Human Capital: Implementing an Effective Workforce Strategy Would Help EPA to Achieve Its Strategic Goals
Published: 2001-07-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: During the last decade, as most federal agencies downsized, the Environmental Protection Agency's (EPA) workforce grew by about 18 percent. Much of this growth occurred in EPA's 10 regional offices, which carry out most of the agency's efforts to encourage industry compliance with environmental regulations. Currently, EPA's workforce of 17,000 individuals includes scientists, engineers, lawyers, environmental protection specialists, and mission-support staff. Some Members of Congress have questioned whether EPA is giving enough attention to managing this large and diverse workforce. The workforce management practices of EPA's Office of Enforcement and Compliance Assurance (OECA)--which takes direct action against violators of environmental statutes and oversees the environmental enforcement activities of states--have come under particular scrutiny because its enforcement activities span all of EPA's programs and regions. Although EPA has began several initiatives during the last decade to better organize and manage its workforce, it has not received the resources and senior-level management attention needed to realize them. This report reviews (1) the extent to which EPA's strategy includes the key elements associated with successful human capital strategies, (2) the major human capital challenges EPA faces in the successful implementation of its strategy, and (3) how OECA deploys the enforcement workforce among EPA's 10 regions to ensure that federal environmental requirements are consistently enforced across regions either by OECA or by states with enforcement programs that OECA oversees.
section_title: What GAO Found
paragraphs: GAO found that EPA's November 2000 human capital strategy is a promising first step towards improving the agency's management of its workforce, but it lacks some of the key elements that are commonly found in the human capital strategies of high-performing organizations. EPA's major challenges in human capital management involve assessing the work requirements for its employees, ensuring continuity of leadership within the agency, and hiring and developing skilled staff. OECA does not systematically deploy its workforce to ensure the consistent enforcement of federal regulations throughout all EPA regions and bases deployment decisions on outdated and incomplete information on key regional workload factors.

section_title: Letter
paragraphs: During the past decade, as most federal agencies reduced their staffing, the Environmental Protection Agency's (EPA) workforce grew by about 18 percent. Much of this growth occurred in EPA's 10 regional offices (regions), which carry out most of the agency's actions to encourage or compel industry compliance with environmental regulations. Currently, EPA's workforce of scientists, engineers, lawyers, environmental protection specialists, mission-support staff, and others consists of over 17,000 people across the country, and some Members of Congress have questioned whether EPA is giving sufficient attention to managing this large and diverse workforce. Particular interest has been expressed regarding the workforce management practices of EPA's Office of Enforcement and Compliance Assurance (OECA)—which takes direct action against violators of environmental statutes and oversees the environmental enforcement activities of states—because enforcement activities span all of EPA's programs and regions.
As we reported in March 2000, while EPA has implemented several initiatives during the past decade to better organize and manage its workforce, they have not received the resources and senior-level management attention needed to realize their goals. In June 1998, EPA initiated a study to assess its workforce. While this study identified the general competencies, such as communication and computer skills, needed to carry out EPA's missions, it was not designed to result in a workforce planning system for determining how many employees needed such competencies or how they should be deployed among strategic goals, across program areas, and in various parts of the country. Building on its workforce assessment project, in November 2000, EPA developed a strategy to refine its human capital policies and practices. This strategy identifies the agency's vision for its employees and six major human capital objectives for the next 2 years, including the development of a workforce planning system. In addition, it discusses implementation plans for achieving these objectives and identifies the agency units responsible for carrying out the implementation plans.
In response to your continuing interest in EPA's management of its human capital, we reviewed (1) the extent to which EPA's strategy includes the key elements associated with successful human capital strategies and (2) the major human capital challenges EPA faces in the successful implementation of its strategy. In addition, we reviewed one specific aspect of human capital management within OECA: how it deploys the enforcement workforce among EPA's 10 regions to ensure that federal environmental requirements are consistently enforced across regions either by OECA or by states with enforcement programs that OECA oversees.
To address these issues, we reviewed EPA's human capital strategy and analyzed the nature and status of EPA's key human capital management initiatives. We discussed these initiatives with officials of EPA's Office of Human Resources and Organizational Services, OECA, and each of EPA's 10 regions. In this regard, we asked agency officials to respond to questions based on GAO's human capital self-assessment "checklist," an assessment tool that identifies human capital elements and underlying values that are common to high-performing organizations. We used the checklist as a framework for organizing and evaluating their responses. Furthermore, we obtained and analyzed data from EPA's 10 regions on their enforcement workforce and workload. (See app. I for details on our scope and methodology.)
subsections: section_title: Background
paragraphs: EPA is organized into 13 major headquarters offices (including OECA) that are located in Washington, D.C. (App. II shows EPA's organizational structure.) These offices receive administrative, investigative, and laboratory support from numerous headquarters field offices located throughout the country. EPA also maintains 10 regional offices to implement federal environmental statutes and to provide oversight of related state activities. EPA's staff or full time equivalents (FTEs) grew by about 18 percent from fiscal year 1990 through fiscal year 1999 (see fig. 1).Over this period, the staff in EPA's headquarters—including headquarters field offices located outside of Washington, DC—and its regions grew at about the same pace, with less than half of the agency's total staff located in the regions.
Data from the Office of Personnel Management (OPM) indicate that, as of the end of fiscal year 2000, about 35 percent of EPA's permanent staff were located in its Washington headquarters, 17 percent in headquarters field offices, and 48 percent in its regional offices.
