Clean Water Act: Improved Resource Planning Would Help EPA Better Respond to Changing Needs and Fiscal Constraints
Published: 2005-07-22T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Federal and state fiscal constraints may jeopardize past and future accomplishments resulting from the Clean Water Act (the act). In this environment, it is important to manage available resources as efficiently as possible and to identify future human capital needs, including the size of the workforce and its deployment across the organization. GAO was asked to determine (1) the extent to which the Environmental Protection Agency's (EPA) process for budgeting and allocating resources considers the nature and distribution of its Clean Water Act workload and (2) the actions EPA is taking to improve resource planning and the challenges the agency faces in doing so.
section_title: What GAO Found
paragraphs: EPA's process for budgeting and allocating resources is largely based on historical precedent and does not fully consider the changing nature or distribution of the workload either for specific environmental laws or the broader goals and objectives in the agency's strategic plan. With prior year's allocations as the baseline, year-to-year changes are marginal. EPA's program offices and regions also have some flexibility to realign resources based on actual workload. Overall, the impact of these changes is minor, according to EPA. Because the nature and distribution of the act's workload has changed as the scope of regulated activities has grown, with EPA gaining new responsibilities and shifting others to the states, more than marginal changes may be appropriate. EPA does not conduct the periodic "bottom-up" assessments of the work that needs to be done, the distribution of the workload, or the resources needed to respond more effectively to changing needs and constrained resources. EPA has developed initiatives that could improve its ability to plan its resources more strategically, including efforts that focus on workforce planning. These efforts are promising but could be more effective if two agencywide initiatives were better coordinated and employee skill surveys were designed to identify gaps in needed skills. Beyond these initiatives, EPA faces larger challenges in adopting a more systematic process for budgeting and resource allocation, particularly in obtaining reliable data on key workload indicators. According to EPA officials, data on many of the factors that affect workload--and thus, drive resource needs--are not comprehensive or reliable. One of the biggest challenges will be assessing which of the workload indicators represent the most significant factors in determining resource needs. While this assessment presents a challenge, it would help EPA set priorities for improving data quality.

section_title: Letter
paragraphs: For over 50 years, the Federal Water Pollution Control Act, commonly  referred to as the Clean Water Act, has played a critical role in reducing  water pollution and improving the health of the nation’s waterways.   However, federal and state fiscal constraints may jeopardize these  accomplishments and make it increasingly difficult to achieve further  progress in addressing new and existing sources of pollution. In this  environment, it is important to manage available resources as efficiently as  possible. The Environmental Protection Agency (EPA), as the federal  agency primarily responsible for administering the Clean Water Act, plays a  key role in determining what must be done to meet the act’s requirements,  identifying the skills needed to accomplish the work, and deploying  resources to the appropriate entities.
In addition to fiscal constraints, other forces, such as demographic trends  and technological advances, are challenging government agencies to  change the way they do business by setting priorities and managing their  resources to achieve better performance more efficiently. In this context,  leading private sector organizations have found that ensuring that the right  people with the right skills are in the right place is critical to achieving  performance goals. Relatedly, in September 2000, GAO recommended that  federal agencies develop an explicit workforce planning strategy to identify  their current and future human capital needs, including the size of the  workforce; its deployment across the organization; and the knowledge, skills, and abilities needed for the agency to meet its goals and objectives.   GAO further recommended that such a strategy should be explicitly linked  to the agencies’ mission and strategic and program planning efforts.
For EPA specifically, both GAO and the National Academy of Public  Administration have recommended that EPA use data on workload  requirements and skill needs to better manage resources for its  environmental programs. For example, in July 2001, GAO recommended  that EPA collect information on the size of its workforce, the deployment  of staff geographically and organizationally, and the skills needed to  support its strategic goals. GAO concluded that a workforce strategy could  be particularly useful during a time of fiscal constraint because such a  strategy allows the agency to tailor reductions in a manner that would  minimize potential adverse impacts on EPA’s programs.
To carry out its responsibilities under the Clean Water Act, EPA relies on its  Office of Water, Office of Enforcement and Compliance Assurance, and 10  regional offices, as well as states’ water pollution control agencies. With a  number of key amendments beginning in 1972, the scope of the act has  increased significantly, along with the workload associated with  implementing and enforcing its requirements. Major changes included, for  example, controls over pollution from sewer overflows, storm water, and  animal waste at concentrated feeding operations. At the same time, EPA  has authorized states to take on more responsibilities, shifting the agency’s  workload from direct implementation to oversight. Changes in the nature,  extent, and distribution of the Clean Water Act workload can affect the  resources needed to carry out the act. In this regard, section 516(b)(1) of  the act requires, among other things, that EPA provide the Congress with a  detailed estimate of these costs every 2 years.
You asked us to determine the (1) extent to which EPA’s process for  budgeting and allocating resources considers the nature and distribution of  its Clean Water Act workload and (2) actions EPA is taking to improve  resource planning and the challenges it faces in doing so. In addition, we  determined what effort EPA has made to develop the detailed estimate of  the cost of carrying out the provisions of the Clean Water Act, as required  by the act. As agreed with your offices, we focused on EPA and state  resources associated with implementing and enforcing the major programs  under the Clean Water Act. Also as agreed, for the purposes of this review,  we defined EPA’s Clean Water Act workload to include activities associated  with controls over pollution from specific facilities (called the National  Pollutant Discharge Elimination System program) and diffuse sources,  such as agricultural runoff. We also included related activities, such as  setting water quality criteria and standards, for both specific pollutants and  individual water bodies; monitoring water quality; and establishing  requirements for the disposal of sewage sludge. We excluded (1) financial  assistance for local infrastructure under the Clean Water State Revolving  Fund; (2) activities for which the primary federal responsibility lay outside  EPA, such as issuing permits for dredged and fill material, managed by the  U.S. Army Corps of Engineers; and (3) location-specific programs, such as  those focused on the Great Lakes, Chesapeake Bay, and designated sites  under the National Estuary Program. (App. I contains a detailed description  of our methodology.)
