Environmental Protection: EPA-State Enforcement Partnership Has Improved, but EPA's Oversight Needs Further Enhancement
Published: 2007-07-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Environmental Protection Agency (EPA) enforces the nation's environmental laws through its Office of Enforcement and Compliance Assurance (OECA). OECA sets overall enforcement policies and through its 10 regions oversees state agencies authorized to implement environmental programs consistent with federal requirements. GAO was asked to (1) identify trends in federal resources to regions and states for enforcement between 1997 and 2006, and determine regions' and states' views on the adequacy of these resources; (2) determine EPA's progress in improving priority setting and enforcement planning with states; and (3) examine EPA's efforts to improve oversight of states' enforcement programs and identify additional actions EPA could take to ensure more consistent state performance and oversight. GAO examined information from all 10 regions and 10 authorized states, among other things.
section_title: What GAO Found
paragraphs: Overall funding to regions and authorized states increased from 1997 through 2006, but these increases did not keep pace with inflation and the growth in enforcement responsibilities. Over the 10-year period, EPA's enforcement funding to the regions decreased 8 percent in inflation-adjusted terms. Regional officials said they reduced the number of enforcement staff by about 5 percent. EPA's grants to states to implement federal environmental programs also declined by 9 percent in inflation-adjusted terms while enforcement and other environmental program responsibilities increased. According to state officials, reductions in grant funds have limited their ability to meet EPA's requests to implement new requirements. For example, according to New York State officials responsible for the hazardous waste program, a reduction in EPA grants between 1997 and 2006 has meant a 38 percent reduction in the full-time state staff supported by federal funding for this program. However, EPA information on the workload and staffing needs of its regions and the states is incomplete, and, thus, it is not possible with existing data to determine their overall capacity to meet their enforcement responsibilities. EPA has made substantial progress in improving priority setting and enforcement planning with states through its system for setting national enforcement priorities and the EPA/state National Environmental Partnership System (NEPPS), which have fostered a more cooperative relationship. For example, on states' recommendation, OECA accepted as a priority ensuring that facilities handling hazardous substances, such as lead or mercury, have the financial resources to close their facilities, clean up contamination, and compensate communities and individuals affected by the contamination. EPA and states have also made some progress in using NEPPS for joint planning and resource allocation. State participation in the partnership grew from 6 pilot states in fiscal year 1996 to 41 states in fiscal year 2006. EPA has improved its oversight of state enforcement programs by implementing the State Review Framework (SRF) as a means to perform a consistent approach for overseeing the programs. Moreover, EPA can make additional progress by addressing weaknesses that the SRF reviews identified and by implementing other improvements to ensure oversight that is more consistent. For example, the SRF reviews show that EPA has limited ability to determine whether the states are performing timely, appropriate enforcement and whether penalties are applied to environmental violators in a fair and consistent manner within and among the states. In addition, GAO noted that EPA could make further use of the SRF to (1) determine the root causes of poorly performing programs; (2) inform the public about how well the states are implementing their enforcement responsibilities; and (3) extend the use of the SRF methodology to assess the performance of EPA's regions, which have been inconsistent in their enforcement and oversight efforts.

section_title: Letter
paragraphs: The Environmental Protection Agency (EPA), in partnership with state  The Environmental Protection Agency (EPA), in partnership with state  agencies, oversees compliance with 44 separate environmental programs.  agencies, oversees compliance with 44 separate environmental programs.  These programs regulate facilities—such as sewage treatment plants,  These programs regulate facilities—such as sewage treatment plants,  petroleum refineries, and power plants—whose operations could pollute  petroleum refineries, and power plants—whose operations could pollute  the air, water, and land, and thereby endanger public health and the  the air, water, and land, and thereby endanger public health and the  environment. EPA and its regulatory partners are responsible for ensuring  environment. EPA and its regulatory partners are responsible for ensuring  that these regulated facilities comply with program requirements and  that these regulated facilities comply with program requirements and  taking enforcement action in instances of noncompliance. These  taking enforcement action in instances of noncompliance. These  enforcement efforts are important for ensuring a level playing field  enforcement efforts are important for ensuring a level playing field  because, among other things, facilities that do not comply with program  because, among other things, facilities that do not comply with program  requirements might have a competitive economic advantage over facilities  requirements might have a competitive economic advantage over facilities  that take environmental requirements seriously and thereby incur  that take environmental requirements seriously and thereby incur  additional operational costs.  additional operational costs.
Many federal environmental statutes, such as the Clean Air Act, the Clean  Many federal environmental statutes, such as the Clean Air Act, the Clean  Water Act, and the Solid Waste Disposal Act, direct EPA to approve or  Water Act, and the Solid Waste Disposal Act, direct EPA to approve or  authorize qualified states to implement and enforce environmental  authorize qualified states to implement and enforce environmental  programs consistent with federal requirements. EPA expects its 10  programs consistent with federal requirements. EPA expects its 10  regional offices to take a systematic, consistent approach in overseeing  regional offices to take a systematic, consistent approach in overseeing  the state enforcement programs and, in doing so, to follow EPA’s  the state enforcement programs and, in doing so, to follow EPA’s  regulations, policies, and guidance. EPA outlines, by policy and guidance,  regulations, policies, and guidance. EPA outlines, by policy and guidance,  its oversight expectations for regional offices with regard to ensuring the  its oversight expectations for regional offices with regard to ensuring the  state approaches include the elements of an acceptable state enforcement  state approaches include the elements of an acceptable state enforcement  program, such as the type and timing of the actions that should be taken  program, such as the type and timing of the actions that should be taken  for various violations, and track how well the states comply.  for various violations, and track how well the states comply.
This model of state enforcement of environmental laws, accompanied by  EPA’s regional oversight, allows the level of government closest to  environmental conditions to assume primary responsibility for  implementing programs. But it requires that states acquire and maintain  adequate capacity to enforce state environmental programs that are  consistent with federal requirements and act in a timely and appropriate  manner to ensure violators come into compliance. EPA establishes by  regulation the requirements for state enforcement authority, such as the  authority to seek civil and criminal penalties and injunctive relief. EPA  grants authorization to the states on a program-by-program basis. EPA  policy and guidance outline, with greater specificity, the elements of an  acceptable state enforcement program—such as the necessary legislative  authorities and the type and timing of the enforcement actions for various  violations—and track how well states comply.
Most states have responsibility for multiple EPA programs. EPA- authorized states monitor the compliance of regulated facilities by  conducting inspections, performing evaluations, and reviewing records to  verify facilities’ compliance with programs regulating the discharge of  pollutants into surface water or the air and the storage and disposal of  hazardous waste. States are expected to pursue enforcement actions  against those facilities found in noncompliance and to report their actions  to EPA.
EPA administers its environmental enforcement responsibilities through  its headquarters Office of Enforcement and Compliance Assurance  (OECA). OECA monitors the compliance of regulated facilities, identifies  national enforcement concerns and sets priorities, and provides overall  direction on enforcement policies. While OECA headquarters occasionally  takes direct enforcement action, much of EPA’s enforcement  responsibilities are carried out by its 10 regional offices. These offices are  responsible for carrying out core program activities under each of the  major federal environmental statutes, as well as significant involvement in  implementing EPA’s national enforcement priorities and taking direct  enforcement action. The regions are also responsible for overseeing  authorized states’ enforcement programs, implementing programs in  Indian country and states that are not authorized for particular programs.  OECA also expects regions and authorized states to establish enforcement  priorities and expectations and reach agreement on their respective roles  and responsibilities. Authorized states may also receive EPA grants to  assist in implementing and enforcing authorized programs. In fiscal year  2006, grants to states and tribes totaled $3.2 billion, or about 42 percent of  EPA’s total budget.
Over the years, states have increased their inspection and enforcement  activities. As a result, EPA regional offices are now more actively involved  in conducting oversight and providing states with guidance, training, and  technical assistance to assure consistent performance of state  enforcement programs. If EPA finds a state is not adequately  administering or enforcing authorized programs, individual environmental  statutes may authorize EPA to take certain actions, including providing  additional technical assistance, conditioning the receipt of grant funds on  compliance with EPA guidance, or withdrawing state authorization. In  addition, when EPA finds a specific state enforcement action to be  inadequate, the agency may take federal enforcement action against the  violator.
Despite the interdependence between EPA and the states in carrying out  enforcement responsibilities, effective working relationships have  historically been difficult to establish and maintain, as we, EPA’s Office of  Inspector General, the National Academy of Public Administration, and  others have reported. The following three key issues have affected EPA- state relationships:    EPA’s funding allocations to the states have not fully reflected the  differences among the states’ enforcement workload and their relative  ability to enforce state environmental programs consistent with federal  requirements. In this regard, EPA lacks information on the capacity of  both the states and EPA’s regions to effectively carry out their  enforcement programs, because the agency has done little to assess the  overall enforcement workload of the states and regions and the number  and skills of people needed to implement enforcement tasks, duties, and  responsibilities. Furthermore, the states’ capacity continues to evolve as  they assume a greater role in the day-to-day management of enforcement  activities, workload changes occur as a result of new environmental  legislation, new technologies are introduced, and state populations shift.
