

RECOMMENDATIONS We recommend that the Regional Administrator:

5-1. Establish written priorities and procedures for PCS

input that ensure that new permit effluent limits and

reporting requirements are input into the PCS as soon as

the permit is effective. 

5-2. Improve procedures to ensure that the entry date of new

permit effluent limits and reporting requirements into the

PCS are documented on the permit with the date of

entry and initials of personnel making entries.

REGION COMMENTS

AND OIG EVALUATION

The Region concurred with the recommendations and stated that it

has either implemented or is in the process of implementing

corrective actions. We consider the corrective actions implemented

or proposed to be satisfactory.
44 Report No. E1HWF7-10-0012-8100076

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45 Report No. E1HWF7-10-0012-8100076

APPENDIX A

AUDIT SCOPE AND METHODOLOGY

This section describes the audit scope and methodology, including

sample selection for our review of permits, applications, compliance

inspections, enforcement activities, and management reporting.

We performed our audit in accordance with the Government

Auditing Standards issued by the Comptroller General of the United

States. Audit fieldwork was performed between March 1997 and

September 1997. The audit covered management controls in effect

for the period October 1994 to March 1997. In addition, we

reviewed the Region’s progress on its Comprehensive Plan through

September 30, 1997. Our audit focused primarily on the

nondelegated States of Alaska and Idaho.

We interviewed officials in the Region's Office of Water and the

operation offices in Alaska and Idaho. We reviewed applicable

laws, regulations, and directives and examined records maintained

by the Region. 

The scope included a review of management controls associated

with: (i) permit issuance and renewal; (ii) compliance monitoring;

(iii) enforcement; and (iv) management reporting system. We

obtained an understanding of management controls through

inquiries, observations, and inspections of documents and records. 

We assessed the control environment, policies and procedures, and

risk for the four program areas listed above. 

The management control deficiencies that were identified in the

audit are described in the report, along with recommendations for

corrective actions. We also reviewed the Region’s 1997 annual

FMFIA assurance letter to the Administrator.

Permit Sampling Our review of permits included a judgmental sample of 18 out of 33

permits issued for the States of Alaska and Idaho. The sample

included a mix of: general, municipal, industry, and Federal

dischargers.
46 Report No. E1HWF7-10-0012-8100076

Application Sampling We judgmentally selected a sample of 52 out of 301 applications

from dischargers in the States of Alaska and Idaho that were

received between October 1992 and March 1997. The sample

included a mix of categories where the applicant never received a

permit, the permit expired and had not been administratively

extended, and the permit expired and it was administratively

extended. The sample also included a mix of municipals and

industries.

Compliance

Inspection Sampling

We selected a judgment sample of 22 compliance inspections,

including 13 major dischargers (municipal and industrial) for Alaska

and Idaho out of 291, and 9 miscellaneous dischargers such as

Federal, Tribal, and minor for the States of Alaska, Idaho, and

Washington. The sample also included a mix of the two inspection

types reported and included inspections during inspection years

1995, 1996, and through April 18, 1997.

Enforcement

Sampling

We reviewed all 25 dischargers that were reported by PCS as being

in SNC for a quarter or more. The 25 dischargers in SNC were a

mix of municipals and industries in the States of Alaska and Idaho,

and a Federal discharger in the State of Washington. The time

period included fiscal 1995 through the first quarter of fiscal 1997.

Management

Reporting Sampling

Our review of management reporting included a judgment sample

of 24 monitoring reports and 35 compliance plans and reports. 

These samples were from the permit sample of 18 issued permits in

the States of Alaska and Idaho. 
47 Report No. E1HWF7-10-0012-8100076

APPENDIX B

ACRONYMS

AK Alaska

Cl Chlorine

CFR Code of Federal Regulation

CWA Clean Water Act

DMR Discharge Monitoring Report

DOT Department of Transportation

EL Exceptions List

EMS Enforcement Management System

FMFIA Federal Managers’ Financial Integrity Act of 1982

GP General Permit

ID Idaho

MOA Memorandum of Agreement

NOI Notice of Intent

NPDES National Pollutant Discharge Elimination System

NPU NPDES Permit Unit

OIG Office of Inspector General

OR Oregon

ORC Office of Regional Counsel

PCS Permit Compliance System

QNCR Quarterly Noncompliance Report

RA Regional Administrator

SNC Significant Noncompliance

SWPPP Storm Water Pollution Prevention Plan

TMDL Total Maximum Daily Load

WA Washington
48 Report No. E1HWF7-10-0012-8100076

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49 Report No. E1HWF7-10-0012-8100076