EPA uses contractors to perform much of its work. The agency estimates that it would need an additional 11,000 to 15,000 employees if it did not receive appropriations to fund contractors. Therefore, EPA's workforce must be adept both at delivering services directly and at effectively managing the cost and quality of services delivered by third parties on the government's behalf.
OECA, with more than 3,500 FTEs nationwide, is responsible for developing policies to ensure that industries and other entities that are regulated under environmental statutes comply with the requirements of the law. Over 2,600 of these FTEs are allocated to implement enforcement policies in each of EPA's 10 regions (see fig. 2). The regional enforcement staff are specifically responsible for (1) inspecting and monitoring certain industrial and other facilities that are regulated under federal environmental statutes; (2) taking enforcement actions against those who have violated environmental statutes and regulations; (3) helping industries comply with environmental regulations; and (4) overseeing enforcement activities that EPA has delegated to states. (App. II discusses OECA's enforcement process and activities in greater detail.)
As reflected in GAO's human capital checklist, our past work has demonstrated that effective performance-based management depends on senior managers' willingness and ability to strategically manage all of the agency's resources—including its human capital—to achieve its missions and goals. Specifically, it requires aligning strategic and program planning systems with explicit strategies for identifying (through workforce planning) the needed mission-critical competencies, and for recruiting, hiring, and training leaders and staff to fill identified competency gaps. These are critical components of effective human capital management and among the building blocks to achieving an organization's mission and strategic goals (see app. I).
section_title: EPA's Human Capital Strategy Is a Promising First Step but Lacks Key Elements
paragraphs: EPA's human capital strategy is a promising initial effort to develop a framework for managing the agency's workforce. Nevertheless, it does not include all of the key elements that we have identified as essential components of an effective human capital strategy. In this regard, EPA's strategy does not (1) fully integrate its human capital objectives with its strategic environmental goals; (2) identify the specific activities, milestones, and resources needed to implement the strategy; and (3) establish results-oriented performance measures to track the strategy's implementation and success. By including these elements in its strategy, EPA could better ensure that its workforce is deployed to effectively meet its strategic goals. (App. III summarizes the current status of EPA's human capital management practices and its efforts to implement its human capital strategy).
EPA and federal agencies in general have not given adequate attention to human capital management in the past. However, EPA is among the agencies that have become more acutely aware of challenges facing the government in the human capital area and have taken steps to improve their approaches to building and managing their workforces. EPA's strategy recognizes the importance of better managing the agency's human capital. As we noted in our human capital checklist, an agency should develop strategies to enhance the value of its employees and focus its efforts on the agency's shared vision—its mission, vision for the future, core values, and goals and objectives. Overall, EPA's strategy is detailed and addresses most of the issues that we identified in our checklist. For example, the strategy clearly identifies the agency's vision for its people, its core values, and six major human capital goals for the next 2 years, such as attracting and retaining a highly skilled workforce and improving teamwork and collaboration among its employees. In addition, the strategy (1) discusses implementation plans, including actions for achieving each of its six human capital goals; (2) identifies the units within the agency that are responsible for developing and carrying out the implementation plans; and (3) for the most part, directly links the implementation plans to each human capital objective (see table 1).
Although the strategy is a positive step towards addressing the agency's key human capital issues, it falls short in several areas. First, it does not fully integrate its human capital objectives with the agency's 10 strategic goals for protecting human health and the environment. These goals, which are identified in EPA's strategic plan prepared under the Government Performance and Results Act (GPRA), are shown in table 2.
While EPA acknowledges the importance of effectively managing the agency's staff to meet its strategic goals, it does not describe how various human capital activities will help the agency to achieve these goals. EPA officials told us that, in updating the agency's strategic plan, they will integrate EPA's human capital objectives and strategies with specific strategic environmental goals. Under GPRA, the strategic plan must be updated by September 30, 2003, and may be updated earlier at EPA's discretion. EPA officials told us that they have not yet made a decision on whether to update the plan before the date required under GPRA.
Second, EPA has not identified the specific activities or time required to implement its strategy. EPA's strategy identifies 18 implementation actions and related tasks for achieving its six human capital objectives. For example, to achieve the human capital objective of attracting and retaining a diverse and highly skilled workforce, EPA's strategy contains an action to develop and to implement a workforce planning system. One of the general tasks for developing this system is to establish standardized workforce planning requirements and a methodology to be used throughout the agency. During 2001, EPA plans to undertake tasks related to 11 of the 18 implementation actions. However, EPA's strategy does not identify specific milestones for completing any of the implementation actions or their related tasks.
Finally, like many other federal agencies, EPA has found it difficult to establish results-oriented performance measures to track the implementation of the strategy and its success in meeting human capital objectives. EPA's fiscal year 2002 annual performance plan and budget justification identifies a number of performance measures for its workforce improvement activities under the "Effective Management" strategic goal. These measures include, among others, the number of (1) interns hired, (2) candidates in the Senior Executive Service (SES) Candidate Program, and (3) competencies addressed through training and development activities. While these measures are useful for tracking EPA's progress, they do not reflect the programmatic outcomes that the agency would like to achieve as a result of investing in human capital improvements for the strategic goal. As we, the Office of Personnel Management, and others have found, federal agencies in general have experienced difficulties in defining practical, meaningful measures that assess the effectiveness of human capital management. Yet, such measures are crucial to effectively managing for results and holding managers accountable. EPA officials told us that they plan to develop specific outcome measures, although they have yet to establish time frames for doing so.