Problems in EPA’s enforcement planning and priority setting processes  have resulted in misunderstandings between OECA, regional offices, and  the states regarding their respective enforcement roles, responsibilities,  and priorities. States have raised concerns that EPA sometimes  “micromanages” state programs without explaining its reasons for doing  so and often does not adequately consult the states before making  decisions affecting them.
OECA has not established a consistent national strategy for overseeing  states’ enforcement of EPA programs. Consequently, the regional offices  have not been consistent in how they oversee the states. Some regional  offices conducted more in-depth state reviews than others, and states in  these regions have raised concerns that their regulated facilities are held  to differing standards of compliance than facilities in states located in  other regions.
EPA and leaders of state environmental programs have tried over the  years to establish new mechanisms to address each of these long-standing  problems in order to strengthen the EPA-state partnership. For example,  EPA has linked its budgeting and allocation process to its strategic goals  and objectives, and makes strategic decisions in developing its budget for  its enforcement workforce to reflect shifting priorities. Nonetheless,  according to OECA officials, shifts in funding and staff years made as a  result of changing priorities are generally marginal. In this regard, in July  2005 we reported that an effective workforce strategy is needed,  particularly during times of fiscal constraint, so that OECA can tailor  workforce changes to reflect actual conditions in the regions and states  and minimize potential adverse impacts on EPA’s programs.
To better clarify roles, responsibilities, and priorities between EPA and the  states, the agency established the National Environmental Performance  Partnership System (NEPPS) in 1995 to give states demonstrating strong  environmental performance greater flexibility and autonomy in planning  and operating their environmental programs. Under this system, a state  and EPA may enter into a Performance Partnership Agreement (PPA) that  identifies the state’s environmental goals and priorities, and spells out how  EPA and state officials are to address them. States may also ask to  combine EPA grants into a Performance Partnership Grant (PPG), which  is intended to allow the state greater flexibility in targeting limited  resources to meet its priorities. In 2003, OECA revised its process for  setting national enforcement priorities to better consider the views of  states and regions and to more effectively target enforcement resources.  Under the new process, OECA headquarters evaluates the overall  environmental performance of individual industrial sectors, and solicits  views about those sectors from states and regions, the representatives of  the industrial sectors, and the public. OECA uses this information to  identify priorities that are best addressed through focused federal  attention. OECA issues guidance to the regions and states for  implementing the national enforcement priorities, as well as guidance for  deterring noncompliance among all regulated sectors.
Likewise, OECA implemented a new oversight program in 2004, known as  the State Review Framework (SRF), to more uniformly and objectively  measure the performance of states’ enforcement programs. Under SRF,  regions evaluate the extent to which state performance in managing three  major programs complies with specific legal requirements, policy, and  guidance, while OECA headquarters manages the overall review process.  In conducting this evaluation, the regions use 12 review elements, such as  the degree to which states complete planned inspections, accurately  identify significant violations, and take timely and appropriate  enforcement action. As of January 2007, EPA had conducted SRF reviews  in 33 states and expected to complete its assessment of the remaining  states by the end of fiscal year 2007. EPA plans to evaluate the  implementation of SRF in fiscal year 2008. Appendix II contains a detailed  description of the development of the SRF.
In this context, you asked that we (1) identify trends in the federal  resources provided to regions and states for enforcement between 1997  and 2006, and determine regional and states’ views on the adequacy of  these resources to implement their activities; (2) determine EPA’s  progress in improving priority setting and enforcement planning with its  regions and authorized states; and (3) examine EPA’s efforts to improve its  oversight of state’s enforcement and compliance programs and identify  additional actions that could be taken to ensure more consistent state  performance and more consistent oversight of state programs.
To address these issues, we reviewed EPA’s strategic plans and national  strategy, and its policy and guidance for planning and implementing its  enforcement programs and for establishing performance partnerships with  authorized state agencies. We also examined the budgets for EPA and  OECA for fiscal years 1997 through 2006. We discussed the development  and implementation of national strategy, policy, guidance, and resource  allocation with officials of OECA, EPA’s Office of Congressional and  Intergovernmental Relations, EPA’s Office of Chief Financial Officer, and  officials responsible for state program oversight in each of EPA’s 10  regional offices. In each region, we examined regional strategic plans,  partnership agreements with authorized states, and state oversight  reviews. We used semi-structured interviews to elicit, organize, and  evaluate narrative responses from officials at the 10 regional offices and 10  authorized state agencies. We selected one state from each region: five  states that had performance partnership agreements with EPA (Iowa,  Massachusetts, Minnesota, Oregon, and Utah) and five that did not  (Arizona, Arkansas, Florida, New York, and West Virginia). At these state  agencies, we reviewed strategic plans and strategy, and policy and  guidance for planning and implementing enforcement programs. We were  not able to assess the workload and capacity of states to meet their  programs because, as mentioned previously, EPA does not have a system  to collect information needed for such an assessment, including consistent  and complete information from the states or regions on their workload  and the number, type, and skills of staff needed to carry out these  responsibilities. Appendix I contains a detailed description of our scope  and methodology. We performed our work from October 2005 through  July 2007 in accordance with generally accepted government auditing  standards, which included an assessment of data reliability and internal  controls.
subsections: section_title: Background
paragraphs: Since its creation in 1970, EPA has generally been responsible for ensuring  the enforcement of the nation’s environmental laws. This responsibility  has traditionally involved monitoring compliance by those in the regulated  community (such as factories or businesses that release pollutants into the  environment or use hazardous chemicals), ensuring that violations are  properly identified and reported, and ensuring that timely and appropriate  enforcement actions are taken against violators when necessary.
Because states historically had primary responsibility for addressing  environmental pollution, including taking the lead role in enforcement  under federal environmental legislation of the 1950s and 1960s, many  states were dissatisfied with the new enforcement powers Congress  granted to EPA. Referring to his first term as EPA Administrator during  the 1970s, William Ruckelshaus described relations between EPA and state  governments as “terrible,” largely because EPA itself represented a  repudiation of what the state regulators had been doing. The states felt, he  believed, that in the face of very little public or political support, they had  made considerable progress and were getting no credit for it. The very  existence of EPA symbolized to state environmental agencies the lack of  appreciation the public had for their efforts and accomplishments.
Furthermore, because EPA was now responsible for ensuring the  implementation and enforcement of environmental laws, states needed to  demonstrate to EPA that they had acquired and were maintaining  adequate authority to enforce program requirements consistent with  federal law before EPA would “authorize” and continue to allow states to  assume the day-to-day administration of new environmental programs.  This federal oversight contributed to a very difficult period between EPA  and the states. The states thought EPA dictated too much and was too  intrusive.
Difficulties in the EPA-state relationship manifested themselves from the  1970s through the 1990s and, to some degree, have continued to the  present day. In 1980, we described the failings of the EPA-state  partnership. In a 1988 comprehensive management review of EPA, we  reported that while some progress had been made in improving the  EPA/state relationship, the goal of a truly effective EPA-state partnership  remained elusive. Many state officials expressed concerns about having  limited flexibility, too much EPA control, and excessively detailed EPA  oversight.
In 2003, OECA officials said that environmental commissioners in several  states and members of the Environmental Council of the States (ECOS)  called for OECA to develop and implement a consistent and objective  mechanism for measuring state performance. Specifically, ECOS wanted  EPA’s oversight of state programs to be consistent between EPA regions  and states in the same region. ECOS also wanted EPA oversight to be  predictable, repeatable, and unbiased. In December 2003, OECA began  jointly developing the SRF with input from EPA regions, associations  representing state pollution control agencies, ECOS and state officials to  evaluate the extent to which state performance in three major programs  complies with specific legal requirements, policy and guidance. The SRF  measures state performance using 12 required elements and an optional  13th element. The elements include five categories: (1) review of state  inspection implementation; (2) review of state enforcement activity; (3)  review of state enforcement commitments; (4) review of state data  integrity; and (5) for the optional 13th element, a review of additional  programs of the state’s choice to insure consideration of state activities  that support the overall evaluation. Regions prepare a draft report of the  findings and conclusions of each review, jointly discuss with the state how  major recommendations will be addressed, and provide the draft reports  to OECA headquarters. OECA reviews the draft reports and provides  comments on the regions’ analyses and recommendations. A more detailed  description of the SRF is included in appendix II.