APPENDIX C

REGION RESPONSE TO DRAFT REPORT

Attached is the Region’s comments to the draft report.
50 Report No. E1HWF7-10-0012-8100076

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51 Report No. E1HWF7-10-0012-8100076

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION 10

1200 Sixth Avenue

Seattle, Washington 98101

JAN 2 3 1998

Reply To

Attn Of: OW-130

MEMORANDUM

SUBJECT: Draft Report on Region 10's NPDES Permit Program, Draft

Report No. ElHWF7-10-0012

FROM: Chuck Clarke 

 Regional Administrator

EPA Region 10

TO: Truman R. Beeler

Divisional Inspector General for Audits 

Western Audit Division

Thank you for providing us the opportunity to review the draft

report on the Region's NPDES Permit and Compliance Program. Our

responses are attached for your consideration in preparing the final

report. Since the draft position papers were prepared, we have

completed certain tasks and have outlined them in the attachment. 

Where appropriate, we have provided target dates for addressing other

recommendations.

We are committed to managing an effective NPDES program and

generally accept the recommendations in the report. Our attention

will continue to be focused towards priority watersheds that have been

significantly impacted by point sources and targeted significant

categories of dischargers.

Please inform us if you wish to discuss our responses. I have

asked that Roger Mochnick, Assistant Director, Office of Water

(206)553-1216, be our contact person.

Attachments

cc: Charles Reisig, OIG Team Leader 

Janet Tursich, OIG Auditor-in-Charge
52 Report No. E1HWF7-10-0012-8100076

EPA Region 10 Response to the OIG's NPDES Draft Audit Report

A. NPDES Permit Program

Recommendation 2-1: Report the backlog of NPDES permit applications as

a material weakness in the next annual FMFIA assurance letter to the

EPA Administrator.

Non-concur. The Region acknowledges the backlog. As outlined in the

report, a strategic plan has been developed and is being implemented

to address the backlog. In addition, the Region hired a permit writer

in 1997 and expects to hire another one in FY 98. The Region's policy

is to continue to focus its limited permit resources, in the near

term, on point sources located in the highest priority watersheds,

selected major industrial categories and on New Source applicants. 

Our eventual goal will be to address all applications. Finally, as

was stated in the report, the data base the Region used to estimate

its permit workload in its strategic plan is outdated and is being

updated. Initial estimates are that the backlog will decrease by at

least 33 percent. Given the above, the Region feels that reasonable

steps are being taken to address the backlog.

Recommendation 2-2: Aggressively monitor Objective 1, tasks 3, 4, and

5 in the Plan to help assure issuance of permits to strategically

targeted dischargers by September 30, 1999. Recommendation 2-3:

Monitor the accomplishment of all tasks identified in the Plan

relating to eliminating the permit backlog.

Concur with comment

! Task 3, (permit writers develop individual permit workplans) is

completed. The individual workplan is a tool that permit writers

are employing to manage their individual projects. However, the

most important task was assigning the permits to the individual

permit writers for the next 3 years (Task

3). This was completed during the first quarter of FY 97.

! Task 5 (re-evaluating Tier 1 permits) was completed and will be reevaluated each year.
53 Report No. E1HWF7-10-0012-8100076

! The watersheds identified in the report are high priority for the

Region. The permits associated with these watersheds are

contained in the unit plan as priority facilities for permitting. 

In addition, the mid-reach of the Middle Snake River in Idaho is

a high priority watershed. EPA completed 3 TMDLs in Unalaska Bay

and issued permits to the affected facilities. There is one

remaining “Major" facility (Westward) which is scheduled for

issuance in FY98.

! It is hard to predict impediments to issuance of the permits. Of

particular concern is Endangered Species Act Consultation. Many

of the high priority facilities discharge to waterbodies with

listed or threatened species. EPA cannot issue permits until the

Region is in receipt of an approval letter from the affected

Service(s).

THIS PORTION OF THE RESPONSE DELETED BECAUSE OF CHANGES

MADE IN THE FINAL AUDIT REPORT

! Page 8, Table of applications: There are only a few

 “majors" without permits and/or whose permit could not be 

administratively extended. They are listed as Tier 1 

facilities in the Unit Plan.
54 Report No. E1HWF7-10-0012-8100076

! The current permit status for Tier 1 permits in the Unit Plan

is: permits issued (14), public notice awaiting state

certification (6), at public notice (14), permits being

drafted (24), additional permits targeted in FY 98 for

drafting (17). This represents approximately 75% of the

facilities identified as Tier 1.