We performed our work between August 2004 and July 2005 in accordance  with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: Through the National Pollutant Discharge Elimination System program, the  Clean Water Act established the basic structure for regulating discharges of  pollutants into the waters of the United States, including rivers, lakes, and  streams. Under this program, EPA and EPA-authorized states issue and  enforce permits to regulate pollution from specific entities, including, for  example, industrial dischargers and municipal wastewater treatment  facilities, known as “point sources.”  In support of the permitting program,  EPA and the states perform a number of important activities, such as  monitoring water quality and setting limits on the amounts of specific  pollutants that can be discharged into water bodies. The act also requires  states to implement management programs for controlling pollution from  diffuse or “nonpoint” sources, such as agricultural runoff.
To carry out its responsibilities for controlling point and nonpoint source  pollution, EPA relies on the Office of Water, the Office of Enforcement and  Compliance Assurance, and 10 regional offices, as well as states’ water  pollution control agencies. As table 1 shows, since the Clean Water Act was  amended in 1972, the scope of EPA and state responsibilities and the  associated workload, has increased significantly.
Even as the overall workload has increased as a result of these changes, the  states have been playing a greater role in carrying out required tasks. As  shown in figure 1, since 1972, EPA has authorized 45 states to perform at  least some of the permitting activities associated with controlling pollution  from wastewater treatment and industrial facilities. As EPA authorizes  states to take on more responsibilities, the agency’s workload shifts from  direct implementation to oversight.
section_title: EPA’s Process for Budgeting and Allocating Resources Does Not Fully Consider the Current Workload in Terms of Strategic Goals or Specific Laws
paragraphs: EPA budgets and allocates resources incrementally, largely based on  historical precedents, and thus its process does not reflect a bottom-up  review of the nature or distribution of the current workload—either for  specific environmental laws or the broader goals and objectives in the  agency’s strategic plan. These historical precedents are drawn from  workload models EPA had developed in the 1980s, but the distribution of  EPA’s workload has changed over time as EPA has taken on new  responsibilities under the Clean Water Act and other laws and the states  gradually assumed a greater role in the day-to-day implementation of key  aspects of this workload. Other factors, such as the introduction of new  technologies and shifts in regional population, have also affected the  amount, type, and distribution of EPA’s resource needs.
Nonetheless, in developing the amounts of its budget request and  subsequent resource allocations, EPA officials use prior years’ allocations  as a baseline and make adjustments to reflect (1) direction from the Office  of Management and Budget and the Congress and (2) spending caps  imposed by EPA’s Chief Financial Officer, such as ceilings on staff years  and payroll. For example, guidance from the Office of Management and  Budget sets overall parameters for the agency’s budget—generally a given  percentage of the previous year’s budget. Once EPA receives its  appropriation from the Congress, the agency’s operating plan—which is  also based on historical precedent—guides the allocation of funding and  staff years to the organizational units.
While acknowledging that their budgeting and resource allocation is not  based on a bottom-up review, EPA officials said that the process is linked  to the agency’s strategic goals and objectives. They told us that the annual  budgeting and resource allocation process reflects changes in program and  budget priorities, as determined by senior EPA managers, across the  agency and within specific program offices. In particular, officials from  both the Office of Water and Office of Enforcement and Compliance  Assurance told us that they make strategic decisions in developing the  agency’s budget—within and across agency goals and objectives—to  reflect shifting priorities. For example, for fiscal year 2005, EPA asked for  an additional $22 million for grants to state water pollution control  agencies, including $17 million to address a need for more water quality  monitoring. However, EPA officials acknowledged that shifts in funding  and staff years, as a result of changing priorities, are generally marginal and  that increases in priority areas are usually offset by decreases in areas of  lower priority.
Within the existing system, EPA and state officials have some flexibility to  realign resources based on actual workload but have not taken full  advantage of such opportunities. For example:  During each budget cycle, EPA’s regional offices have an opportunity to  influence how the program offices allocate any increases or decreases  in resources, as reflected in the agency’s operating plan. While, in  theory, such changes could be directed to the regions based on their  relative need, regional officials report that most changes are allocated  based on historical precedent.
Under section 106 of the Clean Water Act, EPA must distribute grants to  state water pollution control agencies based on the extent of the  pollution problem in the respective states. In 1997 and 1998, an EPA- state work group developed a weighted distribution formula that  considers various workload indicators, such as a state’s surface water  area, groundwater use, water quality impairment, point and nonpoint  pollution sources, and population of urbanized areas. The formula,  currently in regulations, includes a funding “floor,” which stipulates that  states must receive at least as much as they received in fiscal year 2000,  unless funding goes down, with an annual adjustment for inflation and  the current year’s appropriation. Consequently, as EPA regional  officials pointed out, the allocations do not fully reflect relative  workloads.
In 1995, EPA and the states established the National Environmental  Performance Partnership System, which gave states greater flexibility to  direct resources to their most pressing environmental problems by  combining funds from multiple grants. In practice, however, officials in  EPA’s regional offices and a state environmental organization report  limited use of the funding flexibility. According to EPA officials, states  have only used the program to move marginal amounts of money to  target cross-cutting initiatives or other similar programs.