The relationship between EPA and state environmental agencies varies  substantially from state to state and program to program. Staff in EPA’s  regional offices operate programs in those states that have elected not to  seek authorization and in those states that EPA has concluded are not  prepared to manage the programs effectively. In some cases, where EPA  has denied a state with program authorization, state personnel may do  most of the work as if they had the authority to grant permits, with EPA  employees handling only the final step of formally issuing the documents.  In other states or programs, EPA may approve a “partial delegation” of  authority, under which a state operates part of a program that can be  delegated and EPA operates the remainder.
Just as EPA can authorize a state to conduct day-to-day program  management, environmental statutes may allow EPA to withdraw  authorization if a state fails to meet certain conditions, including  maintaining the capacity to effectively manage the program and adopting  and properly exercising the legal authorities to enforce program  compliance consistent with federal laws and regulations. In practical  terms, however, EPA’s ability to directly manage state programs is limited  because of its staffing levels and other resources.
section_title: Increases in EPA Funding Have Not Kept Pace with Inflation and Enforcement Responsibilities
paragraphs: Overall funding to regions and authorized states increased from fiscal  years 1997 through 2006. However, these increases did not keep pace with  inflation and the growth in enforcement responsibilities. Both EPA and  state officials told us they are finding it difficult to respond to new  requirements while carrying out their previous responsibilities. However,  EPA does not collect sufficient data on enforcement workload and  staffing, which it needs to assess the capacity of the regions and states to  effectively implement their responsibilities for enforcing environmental  laws consistent with federal requirements.
subsections: section_title: Resources for EPA Regions and the States Have Declined in Real Terms
paragraphs: According to our analysis of EPA’s budget and workforce for fiscal years  1997 through 2006, EPA’s total budget increased from $7.3 billion to $7.7  billion—a decline of 13 percent in real terms. At the same time, total  funding for EPA enforcement increased from $455 million to $522  million—a decline of 5 percent in real terms. For the regions, which  command the bulk of enforcement resources, funding increased from $288  million to $322 million—a decline of 8 percent in real terms, while  headquarters enforcement funding increased from $167 million to $200  million—a decline of 1 percent in real terms. Figure 1 shows the changes  in EPA enforcement funding in real terms, in total, and by headquarters  and regional offices.
According to officials in OECA and EPA’s Office of the Chief Financial  Officer, OECA headquarters absorbed decreases in OECA’s total  enforcement funding in recent years to prevent further reductions to the  regions. According to our analysis, enforcement funding for OECA  headquarters increased from $197 million in fiscal year 2002 to $200  million in fiscal year 2006—a 9 percent decline in real terms. During the  same time, regional enforcement funding increased from $279 million to  $322 million—a 4 percent increase in real terms.
EPA reduced the size of the regional enforcement workforce by about 5  percent over the 10 years, from 2,568 full-time equivalent (FTE) staff in  fiscal year 1997 to 2,434 FTEs in fiscal year 2006. In comparison, the OECA  headquarters workforce declined 1 percent, and the EPA total workforce  increased 1 percent during the same period. Figure 2 shows the changes in  headquarters and regional FTEs from fiscal years 1997 through 2006.
As figure 3 shows, the change in FTEs was not uniform across the 10  regions over the period. For example:    Two regions—Region 9 (San Francisco) and Region 10 (Seattle)— experienced increases in their workforce: Region 9 increased 5 percent,  from 229 to 242 FTEs, and Region 10 increased 6 percent, from 161 to 170  FTEs.
Two regions—Region 1 (Boston) and Region 2 (New York) experienced  the largest declines: Region 1 experienced a 15 percent decline, from 195  to 166 FTEs, and Region 2 had a 13 percent decline, from 291 to 254 FTEs.
As EPA’s real total funding declined, EPA’s real total grant funding to  states and tribes declined, as shown in figure 4. States and tribes use these  grant funds, combined with their own resources, to implement and  enforce environmental programs consistent with federal requirements.  EPA’s grants to authorized states and tribes increased from $2.9 billion to  $3.2 billion from fiscal years 1997 through 2006—a decline of 9 percent in  real terms. However, grant funding to states and tribes dropped  substantially between fiscal years 2004 and 2006, from $3.9 billion to $3.2  billion—a 22 percent decline in real terms.
For the programs we examined, EPA provides states with federal  resources through grant programs. In addition, under the Clean Air Act,  states must collect fees from permitted facilities to help fund the program.  The following are some of the funding sources for the programs we  examined:    Clean Water Act Section 106 Grants. The Office of Water provides annual  Water Pollution Control grant funds to the states under the Clean Water  Act for, among other things, enforcement of point source pollution  requirements.
Clean Air Act Section 105 Grants. States finance enforcement of air  quality laws with fees paid by permitted facilities (e.g., electric utilities and  chemical manufacturers), in accordance with title V of the Clean Air Act.  States assess fees based on tons of pollution emitted. The fee must be at  least $25 per ton (as adjusted for inflation) of regulated pollutants  (excluding carbon monoxide). EPA provides grants to states to help fund  programs that prevent and control air pollution or to implement national  ambient air quality standards, including programs that may address  smaller sources that do not have to obtain permits (e.g., dry cleaners and  gasoline stations).
Resource Conservation and Recovery Act (RCRA) Section 3011 Grants.
The Office of Solid Waste and Emergency Response provides annual  grants to states under section 3011 of the Solid Waste Disposal Act to  support, among other things, state enforcement of the RCRA Subtitle C  Hazardous Waste Management programs. EPA’s financial assistance  covers up to 75 percent of a state’s total costs for managing hazardous  waste.
Underground Storage Tank (UST) Grants. The Office of Underground  Storage Tanks provides grants to states under subtitle I of RCRA to  support state UST programs, including inspections and enforcement  activities.
section_title: EPA Regions and States Find It Difficult to Respond to New Requirements under Current Resource Constraints
paragraphs: Given the real reductions in funding and personnel, regional and state  enforcement officials noted states are finding it difficult to respond to new  enforcement requirements in the Clean Water Act, Clean Air Act, and  RCRA, which have greatly increased the number of regulated pollutants  and sources. However, as we reported in June 2006, EPA’s data collection  system for state and regional enforcement activities does not provide  consistent and complete data on the workload of the states or the regions,  and on their capacity to meet their workload, including the enforcement of  environmental programs consistent with federal requirements. Thus, we  were not able to independently assess their capabilities to meet their  responsibilities under environmental programs with their existing  resources.
subsections: section_title: Clean Water Act
paragraphs: In 1987 amendments to the Clean Water Act, Congress expanded the  scope of the act by regulating storm water runoff from rain or snow as a  discharge from point sources, such as industrial facilities and municipal  separate storm sewer systems. We reported in 2005 that that the new  storm water regulations increased the number of industrial and municipal  facilities subject to regulation by an estimated 186,000 facilities. In that  same year, the EPA Office of Inspector General reported that the new  requirements added hundreds of thousands of construction projects to  states’ and regions’ workloads related to storm water pollution sources. In  2005, EPA established storm water as a national enforcement priority.
According to state water quality enforcement officials, it is difficult to  meet these new requirements while still meeting older requirements to  periodically inspect large municipal and industrial point sources. For  example, Minnesota officials told us that there are a huge number of  facilities and locations that require inspection and permits in that state.  The Minnesota storm water officials provided us a performance report that  indicated noncompliance with storm water requirements was so pervasive  that the state’s water enforcement program was not meeting its timeliness  targets for closing enforcement cases where it has the authority to issue a  penalty. The report said that the situation threatened to undermine earlier  success in implementing the state’s storm water permit program.  According to the Arkansas director of the state’s water quality program,  storm water enforcement work in the fast-growing northwestern corner of  the state has overwhelmed the program. According to state data, the  number of storm water permits issued grew by 512 percent—from 427 to  2,616—between 2003 and 2005. At the same time, the number of permits  Arkansas officials issued to traditional point sources increased by 19  percent, from 190 to 227 facilities. However, the state is beginning to fall  behind in issuing the traditional permits because it has had to redeploy  inspectors to work on storm water enforcement.
Regional officials told us they have provided assistance to some states to  meet enforcement requirements for storm water, such as helping states  complete a specified number or percentage of state inspections. For  example, Region 8 (Denver) enforcement officials said they share the  inspection workload with Montana officials because that state’s permit  program is chronically underfunded, and this partnership enables state  officials in Montana to focus on reducing their backlog of regulated  facilities that require permit renewals.
section_title: Clean Air Act
paragraphs: In 1990 amendments to the Clean Air Act, Congress created significant  new enforcement requirements for both EPA regions and states. Title III  of the 1990 amendments required EPA to control emissions of 189 air  toxics by, among other things, developing technology-based emissions  limits for major stationary sources. By 2006, there were an estimated  84,000 major stationary sources within 158 major source categories such  as incinerators and chemical plants to which these standards applied. Title  III of the amendments also directed EPA to develop a list of categories of  small stationary sources, such as dry cleaners and gas stations—so-called  “area sources”—sufficient to represent 90 percent of emissions from small  stationary sources of listed hazardous air pollutants. EPA and authorized  states were then to implement strategies to control toxic emissions from  these sources. EPA developed a list of 70 categories, but, as we reported in  2006, it had issued standards for only 16.