section_title: EPA Faces Agencywide Human Capital Challenges That, if Not Addressed, Will Limit Its Ability to Achieve Its Mission
paragraphs: EPA has begun to recognize the importance of strategic human capital management to mission accomplishment and has taken steps to align the agency’s human capital with its mission. However, EPA, like many other agencies, still faces serious challenges that will require the sustained attention and commitment of its leaders. As EPA takes steps to implement its human capital strategy, it will face a number of challenges throughout the agency with regard to assessing workforce requirements, ensuring continuity of leadership, and hiring and training skilled staff. Specifically, EPA has not determined the number of employees it needs to accomplish its strategic goals, the competencies and technical skills they should possess, and the deployment of its current and future workforce among strategic goals, across program areas, and in various areas of the country. In addition, EPA has not prepared for the anticipated losses in leadership, institutional knowledge, and expertise that will likely occur as potentially large numbers of its senior executives retire in the near future. Nor has the agency fully addressed the need to maintain and develop mission-critical skills in areas such as environmental protection, environmental engineering, toxicology, and ecology.
subsections: section_title: EPA Has No Systematic Means for Assessing Workforce Needs
paragraphs: High-performing organizations identify their current and future human capital needs—including the appropriate number of employees, the key competencies for mission accomplishment, and the appropriate deployment of staff across the organization—and then create strategies for identifying and filling the gaps. To better plan for meeting the agency's future human capital needs, in June 1998, EPA initiated a study to identify the competencies needed to meet the agency's current and future missions. While a positive step, the study (completed in May 1999) identified only general competencies for all EPA employees, such as effective communication and collaboration. However, the study did not determine the number of employees with the identified competencies needed either agencywide or in individual organizational or geographical units.
Since completing its study, EPA has made little progress in determining the right size, skills needs, or deployment of its workforce to achieve its strategic goals. As a result, it lacks the detailed information needed to make informed workforce deployment decisions, including information on (1) the relationship between its budget requests for full-time-equivalents (FTEs) and its ability to meet individual strategic goals and (2) any excesses or gaps in needed competencies within the agency's various headquarters and field components.
As part of EPA's recent human capital strategy, the agency plans to develop and to implement a workforce planning system. The strategy calls for (1) linking workforce planning to the agency's strategic planning efforts, (2) securing essential competencies by recruiting and developing staff and providing incentives to retain highly competent employees, (3) continually monitoring and assessing the workforce, and (4) evaluating the effectiveness of actions taken. EPA officials told us that the agency received 20 percent less funding than requested for workforce planning in fiscal year 2001. With these funds, EPA has benchmarked other federal agencies' workforce planning activities and is investigating the possibility of partnering with another agency to develop a model for workforce planning.
The importance of taking such actions is emphasized in the Office of Management and Budget's (OMB) May 8, 2001, bulletin on "Workforce Planning & Restructuring." As a first step toward restructuring federal workforces to streamline federal organizations, OMB asked agencies to identify, by June 29, 2001, supervisors and managers by occupational title, grade level, location, and the number of people that they oversee; evaluate the skills of the workforce; and provide demographics of the workforce by age, grade, retirement eligibility, and expected retirements over the next 5 years. However, because EPA has not yet performed a comprehensive workforce assessment, EPA human resource managers told us that they relied on past work, such as its workforce assessment project completed in 1999, and information provided by its headquarters and regional offices to meet OMB's June 2001 deadline. According to these managers, while this analysis provides a valuable "snapshot" of EPA's workforce and serves as a starting point for a detailed workforce assessment, it is not as comprehensive as the workforce planning effort the agency plans to conduct under its human capital strategy. Because EPA submitted its analysis to OMB as this report was being processed, we were unable to obtain and review it in time to include our evaluation of it in this report.
While such information provides a general overview of the structure of EPA's workforce, EPA cannot ensure the accuracy of this information or the reliability of the information systems it uses for its human capital management. The agency has no reliable means to determine how its employees spend their time—information that is critical to assessing an agency's workforce requirements. In March 2000, we reported that EPA needs to more accurately determine how employees spend their time in order to ensure that they are being used for designated purposes. We pointed out that EPA officials had yet to assess the accuracy of the data collected under its cost accounting system, which it used to determine the number of FTEs that the agency devotes to each of its strategic goals and objectives. Furthermore, in November 2000, EPA's Inspector General noted that EPA needed to follow through on improving its cost accounting systems and that resources that EPA headquarters budgeted for environmental programs should be controlled and accounted for— including better tracking of how employees spend their time—to ensure that they are being used for designated purposes. Without accurate workforce data, EPA cannot determine (1) the appropriate number of people and competencies needed to effectively accomplish its mission or (2) the costs of carrying out its strategic goals and objectives.
section_title: EPA Is Not Prepared for the Potential Loss of Leadership and Institutional Knowledge
paragraphs: Agencies need to aggressively pursue comprehensive succession planning and executive development actions to address the potential loss of leadership continuity, institutional knowledge, and expertise in the Senior Executive Service (SES) ranks. These actions include (1) developing a formal succession plan based on a review of the agency's current and emerging leadership needs in light of its strategic and program planning, and (2) identifying sources of executive talent both within and outside the agency. However, EPA does not currently have in place a succession plan to ensure continuity in the agency's leadership and to prepare for the management losses that will likely occur as potentially large numbers of its senior executives retire in the near future.
Fiscal year 2000 data on EPA’s workforce indicate that 57 percent of the agency's 255 senior executives are eligible to retire before fiscal year 2006. As shown in figure 3, potential retirements may create particularly severe shortages in some EPA units and regions, such as Region 8 (Denver) in which up to 83 percent of executives are eligible to retire over the next 5 years.