In terms of overall structure, EPA has organized its budget requests and  allocated resources around its strategic plan, rather than specific  environmental laws or programs. The strategic plan lays out broad agency  goals and objectives, some of which encompass Clean Water Act  responsibilities for controlling point and nonpoint source pollution. EPA’s  current strategic plan includes these activities primarily under two goals:   Clean and Safe Water (Goal 2) and Compliance and Environmental  Stewardship (Goal 5). As table 2 indicates, however, the objectives and  subobjectives within each goal can include activities under multiple  environmental laws. Within the agency’s goal for Clean and Safe Water, for  example, objectives for protecting water quality, protecting human health,  and enhancing science and research address requirements under the Safe  Drinking Water Act and other laws, in addition to those under the Clean  Water Act.
According to officials from EPA’s Office of the Chief Financial Officer,  Office of Enforcement and Compliance Assurance, and Office of Water,  isolating the amount of resources dedicated to specific Clean Water Act  programs and activities would be extremely difficult. The officials said that  the budgeting and allocation structure aligns resources with goals and  objectives that encompass multiple laws and programs and is not intended  to provide statute-specific or program-specific breakdowns. The Office of  Enforcement and Compliance Assurance, in particular, organizes its budget  into program projects, such as compliance monitoring and civil  enforcement, that cut across all environmental media.
Recognizing these difficulties, we asked budget officials within the Office  of Enforcement and Compliance Assurance and Office of Water to estimate  the funding and staff years allocated to EPA’s regional offices for  controlling point and nonpoint source pollution under the Clean Water Act  and to provide the amounts allotted to the states under two grant programs  that support such activities at the state level. (See app. II for this  information.)
section_title: EPA Has Made Some Progress in Improving Its Resource Planning, but Challenges Remain
paragraphs: To plan their resources most effectively, organizations must determine  what they need to accomplish their work and develop a plan to meet those  needs by obtaining staff and other resources. EPA has developed several  initiatives that could improve the agency’s ability to plan its resources more  strategically, including some efforts that focus on workforce planning and  others that could provide key information needed to support a data-driven  approach to budgeting and allocating resources. Beyond these initiatives,  however, EPA faces larger challenges in adopting a more systematic  process for budgeting and resource allocation:  obtaining reliable data on  key workload indicators and overcoming internal resistance to adopting  such a process.
subsections: section_title: Effective Resource Planning Involves Identifying Staff and Other Resources Needed to Meet Performance Goals and Fulfill the Organization’s Mission
paragraphs: At its most basic level, effective resource planning involves identifying the  specific activities and tasks that must be accomplished to achieve an  organization’s objectives, determining the type and level of resources  needed to carry out the work, and developing a strategy to obtain the  needed resources. Realistically, because organizations rarely have access  to unconstrained budgets, managers typically have to set priorities so that  the most important tasks can be accomplished within available resources.  Particularly in an environment of limited resources, the data that inform  resource planning are useful in helping decision makers determine how  best to absorb budget cuts. Because an organization’s employees often  account for a significant share of its resources, workforce planning is a key  component of any successful resource management strategy.
Studies by GAO and others have shown that successful organizations use  strategic workforce planning to identify and fill the gaps between their  current and future workforce needs in meeting organizational goals and  fulfilling their overall mission. Strategic workforce planning encompasses a  broad array of initiatives to attract, retain, develop, and motivate a top- quality workforce with the skills needed to meet performance goals. In  2003, for example, we reported that successful organizations have used  strategic workforce planning as a tool to both identify current needs and  anticipate and prepare for upcoming human capital issues, such as an aging  workforce or changes in mission-critical skills, that could jeopardize the  accomplishment of goals. More recently, we found that leading  organizations go beyond a succession planning approach that focuses on  simply replacing individuals and, instead, engage in broad, integrated  efforts that focus on strengthening both current and future organizational  capacity.
Our 2003 report said that an analysis of gaps in an organization’s workforce  should identify how many employees have the skills and competencies  needed to meet program goals and the number that are likely to remain  with the agency over time, given expected losses due to retirement and  other attrition. Similarly, the report found that a forward-looking analysis  should identify the specific skills and competencies that will be needed to  meet future goals. We concluded that workforce gap analyses can be useful  in justifying budget requests by showing the link between the program  goals and the staff resources needed to accomplish them.
In July 2001, we reported specifically on EPA and the extent to which the  agency was using key management practices associated with successful  human capital strategies, including strategic workforce planning. We also  examined how EPA’s Office of Enforcement and Compliance Assurance  deployed resources across the 10 regional offices to ensure consistent  enforcement of federal environmental requirements. Among other things,  we recommended that EPA   develop a system for workforce allocation and deployment that is  explicitly linked to the agency’s strategic and program planning efforts  and that is based on systematic efforts of each major program office to  accurately identify the size of its workforce, the deployment of staff  geographically and organizationally, and the skills needed to support its  strategic goals;  design succession plans to maintain a sustained commitment and  continuity of leadership within the agency; and  target recruitment and hiring practices to fill the agency’s short- and  long-term human capital needs and, specifically, to fill gaps identified  through EPA’s workforce planning system and implement training with  an explicit link to needed competencies.