Under title V of the 1990 amendments, Congress directed EPA and  authorized states to implement a comprehensive permit program for  sources emitting regulated air pollutants. The new requirement  significantly expanded an earlier permit program that applied only to  major new construction or modifications of existing major sources of  pollution. As of April 2001, EPA had authorized all 50 states and 63 local  governmental units to act as clean air regulatory agencies and issue Title V  operating permits. The 1990 amendments also required states to collect  fees from regulated facilities sufficient to cover program costs. We  reported in 2001 that 19,880 major sources had already received, or could  be expected to obtain or comply with the conditions of, Title V permits;  furthermore, federal and state regulators performed about 17,800 routine  inspections each year in fiscal years 1998 and 1999.
State air enforcement officials said that reductions in federal air quality  grants and EPA restrictions on how states can use the permit fees limit  their ability to meet new Clean Air Act requirements. For example,  enforcement officials in Arizona and West Virginia told us that reductions  in section 105 grants have made it difficult to meet EPA’s push for states to  identify and regulate air toxic emissions from small stationary sources,  such as dry cleaners. According to the director of West Virginia’s air  quality program, while his office has identified these sources and provided  this information to Region 3 (Philadelphia), it does not have the resources  to regulate these sources. Title V rules restrict states from using permit  fees for enforcement of air toxic emission standards for small stationary  sources.
Several state officials said they also face difficulties keeping up with Title  V requirements to issue operating permits and inspect facilities. For  example, according to West Virginia’s Director of Air Quality, the state  program is spending more than it generates in revenues from Title V  permit fees. Furthermore, the state is drawing down a reserve fund that it  established in 1993, when it was operating a preliminary Title V program  before it was authorized to administer this program. West Virginia’s Title V  fee is around $21 per ton, which is below the national average fee of $28  per ton paid by major sources in 2001. The Director of Arizona’s Air  Quality Division said that as a result of new standards and new types of  performance testing, the Title V permitting workload has increased faster  than staff levels.
section_title: Resource Conservation and Recovery Act
paragraphs: The 1984 amendments to RCRA required EPA and authorized states to  regulate small-quantity hazardous waste generators—those producing  between 100 and 1,000 kilograms of waste per month. Before the 1984  amendments, EPA only required generators who produce more than 1,000  kilograms of hazardous waste to comply with regulations concerning,  among other things, record keeping and reporting. In addition, the 1984  amendments required EPA and authorized states to ensure that owners  and operators of treatment, storage and disposal facilities comply with  new prohibitions for disposing of untreated hazardous wastes on land.
This expansion of responsibility, combined with a reduction in resources,  has made it difficult to carry out responsibilities, according to state  hazardous waste enforcement officials we spoke with. For example, data  provided to us by New York State officials showed that the state’s grant  for hazardous waste management dropped in real terms by 19 percent  between fiscal years 1997 and 2006. As a result of this decline in funding,  New York State officials said that the grant supports fewer full-time staff.  The officials provided us data that showed New York State’s grant for  hazardous waste management supported 38 percent fewer full-time staff in  the state’s RCRA program in fiscal year 2006 than in fiscal year 1997.  Furthermore, while it continues to focus on EPA’s national priorities for  enforcement, the state has accumulated a backlog of permits that must be  renewed. Renewing these hazardous waste permits is critical to protecting  the environment and public health because EPA and authorized states can  enforce new hazardous waste standards only when they are specified in a  permit. According to these officials, EPA has issued new standards during  the life of the old permit and these new standards are not enforceable until  the permit is renewed.
Several states identified an emerging challenge: verifying that owners and  operators of hazardous waste facilities have the financial resources to  clean up their sites, as RCRA requires, rather than leaving site cleanup to  the taxpayer. As we reported in 2005, EPA’s Office of Inspector General  concluded that required cleanups at some sites could exceed $50 million.  EPA made enforcement of the financial assurance requirement a national  enforcement priority in 2005. However, state officials told us, and EPA’s  regional officials agreed, that they do not have the personnel with the  necessary skills to evaluate the financial assurances provided. For  example, New York State officials told us that they have only one person  trained to review the adequacy of a facility’s financial assurance.
The Energy Policy Act of 2005 also expanded states’ enforcement  workload by requiring, among other things, (1) EPA and any state  receiving federal funding to inspect by August 8, 2007, all regulated tanks  that were not inspected since December 22, 1998, and (2) EPA or the state  must generally inspect regulated tanks once every 3 years and complete  the first 3-year inspection cycle within 3 years of completing inspections of  underground storage tanks that had not been inspected by December 22,  1998. We reported in February 2007 that according to EPA data there  were 645,990 active federally regulated underground storage tanks  registered with state underground storage tank programs.
To carry out these additional inspections, the act, as amended, allows  states to use Leaking Underground Storage Tank Trust Fund  appropriations, and authorizes substantial appropriations from the trust  fund during fiscal years 2006 through 2011. These new appropriations  were to be in addition to State and Tribal Grant funds EPA provides to  states for underground storage tank programs, which historically have  been about $187,000 annually. These additional funds were not  appropriated in fiscal years 2006 and 2007. As a result, some state officials  told us, they do not have sufficient resources to meet the new inspection  requirements. For example, Minnesota officials said they have sufficient  resources for inspecting underground storage tanks only once every 9  years. Regional officials acknowledged that many states need additional  inspectors for meeting these new underground storage tank inspection  requirements and said they provide support to states facing fiscal  constraints. For example, the Region 3 Chief of RCRA enforcement and  compliance said the region helped state officials in West Virginia by  inspecting small and midrange gas stations in the state. Region 9 (San  Francisco) has also been working with UST officials in Arizona to meet  the new inspection requirements.
section_title: EPA and States Have Taken Steps to Improve Planning and Priority Setting for Enforcement, but Results Are Uneven
paragraphs: EPA has made substantial progress in improving priority setting and  enforcement planning with states through its system for setting national  enforcement priorities and NEPPS, which have fostered a more  cooperative relationship. For example, on states’ recommendation, OECA  accepted as a priority ensuring that facilities handling hazardous  substances, such as lead or mercury, have the financial resources to close  their facilities, clean up contamination, and compensate communities and  individuals affected by the contamination. EPA and states have also made  some progress in using NEPPS for joint planning and resource allocation.  State participation in the partnership grew from 6 pilot states in fiscal year  1996 to 41 states in fiscal year 2006.
subsections: section_title: EPA Implemented a More Collaborative Process for Setting National Priorities for Enforcement
paragraphs: Since the late 1980s, EPA’s top agency executives have set priorities for  improving agency management. To develop more collaborative  relationships among EPA’s headquarters and regions, and the states,  OECA created the Planning Council in 2003 to direct OECA’s strategic and  planning processes, including selecting national enforcement priorities.  The council includes both EPA headquarters and regional officials. In the  summer of 2003, OECA asked officials representing state environmental  agencies, tribal governments, and air, water, and solid waste pollution  control associations to recommend priorities for consideration as national  priorities for fiscal years 2005 through 2007. Considering these  recommendations, as well as those from EPA’s media program managers,  OECA developed a list of potential national priorities that it published in  the Federal Register in December 2003. OECA asked for public comments  on candidate priorities and suggestions for new national enforcement  priorities. In January 2004, OECA hosted a meeting with headquarters and  regional officials, and representatives from 10 state environmental  agencies, four tribal governments, and three pollution control associations  to discuss and rank their choices of potential priorities. OECA then  selected the final national enforcement priorities for fiscal years 2005  through 2007 based on the following criteria:    Significant environmental benefit. In what specific areas can the federal  enforcement and compliance assurance programs make a significant  positive impact on human health and/or the environment? What are the  known or estimated public health or environmental risks?
Noncompliance. Are there particular economic or industrial sectors,  geographic areas, or facility operations where regulated entities have  demonstrated serious patterns of noncompliance?
EPA responsibility. What identified national problem areas or programs  are better addressed through EPA’s federal capability in enforcement or  compliance assistance?
Table 1 shows the potential national priorities, and those that were  selected.