B. NPDES Compliance Program

Recommendation 3-1: Establish controls to assure that the Region

meets its compliance inspection commitments.

Concur with comment. Region 10 NPDES Compliance Unit (NCU) has

established a process to ensure that the targeted inspections reflect

the commitments. We have also initiated an inspection tracking

program that will monitor our progress and enable us to make any

necessary mid-course corrections. However, at times the NCU may not

inspect 100% of the major dischargers or facilities on the commitment

list if other dischargers are deemed to be of greater environmental

concern. EPA HQ concurs with this approach. For instance, some

minor dischargers pose larger environmental concerns than listed

majors. In such cases, environmental protection must take precedent. 

The NCU will target 85-90% of all majors during the inspection

planning process at the beginning of each fiscal year. Those not

inspected will be a high priority the following year.

Corrective action process implemented 4th Q FY97.

Recommendation 3-2: Establish procedures for inspectors to issue

timely reports.

Concur with comment. Region 10 NPDES Compliance Unit (NCU) has

established inspection report submittal dates of 45 days for sampling

inspections and 30 days for evaluation inspections as stated in the

IG report. Due diligence will be utilized to adhere to the

stipulated time frames. Inspection dates and report submittals will

be more closely tracked by the NPDES data management support group

and the Unit Manager. We have also developed a guidance document for

writing inspection reports and have forwarded it to the inspectors. 

In the transmittal memo for the guidance, we have stated that the

reports should in most cases be submitted within two weeks. This

time frame is an internal target and is intended to provide a buffer

to ensure that 30 and 45 day official targets are met. During the

FY97
55 Report No. E1HWF7-10-0012-8100076

dairy initiative the average time for completed reports for the 64

inspections was two weeks.

Corrective Action established 4th Q FY97.

Recommendation 3-3: Assure that the new procedures requiring

Compliance Officers to notify dischargers of the results of

inspections continue to be consistently implemented.

Concur with comment. Compliance Officers have been notified that

inspection reports are to be forwarded to the facilities immediately

after completion. In addition, we have implemented an inspection

report routing form which provides detailed written instructions as

well as due dates for each activity for each person involved in the

forwarding of inspection reports.

Corrective action implemented 3rd Q FY97.

Recommendation 3-4: Establish a log or other procedures to ensure that

citizen complaints relating to potential permit and other NPDES

violations are documented, resolution of complaints are tracked, and

the complainant is notified of the resolution.

Concur with comment. The Seattle based NCU staff has initiated the

following compliance tracking system: complaint received, follow-up

action, and potential enforcement action. Complainant will be

notified of follow-up action, when requested.

Corrective action implemented 4th Q FY97.

Recommendation 3-5: Commit resources to compliance monitoring

activities for the general storm water permits. Specifically,

resources should be committed to perform the following activities: (i)

reconciliations between those dischargers required to submit an NOI

and those discharges who have submitted an NOI; (ii) send letters to

those dischargers violating the NOI requirements; (iii) initiate

appropriate enforcement actions; and (iv) track reporting. 

Requirements stipulated by the general permits.

Concur with comment. No additional resources are being planned beyond

what is now allocated by Region 10 for storm water monitoring

activities. However, as discussed earlier, environmental concerns

including storm water activities warranting EPA actions will take

precedent over other concerns.
56 Report No. E1HWF7-10-0012-8100076

Region 10 is also attempting to track those facilities required to

submit NOIs and those facilities that are currently doing so. 

Additionally, notices of violation are being sent to noncompliant

facilities and appropriate enforcement actions are being taken. For

example, the NCU recently initiated and settled a storm water

violation case with the Alaska Department of Transportation. The NCU

is also currently investigating two other potential storm water

violation cases in Alaska and Washington.

Corrective action implemented lst Q FY97.

Recommendation 3-6: Establish and implement procedures to ensure

adequate and consistent compliance monitoring of dischargers under all

general permits (particularly general permits for storm water and

seafood) and minor dischargers. At a minimum, the procedures should

include adequate tracking of: (i) dischargers required to be covered

by permits; and (ii) discharger submittals of required reports. 

Procedures should also include appropriate enforcement on instances of

identified noncompliance.