Our recommendations to EPA’s Office of Enforcement and Compliance  Assurance expanded on some of the same themes. For example, we  recommended that the office develop a systematic method for deploying  resources to address the agency’s enforcement workload, taking into  account the workforce planning information needed to analyze the  workload. According to our report, such information should include the  level of resources currently being allocated to specific enforcement  activities; the factors that determine the enforcement workload in each  region; and the specific skills needed to address each region’s workload,  along with the number of employees who possess such skills.
section_title: EPA Has Several Efforts Under Way to Improve Resource Planning
paragraphs: EPA has initiated several efforts that could improve the agency’s ability to  strategically plan its workforce and other resources. While some of these  efforts are not directly related to workforce planning, they could give the  agency some of the information needed to support a systematic, data- driven method for budgeting and allocating resources.
Three initiatives within EPA focus specifically on workforce planning,  including one by the Office of Enforcement and Compliance Assurance,  which focused on civil enforcement activities and was completed in 2003,  and two agencywide efforts that are still in the early stages of development.  The agencywide efforts are being managed by EPA’s Office of Human  Resources and the Office of the Chief Financial Officer. These three  initiatives are as follows:   Workforce Deployment Review for civil enforcement activities. In  response to our July 2001 report, the Office of Enforcement and  Compliance Assurance surveyed about 2,600 headquarters and regional  employees engaged in civil enforcement activities to identify existing  workforce skills and specific areas of programmatic expertise. EPA’s  report on the survey, issued in October 2003, recommended, among  other things, expanding the survey to include all of the office’s  employees, periodically updating the information, and aligning training  with national priorities. In addition, the report recognized that  circumstances have changed since the 1980s, when EPA last used the  workload models to establish a baseline. The report concluded that  enforcement officials should reexamine the existing practice of  adjusting staff levels based on historical precedent.
Strategic workforce planning process. In response to guidance from the  Office of Management and Budget, EPA’s Office of Human Resources is  currently working on a strategic workforce planning process to help  EPA identify and address skill needs agencywide. Human Resource  officials believe that EPA should be using detailed workforce plans to  drive its budget requests and make informed decisions about how to  make the best use of the resources it receives. The new planning  process includes (1) analyzing the skills needed to achieve agency goals  now and in the future, (2) assessing the skills possessed by the current  workforce, (3) identifying any current or future gaps in critical skills,  and (4) developing strategies to fill such gaps. During 2003, the Office of  Human Resources piloted a computer-based tool designed to capture  information on the skills possessed by EPA staff but abandoned the  effort in response to complaints that the tool was overly complicated  and did not provide helpful information. In 2004, the office’s workforce  planning team reviewed the agency’s strategic plan and other relevant  studies and interviewed key stakeholders inside and outside EPA to  develop a strategic picture of the agency’s future work and workforce  requirements. The team corroborated its findings with senior EPA  executives, who provided their views on the work that the agency will  be doing in the future and described the workforce in terms of the  priority, mission-critical competencies, and occupations needed to  support the work.  As a result of this effort, EPA identified 18 priority  occupations, 12 technical competencies, and 12 cross-occupational  competencies that are essential for the agency to accomplish its future  mission. In addition, based on projected retirements and other attrition,  EPA identified potential gaps in critical areas. Currently, the office is  examining any ongoing resource planning efforts by EPA regional and  program offices before moving ahead with its own planning process.
Options for an agency approach to workforce assessment. EPA’s Office  of the Chief Financial Officer formed a work group in the fall of 2004 to  improve the agency’s tools for making decisions on distributing staffing  resources. The work group is currently exploring options for how  frequently to measure workload:  doing a comprehensive assessment of  all programs every 3 to 5 years or applying a screening tool to identify  certain high-priority program areas for annual assessment.
Although EPA’s workforce planning initiatives address, to varying degrees,  some of the recommended practices for managing human capital, its  efforts could be more effective. For example, both the Office of  Enforcement and Compliance Assurance and the Office of Human  Resources attempted to determine the types of skills they possess without  first identifying the skills most needed to accomplish the agency’s mission.  As a result, these surveys may not necessarily capture the information EPA  needs to comprehensively determine the skills gap. Although the Office of  Human Resources followed up its skills survey by identifying priority  occupations, needed competencies, and skill gaps for the agency as a  whole, EPA characterized the effort as an assessment at the “20,000 foot”  level. Human Resource officials acknowledged that the effort was not  linked to a detailed analysis of workload and did not provide information  on region- or program-specific workforce needs. To guide the office’s  development of ground-level analyses, during the spring of 2005, the office  surveyed program and regional offices to determine the nature of any  localized workforce planning. In addition, although officials involved in the  two agencywide initiatives (sponsored by the Office of Human Resources  and the Office of the Chief Financial Officer) were aware of the parallel  efforts, we found little evidence that the two offices were coordinating with  each other to avoid duplication or the adoption of conflicting strategies.  Both these efforts are still in the early stages; coordinating now would  allow the agency to ensure that it is making the best use of its resources.
Two other initiatives within the Office of Water, while not directly related to  resource planning, could provide relevant and useful information for a  data-driven approach to budgeting and allocating resources. For example,  beginning in December 1998, EPA and the states collaborated on a state  resource analysis for water quality management to develop an estimate of  the resources that states need to fully implement the Clean Water Act. The  primary focus of the project was identifying the gap between states’ needs  and available resources. To develop the estimates of the gap, EPA and the  states created a detailed model of activities associated with implementing  the Clean Water Act, the average time it takes to complete such activities,  and the costs of performing them. The National Academy of Public  Administration subsequently reviewed the model and determined that the  underlying methodology was sound. In fact, the academy recommended  that EPA and the states refine the model to support data-driven grant  allocation decisions. According to EPA and representatives of state  environmental organizations, however, the agency has not implemented the  recommendation because of resource constraints and reluctance on the  part of some states.