According to state and regional officials, OECA’s approach for selecting  national priorities has fostered a more collaborative working relationship,  and they pointed to the financial assurance national priority under RCRA  as a case in point. This priority focuses on ensuring that owners and  operators of facilities handling hazardous substances, such as lead or  mercury, provide assurance that they have the financial resources  necessary to close their facilities, clean up any contamination, and  compensate communities and individuals affected by any contamination  they cause. Stakeholders—EPA regions, states, pollution control  associations, and the public—told OECA that financial assurance should  be a national priority. EPA and state supporting investigations confirmed  that (1) there are significant noncompliance issues relating to the financial  assurance requirements; (2) the issues are of national importance and deal  with several environmental laws and regulatory programs; and (3) areas of  noncompliance were not isolated to a specific sector, industry, or  geographic location. In selecting financial assurance as a national priority,  OECA stated that an effective national enforcement and compliance  strategy would help address many of the problems created by the  regulated facilities’ failure to fulfill their financial responsibility  obligations. In this regard, EPA is providing training to state inspectors— who often do not have expertise in financial management—on how to  assess the adequacy of financial documentation provided by regulated  facilities.
While state and regional officials told us the priority setting process is  more collaborative, some state officials raised a number of issues about  how EPA considered their comments about national priorities. For  example, Massachusetts and Oregon officials told us that they did not  understand why OECA ranked some of their priorities lower than the  national priorities that were selected and would like to have feedback on  how their views were considered when selecting national enforcement  priorities. In addition, while Minnesota, Utah, and Arizona officials agree  that the planning and priority setting has improved, they would prefer  earlier involvement in the decision-making process, that is, in developing  the candidate list. On the other hand, New York and Arkansas said that  they preferred to provide input on the national enforcement priorities  through the pollution control associations and/or ECOS. They said, by  doing so, OECA will receive states’ collective views on the candidate  priorities in a more representative and compelling way.
After OECA selects the national enforcement priorities, it uses the  National Program Managers guidance to inform its stakeholders of the  national priorities and required elements of all environmental laws. The  managers establish overall national goals for their respective programs  based on a variety of factors, including underlying statutory mandates,  congressional directives, administration/administrator priorities, and their  own view of programs and policies that the programs should focus on.  EPA regions and states use this guidance to negotiate agreements based  on (1) which environmental problems will receive priority attention within  state programs, (2) what EPA’s and the states’ respective enforcement  roles and responsibilities will be, and (3) how the states’ progress in  achieving program objectives will be assessed. The results of these  negotiations are documented primarily in PPAs and/or PPGs. According to  EPA, NEPPS allows regions and states to negotiate agreements that vary  in content and emphasis to reflect regional and state conditions and  priorities.
section_title: Extent of States’ Participation in the Planning and Priority Setting Process Varies
paragraphs: State participation in NEPPS grew from 6 pilot states in fiscal year 1996 to  41 states in fiscal year 2006. Of these 41 states participating in NEPPS in  fiscal year 2006, 31 had both PPAs and PPGs; 2 had agreements only; and 8  had grants only. Twelve states did not participate at all in NEPPS.
Regional officials and states participating in NEPPS said it contributed to  improvements in their planning and priority setting process by helping  identify enforcement priorities, roles, and responsibilities. The states we  spoke with that had a PPA—Iowa, Massachusetts, Minnesota, Oregon, and  Utah—also had a PPG and generally agreed that EPA’s planning and  budget process fostered collaboration in setting joint priorities, roles, and  accountability for each party. In addition, Minnesota and Massachusetts  officials told us that they have been able to use grant resources to address  other state priorities. However, these officials noted that EPA guidance  continues to call for a specific number of enforcement activities, which  does not allow for as much flexibility as envisioned.
States without a PPA can still participate in NEPPS through a PPG, which  allows them to combine individual categorical grant funds into a  consolidated grant. Once the funds are consolidated, they lose their  category-specific identity and can be used with greater flexibility. We  found that states that had a PPG, but not a PPA, had mixed views on  NEPPS. For example, according to the New York State Department of  Environmental Conservation (NYSDEC), which currently has a  performance grant only for water programs, it experimented with a  performance agreement in the mid-1990s but dropped the endeavor  because of difficulties in drafting an agreement that combined multiple  agency divisions. NYSDEC officials said the amount of work involved  outweighed the benefits to individual programs. Furthermore, even with a  performance grant for water programs, NYSDEC officials told us, EPA still  maintains requirements for how the money is used and attempts to steer  the state toward EPA’s priorities, which are not necessarily NYSDEC’s  priorities. In contrast, the Arizona Department of Environmental Quality,  which has a performance grant but not a performance agreement, said it  has a “fantastic relationship” with Region 9 that is characterized by  extensive coordination and communication. Because of its grant, Arizona  officials told us, the state has realized administrative efficiencies and has  more flexibility to move money among programs.
States that do not participate in NEPPS were generally satisfied with the  amount of joint planning and coordination in their work plan agreements  (i.e., memorandum of agreement and annual work plans). For example,  West Virginia and Florida told us that their work plan agreements with  their EPA regions provided them with much of the same opportunities for  joint planning, flexibilities, and priority setting as NEPPS participants.  Officials from the West Virginia Department of Environmental Protection  said they did not participate in NEPPS because they did not wish to  transfer grant funding among media programs. They said state programs  rely heavily on revenue generated through fees and penalties; therefore,  program managers are reluctant to share resources. According to officials  from the Florida Department of Environmental Protection, they have not  participated in NEPPS since 1999 because their work plan agreements  provide the benefits of NEPPS—good dialogue with the region in planning  and priority setting. Moreover, Florida officials said they cannot use the  flexibility allowed under NEPPS to redirect resources between programs  because state appropriation procedures place restrictions on their ability  to shift resources among programs.
section_title: State Review Framework Has the Potential to Provide More Consistent Oversight
paragraphs: With its implementation of the SRF, EPA has—for the first time—a  consistent approach for overseeing authorized states’ compliance and  enforcement programs and has identified several significant weaknesses in  how states enforce their environmental laws in accordance with federal  requirements. For example, the SRF reviews found that states are not  properly documenting inspection findings or penalties, as directed by  EPA’s enforcement policy and guidance. While recognizing that these  findings are useful, EPA has not developed a plan for how it will uniformly  address them in a timely manner. Nor has the agency identified the root  causes of the weaknesses, although some EPA and state officials attribute  the weaknesses to causes such as increased workloads concomitant with  budgetary reductions. Until EPA addresses enforcement weaknesses and  their causes, it faces limitations in determining whether states perform  timely and appropriate enforcement, and whether they apply penalties to  environmental violators in a fair and consistent manner within and among  the states. Moreover, the SRF is still in its early stages of implementation  and offers additional uses that EPA has not yet considered. In this regard,  its structured approach provides consistent information that would be  useful to (1) inform the public about how well the states are implementing  their enforcement responsibilities and (2) serve as a basis for assessing the  performance of EPA’s regions, which have been inconsistent in their  enforcement and oversight efforts in the past.
subsections: section_title: SRF Findings Demonstrate the Value of a Uniform Approach to Evaluating State Enforcement Programs
paragraphs: As of January 25, 2007, OECA had conducted SRF reviews in 33 states and  expected to complete its assessment of remaining states by the end of  fiscal year 2007. OECA reported good performance in most aspects of  state compliance and enforcement programs. However, it also reported  that the reviews found several weaknesses in state programs that will  require focused attention to correct. EPA officials said the following four  weaknesses were the most frequently identified:    States are not adequately documenting the results of facility inspections  in order to determine the significance of violations. EPA policy states  that complete and accurate documentary evidence is needed to determine  the nature and extent of violations, particularly the presence of significant  violations, and to support timely and appropriate enforcement actions.  EPA policy also states that a quality program should maintain accurate  and up-to-date files and records, and report this information to EPA to  support effective program evaluation and priority setting. EPA and state  officials suggested that some of the causes of inadequate state  documentation and reporting of facility inspections can be traced to a lack  of staff expertise, inadequate training, increasing workload, and  reductions in staff and budgetary resources in recent years.
States are not adequately entering significant violations noted in their  inspection reports into EPA databases. GAO, EPA’s Office of Inspector  General, and OECA have reported that the lack of complete and accurate  national enforcement data has been a long-term problem. OECA needs  accurate and complete enforcement data to help it determine whether  core enforcement requirements are being consistently implemented by  regions and states and whether there are significant variations from these  requirements that should be corrected. In addition, accurate and complete  enforcement data helps OECA more efficiently and effectively oversee  states and regions. According to EPA regional and state officials, the SRF  is helping them recognize the reasons for discrepancies between state and  EPA databases and improve the quality of data in these databases.
States lack adequate or appropriate penalty authority or policies.