EPA human resource managers believe that the agency is adequately prepared for a potentially large number of retirements in the near future.
These managers told us that, in general, EPA has 7 to 10 qualified and experienced candidates within the agency for each SES position advertised, as well as a pool of qualified external candidates. Historically, according to these managers, SES recruitment efforts draw from 30 to 50 applicants for each vacancy, many of whom are internal candidates. Nevertheless, EPA currently has no formal succession plan based on a comprehensive workforce assessment, which could provide it greater assurance of leadership continuity.
EPA has initiated a number of activities aimed at ensuring the continuity of its leadership, such as establishing an SES mentoring program and beginning a review of executive succession needs. In addition, under its human capital strategy, EPA plans to reinstitute an SES candidate program and develop a leadership succession-planning program. In these endeavors, as in many of the other positive efforts under EPA's human capital strategy, the agency has made limited progress and it is too early to determine whether its initiatives will be successful.
section_title: EPA's Recruiting and Training Policies Do Not Fully Address Potential Shortages in Mission- Critical Skills
paragraphs: While EPA acknowledges that it faces significant challenges in maintaining a workforce with the highly specialized skills and knowledge required to accomplish the agency's work, it has yet to fully address the need to hire and develop staff with mission-critical skills in key technical areas. In order to function as a high-performing organization, an agency needs to hire and retain a dynamic, results-oriented workforce with the talents, multidisciplinary knowledge, and up-to-date skills to ensure that it is equipped to achieve its mission. Similarly, it is crucial that agencies invest in training and developing staff to develop mission-critical skills. However, EPA currently has neither a recruiting and hiring strategy that is targeted to fill identified gaps in skills, nor a training and employee development strategy that explicitly links the agency's curricula with the specific technical skills needed to achieve the agency's mission.
Moreover, as discussed above, EPA has not yet completed the crucial first step in developing these strategies: identifying the agencywide critical skills needed for mission accomplishment, the number of needed staff with these skills, and their appropriate geographical and organizational locations. According to EPA officials, once this effort is completed it will serve as the basis for targeted recruitment and training strategies to fill the identified gaps. However, EPA's human resource managers do not know when the workforce assessment will be completed.
Although the agency has not completed its assessment of skills, it has identified a number of "critical occupations" that are needed to achieve its mission. These include, among others, environmental protection specialists, general biological scientists, ecologists, toxicologists, environmental engineers, general physical scientists, and health physicists. The scientists in these seven job categories accounted for 45 percent of EPA's total staff of almost 18,000 employees at the end of fiscal year 2000. About 20 percent of these scientists will be eligible for retirement before fiscal year 2006.
The National Research Council recently reported on EPA's difficulty in managing its scientific workforce. The Council pointed out that EPA's scientific performance has been criticized many times in reports released by the Council, EPA's Science Advisory Board, GAO, and other organizations and "in countless criticisms and lawsuits from stakeholders with interests in particular EPA regulatory decisions." While noting EPA's significant improvements during the past decade in some of its scientific practices, the Council expressed concerns about EPA's science capabilities, including its ability to attract first-rate talent. For example, it concluded that hiring freezes within the agency and intense job market competition from the private sector and academic institutions have made it "extremely difficult" to recruit or even retain the talent needed to sustain and enhance its research workforce.
The shortage in mission-critical staff could worsen as scientists reach retirement age and consider leaving the agency. Over the next 5 years, for example, EPA faces the potential loss of much of the technical expertise, which it needs to achieve its strategic goals, as potentially large numbers of the agency's scientists in some key technical areas become eligible to retire. Figure 4 shows the percentage of EPA staff in each critical occupation who will be eligible to retire by fiscal year 2006.
Furthermore, some EPA organizational units may be more severely affected than others by the impending retirements of staff with critical scientific and technical skills. For example, figure 5 shows the effects of potential retirements of biological scientists on EPA's organizational units.
EPA can fill the gaps in scientific and technical skills that may arise from these pending retirements through (1) targeted recruiting efforts to hire outside expertise and (2) training to ensure that current staff develop the needed technical skills. EPA has continued its recruitment efforts in recent years, placing emphasis on achieving diversity goals. Furthermore, while EPA acknowledges the need to invest in EPA employees through training, it has yet to develop an employee development strategy to meet specific scientific and technical skill gaps. EPA's Office of Inspector General emphasized the need for such a strategy in November 2000, when it identified EPA's training and employee development as a fiscal year 2000 management control weakness.
To address these concerns, EPA proposes to directly link employee development to mission needs by, among other actions, developing and testing a rotational assignment program and implementing a workforce development strategy. However, EPA received no funding in fiscal year 2001 for the rotational assignment program and its workforce development strategy aims to enhance general competencies, such as communication and collaboration, rather than specific mission-critical technical skills.
section_title: OECA's Workforce Deployment Does Not Ensure the Consistent Enforcement of Environmental Requirements Across Regions
paragraphs: Managing EPA's enforcement workforce is particularly challenging because enforcement activities pervade the agency's programs and regions. Enforcement responsibilities are centralized within OECA, which is responsible for monitoring the compliance of facilities regulated by federal environmental laws and ensuring that violations are reported and that actions are taken against violators when necessary. OECA provides overall direction on enforcement policies to the regions, which carry out enforcement actions and oversee the enforcement activities of states that EPA has authorized to enforce federal environmental regulations. While OECA recognizes that the regions need to maintain an appropriate level of consistency in enforcing requirements and overseeing state enforcement programs, it acknowledges that some regional variation in environmental enforcement activities is to be expected for a number of reasons. For example, differences exist in (1) the opinions of enforcement staff about the best way to achieve compliance with environmental regulations and (2) state laws and enforcement authorities and the manner in which individual regions respond to such differences. In addition, OECA's decisions on how to deploy its enforcement staff to the regions can affect its ability to ensure the consistent enforcement of federal environmental requirements throughout the country. In this regard, we found that OECA's deployment decisions are hampered by two interrelated problems:   Workforce deployment decisions do not fully consider workload changes that are known to have occurred over the past decade, such as the number of regulated facilities in individual regions that are subject to environmental inspections. Information is not collected and analyzed for key regional workload factors, such as the extent to which specific enforcement-related functions are performed and the time required to perform them.