Another initiative by the Office of Water, called the Permitting for  Environmental Results Strategy, also has potential to provide useful  information for more effective resource planning. This effort began in 2003,  prompted by circumstances that were making it increasingly difficult for  EPA and the states to meet their responsibilities under the Clean Water Act.  According to EPA, not only had the scope and complexity of the act  expanded over time, but the states were facing an increasing number of  lawsuits and petitions to withdraw their authorization to administer some  Clean Water Act programs. As part of its effort to identify and resolve  performance problems in individual states, EPA and the states have been  developing profiles containing detailed data on the responsibilities,  resources, and workload demands of each state and region—information that could be useful in any comprehensive and systematic resource  planning method.
section_title: Challenges to Adopting a More Systematic Process for Allocating Resources Include Obtaining Reliable Workload Data and Overcoming Internal Resistance
paragraphs: Perhaps the most significant obstacle to developing a systematic, data- driven approach to resource allocation is ensuring that needed data on  EPA’s workload are complete and reliable. While our particular interest was  Clean Water Act activities for controlling point and nonpoint source  pollution, evidence suggests that EPA would encounter similar reliability  concerns if a systematic resource allocation process were to be organized  around strategic goals and objectives, thus encompassing other program  areas. Without comprehensive and reliable data on workload, EPA cannot  accurately identify where agency resources, such as staff with particular  skills, are most needed.
According to EPA officials, some of the key workload factors related to  controlling point and nonpoint source pollution include the number of  point source dischargers, the number of wet weather dischargers, and the  quantity and quality of water in particular areas. However, for some of this  information, the relevant databases, such as the Permit Compliance  System, which contains information on discharging facilities, and the  National Water Quality Inventory, which contains information on water  quality, have been subject to criticism from several sources, including GAO.  For example:   Discrepancies between Permit Compliance System and state data. In  2001, the Environmental Council of the States reported that of 42 states  surveyed, more than 80 percent found “significant and pervasive data  discrepancies” between data tracked by state authorities and data  contained in the Permit Compliance System. Even among states that  reported using EPA’s database as their primary information system, 75  percent found errors in the data. Another problem is that the last system  modernization effort was in 1982; as a result, the database does not  contain information on more recently regulated entities, such as storm  water dischargers and concentrated animal feeding operations. The  database also lacks complete information on the point source  dischargers it does track, particularly smaller facilities and states’  enforcement actions. Although at one time EPA linked states’ grant  funding to the submission of facility data to the database, the agency  discontinued the policy. In addition, EPA does not require complete  information on minor facilities.
Lack of historical data in Permit Compliance System. EPA’s Permit  Compliance System database does not provide sufficient information to  evaluate trends in key workload indicators because the system  overwrites older information whenever program officials enter new data  on a facility. Thus, for example, EPA cannot generate trend data on the  number of permits issued or renewed over a specified time period. After  related criticism from EPA’s Inspector General, Office of Water officials  told us that, in 1999, they began pulling data from the system at regular  intervals to provide data on trends in the agency’s permitting backlog  and the number of regulated facilities. At the same time, however, EPA  began to clean up its inventory, eliminating data on facilities that were  no longer in existence. Although the cleanup was necessary, it also  affected the agency’s ability to develop reliable trend data. For these and  other reasons, EPA identified the Permit Compliance System as an  agency weakness beginning in 1999.
Data limitations in the National Water Quality Inventory. Data on the  quality of the nation’s waters, which EPA compiles and presents in the  National Water Quality Inventory, are also subject to important  limitations. While the majority of states contributed data describing  rivers and lakes, data on other types of water bodies were less  comprehensive. For example, only nine states provided information on  the status of their wetlands. In addition, states are only able to assess a  portion of their waters every 2 years. For example, according to the 2000  report, states assessed 19 percent of the nation’s total river and stream  miles and 43 percent of the total lake, pond, and reservoir acres.  Furthermore, states do not report data consistently. In 2002, GAO found  that variations in the approaches that states use to assess water quality  causes inconsistencies in the listing of impaired waters. These  inconsistencies also limit the ability to compare data from year to year.
While acknowledging that some data are missing from the Permit  Compliance System, EPA officials told us that since 2001, they have worked  with the states and regional offices to clean up the data and believe that  their efforts have improved data quality. The officials also said that the  system will be modernized into the Integrated Compliance Information  System, which will be phased in beginning in 2006. According to  information provided by EPA, the modernization effort will identify the  data elements to be entered and maintained by the states and regions and  will include additional data entry for minor facilities and special regulatory  program areas, such as concentrated animal feeding operations, combined  sewer overflows, and storm water. Regarding the National Water Quality  Inventory, the Office of Water recently began advocating the use of  standardized, probability-based, statistical surveys of state waters so that  water quality information would be comparable both among states and  from year to year.
We did not attempt to compile an exhaustive list of all factors that  potentially affect EPA and state workload. Although the state water quality  management resource analysis compiled a comprehensive list of activities  performed in support of the Clean Water Act to serve as a basis for  estimating the state resource needs, there is no similar analysis of  workload indicators for EPA headquarters or regional offices. In addition  to the factors discussed above, EPA officials and representatives of state  environmental organizations identified other factors that directly or  indirectly affect workload and thus could provide some indication of  resource needs. Some factors were mentioned consistently by all or most  of the officials we interviewed and other factors were cited less frequently.  One of the challenges to improving data quality will be determining which  of the workload indicators represent the most significant drivers of  resource needs. Making this determination, however, would also help EPA  prioritize efforts to improve data quality.