Penalties play a key role in environmental enforcement by deterring  potential violators and ensuring that members of the regulated community  cannot gain a competitive advantage by violating enforcement regulations.  To qualify as an authorized state for administering environmental  programs, states must, among other things, acquire and maintain adequate  authority to enforce program requirements consistent with federal  requirements. For example, to obtain EPA’s approval to administer the  Clean Air Act’s Title V permitting requirements for major air pollution  sources, states must have, among other things, authority to recover civil  penalties and provide appropriate criminal penalties. EPA’s policy  provides that all penalties should include two components. First, penalties  should include an “economic benefit” component that reflects the benefit  achieved by avoiding compliance. This component is considered important  to “leveling the playing field” among companies within an industry and  eliminating any economic advantage violators gain through delayed or  avoided compliance costs. The second component—the “gravity-based  component”—reflects the seriousness of the violation, the actual or  possible harm it causes, and the size of the violator.
States are not documenting how they implement EPA’s policies for  calculating and assessing penalties. According to EPA policy, states need  to maintain sufficient documentation so that the regions can evaluate (1)  the state’s rationale for obtaining a penalty and (2) where appropriate, the  calculation of the economic benefit and gravity-based components. If a  state has not assessed a penalty or other appropriate sanction against a  violator, EPA may take direct enforcement action to recover a penalty.  However, regional and state offices we interviewed said applying this  policy places strains on the EPA/state working relationship because states  generally prefer that EPA not take direct enforcement action against  regulated entities in their states. For this reason, EPA generally does not  take direct enforcement action solely to recover additional penalties  unless a state penalty is determined to be grossly deficient.
Regional and state officials said states vary as to whether their  environmental program administrators have the authority to assess  penalties. If program administrators lack this authority, they must pursue  judicial remedies through their state attorney general. Judicial actions  generally result in penalties and court orders requiring correction of the  violation. However, this route is more time-consuming and resource- intensive than having the environmental program office assess the penalty  and can significantly delay obtaining penalties and achieving a return to  compliance.
section_title: Modifications to the SRF Could Improve EPA’s Enforcement Oversight Process
paragraphs: The initial SRF findings provide the basis for discussions between EPA  and the states on how to address deficiencies in state compliance and  enforcement programs, many of which have been well known and long- standing. According to OECA officials, EPA will have completed an SRF  review in all states by the end of 2007 and will perform an evaluation of  the SRF in fiscal year 2008. The proposed evaluation methodology states  that EPA will address the effectiveness of implementing the SRF by  surveying the state environmental agencies that participated in the reviews  and the pollution control associations. However, this proposed evaluation  may not yield the results EPA will need to better ensure more consistent  state performance and more consistent state program oversight. In this  regard, the proposed evaluation methodology does not specify how EPA  plans to use the results of the SRF to begin determining the causes for  cited deficiencies and to identify strategies for uniformly and  expeditiously implementing potential corrective actions.
While EPA’s proposed evaluation may prove to be useful in obtaining  views on the success of the SRF and on areas needing improvement in  performing the reviews, the proposal is still in its early stages of  development, and specific details have not been laid out on whether and  how certain potential issues will be addressed. EPA could better ensure  more consistent state performance and more consistent oversight of state  enforcement programs by (1) developing and implementing corrective  actions for the major deficiencies identified through the SRF and (2)  assessing the capacity of poorly performing state programs to determine  whether they possess the staff, financial, and other resources to effectively  implement enforcement programs consistent with federal requirements.
Region 8’s experience in using the findings of its Uniform Enforcement  Oversight System may prove to be useful for OECA in addressing the  findings of the SRF on a nationwide basis. This oversight system was  designated a “best practice” in the area of state agency oversight by EPA’s  Office of Inspector General. The region evaluated states’ enforcement  programs using uniform review criteria that had been previously agreed to  by each state agency. The region then used the evaluation findings to  develop an improvement strategy tailored to the particular weakness  identified in each state’s enforcement program. In order to hold the states  accountable for correcting the weaknesses identified, Region 8 also used  the improvement strategy in arriving at annual agreements with the states.  For example, because of the findings from its oversight review of  Colorado’s hazardous waste program, Region 8 officials became  concerned about the adequacy of the authorized program’s ability to  protect human health and the environment or to take on new program  responsibilities. On the basis of these concerns, the region conducted an  in-depth “capability assessment” of Colorado’s hazardous waste program  beginning in 1998, covering items such as the state’s levels of resources  and staff skills; professional development and training programs; and the  efforts to resolve legal and institutional limitations in its program. Over the  next 4 years, regional and state officials worked with state government  leaders to increase program funding, staff, and training, and to implement  new penalty policies. Region 8 also directly implemented compliance  monitoring and enforcement activities at selected Colorado hazardous  waste facilities while the state program developed and implemented its  enhanced capabilities. Region 8 conducted another capability assessment  in 2001 and concluded that the state had made the improvements  necessary to implement a fully authorized program.
EPA could also use the SRF to inform the general public and others about  the extent to which states effectively implement environmental  enforcement programs consistent with federal requirements. EPA has not  yet determined whether or how the results of the SRF reports will be made  available to the general public, congressional committees, environmental  interest groups, state environmental organizations, local community  groups, and other interested groups and organizations. Many of these  groups have expressed deep interest in and concern over the years about  the consistency, fairness, and effectiveness of environmental enforcement.  A common criticism has been that variation in environmental compliance  and enforcement among the states has resulted in the lack of equitable  public health and environmental protection and the lack of a “level playing  field” for business from one state to another. EPA’s Office of Inspector  General also recommended that regional evaluations of state programs  should be made easily accessible to the public as an important means for  holding states accountable for their environmental performance. ECOS  and several states officials we interviewed expressed concern that public  dissemination of the SRF reports would be used inappropriately to  compare or rank state performance. However, the SRF reports have the  potential to convey useful information to both EPA managers and to the  public on the extent to which the enforcement program is being  implemented consistently and fairly nationwide.
In addition to the usefulness of the SRF in evaluating state enforcement  programs, the SRF provides a model that OECA could use to evaluate  progress being made by EPA’s regions in addressing inconsistencies in  enforcement actions and oversight. Although we focused our review on  EPA’s oversight of state enforcement programs, rather than on the  enforcement programs of EPA’s 10 regional offices, we testified in June  2006 based on reviews on EPA’s enforcement program that the regions  vary substantially in the actions they take to enforce environmental  requirements, such as the number of inspections performed at regulated  facilities and the amount of penalties assessed for noncompliance with  environmental regulations. In addition, past EPA Inspector General and  OECA evaluations found variations among regions regarding issues such  as sufficiently encouraging states to consider economic benefit in  calculating penalties, taking more direct federal actions where states were  slow to act, and requiring states to report all significant violators.
In our June 2006 testimony, we stated that broad agreement exists among  EPA and state enforcement officials on the key factors contributing to  variations among regions including (1) differences in philosophy among  regional enforcement staff about how best to secure compliance with  environmental requirements, (2) differences in state laws and enforcement  authorities and the manner in which regions respond to these differences,  (3) variations in resources available to both state and regional  enforcement offices, (4) the flexibility afforded by EPA policies and  guidance that allow states a degree of latitude in their enforcement  programs, and (5) incomplete and inadequate enforcement data that  hamper EPA’s ability to accurately characterize the extent to which  variations occur.
Although EPA has noted that some variation in environmental  enforcement is necessary to take into account local environmental  conditions and concerns, it has acknowledged that similar violations  should be met with similar enforcement responses to ensure fair and  consistent enforcement and equitable treatment for regulated businesses,  regardless of geographic location. Our testimony noted that the SRF was  among the initiatives that could make a positive contribution to EPA’s  efforts to ensure consistent approaches in regional enforcement activities,  although it is too early to tell whether the initiative will create a level  playing field for the regulated community across the country.
section_title: Conclusions
paragraphs: The SRF initiative provides EPA with a potential means to ensure  consistent and effective enforcement among the states, thereby addressing  a difficult and long-standing challenge to the agency. EPA’s plan to  evaluate the SRF in 2008 will provide the agency with an opportunity to  obtain information from the regions and the states regarding what does  and does not work well in these SRF reviews and to make appropriate  corrections to its review methodology. However, the proposed evaluation  methodology does not describe how EPA will examine the causes of the  significant deficiencies noted during the SRF reviews and develop a  strategy for addressing them. If these deficiencies are not addressed in a  uniform and timely manner, EPA and the states will not gain the full  benefit of the SRF.