Concur with comment. The NCU has recently initiated a new compliance

monitoring system termed the NPDES Compliance Evaluation Program

(NCEP). This new system will enable the Unit to evaluate the

compliance status of any facility submitting DMRs including minors. 

The NCEP is intended to supplement the existing compliance monitoring

systems, such as PCS. The focus for NCEP will be those facilities

that are priority sector facilities or those located in priority

watersheds. The NCU manager and the Data Tracking Coordinator will

meet on a monthly basis to evaluate the compliance information from

the monitoring system and, with input from the compliance officers,

will determine the appropriate enforcement actions. The NCU manager

has also recently initiated quarterly conference calls with

headquarters to discuss pending enforcement actions.

Corrective action implemented lst Q FY98.

Recommendation 4-1: Implement controls to ensure that: (i) appropriate

and timely enforcement actions are taken against discharges in SNC;

and (ii) the importance of Agency guidance requiring formal

enforcement actions against dischargers in SNC
57 Report No. E1HWF7-10-0012-8100076

is emphasized to the Compliance Unit staff. As a first step, the

Region should update and implement its EMS Manual, ensuring its

consistency with Headquarters’s EMS and the Agency's enforcement

policy for SNC violators.

Concur with comment. The NPDES Unit Manager and the Data Management

Coordinator have recently initiated quarterly conference calls with

Headquarters Enforcement Coordinator to decide appropriate

enforcement actions for facilities on the SNC. The NCU is also

currently updating the EMS process to be consistent with Agency

guidelines. This should be completed by March 1, 1998. In addition,

NCEP will alert the compliance officers of the facilities that are

nearing SNC. This information will be used to proactively deal with

facilities nearing SNC.

Corrective action completed 2nd Q FY98.

Recommendation 4-2: Ensure that all decisions not to take formal

enforcement action against SNC violators are justified and adequately

documented in the compliance file. This could be accomplished

through a standard Record of Decision form completed by the

Compliance Officer and signed by the Compliance Unit Chief.

Concur with comment. The Compliance Officers and Unit Manager will

immediately begin to use standard Record of Decisions forms. 

Additionally, "no enforcement actions" will be discussed with

Headquarters Regional Coordinator via monthly conference calls.

Corrective action implemented 2nd Q FY98.

Recommendation 4-3: Implement procedures that require the Compliance

Unit Chief to provide written concurrence in all decisions to take no

formal action against violators in SNC.

Concur comment. See above response under 4-2.

Recommendation 5-1: Establish written priorities and procedures for

PCS input that ensure that new permit effluent limits and reporting

requirements are input into the PCS as soon as the permit is

effective.

Concur with comment. The written priorities and procedures for PCS

input are already documented in the PCS Quality Assurance

Guidance Manual, dated August 1992. The NPDES Compliance Unit's data

quality objectives for timeliness, accuracy, completeness and
58 Report No. E1HWF7-10-0012-8100076

consistency will be at least as stringent as the national standards

summarized in Tables 2 and 3 of that document (tables available on

request). The NCU has also established a procedure whereby after a

permit is coded/updated in PCS, the data entry staff provides the

compliance officer with the permit, a Limitations Summary Report, and

Compliance Schedule Report to review for data completeness and

accuracy.

Corrective action implemented 2nd Q FY98, completed 4th Q FY98.

Recommendation 5-2: Improve procedures to ensure that the entry date

of new permit effluent limits and reporting requirements into the PCS

are documented on the permit with the date of entry and initials of

personnel making entries.

Concur with comment. The NCU's data entry staff will ensure that they

document the date of data entry and initial the permit. The NCU has

recently initiated a backup system to catch undocumented permits

before they are filed in the administrative records by instructing the

file clerk to flag and return any permits not documented to the data

entry staff.

Corrective action implemented 2nd Q FY98, completed 4th Q FY98.
59 Report No. E1HWF7-10-0012-8100076

APPENDIX D

REPORT DISTRIBUTION

Office of Inspector General

Acting Inspector General (2410)

Deputy Assistant Inspector General for Internal Audits (2421)

EPA Headquarters Office

Assistant Administrator for Office of Water (4101)

Assistant Administrator of Office of Enforcement and Compliance Assurance (2201A)

Agency Followup Official (2710)

Agency Followup Coordinator (3304)

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

Associate Administrator for Congressional and Legislative Affairs (1301)

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

Region 10

Regional Administrator

Director, Office of Water

Audit Followup Coordinator 

Regional Library