Without such information, OECA cannot determine the appropriate size, skills-mix, and location of the regional enforcement staff needed to ensure that regulated industries receive consistent, fair, and equitable treatment throughout the nation. OECA also cannot ensure effective oversight of state programs, which share with EPA responsibility for enforcing federal environmental requirements. Furthermore, without this information, OECA has no basis for systematically determining where staffing increases or reductions—such as the 8-percent reduction proposed for fiscal year 2002—should be made.
subsections: section_title: OECA's Enforcement Workforce Deployment Is Not Based On Current Workload Information
paragraphs: OECA deploys its enforcement workforce largely on the basis of outdated workload models that were developed over a decade ago and not updated since 1989. In general, the workload models were based on the number of regulated facilities in each region and the type and amount of enforcement activities required for a particular program. While the workload models may have been an appropriate tool for allocating enforcement personnel during the 1980s, many critical changes affecting the enforcement workload have occurred over the past decade. Since the workload models were developed, (1) the number of environmental laws, regulations, and programs has increased; (2) the focus and requirements of several environmental programs have shifted; (3) states have assumed a greater role in environmental enforcement; and (4) technological advances have affected the skills and expertise needed to conduct enforcement actions. OECA officials told us that they are currently examining how OECA’s headquarters resources can best be deployed to meet their strategic goals and are working to develop a more comprehensive plan for deploying enforcement resources in the regions.
EPA regions currently vary in the extent to which they enforce environmental requirements and oversee state enforcement activities. For example, as figure 6 indicates, the number of inspections conducted under the Clean Air Act in fiscal year 2000 relative to the number of facilities in each region subject to EPA's inspection under the act varied from a high of 80 percent in Region 3 to a low of 27 percent in Regions 1 and 2.
Furthermore, the number of regional enforcement staff available to oversee state programs varies significantly among the 10 regions, raising questions about some regions' ability to provide consistent levels of oversight. As figure 7 indicates, differences exist in the number of state inspections performed in relation to individual OECA staff assigned to monitoring activities, which include overseeing state activities.
While federal and state enforcement officials agree that basic enforcement activities should be largely consistent, some variation among regions is to be expected and, under certain circumstances, encouraged. According to EPA, for example, differences are appropriate in how each region targets its resources to address the most significant compliance issues in the region. However, OECA has not determined whether and to what extent variations in enforcement activities across regions represent (1) an exercise of flexibility in adapting national program goals to local circumstances or (2) a deployment problem that needs to be analyzed and remedied.
section_title: OECA Lacks Sufficient Enforcement Information
paragraphs: OECA cannot fully determine the causes and appropriateness of the variations in regional enforcement activities because it does not have complete and reliable workforce planning information on these activities. Specifically, OECA does not have accurate information on (1) the universe of entities subject to regulation under federal environmental laws and (2) the time required to perform enforcement-related activities, such as assisting facilities to comply with environmental regulations.
Determining the size of the universes regulated under various environmental statutes is a difficult process that relies heavily on the accuracy of EPA's data systems. However, the reliability of these systems has been challenged from sources both inside and outside of the organization. The universes regulated under various EPA statutes are based on state-provided information that is subject to change as companies are created, go out of business, reach thresholds for chemical emissions that bring them under EPA's regulatory authority, or reduce their emissions of certain chemicals to levels that are not subject to regulation. Furthermore, many state enforcement programs maintain their own databases to manage their programs and do not use EPA's national databases. Consequently, keeping the information in the EPA databases current has been a low priority for the states in an environment of limited resources. In March 2001, OECA recognized the seriousness of providing inconsistent information when reporting universes and their sizes and initiated efforts to improve the data. OECA also recognized that determining the universe of regulated entities under individual statutes will be difficult because of the complexities of environmental regulations and the number of entities involved—approximately 41 million entities ranging from community drinking water systems to pesticide users to major industrial facilities. Once it completes its initial efforts, OECA plans to periodically review its data to keep the universes as current as possible.
In addition, OECA headquarters and regional managers agree that to develop an accurate workforce planning system, key fact-based information is essential to enable managers to account for the time of their enforcement staff. The data most needed include the amount of time spent in performing inspections, providing oversight of state inspections, assisting states and industrial facilities to comply with environmental requirements, and taking various legal actions when necessary to require compliance. Such managerial accounting information is generally not available to OECA's managers.
The lack of such workforce planning information limits OECA's ability to determine whether regions and states are consistently meeting the requirements of EPA's enforcement program and whether significant variations from these requirements exist and should be corrected. Limitations in OECA's data on its regional activities also hamper its ability to assess the number of staff it needs; the knowledge, skills, and abilities they should possess; and where they should be deployed. With such information OECA could ensure that the right number and types of people are being hired during times of growth and that they are systematically allocated among programs and locations according to need. The information is also needed when operations are being downsized to ensure that staff reductions can be absorbed with minimal impacts on the effectiveness of operations.