Regardless of the extent and effectiveness of oversight reviews to  determine the consistency and effectiveness of enforcement programs,  corrective actions will not be feasible if states lack sufficient funding, staff  levels, expertise, and other resources that are vital to carrying out their  enforcement responsibilities. On the basis of the audits it has conducted,  the EPA’s Office of Inspector General has endorsed the practice of having  regions follow up on the deficiencies noted in their reviews of state  programs and making their findings public. Likewise, Region 8  demonstrated the value of performing a capacity assessment to  understand why deficiencies exist in a state program to demonstrate to  decision makers and the public what needs to be improved. Such  assessments would provide an improved basis for a truly collaborative  approach between the regions and the states during their annual  deliberations on partnership agreements and grants in order to address the  root causes of problems identified in state enforcement programs.
EPA has not determined whether or how it will share the results of the  SRF reviews with the general public and others, including Members of  Congress who over the years have raised questions and expressed  concerns about the way the enforcement program has been implemented.  If Members of Congress and the public fully understand the deficiencies  and their significance, then they would be better informed about how to  assist EPA and the states in ensuring that public health and the  environment are protected and a level playing field is established for  regulated facilities.
Although the SRF thus far has been focused on reviewing state  enforcement programs, the process could be extended to include the  enforcement programs of EPA’s regions. As we have previously reported,  the regions have long been inconsistent in their oversight of states within  their jurisdiction and the enforcement actions they take in order to  provide a level playing field for regulated facilities across the nation.
section_title: Recommendations for Executive Action
paragraphs: To enhance EPA’s oversight of regional and state enforcement activities to  implement environmental programs consistent with the requirements of  federal statutes and regulations, we recommend that the Administrator of  EPA take the following actions:  include, in EPA’s fiscal year 2008 evaluation of the SRF, an assessment of  lessons learned and an action plan for determining how significant  problems identified in state programs will be uniformly and expeditiously  addressed;   evaluate the capacity of individual authorized state programs, where the  SRF finds the state appears to lack sufficient resources (e.g., funding, staff,  and expertise), to implement and enforce authorized programs and then  develop an action plan to improve that state’s capacity;    publish the SRF findings so that the public will know how well state  regulators are enforcing authorized programs and protecting public health  and the environmental conditions in their communities; and   conduct a performance assessment similar to SRF for regional  enforcement programs.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on the draft report, EPA generally agreed with GAO’s  recommendations and stated that the agency is taking action to address  the issues we raised. With respect to our recommendation to publish the  results of the SRF findings, EPA said that it had agreed with the  Environmental Council of the States that the first round of state  enforcement reviews would not be published. However, EPA said it would  consider whether to publish future reviews when it evaluates the  implementation of the SRF in fiscal year 2008. EPA also provided detailed  technical and clarifying comments, which we incorporated as appropriate.  EPA’s letter is included in appendix III.
We are sending copies of this report to interested congressional  committees; the Administrator of EPA; and other interested parties. We  will also make copies available to others upon request. In addition, the  report will be available at no charge on GAO’s 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. Key contributors to this report are listed in   appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess how the Environmental Protection Agency (EPA) and  authorized state agencies work together to deploy resources, plan, set  priorities, and define roles and responsibilities for enforcement of and  compliance with environmental programs consistent with federal  requirements, we (1) identified the federal resources provided to EPA  regions and states for enforcement between 1997 and 2006, and obtained  EPA regional and states’ views on the adequacy of these resources to  implement their activities; (2) determined EPA’s progress in improving  priority setting and enforcement planning with its regions and authorized  states; and (3) examined EPA efforts to improve its oversight of states’  enforcement and compliance programs.
For the purpose of this review, we conducted semistructured interviews  with officials at the 10 EPA regions and at 10 authorized state agencies. To  construct questions for the interviews, we analyzed policies, procedures,  and guidance materials EPA has developed and implemented. We  synthesized the findings, conclusions, and recommendations contained in  reports by us, EPA’s Office of Inspector General (OIG), the National  Academy of Public Administration (NAPA), and the Environmental  Council of the States (ECOS). We also met with officials from EPA Region  4, the Georgia Department of Natural Resources, South Carolina  Department of Health, and the New Jersey Department of Environmental  Protection to obtain a more thorough understanding of how state agencies  work together to plan, set priorities, define roles and responsibilities, and  deploy resources for enforcement and compliance of environmental laws.
We used a nonrandom sample of 10 states, which consisted of 1 state from  each region:    Five had a Performance Partnership Agreement (PPA) and Performance  Partnership Grant (PPG) with EPA (Iowa, Massachusetts, Minnesota,  Oregon, and Utah). These states incorporated an enforcement program  into their PPA, along with other essential elements that EPA and state  leaders considered important (e.g., jointly agreed priorities, defined  roles/responsibilities, and processes for resource deployment).
Five states did not have a PPA (Arizona, Arkansas, Florida, New York, and  West Virginia), but had either a PPG or an alternative working relationship  with EPA.
Our evaluation of 10 selected states cannot be generalized to the other  states with authorized programs. However, we met with EPA officials  representing all 10 regions, who provided their perspectives about all state  programs within their geographic region. In addition, we examined other  sources of state involvement, such as information available from ECOS  and pollution control associations (e.g., Association of State and  Territorial Solid Waste Management Officials, Association of State and  Interstate Water Pollution Control Administrators, State and Territorial Air  Pollution Program Administrators, and the Association of Local Air  Pollution Control Officials, now known as the National Association of  Clean Air Agencies).
We also limited our review to the environmental agencies within each  selected state that implement the major EPA programs (Clean Water Act,  Clean Air Act, Safe Drinking Water Act, and Resource Conservation and  Recovery Act) and did not include state departments or agencies that  implemented other programs, such as the Federal Insecticide, Fungicide,  and Rodenticide Act.
To determine if there were any trends in the federal resources provided to  EPA regions and states for enforcement from 1997 to 2006, and assess  EPA regional and state views on the adequacy of these resources to  implement their activities, we reviewed the budgets for EPA and the Office  of Enforcement and Compliance Assurance (OECA) for fiscal years 1997  through 2006. We also reviewed our prior reports and those from the  Congressional Research Service (CRS), Congressional Budget Office  (CBO), Office of Management and Budget (OMB), EPA, and the EPA OIG,  for information on the distribution of federal resources. We met with  officials from the EPA’s Office of the Chief Financial Officer and OECA,  ECOS, and the Natural Resources Defense Council, and administered  structured interviews to officials in all 10 EPA regions and the selected  state in each region. In each region and state, we obtained perspectives on  the deployment of resources. However, we were not able to assess the  workload of the states and regions and their overall capability to meet  federal enforcement requirements because EPA’s data collection system  does not collect sufficient information needed to make such an  assessment. In this regard, EPA lacks information on the capacity of both  the states and EPA’s regions to effectively carry out their enforcement  programs, because the agency has done little to assess the overall  enforcement workload of the states and regions and the number and skills  of people needed to implement enforcement tasks, duties, and  responsibilities. Furthermore, the states’ capacity continues to evolve as  they assume a greater role in the day-to-day management of enforcement  activities, workload changes occur as a result of new environmental  legislation, new technologies are introduced, and state populations shift.
To determine EPA’s progress in improving priority setting and  enforcement planning with its regions and authorized states, we reviewed  EPA’s strategic plans and national strategy, its policy and guidance for  planning and implementing its enforcement programs, the process for  implementing National Environmental Performance Partnership  agreements with authorized state agencies, and Federal Register notices.  We also reviewed our prior reports and those from CRS, OMB, EPA, EPA  OIG, and NAPA for information on the planning and priority setting  process. We met with officials from EPA’s Office of Congressional and  Intergovernmental Relations, OECA, ECOS, and the Natural Resources  Defense Council, and administered structured interviews to all 10 EPA  regions and the selected state in each region. In each region and state, we  examined regional and state strategic plans and state-EPA enforcement  agreements, such as memorandums of agreement, PPAs, and PPGs. At  state agencies, we also discussed the states’ perspectives on how EPA  administered state-EPA agreements, regional plans, and national priorities.
To determine EPA efforts to improve its oversight of state enforcement  and compliance programs, we reviewed EPA’s policy and guidance for  overseeing state agencies. We met with officials from EPA’s Office of  Congressional and Intergovernmental Relations, OECA, ECOS, and the  Natural Resources Defense Council, and administered structured  interviews to all 10 EPA regions, and the selected state in each region. In  each region, we examined strategic plans, state-EPA agreements, and 33  state oversight reviews of the SRF. At state agencies, we reviewed policy  and guidance and received perspectives on EPA’s oversight process.