More complete data are available on some of the workload factors  identified by EPA and representatives of state environmental organizations,  including the number of states authorized to implement aspects of the  permitting program, the number of major and minor facilities, water  quantity, and population. While these data may not be adequate in all  respects, we believe the data are sufficiently reliable to illustrate potential  differences in the regional distribution of workload. Appendix III contains  a series of figures displaying selected workload indicators.
Even with better workload data, EPA would find it difficult to implement a  systematic, data-driven approach to resource allocation without staff  support for such a process. Support may not be easily forthcoming.  According to EPA officials in several offices and regions, staff are reluctant  to accept a data-driven approach because of their experience in using  workload models during the 1980s. At that time, each major program office  used a model to allocate resources to the agency’s regional offices. When  the models were initially developed, agency officials believed they were  useful because EPA’s programs were rapidly expanding as the Congress  passed new environmental laws. Over time, however, the expansion of  EPA’s responsibilities leveled off, and its impact on the relative workload of  regions was not as significant. The change in the rate of the workload  expansion, combined with increasingly constrained federal resources  during the late 1980s, meant that the workload models were only being  used to allocate changes at the margins. The agency stopped using the  models in the early 1990s because, according to officials, staff spent an  unreasonable amount of time negotiating relatively minor changes in  regional resources.
Officials at EPA headquarters and regional offices cited some of the same  concerns when we asked about applying a more systematic approach to  budgeting and allocating resources today. Officials in several offices  maintained that such an approach would not be useful for the agency, in  part because EPA would not obtain increased resources as a result.  Because all programs have insufficient resources, officials explained, it  would not necessarily be helpful to analyze where these resource gaps  were largest. Some regional officials were more supportive of the use of  workforce planning, particularly where officials believed the region was  receiving fewer resources than it deserved relative to other regions.  Regional officials also believed that this type of analysis would help them  manage the resources they get and could provide information that could  stave off additional funding cuts or reduce how frequently headquarters  officials implement new requirements for the regions.
section_title: EPA Has Not Developed a Detailed Estimate of the Cost to Implement the Clean Water Act, As Required
paragraphs: Section 516(b)(1)(A) of the Clean Water Act requires EPA, in cooperation  with the states, to make a detailed estimate of the cost of carrying out the  provisions of the act. Such estimates must be reported to the Congress  every 2 years. In response to our inquiries, EPA issued a letter on May 2,  2005, stating that the agency has been operating under the assumption that  the requirement had expired as of December 1999. However, the letter  acknowledged that the reporting requirement may have been reinstated.  After studying the issue further, EPA issued a follow-up letter on May 16,  2005, which confirmed that the requirement had been reinstated and that  the agency had been remiss in not producing reports due in 2003 and  2005. EPA’s letter was silent regarding the reports due in 1999 and prior  years.
Even if EPA had been aware of the reporting requirement, it currently lacks  the information needed to develop an estimate of the cost of carrying out  the Clean Water Act. First, the process EPA uses to budget and allocate  resources is built around available resources rather than an unconstrained  budget. Second, EPA’s budget structure and cost accounting systems do not  provide specific detail on how EPA staff spend their time in carrying out  Clean Water Act enforcement responsibilities within the Office of  Enforcement and Compliance Assurance, where the budget is organized  around activities that cut across all environmental media. Finally, as  already described, EPA lacks complete and reliable data on key aspects of  its Clean Water Act workload, making it difficult to develop sound cost  estimates. Having better information on specific workload activities would  not only help improve EPA’s process for budgeting and allocating resources  within its current budget structure, but it would also help EPA develop the  cost estimates needed to comply with section 516(b)(1)(A).
section_title: Conclusions
paragraphs: Because EPA does not have a system in place to conduct periodic bottom- up assessments of the work that needs to be done, the distribution of the  workload, or staff and other resource needs, the agency may be unable to  respond effectively to changing needs and constrained resources. Despite  some flexibility in budgeting and allocating resources, EPA cannot  determine whether the amount and distribution of its resources are  appropriate to effectively carry out its strategic goals and objectives or  meet its responsibilities under the Clean Water Act and other  environmental laws. Moreover, EPA does not have the information it needs  to tailor reductions in staff or other resources in a manner that minimizes  potential adverse impacts on its environmental programs.
Having complete and reliable data on the activities and tasks that must be  accomplished—and how that work is distributed organizationally and  geographically—will help EPA budget and allocate resources more  effectively. In addition, such data will inform the agency’s workforce  planning efforts and help ensure that the right people with the right skills  are where they need to be to get the work done.
EPA is obligated to meet its reporting responsibilities under section  516(b)(1) of the Clean Water Act. Periodic bottom-up assessments of the  workload and related resource needs would give EPA the tools it needs to  develop this detailed estimate, as required.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Administrator, EPA, identify the key workload  indicators that drive resource needs, ensure that relevant data are  complete and reliable, and use the results to inform the agency’s budgeting  and resource allocation.
Furthermore, to ensure that EPA is making the best use of resources  dedicated to strategic workforce planning, we also recommend that EPA  coordinate ongoing planning efforts across the agency to avoid duplication.  EPA’s workforce planning efforts should build on what the agency has  accomplished thus far in identifying priority occupations, needed  competencies, and skill gaps for the agency as a whole. As a next step,  consistent with our 2001 recommendations, EPA should focus its efforts on  a ground level assessment and identify (1) the agency’s workload and skill  needs; (2) the skills and deployment of existing staff, geographically and  organizationally; and (3) strategies to fill identified gaps.