The administration's fiscal year 2002 budget request for enforcement activities illustrates the importance of having accurate enforcement information that can be used to inform workforce decisions. The administration proposes a new grant program under which it intends to redirect $25 million of funding for enforcement activities. Rather than using these funds to perform its enforcement activities, EPA would provide the funds to states and tribes for their enforcement efforts. An April 2001 internal OECA memorandum indicated that EPA did not expect that all states would receive grants. According to this memorandum, the agency believed that grants should be awarded based on the quality of state proposals, and estimated that approximately 15 to 25 states would receive none of this additional funding. However, subsequently, OECA received comments on the proposal from states and tribes and in July 2001, OECA officials told us that they are reconsidering their initial approach for awarding the grants. The agency is currently developing guidance that will address how the grants will be awarded.
As part of the administration's proposal, EPA would reduce its enforcement staff by 270 people, or about 8 percent. EPA officials told us that staffing for OECA's headquarters and the regions will be reduced by about 51 FTEs and 219 FTEs, respectively. The staff reductions within the regions will likely be proportional to the number of staff currently assigned to them (that is, a region employing 10 percent of EPA's total regional enforcement staff would absorb 10 percent of the regional reductions, or about 22 FTEs). However, as we have noted, EPA allocates its regional enforcement staff on the basis of outdated information. EPA contends that it can absorb the staff reductions without jeopardizing its ability to effectively perform enforcement activities and to oversee the state programs to ensure that they consistently and fairly enforce environmental laws and regulations across the nation. However, without accurate workforce planning information on factors such as the amount of time required to perform inspections and oversight functions, EPA cannot demonstrate that the staff reductions will be absorbed without impairing its effectiveness. Furthermore, in some states, particularly those states that may not receive additional grant funds, it is possible that the level of enforcement activity may actually be reduced as a result of the grant program.
section_title: Conclusions
paragraphs: EPA, like most federal agencies, has not consistently made strategic human capital management an integral part of its strategic and programmatic approaches to accomplishing its mission. Nonetheless, to its credit, EPA recently has recognized the importance of strategic human capital management, and is now in a good position to move forward during the next few years toward implementing the human capital practices that are associated with high performing organizations. Although EPA has recently made substantial progress in developing a strategy to more effectively manage its workforce, substantial issues remain and must be addressed to increase the likelihood of the strategy resulting in tangible programmatic results. One such issue involves integrating human capital objectives with EPA's strategic environmental goals to ensure that implementing these objectives will bear directly on the fulfillment of the strategic goals. Other issues that need to be addressed include determining when and at what cost the human capital strategy will be implemented and how its success will be measured.
EPA's human capital strategy recognizes the need to deal with the major human capital management areas, such as workforce planning and employee development, that pose substantial challenges to its success. Previous initiatives to confront some of these challenges, such as obtaining accurate workforce planning data and attracting top-level scientists for the agency's research programs, have met with only limited success. Effectively implementing a strategy to overcome such challenges in a large and complex organization like EPA is not something that can be done quickly or easily. EPA will need to formulate appropriate remedies, and senior managers will need to provide sustained attention and commitment to providing sufficient priority and resources needed to carry out the corrective actions.
EPA's enforcement activities, carried out by OECA, have changed greatly during the past decade as new environmental laws were enacted; the focus of existing environmental programs has changed; and the states have assumed a greater role in enforcing federal environmental regulations. The impact of these changes on the enforcement workload cannot be determined because OECA does not have complete and reliable data on the specific enforcement functions performed by regional staff and the time required to perform them. Without such data, it is not possible for OECA to strategically deploy its staff to ensure that enforcement activities are performed more consistently throughout the nation. (Similarly, other EPA entities might benefit from such data for their respective activities.)
The need for complete and reliable data on the agency's regional enforcement workload, functions, and capabilities is highlighted by the administration's proposal to use $25 million of EPA's fiscal year 2002 budget for a new enforcement grant program and to eliminate 270 of EPA's enforcement staff positions. EPA currently cannot tailor such staff reductions in a manner to minimize potential adverse impacts on its enforcement program because it has no basic workforce-planning information on the number of enforcement staff it needs; the knowledge, skills, and abilities they should possess; and where they should be deployed.
section_title: Recommendations for Executive Action
paragraphs: To ensure that EPA's human capital policies and practices are most effectively directed toward achieving the agency's mission, we recommend that the Administrator, EPA, build upon the agency's substantial progress in more effectively managing its workforce by revising the agency's human capital strategy to (1) link the strategy's action steps with the fulfillment of EPA's strategic goals, (2) identify the milestones and needed resources to implement the strategy, and (3) establish results-oriented performance measures to determine progress toward meeting the strategy's objectives.
Furthermore, as EPA implements its human capital strategy over the next few years, we recommend that the Administrator better align the strategy with those of high-performing organizations by working toward   developing a system for workforce allocation and deployment that is explicitly linked to the agency's strategic and program planning efforts and that is based on systematic efforts of each major program office to accurately identify the size of its workforce, the deployment of staff geographically and organizationally, and the skills needed to support its strategic goals;   designing succession plans to maintain a sustained commitment and continuity of leadership within the agency based on (1) a review of current and emerging leadership needs and (2) identified sources of executive talent within and outside the agency; targeting recruitment and hiring practices to fill the agency's short- and long-term human capital needs and, specifically, to fill gaps identified through EPA's workforce planning system; and implementing training practices that include (1) education, training, and other developmental opportunities to help the agency's employees build the competencies that are needed to achieve EPA's shared vision, and (2) an explicit link between the training curricula and the competencies needed for mission accomplishment.