We performed our work from October 2005 through July 2007, in  accordance with generally accepted government auditing standards, which  included an assessment of data reliability and internal controls.
section_title: Appendix II: Development and Implementation of the State Review Framework
paragraphs: EPA’s criteria for assessing the performance of compliance assurance and  enforcement responsibilities in authorized states can be traced back to the  mid-1980s. In August 1986, the EPA Deputy Administrator issued a policy  guidance memorandum entitled “Revised Policy Framework for State/EPA  Enforcement Agreements.” The policy memorandum was intended to  provide a framework for gathering information and making judgments  about the effectiveness of state compliance and enforcement performance  and providing guidance on when and how EPA would become involved in  enforcement actions in authorized states. Among other things, the 1986  policy guidance discussed (1) EPA oversight criteria and the measures that  the agency would use to define good state performance, (2) oversight  procedures and protocols, and (3) criteria for direct federal intervention— factors EPA would consider before taking direct enforcement action in a  state and what states might reasonably expect of EPA in this regard.
According to OECA officials, subsequent experience with the 1986 policy  guidance revealed several implementation shortcomings that limited  EPA’s ability to adequately and consistently oversee state compliance and  enforcement programs. For example, the 1986 policy guidance did not  clearly describe how EPA would oversee state enforcement programs,  including what constituted “good program performance”. Moreover, EPA  and authorized states did not agree on what uniform program information  states needed to maintain and provide to EPA for performance  measurement. This led to considerable inconsistency from region to  region in overseeing state compliance and enforcement programs.
By 2003, OECA officials said that environmental commissioners in several  states and members of ECOS were in the forefront of the call for  developing and implementing a more uniform and systematic process for  EPA’s oversight and evaluation of state compliance and enforcement  programs. Other factors also pointed to the need to develop a more  consistent method of gauging state performance. These included EPA’s  OIG audits of state programs, EPA’s internal assessments, and public  petitions for withdrawal of program authorizations for some state  programs. A common criticism was that variation in environmental  compliance and enforcement among the states was directly attributable to  the lack of uniform EPA oversight and performance measurement and that  the result was the lack of equitable public health and environmental  protection and lack of a level playing field for business from one state to  another.
At an ECOS meeting in 2003, OECA officials said the Chairman of the  ECOS Compliance Committee proposed to EPA’s then Deputy Assistant  Administrator for OECA a method for systematically and uniformly  assessing state performance. The assessment method, called the SRF, was  patterned after a review process originally developed by EPA’s Region 8 to  assess the performance of state compliance and enforcement programs in  that region (encompassing the states of Colorado, Utah, Wyoming, South  Dakota, North Dakota, and Montana and 27 sovereign tribal nations). The  SRF was formally agreed to by EPA, ECOS, state media organizations, and  state environmental agency officials in December 2003.
The 12-point evaluation model used in Region 8, called the Uniform  Enforcement Oversight System, became the basis for a review framework  for evaluating state compliance and enforcement performance. These 12  required elements for evaluation of state performance include the  following:  1.  the degree to which a state program has completed the universe of  planned inspections (addressing core requirements and federal, state  and regional priorities);  2.  the degree to which inspection reports and compliance reviews  document inspection findings, including accurate descriptions of what  was observed to sufficiently identify violations;  3.  the degree to which inspection reports are completed in a timely  manner, including timely identification of violations;  4.  the degree to which significant violations (e.g., significant  noncompliance and high priority violations) and supporting  information are accurately identified and reported to EPA national  databases in a timely manner;  5.  the degree to which state enforcement actions include required  corrective or complying actions (e.g., injunctive relief) that will return  facilities to compliance in a specific time frame;  6.  the degree to which a state takes timely and appropriate enforcement  actions, in accordance with policy relating to specific media;  7.  the degree to which a state includes both gravity and economic benefit  calculations for all penalties, appropriately using the economic benefit  calculation model (BEN) or similar state model (where in use and  consistent with national policy);  8.  the degree to which final enforcement actions collect appropriate  economic benefit and gravity penalties in accordance with applicable  penalty policies;  9.  the degree to which enforcement commitments in the PPA, PPG,  and/or other written agreements to deliver a product/project at a  specified time, if they exist, are met and any products or projects are  completed;  10. the degree to which the minimum data requirements are timely;  11. the degree to which the minimum data requirements are accurate; and  12. the degree to which the minimum data requirements are complete,  unless otherwise negotiated by the region and state or prescribed by a  national initiative.
The SRF also includes a 13th “optional” element that is open for  negotiation between regions and states. EPA and ECOS encourage the use  of the 13th element to ensure the review takes a measure of the full range  of program activities and results. These components can add meaningful  input into a state’s overall performance and program. Topics could include  program areas such as compliance assistance, pollution prevention,  innovation, incentive or self-disclosure programs, relationships with state  attorneys general, and outcome measures or environmental indicators that  go beyond the core program activities covered in elements 1 through 12.
The SRF was also seen by the parties as being consistent with the  principles of the National Environmental Performance Partnership  System, which provides a mechanism for joint planning and program  management that takes advantage of the unique capabilities of each party  in addressing pressing environmental problems. Also, the SRF considers  commitments negotiated between EPA regions and states contained in  PPAs, PPGs, and/or other agreements that may differ from national policy  and guidance and evaluates state performance in terms of those  commitments. In cases where states and regions have negotiated different  state commitments (e.g., number of inspections) or other activities, states  are held accountable for those commitments, although the SRF reviewers  may provide feedback that those commitments need to be increased in the  future to fully demonstrate an adequate enforcement program.
After a review is completed, the regions prepare a draft report of the  findings and conclusions, jointly discuss with the state how major  recommendations will be addressed, and provide the draft report to OECA  headquarters. OECA reviews the draft reports and provides comments on  the regions’ analyses and recommendations. OECA expects regions to  incorporate these recommendations into the next round of negotiated  agreements, where OECA will track and manage the recommendations to  conclusion.
Additional anticipated benefits of applying the SRF’s elements in a  uniform manner included, among others, (1) more strategic resource  allocation, (2) reduction of duplicative work, (3) consistent and  predictable baseline oversight across states and regions with agreed-upon  thresholds for corrective action, (4) differential oversight of state  programs based on performance, (5) a level playing field for states in  competition for business, and (6) improved public confidence in federal  and state compliance and enforcement programs. In addition, the SRF is  viewed as providing a basis to establish a dialogue on performance that  will lead to improved program management and environmental results.
OECA pilot-tested the SRF during fiscal year 2004 in at least one state in  each of EPA’s 10 regions. The states that participated in the pilot were all  volunteers. The pilot states included Alaska, Arizona, Colorado, Rhode  Island, New Jersey, Maryland, Michigan, Missouri, Nebraska, Oklahoma,  and South Carolina. OECA also piloted the SRF in one EPA region, Region  10 (Seattle), to test the approach on EPA’s direct implementation of the  Resource Conservation and Recovery Act (RCRA) and the Clean Water  Act National Pollution Discharge Elimination System (NPDES) program in  Alaska. EPA used the SRF to evaluate the enforcement performance of  three media programs (both the pilot reviews and subsequent reviews):  the Clean Air Act Stationary Sources program, the Clean Water Act  NPDES program, and (RCRA) Subtitle C hazardous waste program. For  each program, the SRF defined the essential elements and then, in a  companion Framework Implementation Guide more fully defined how  each element is to be applied and measured.
In February 2005, OECA contracted for an evaluation of the pilot review  process to determine whether the SRF provides an accurate assessment of  state compliance and enforcement activities. The evaluation sought to  obtain answers to questions, such as the following: (1) Are the 12 review  elements the right ones? (2) Are the right data metrics being used? (3)  What barriers were encountered? The evaluation also addressed such  implementation issues as whether the reviews could be streamlined and  made more efficient; what barriers were encountered in conducting the  reviews and how they could be reduced or eliminated; and the consistency  of application across the country, specifically any need for and ways to  improve consistency; problems with objectivity; and apparent gaps in  capability or expertise that need to be addressed.
The pilots were also evaluated to determine what they indicated about the  performance of the states, whether corrective actions or differential  oversight agreements get codified in grant agreements, and the best way to  summarize and communicate the results of the review. The evaluation  used the results of the pilots as well as discussions with key stakeholders  to support recommendations aimed at helping OECA improve the SRF  before implementing it more broadly. For example, while OECA had  allowed regions considerable discretion/flexibility on procedures for file  selection, the evaluation identified a number of weaknesses in the file  selection process and highlighted potential improvements to OECA’s file  selection protocol. The consultant developed an improved sampling model  that would yield representative file reviews across states and provide a  more representative picture of enforcement and compliance assurance  across states with varying levels of enforcement activity.
section_title: Appendix III: Comments from the Environmental Agency
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Ed Kratzer, Assistant Director;  Charles W. Bausell, Jr.; Kevin S. Bray; Brian M. Freidman; Carol M. Henn;  Tom M. James; Ralph L. Lowry; Lynn M. Musser; Carol H. Shulman; John C.  Smith; and Ignacio J. Yanes made key contributions to this report.