Finally, we recommend that EPA meet its reporting responsibilities under  section 516(b)(1) of the Clean Water Act or seek appropriate relief from the  Congress.
section_title: Agency Comments and Our Evaluations
paragraphs: We provided a draft of this report to EPA for review and comment. EPA  agreed with our recommendation regarding its reporting responsibilities  under section 516(b)(1) of the Clean Water Act and plans to respond  according to the requirements of the law. While not addressing our  recommendation on eliminating potential duplication of effort, EPA  acknowledged that the workforce planning strategies we recommended  can be effective tools for identifying and addressing future performance  needs and stated that it has already initiated several of these efforts. EPA  also noted that our report raises important issues affecting the distribution  of constrained resources. However, the agency noted that its resource  allocation decisions are based on performance and results and expressed  concern that a bottom-up assessment of the underlying workload  contrasted with its approach. We do not take issue with the use of  performance and results in developing budgets and allocating resources,  although, based on our review, EPA’s budget and resource allocations were  based primarily on historical precedent and, hence, year-to-year changes  were marginal. Moreover, we believe our recommendation is fully  compatible with an approach that links budgeting and resource allocation  to performance goals and results. In our view, the agency’s performance  goals should be informed by an assessment of the underlying workload— and how the tasks that must be accomplished drive resource needs  organizationally and geographically. Finally, EPA officials also provided a  number of technical comments and clarifications, which we incorporated  as appropriate. EPA’s comments are in appendix IV.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to appropriate congressional  committees; the Administrator, EPA; and the Director of the Office of  Management and Budget. We also will make copies available to others  upon request. In addition, the report will be available at no charge on the  GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-3841 or stephensonj@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix V.
section_title: Scope and Methodology
paragraphs: We defined the scope of our review to include Clean Water Act programs  for controlling pollution from point and nonpoint sources and related  activities, such as setting water quality criteria and standards, for both  specific pollutants and individual water bodies; monitoring water quality;  and establishing requirements for the disposal of sewage sludge.  We  excluded (1) financial assistance for local infrastructure under the Clean  Water State Revolving Fund; (2) activities for which the primary federal  responsibility lay outside the Environmental Protection Agency (EPA),  such as issuing permits for dredged and fill material, managed by the U.S.  Army Corps of Engineers; and (3) location-specific programs, such as those  focused on the Great Lakes, Chesapeake Bay, and designated sites under  the National Estuary Program. We performed our work at EPA’s Office of  Congressional and Intergovernmental Relations; Office of the Chief  Financial Officer; Office of Enforcement and Compliance Assurance; Office  of General Counsel; Office of Human Resources; and Office of Water in  EPA’s Washington, D.C., headquarters. We also obtained information from  four EPA regional offices located in Atlanta, Ga.; Boston, Mass.;  Philadelphia, Pa.; and San Francisco, Calif. Our criteria for selecting these  offices included differences in how the offices are organized to implement  the Clean Water Act, differences in the factors that drive their workload,  and geographic distribution.
For information on EPA’s process for budgeting and allocating resources,  we interviewed officials from the Office of the Chief Financial Officer and  other EPA offices with responsibility for Clean Water Act programs to  control pollution from point and nonpoint sources, including the Office of  Congressional and Intergovernmental Relations, Office of Enforcement  and Compliance Assurance, and Office of Water. Among other things, we  reviewed relevant portions of EPA’s strategic plan, budget data, and  operating plan. We also obtained (1) estimates of the funding and staff  years allocated to EPA’s regional offices and (2) allotments to the states  under two relevant grant programs. While these data may not be adequate  in all respects, we determined that they were sufficiently reliable to  illustrate differences in the relative share of resources across EPA’s  regional offices. In the four EPA regional offices selected for review, we  discussed the budgeting and allocation process with cognizant officials.
For information on EPA’s efforts to improve resource planning, we  interviewed officials from EPA’s Office of the Chief Financial Officer, Office  of Enforcement and Compliance Assurance, Office of Human Resources,  and Office of Water, as well as the Association of State and Interstate Water  Pollution Control Administrators, the Environmental Council of States, and  the National Academy of Public Administration to identify such efforts and  obtain relevant documents on their status and results. Officials from these  entities and the four EPA regional offices selected for review also provided  information on the challenges EPA faces in taking actions to improve  resource planning. In particular, we researched sources of data for the  workload factors identified by EPA officials and state environmental  officials as among the key drivers of resource needs.  For some factors,  such as number of authorized states in EPA regions, states for which EPA  has direct implementation responsibilities, population, and population  growth, we determined that the data were sufficiently reliable for our  purposes. Regarding other factors, such as number of facilities and water  quality, we found the data to be incomplete or unreliable for certain states  or regions, for certain years, or for certain types of facilities or water  bodies.  As a result, we were unable to analyze these data for workload  trends or geographic distribution. We found them sufficiently reliable to  provide illustrative examples. To identify key elements of strategic  workforce planning, we reviewed reports from GAO, EPA’s Office of  Inspector General, and the National Academy of Public Administration.
For information on EPA efforts to develop the detailed cost estimate  required under section 516(b)(1)(A) of the Clean Water Act, we interviewed  officials from EPA’s Office of the Chief Financial Officer, Office of General  Counsel, and Office of Water.