In addition, to ensure that OECA deploys its resources most effectively and efficiently to achieve the agency's strategic goals for enforcement, we recommend that the Administrator, EPA, establish, within the context of the agency's human capital strategy, a systematic method for deploying resources to address the agency's enforcement workload in the regions. An effective methodology should take into account the workforce- planning information needed to analyze the enforcement workload and the workforce capabilities of its 10 regions. Specifically, this would include information on (1) the level of resources (FTEs) that are currently being allocated to specific enforcement activities; (2) the factors that determine the enforcement workload in each region, including, among others, the size of the regulated universe and the extent to which states conduct enforcement/compliance activities that would otherwise be EPA's responsibility; (3) the specific skills that are needed to address each region's enforcement workload and the number of employees in each region who currently possess such skills. To develop such a methodology, OECA needs to establish mechanisms for obtaining more complete and reliable data on these factors. Furthermore, this methodology would be most effective if it were linked to agencywide recruiting, hiring, and training policies and practices in order to fill identified gaps in the skills needed to perform effective enforcement actions.
Finally, in redirecting enforcement resources to states and tribes, we recommend that the Administrator, EPA, before reducing the enforcement staff by 270 positions, collect and review more complete and reliable workforce-planning information than is currently available on the enforcement workload and the workforce capabilities of EPA's 10 regional offices.
section_title: Agency Comments
paragraphs: We provided EPA with a draft of this report for review and comment. EPA officials, including the Acting Deputy Director, Office of Human Resources and Organizational Services and the Director, Administration and Resources Management Support Staff, Office of Enforcement and Compliance Assurance, provided comments on the draft. These officials generally agreed with our findings and recommendations and offered a number of detailed clarifications, which we have incorporated where appropriate.
As arranged with your office, we plan no further distribution of this report for 10 days from the date of this letter unless you publicly announce its contents earlier. At that time, we will send copies to the Chairman, Subcommittee on VA, HUD, and Independent Agencies, Senate Committee on Appropriations; the Chairmen and Ranking Minority Members of the Senate Committee on Environment and Public Works and the House Committee on Energy and Commerce; other interested Members of Congress; the Administrator, EPA; the Director of the Office of Management and Budget; and other interested parties. We will make copies available to others upon request. The letter will also be available on GAO's home page at http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 3841 or Edward Kratzer at (202) 512-6553. Key contributors to this report were Vincent P. Price, Bernice Dawson, Alyssa Hundrup, Ken McDowell, Ellen Rubin, and Gregory Wilmoth.
section_title: Appendix I: Scope and Methodology
paragraphs: Our objectives for this review were to determine (1) the extent that EPA's strategy to improve its human capital management includes the key elements associated with successful human capital strategies, (2) the major human capital challenges facing EPA in successfully implementing its strategy, and (3) the extent to which EPA's deployment of its enforcement workforce ensures that federal environmental requirements are consistently enforced across regions. To address the first two objectives, we reviewed the EPA publication “Investing in Our People: EPA's Strategy for Human Capital, 2001 through 2003,” and analyzed information on the nature and status of EPA's key human capital management initiatives. In this regard, in July and August 2000, we asked agency officials in EPA's Office of Human Resources and Organizational Services, Office of Enforcement and Compliance Assurance, and each of its ten regions to respond to questions based on GAO's human capital self- assessment "checklist" and used the checklist as a structure for organizing and evaluating their responses. The checklist is an assessment tool that identifies the key human capital elements and underlying values that are common to high-performance organizations (see table 3). We also obtained information from EPA's Office of Human Resources and Organizational Services on the status of the agency's efforts to implement the strategy.
Finally, to determine the extent to which EPA's deployment of its enforcement workforce ensures that federal environmental requirements are consistently enforced across regions, we obtained and analyzed data from EPA's 10 regions on their enforcement workforce and workload. In this regard, from August through November 2000, we worked with enforcement officials and staff in OECA's headquarters office and EPA's Region 4 to develop a comprehensive instrument to obtain information by major program on, among other factors, (1) the number and type of each region's regulated facilities, (2) the nature and number of individual enforcement activities (such as inspections and oversight activities) conducted in each region by EPA and the states, and (3) the number of staff conducting these activities. We received and began analyzing information from most regions in January and February 2001. Our analysis showed that, overall, the data were incomplete and inconsistent across regions and programs because of differences in definitions, reporting requirements, and states' willingness to provide data voluntarily. For these reasons, we were generally unable to rely on these data for drawing conclusions relating to EPA's enforcement workforce and workload. As an alternative, for our analysis on workload variations and imbalances, we relied primarily on information from OECA headquarters on enforcement FTEs in each region and standard Program Review Status reports produced annually by OECA. Our comparative analysis of these data with the information from the regions further confirmed the inconsistency of EPA's enforcement data.
Our work for this review was conducted between June 2000 and July 2001 in accordance with generally accepted government auditing standards.
section_title: Appendix II: EPA's Structure and Environmental Enforcement Activities
paragraphs: EPA is organized into 13 major headquarters offices (including OECA), located in Washington, D.C. (see fig. 8). These offices receive administrative, investigative, and laboratory support from numerous headquarters field entities located throughout the country. EPA also maintains 10 regional offices to implement federal environmental statutes and to provide oversight of related state activities.
EPA has been responsible for enforcing the nation's environmental laws since it was created in 1970. This responsibility has traditionally involved monitoring the compliance of those in the regulated community (such as factories or small 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. Under many major federal environmental statutes, EPA gives states that meet specified requirements the authority to implement key programs and to enforce their requirements. In such cases, EPA establishes by regulation the minimum components of state enforcement authority, such as the authority to seek injunctive relief and civil and criminal penalties. EPA also outlines by policy and guidance its views as to the elements of an acceptable state enforcement program, such as necessary legislative authorities and the type and timing of the action for various violations, and tracks how well states comply. EPA may also take appropriate enforcement action against violators.
EPA administers its environmental enforcement responsibilities through its headquarters Office of Enforcement and Compliance Assurance (OECA). While OECA provides overall direction on enforcement policies and sometimes takes direct enforcement action, it carries out much of its enforcement responsibilities through its 10 regional offices. These offices are responsible for taking direct enforcement action and for overseeing the enforcement programs of state agencies in those instances in which EPA has approved a state program.
Although EPA acknowledges that some variation in environmental enforcement is necessary to take into account local conditions and local concerns, core enforcement requirements must nonetheless be consistently implemented. EPA also maintains that to ensure fairness and equitable treatment, like violations in different regions of the country should be met with comparable enforcement responses.
Many major federal environmental statutes allow EPA to authorize states to administer environmental programs. One of the key conditions for authorizing state programs is that the state acquire and maintain adequate authority to enforce the federal law. For example, to obtain EPA approval to administer the Clean Air Act's title V permitting program for major air pollution sources, states must have, among other things, adequate authority to ensure compliance with title V permitting requirements and to enforce permits, including authority to recover civil penalties and provide appropriate criminal penalties. Similarly, the Clean Water Act allows EPA to approve state water pollution programs under the National Pollutant Discharge Elimination System if the state programs contain, among other things, adequate authority to issue permits that ensure compliance with applicable requirements of the act, and to abate violations, using civil and criminal penalties and other means of enforcement.
EPA develops enforcement policies for these programs. The enforcement policies outline EPA's traditional regulatory approach to enforcement, including what constitutes a violation, especially the significant violations that are likely to require an enforcement action. When a violation is discovered, the policies generally require an escalating series of enforcement actions, depending on the seriousness of the violation and the facility's level of cooperation in correcting it. Actions might start with a verbal warning, or a warning letter, and escalate to administrative orders requiring a change in the facility's practices. These enforcement policies also define timely and appropriate enforcement actions for various types of violations. In the most serious cases, EPA or the states can assess penalties or refer the case to the U.S. Department of Justice or a state’s Office of Attorney General for prosecution. The monetary penalties that EPA assesses include two amounts: one amount based on the seriousness of the violation and the other amount designed to remove any financial advantage the violator obtained over its competitors through noncompliance. EPA may also pursue criminal enforcement action if the situation warrants.
Whether EPA or state personnel take the lead in taking enforcement actions depends on whether the state has been authorized to administer the program. If EPA retains the program, the cognizant EPA regional office generally takes the lead in monitoring compliance and taking enforcement actions, often with support and/or guidance of EPA headquarters program offices, OECA, and the Office of General Counsel.
EPA's polices provide guidance to the states that have been authorized to administer the enforcement program. Moreover, EPA's regions and the states work together each year to establish enforcement expectations and lay out their respective roles. EPA also provides grant funds to states to assist in the implementation of the federal programs and, under certain circumstances, conditions receipt of grant funds on compliance with EPA guidance.
EPA oversees the states' enforcement in a variety of ways, including reviewing inspection reports and enforcement actions and accompanying state inspectors. EPA also requires states to report information on various aspects of their enforcement efforts, such as the number and type of inspections the state has taken, the results of those inspections, and any enforcement actions resulting from discovered violations. EPA's enforcement policy under the Clean Air Act and Clean Water Act concentrates primarily on large facilities and large sources of pollution. States have more autonomy in determining how they will enforce the law at smaller sources and smaller facilities.
EPA officials use a number of methods to oversee regional and state enforcement programs. An important first step is the biennial Memorandum of Agreement between EPA headquarters and the regions, which contains the core program requirements and national priorities that both headquarters and the regions agree must be addressed. In addition to the national priorities, the agreements with each individual region contain region-specific priorities that OECA reviews and approves. The regions share this agreement with their states so that all key parties understand the regions' goals and commitments with headquarters. Senior OECA managers visit the regions during the year to review regional progress in meeting the agreed-upon enforcement goals and commitments in the memorandum and to make mid-year corrections. OECA also sponsors national meetings, schedules routine conference calls between headquarters and regional media program staff, and conducts periodic evaluations of regional enforcement programs. EPA regional enforcement program staff frequently communicate with state enforcement staff through routinely scheduled telephone conferences. In addition, a number of regions have implemented protocols for overseeing state performance.
section_title: Appendix III: Information Reported by EPA on the Status of the Agency's Human Capital Management
paragraphs: In July 2000, we submitted a set of questions based on our human capital self-assessment "checklist" to officials in EPA's Office of Human Resources and Organizational Services. We asked these officials to provide us with information on the extent to which EPA's human capital policies and practices exhibited the principals that we had identified as being associated with high-performing organizations. The following table provides a summary of their responses, organized by the key elements as defined in our checklist. The table also provides information, as of June 2001, on the status of EPA's efforts to implement its human capital strategy as they relate to each checklist element.