We conducted our work from August 2004 through July 2005 in accordance  with generally accepted government auditing standards.
section_title: Information on Resources Allocated to EPA Regional Offices and States for Controlling Point and Nonpoint Source Pollution
paragraphs: Across the Environmental Protection Agency (EPA), the program offices  track the funds and staff years dedicated to the goals and objectives laid  out in the agency’s strategic plan, down to a level of detail known as  program projects. The plan’s objectives generally contain multiple program  projects and the reverse may also be true: an individual program project  can contribute funds or staff years to multiple agency objectives.  For  example, within the Office of Water, most of the resources applicable to  controlling point and nonpoint source pollution under the Clean Water Act  are included under the program project called Surface Water Protection  and the projects for categorical grants on Pollution Control (Section 106)  and Nonpoint Source (Section 319). However, the Surface Water Protection  program project contains resources for a broader range of activities than  those included within our scope. At the same time, some of the resources  that are relevant to controlling point and nonpoint source pollution are  included in program projects that contain resources for other Clean Water  Act and Safe Drinking Water Act-related activities.
We asked Office of Water officials to provide a regional breakdown of the  funding contained in the Surface Water Protection program project (see fig.  2).  Fiscal years 2004 and 2005 are the only years for which consistent data  are available because the program project for Surface Water Protection  was created in 2004.
Figure 3 provides a similar breakdown in terms of regional staff years.
Within the Office of Enforcement and Compliance Assurance, it is difficult  to isolate resources dedicated specifically to implementing the Clean Water  Act or other environmental statutes because the office organizes its budget  by program projects, such as compliance monitoring and civil enforcement,  that cut across all environmental media. Beginning in fiscal year 2000,  however, the office’s budget officials asked the regional offices to provide a  “best guess estimate” of the number of staff years devoted to particular  program areas, including activities related to controlling point sources  under the Clean Water Act. (See fig. 4.)  The budget officials indicated that  this exercise likely does not capture all relevant staff years and said that  they did not verify the regional estimates. Fiscal years 2004 and 2005 were  the only years for which complete data were available.
The Office of Enforcement and Compliance Assurance does not develop  similar estimates for the amount of funding allocated to the regional  offices. Although budget officials suggested that we could estimate  regional spending based on the average cost of a staff year, regional  officials said such an approach might be misleading because the cost of  staff years varies from year to year and region to region.
The states receive annual allotments from the Office of Water under two  major grant programs. Grants under section 106 of the Clean Water Act  provide funds for water quality monitoring, regulating point source  dischargers, and related activities. Grants under section 319(h) of the act  fund the implementation of state programs for controlling pollution from  nonpoint sources, such as agricultural runoff. Figures 5 and 6 show  allotments to the states, by region, under the program projects for Pollution  Control (Section 106) and Nonpoint Source (Section 319).
section_title: Information on Selected Workload Indicators Related to Controlling Point and Nonpoint Source Pollution
paragraphs: This appendix contains information on selected workload indicators for  which the underlying data are sufficiently reliable to illustrate potential  differences in the regional distribution of workload.
Figure 7 shows the number of states in each Environmental Protection  Agency (EPA) region that are authorized to issue individual permits under  the Clean Water Act and the number of states for which EPA retains direct  implementation responsibility. The number of authorized states in a given  region affects workload in several ways, including the number of staff  devoted to oversight. When states are not authorized, regional officials  have greater responsibilities, such as writing permits for regulated entities.
Figure 8 shows the regional distribution of major and minor facilities,  including both municipal and industrial dischargers. Although these data  are from EPA’s Permit Compliance System, for which concerns about data  reliability are significant, EPA officials believe that the information on the  number of facilities is adequate.
One of the key workload indicators cited by EPA and representatives of  state environmental organizations was the quantity of surface waters that  must be assessed and monitored to obtain a complete picture of water  quality. These assessments may, in turn, trigger other resource-intensive  activities, such as establishing total maximum daily loads. Figures 9 and 10  portray the miles of rivers and streams and the acres of lakes in each EPA  region, according to the 2002 update of the National Hydrography Dataset,  which was first compiled by the U.S. Geological Survey in 1992.
The National Hydrography Dataset does not contain detailed information  on wetlands. The most recent information on wetlands was compiled in  1997 by the U.S. Fish and Wildlife Service. However, the information is no  longer considered accurate because, for example, the Fish and Wildlife  Service estimates that the United States loses 58,500 acres of wetlands  annually.
EPA identified population and population growth as indirect indicators of  workload, which are not necessarily linked to resource needs. For  example, while a large population may indicate that the region has a large  number of municipal wastewater treatment facilities, the population may  be concentrated in a few large cities with centralized facilities, resulting in  fewer individual facilities than otherwise expected. Similarly, growth in  population might indicate that EPA and state staff will need to regulate  more construction sites. However, the work required of environmental  officials could vary depending on the number and size of these sites in each  region. Figure 11 shows the census population estimates for the EPA  regions for 1990 and 2004, along with the percentage increase in each  region. We used 1990 as the starting point for this comparison because it  was shortly after EPA abandoned the use of workload models in the late  1980s.
Figure 12 presents a slightly different picture of the same population data.  It shows the change in the relative share of the U.S. population in each  region between 1990 and 2004.
The 2004 census data are based on state estimates from 2004.
section_title: Comments from the Environmental Protection Agency
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Christine Bonham, Stephen  Cleary, Ellen Crocker, Elizabeth Curda, Denise Fantone, Julian Klazkin,  Krista Loose, Naved Qureshi, Lisa Shames, Carol Herrnstadt Shulman,  Gregory Wilmoth, and Melissa Wolf made key contributions to this report.